Okay.
Gentry, welcome to the podcast, man.
Thanks for coming on.
Great to be here, man.
You were standing in the
wrong place at the right
time or the right place at
the wrong time because you
were standing next to me at
the APTA PPS conference.
And I'm super shy and I'll
just start conversations with anybody.
And I'm like, hey, man, you know,
where are you?
I think I was like, where are you a PT?
And you're like, well, I'm not.
I'm like, OK, cool.
Then why are you here?
That's interesting.
So how do you typically
explain if someone like me
were to ask you, like, you know,
what do you do or where are you a PT?
You're like, I'm not.
What do you do?
Yeah, after twenty years,
I've had a lot of time to
think of the answer to that question,
Jimmy.
So typically I tell people
and they're a little shocked by this.
I think some of them,
maybe not so much the PTs,
but I just tell them I help
people get away from the big,
bad insurance companies.
that, in my opinion,
have destroyed our health care system.
And obviously,
that causes a lot of curiosity.
But that's my common answer now is,
you know, in the past,
there weren't a lot of options.
And I think there are more
and more options becoming available.
All right.
So that's what you do.
But how do you do that?
How do you help people get
away from the big, bad insurance company?
Now, we'll zoom in just a little bit.
Yeah, for sure.
So depending on the size of the group,
right,
it's harder when you don't have as
many employees,
but when you have around a
hundred or more employees,
it opens up options to use
third-party administrators
that can adjudicate claims.
You can really tailor
Your plan,
you can get stop loss insurance
to protect your company.
You can choose a pharmacy
benefit manager that's not
one of the big three that's
owned by the insurance
companies or vice versa.
So that's what I do is I
create tailor-made
solutions when it comes to health plans.
So if you're someone,
if you're a clinic or a
group of clinics with a hundred,
we'll just,
we'll just drop a line at a
hundred imaginary line at a
hundred or more.
You get to now you can come
in and create or sort of
get to start to choose your
own adventure health plan
for that organization.
Yeah.
Yeah, that's right.
So we've had three this year alone.
One of my clients, Tim Spooner,
a lot of people know him.
He's kind of a pioneer here in Phoenix,
Scottsdale area.
He referred me to kind of his group,
his practice group of
different business owners
across the country.
And so we're fortunate to
work with several of them this year.
And we moved them from a
fully insured plan to a self-funded plan.
Two of them are in California,
one up in Washington state,
and we just finished up
another one in Pennsylvania.
So it's not state specific.
We're licensed and all the
fifty states can work with anybody.
So that's cool.
All right.
So what problems does this alleviate?
I'm guessing cost is if you talk cost,
you got people's attention.
But whatever doors is it open?
So I'm guessing,
I don't want to put words in your mouth,
but I'm guessing it reduces
costs or at least to maybe
make risk a little bit lower.
What else?
Like what are the things on
the benefit side of doing this?
What would you call this?
Self-funded insurance for your company,
for your organization?
Exactly.
So it's self-funded insurance,
but you can go to a
self-funded plan through
what we call a book or I'm
going to use that term Blue
Cross United Signet.
Now,
those are the big insurance companies
across the country.
But obviously, it does reduce costs.
Usually health insurance is
the second or third highest
line item on a company's P&L.
And this helps reduce that overall cost.
It also improves the quality.
There's a misconception in our country,
unfortunately, that if I pay more,
the quality is higher.
And in health insurance,
it's actually the inverse of that.
It's the surgeons that do
something more are better at it.
And so they can charge less
versus charging more.
Now,
where the cost comes in is these
hospital systems,
they like to refer to their
surgeons and a surgery
inside a hospital setting
is much more expensive than
a surgery in an ambulatory
surgical center.
So-
That's one of the benefits
and the quality is significantly higher.
So not only does it reduce the cost,
but it also improves the
quality for the patients, you know,
and the members on the health plan.
All right,
so pros and cons of each approach,
let's just go make sure
we'll stay with the basics
before we go deeper.
So the difference is that
the difference are fully insured plans,
am I am I safe to call them
like the typical plans, right,
fully insured plans?
Yes.
Versus self-funding.
Let's just do pros and cons.
Give them the quick high
level because if someone
really wants to dig into this,
they're going to call you
and we'll put your
information on there and
we'll share that.
But do pros and cons of each.
Yeah.
So let's start with the cons first.
The cons of a fully insured
plan is you're subject to
whatever the carrier gives you, right?
In terms of your plan design, deductibles,
co-pays, out-of-pocket.
You can't do anything
innovative within a fully insured plan.
It is what it is.
We call it shelf plans, right?
They're filed with the state.
They're mandated.
They have all of the
different requirements, right?
So that's a huge con.
Another huge con of fully
insured is you get no reporting at all.
Wait, no what?
Say that again.
Yeah.
No reporting of data of
where your money is going.
How is my money being spent
by the members on my plan?
I get zero data.
Now, with a hundred or more employees,
you get limited data,
but you don't get full
access to the data or the
reporting in a fully insured plan.
So that's another con.
Why is understanding that?
So the business owner you're talking about,
the person who's funding
the health insurance,
why would you want that information?
And then why can't we get it?
So in every other aspect of business,
a business owner has access
to how things are being,
where costs are going.
Sure.
And if you don't know where
costs are going,
you can't control a cost.
And so I think it's on purpose.
Um, you know,
I'm not going to go on the
conspiracy theories or anything like that,
but, um,
You don't get reporting and
they hide behind HIPAA.
The insurance companies say, well,
if you have a hundred employees,
you could identify people
and be discriminatory against them.
That's not correct.
That's not true.
So a big downfall of a fully
insured plan is you get
very limited reporting and
because of that you can't
control where your dollars
are being spent and the
quality of it either so
yeah I mean you mentioned
that inverse proportion is
we hear that every we hear
that every every once in a
while we definitely hear it
every four years in terms
of the us is the lo you
know the biggest spender in
healthcare and we're
thirtieth on the list in
this and forty second and
fifty third um so that's
definitely true all right
so that's that's number one
con blind I have no idea
where this money is going I
just keep throwing money into a hole
I don't know how it's being spent.
And then, oh,
magically next year or the
next time my contract is up,
it costs more and maybe I'm offered less.
That's correct.
So let me just give you one
example of one of the plans
that we worked with this year.
We had an employee that was
on a very high prescription drug.
We would have never gotten
this information from their
fully insured carrier up in
Washington State.
And this individual,
we were able to assist them
to get this drug sourced
internationally from Canada,
right north of Washington State.
And they were paying the plan,
meaning the overall cost
for this drug was around
six thousand dollars a month.
And we were able to get it
through an independent
pharmacy benefit manager
who works with a Canadian pharmacy.
for roughly fifteen hundred
dollars a month.
So a significant difference.
Right.
By just going and being innovative,
getting the same drug,
it's shipped to the employee.
There's no member disruption, you know.
So it's it's very simple.
There are lots of little
levers and buttons to push
within a self-funded health
plan that you cannot do
within a fully insured plan.
Well, you couldn't do it,
but there's no reason for
the fully insured plan to
even look into that.
Right.
There's no reason.
Well, that's right.
Claims equal premium.
So the higher the claims are,
the higher the premium that
the insurance company can charge.
And so there isn't any incentive.
And you have stockholders,
shareholders that they have
to increase their pricing
in order to look better on
their earnings.
So there really isn't any
incentive versus a self-funded plan.
The employer has every
incentive to control the costs without
disrupting the members, right?
Or at least working with the
members to try to find
other solutions and say,
this health plan is our health plan.
The better we utilize the plan,
the better we save money by
getting drugs outside of
the country if we can,
that directly competes with
your W-II income.
So if we're more wise with
the way that we spend our current dollars,
we can offer better
benefits and we can reduce
the costs that we charge to you.
All right.
So you throw a few pros and cons.
What else jumps to mind or
what else do you typically
I always ask what what what
passes the eyebrow test?
What when Gentry mentions it
makes like a practice owner go, OK,
didn't think about that.
Yeah, well, obviously the cost,
we do an analysis, right,
for everybody that we start
working with or want to, you know,
start working with us.
And we look at the overall, you know,
benefits.
Typically the first year,
we don't change the
benefits at all because we
want to be able to gather
that data within the first year,
year and a half.
So then we can really start looking at
are deductibles appropriate?
Are copays?
Are out of pocket?
What other solutions can we be looking at?
For example, diabetes.
There are lots of different
diabetes programs and
vendors out there that can
drastically reduce the cost
and improve the health of employees.
And so
Those are the things that
we're looking at.
It's really a strategy of we
have the data.
Now we can start creating
the plan based on your
employee population.
The great thing about these
private practice groups are
most of these employees are young.
They're out of school.
They're starting their
families and they're healthy.
And so why be pooled with
sicker risks when you've
got an employee population
that's much healthier than
the general population in our country?
Um, there's another acronym.
We can't get too many, too many,
too many acronyms in healthcare.
Can't get enough of them.
Uh, TPAs, third party administrators.
You said they can be a key
alternative to these
traditional insurance companies.
What are they?
How do they operate?
How do they operate differently?
And what advantages can this
third party administrator
offer a business owner?
Yeah, great question.
So I like to think of a
third party administrator
as the quarterback to the plan.
So think about like an insurance company,
customer service, ID cards,
adjudicating claims.
They're the ones that
basically are running the
plan and are the
kind of the front forward
facing of to the employees.
But it's extremely important
because they're the ones
that implement the stop
loss insurance and the
pharmacy benefit manager
and the medical management.
And so it's really key that
you have a team of people
on the third party
administrator front that
understand what the plan is
trying to accomplish.
And kind of the Bible to the
plan is what we call the
summary plan document, right?
It's the Bible to the planet
says for every little thing,
what's covered and what's
not covered and how things will be paid.
And so you've got your network,
you've got your pharmacy benefit manager,
stop loss, medical management.
The TPA is the one that's in
charge of managing and
coordinating all of those
different pieces because
what most people don't know,
in your Blue Cross plan or
your United plan,
you have all of those
different players right now.
You just never see them.
right?
With a third party
administrator and an
unbundled self-funded plan,
meaning completely
independent of any
insurance company out there,
you get to see how all of
those different pieces
function and you get to
choose best in class.
Right now we have a very
limited market when it
comes to fully insured.
Maybe in any state you have
four or five players.
I can go out to twenty five
or thirty different stop loss carriers.
There are hundreds of
pharmacy benefit managers.
So
you're really opening up
your field to other options
instead of just four or five.
Okay, more acronyms, more letters.
They went from TPAs to PBMs.
Those are pharmacy benefit managers.
You talked about an example
of changing a cost from six
thousand dollars a month
for one employee to fifteen, right?
So pharmacy benefit managers
and stop loss protection,
which you'll have to
explain to me a little bit.
Talk to me like I'm an idiot
because this is a little
out of my comfort zone,
but I want to learn it.
So PBMs and stop loss
protection play crucial
roles in controlling costs.
Walk us through what those things are,
how those elements work
together and where business
owners can go wrong and
right with their strategy.
Yeah,
so let's start first with stop loss
insurance.
So there are two different
types of stop loss insurance.
You have specific and you have aggregate.
Specific is insurance on any
one individual that has a
catastrophic claim, like cancer,
heart condition, serious back fusion,
right?
These high preemie babies,
those are examples of a
catastrophic claim on any one individual
It could be a spouse or a child.
And so you buy specific stop
loss insurance to protect the business,
the plan from any one
individual bankrupting the plan.
So we use the specific stop
loss to cover any one individual.
And then we have aggregate
or umbrella insurance in
the case that we have lots of claims,
just lots of claims from
multiple individuals.
So you're covering yourself
from one individual and
you're covering yourself as
a whole using the aggregate insurance.
Now, the insurance companies,
when you get your renewal
from a fully insured carrier,
they increase your renewal on everything,
right?
The administration of the plan,
pharmacy benefits, medical management.
On a self-funded plan,
your renewal is usually
just on your stop loss.
There may be some minor
increases to the other pieces of the plan,
but you're not getting...
ten or fifteen percent
increase on the full
premium that you're paying
it's typically on just the
stop loss and you're also
paying taxes right on your
full premium with a
self-funded plan you're
just paying the taxes on
the insurance premium for
the stop loss insurance so
and then there are
different contracts you
know with a stop loss
insurance you know you have
what's called uh twelve twelve which is
incurred in twelve months or
paid in twelve months or
you have a twelve twenty four.
I know I'm kind of getting
in the weeds here,
but incurred in the first twelve months,
paid in the
full twenty four months.
So you have different
contracts with a stop loss
carrier because as most physical therapy,
private practices know,
when you submit that claim,
it's not always paid
immediately or sometimes it
takes a while for the claim
to be submitted.
So you want to make sure
that you're covered by that
stop loss agreement in case
it gets filed at the end of
the year and claims are
filed like January, February, March.
You don't want to be
not having coverage and be
exposed to those claims.
So that's kind of a
generality of what the stop
loss serves as.
And again,
we have access to probably more
than fifty.
I know I said twenty.
That's usually what we try
to narrow it down to.
But there's a lot of options
when it comes to stop loss insurance.
And our goal is to buy the
least amount of insurance.
So as the plan performs,
we actually raise that
deductible on the specific
one individual.
It's not the deductible that
the employee pays.
It's the deductible that the
plan has as a risk, a cap.
So on a hundred life group,
you may have a specific
deductible of anywhere from, you know,
fifty thousand or seventy
five thousand per member
that's on the plan.
And then you have, you know,
that aggregate umbrella
insurance for the rest of the group.
you already sort of talked
about pbms so that's a
pharmacy benefit manager
how they come into play in
terms of thinking
creatively about costs is
that like an accurate you
know that that person's job
is to think creatively or
think more responsibly about costs so um
Maybe people have heard,
maybe they haven't.
FTC is actually suing a lot
of the pharmacy benefit managers.
We have three major pharmacy
benefit managers that
source eighty percent of
all drugs in our country.
Express Scripts, CVS and Optum.
And CVS owns Aetna.
Optum is owned by United
Healthcare and Express
Scripts is owned by Cigna.
So those three are all
pooled together and they
collude and they help each
other to make more profit.
And so these pharmacy benefit managers,
they'll have what are called formularies.
They're lists of drugs that
are covered or not covered.
And they steer people into
the different drugs that
they get paid higher rebates on.
So maybe you've heard of rebates,
maybe you haven't.
But a rebate is basically
just a kickback on higher cost drugs,
usually specialty drugs.
And so those rebates are
paid back to the fully insured plan.
They're not paid to the
employer on a self-funded plan.
Those rebates come back to
the plan to help offset future costs.
So that's one major
difference between an
independent pharmacy benefit manager,
one that's not owned by one
of the large insurance
companies and the three
that I talked about.
Another thing that they do
is these pharmacy benefit managers,
the ones that are creative,
they're looking for ways to reduce costs.
So you may have seen at the
end of commercials at night, right?
These drug commercials for specialty drugs,
Sovaldi, Manjaro,
the GLP-I's are very popular right now.
At the end, they'll say,
you may qualify for
assistance for this drug.
Well, what that is,
is these pharmacy benefit
managers have found a way to work with
these manufacturers to
basically find programs
where those costs can be
reduced both for the member on the plan,
as well as for the plan sponsor,
the employer.
So their patients assistance programs,
their copay assistance programs,
and an independent pharmacy
benefit manager will
actually look at those drugs,
work with the member to see
if they qualify for those
programs and reduce their overall cost.
versus the larger pharmacy
benefit managers typically
don't offer those services.
Some of them are starting to do it more.
The other big thing that I
talked about was international sourcing.
So these independent
pharmacy benefit managers
will work with third parties
to find the drugs that are
same manufacturer, same labeling.
It's just at a lower cost
and shipping it from Canada, New Zealand,
United Kingdom.
We have some plans that
actually get drugs from Mexico.
So we look at everything and
see what makes the most
sense and what the plan
sponsor feels comfortable
with and roll out a
strategy of communication
to the employees to help them with that.
Just feels like more transparency,
more control.
When you go into anything
that's sort of franchised out, right?
Something so huge,
you're going to have less control.
It'll feel like you can save some money,
but when you start to do the math,
it doesn't really look like that.
So it feels like you're just
getting this off the shelf thing,
so it should cost me less and be better.
And we're saying, again,
that's sort of inversely proportional.
The more you pay,
you're not getting the best thing.
That's correct.
Yeah.
And employers, I think,
feel like they're kind of stuck, right?
They play this game every year.
I've played it where every
couple of years they have
to switch insurance companies.
They get a ten or fifteen
percent and we negotiate it
down to seven.
It's like this game back and forth.
And you always ask them,
why am I getting an increase?
Well,
you have some high claimants and it's
due to trend.
And
A lot of employers just fed up with it.
They're like,
I'm tired of running on the
rat wheel and I wanna do
something different.
I wanna have control and get
information that gives me more control.
And this is more of a necessary evil,
unnecessary annoyance.
Like not many PT practice
owners open to practice to
think about the third most
expensive thing on their line item,
which is health insurance
for their employees.
They wanna offer this.
They wanna create a great culture,
a great place to work.
And they wanna have motivated employees.
And they've got to become an
expert in this every time a
contract negotiation begins
or every time a contract
ends and another one begins.
And that sucks.
But if you're one of these big companies,
if you're one of those big
three you mentioned,
you're just going on math.
and you knowing what what
else is being offered so
you're saying this is my
best offer take it or leave
it well now there's there's
these different options so
for business owners
listening we'll talk about
real world impact for the
practice owners who are
like okay either I need to
pay attention to this or
I've been hit with this
health insurance costs are
a huge line item as you
mentioned the I think you
said the third most
expensive one typically
whatever two salaries and overhead
Yeah, and then health insurance.
What's one immediate step
practice owners can take to
start getting better
control over those insurance costs?
And then how can your
approach you're talking
about make a tangible
difference in their bottom line,
their P&L statements?
Yeah,
this is going to sound like a kind of
a strange answer.
OK,
get get your broker to start looking
outside of the book as the
major insurance companies.
There's lots of companies
that are starting to
develop and even for smaller companies.
Right.
Not just the hundred plus,
but there are other
companies that are coming to market.
that can be viable options, right?
So one of the things that
drives down costs
significantly is what's
called reference-based pricing.
So instead of having a
network of doctors like Blue Cross,
United, Aetna, or Cigna,
you can actually work with one of these,
I call them bundled,
non-carrier-owned solutions.
And there are various ones
in different states out there now.
where they can do what's
called a level-funded plan,
where you're still paying a
monthly premium into the plan.
And then at the end of the year,
you can look at how your
plan is performed.
You get limited data.
It's better than what you
get with the major insurance carriers,
but it's still limited.
But it's kind of a middle step, right?
If you're not ready to go
down the full self-funded
plan that I've been talking about,
there are other options
kind of middle of the road
called level-funded carriers, right?
And there are more and more coming about,
you know,
I was just at the Rosetta Fest
Health Rosetta Conference a
few months ago in DC,
and there were probably
three or four new ones that
I'd never heard of before.
So I think that that's something that,
you know, smaller groups,
it's a solution that they
should be looking at.
The risk,
there is no risk for them versus
with a self-funded plan,
they have taken on a little
bit more risk on that
specific deductible.
So that would be just,
You have more power than you
think you have as a business owner.
And you really need to start
pushing these advisors and
brokers like myself that
may not be aware that there
are other options out there
when there truly are.
Love it.
All right.
So if someone is out there nodding,
number one,
how can they get in touch with you?
Like throw out the easiest way, website,
email.
What would you tell people to call you?
How do they get you?
Yeah.
The best way to get ahold of
me is just send me a text
on my cell phone.
Um,
four eight Oh five one eight three nine
four two emails,
simple JD Harris at Mahoney group.com.
And then my LinkedIn profile
Gentry with a J. So I'm the
only Gentry Harris out
there that I'm aware of.
Smart man.
All right.
Last thing we do on an episode,
we call it the parting shot.
What's, what's your last idea?
Mic drop moment, soapbox statement.
You want to leave with the audience?
What do you got?
Yeah, so like I said before,
I think business owners are
the sleeping giant when it
comes to health care.
You have more power than you
think you have.
And don't be afraid to try new things.
There are some things out
there that can be damaging
and not good solutions,
but just find an advisor
that has experience in self-funding,
ask them pointed questions,
ask them for references, look on LinkedIn,
talk to other PT practices
that are doing self-funding.
and really do some homework
because at the end of the day,
it's extremely advantageous.
There is a solution to fix healthcare.
We've just been told otherwise.
And as Jeff Gold,
one of the direct primary
care doctors said at a
conference that I attended,
we are addicted to a system
that is broken.
And it's time for us to get
off of the addiction of
health insurance and fully insured plans.
Well said.
All right, Gentry.
Thanks for making this at least palatable,
even for someone like me,
understanding like, listen, first of all,
if someone takes something away,
there's another option.
You don't have to just go with these,
what'd you call them?
Bucas again?
Blue Cross Blue Shield, United Healthcare.
So there's alternatives.
You don't have to.
And there's people along the
way to help you to figure that thing out.
So you don't always have to
go with these big giants
and the off the shelf things.
Gentry,
thanks for making this understandable,
even digestible for someone like me, man.
Thanks, Jimmy.
Appreciate your time, man.