How To Build An Effective Self-Funded Plan with Neil Quinn | The Broker's Voice

All right, welcome back to the Broker's Voice. We go live every Wednesday. The goal here on the Broker's Voice is to shine the light on folks in the benefits and commercial insurance industry that I believe are doing great things, that even if they're winning, they're still not getting enough attention, in my opinion. And today's episode is no different. I have got with me Neil Quinn, chief revenue officer of Vittori Health. Neil, how you doing today?

I am doing well in minor correction. I am chief strategy officer with Vittori Health. One of my colleagues actually handled the sales, but I'm, you know, a probably salesman at heart, so you're not far.

You know what I literally said in my head as I, as we were coming on, he's the chief strategy officer, and then I said, chief revenue.

I been there, been there.

Can you give me a little credit? Strategy at least leads to revenue, right?

Absolutely does. Yeah. You know that I, I, you know, you gotta. Got a strong umbilical there.

Yeah. Well, I got to ask you, just off the subject question, knowing that you live on the outskirts of Cleveland, you happy? Terry Francona, one Manager of the year.

Oh, goodness, yeah. Of course. You know, this is a, like, come on, boom, boom, boom. You know, up with, up with Cleveland. We've had. We've had a few really good shots in the arm over the years, haven't we?

So, you know, Cleveland, the Indy. I'm gonna still say Indians. I know people hate me for this, but I'm a baseball purist. The Guardians had a pretty cool season. Definitely under, over underrated for how much success they had this year.

Yeah, of course, you know, we're biased, but we would agree with you. And Terry's accolades are great. So, you know, not a bad way to come in into, you know, the winner here.

Now if we can just get the Browns to catch up.

Oh, well, I, I love your baseball analogies, by the way, in the baseball metaphor. It's so fitting for, For a lot of the things that you do. And I think there's. I think as we talk here, there's probably some, Some, you know.

Well, you want to hear something really eerie? And I don't know what just made me think of this, but maybe it's the whole Cleveland thing. I remember being in high school, so this would have been early high school. 92, 93. And one of my buddies, baseball teammate of mine. This is when Cleveland was terrible and the Marlins had just started as an organization and he made a prediction. I still remember this, and I don't know if it was the right year, but he was maybe a year off. He said, Indians, Marlins, World Series.

And they didn't meet at the same time. But then Cleveland went to the World series. Was it 96, 97 against Braves, I believe.

Right? Yeah.

And I just remember going, when that happened, I'm like, whoa. Like, because at the time you made the prediction, Cleveland was probably the worst organization in baseball.

Yeah. Yeah. So, yeah, there was some, there was some clairvoyance there, wasn't there? Yeah.

And I remember that's back in the day when the Indians and the brewers were in the same division. So. Yeah. Well, let's talk about your journey. You've had quite a journey in the health insurance industry. So for the folks jumping on who may not know who you are, why don't you just give us a little flashback of where you started in the industry and what's led you led up to becoming the chief strategy officer at Victoria Health.

Yeah. Happy to do a little bit of a travelogue and you know, you can, you can chaperone this and make sure I leave some oxygen for both of us here as we go through. But you know, as I like to say it, I've, you know, compared to a lot of people, I've got kind of a foot in the grave here. I've been around the, the block a lot in the healthcare industrial complex, including the employee benefit space, the, you know, the employer sponsored health plan space. Cut my teeth way back, way too long ago as a pre med student and then a master's in kinesiology. And my thought was I'm going to traffic into the healthcare system as a, as a provider, as a practitioner and wound up quickly becoming disenchanted during some internships. And even this was back, this was literally back in the 80s and at that point seeing that health care as a healing industry was becoming healthcare as a business industry.

And wasn't appealing to me. So unfortunately I made the pivot. I wound up getting into healthcare administration. I was an administrator exec for a long time with the University of Michigan Health System and watched as it, and probably aided and abetted its sort of, you know, sprawling black hole acquisition of hospitals and primary care and specialists. And this is even back then as it sort of, you know, spread across its own geography. And what happened when we bought entities, we controlled the price. When you control the price, what do you usually do with it? Well, you don't usually lower it, you usually raise it. Right. You know. Yeah. Wound up having an affinity for innovation, technology New business ventures was in technology transfer at the University of Michigan for a while. Created a lot of interesting technology.

That was cutting edge at the time in helping people make behavior change, things like smoking cessation. Ran the health media research lab which was commercialized and after a while bought by Johnson and Johnson moved on and was actually part of one of the first DPC groups in the nation. This is back around, you know, Y2K and we were delivering both occupational health and you know, were asked by all the employers, hey can't you guys just do general health? Can you do non hock health? And we said sure. And those were under DPC arrangements even way back then. So it's not, you know, a lot of this is, you know, what's old is new kind of stuff. And then wound up, you know, honestly being on the insurance brokerage side owning a agency, large agency in the Cleveland area here with a few others for a decade and a half. And so I saw, I've seen all the sausage making in terms of how this sort of multi tentacled, multi stakeholdered, you know, matrix works and I call it the matrix and then wound up selling that, moving into a, an international professional services firm that was specializing in business optimization and supply chain overhaul. And that was the jump where in during which Vittori was created at least the seminal elements. And what would happen is we wound up spending tons of time with private equity firms and their portfolio companies. They would have us land kind of in that sort of overlord position and say, look at everything we're doing, tell us what could be better. And inevitably the deals guys or the ops guys would say what is that white hot ember burning a hole in our P and L called healthcare? Why is it inclined with this steepness? Why is it such a large number? What can you do about it? And so we set to the task of that and we quickly realized that trying to do what the, what was being typically done in the industry, which I call manage the racketeering, meaning leaving most things in place and kind of trying to manage around it for cost or better quality or better member service, better experience, you know, was a little like spitting in lava. You're just not going to cool it and you're not going to make any real traction. So it was at that time that degenesis for Vittori Health came about and we realized that we're going to have to build something brand new from the bottom up. And we had the luxury of standing on the shoulders of others that have come before us. Certainly Understanding what wasn't working with the BUCA plans, you know, the sort of monopoly plans in the country and learning from those that had tried and I give them credit to look at alternative plans, alternative reimbursement or care delivery plans. And that's how Vittoria is born. And so we were moving into our fifth year of paying claims.

Now what I'm going to do, Neil, is as we're talking here, I'm going to throw your email up here. So if, if you're an advisor listening in and you do want to get ahold of Neil and learn more about Vittori, we're going to get into it here in a minute. Here's Neil's email, so feel free to reach out. So I'm, I got one question before we dive into more now, where you're at today. What led you to make the shift from being on the healthcare side for so many years and then joining the broker side?

You know, so I actually thought I could make a difference and I think the advisors on the call and, and this happened almost incrementally in all of these steps that I've taken in my career. And maybe people are chuckling, thinking, well, okay, you're going to move from the healthcare side, which I found quickly. I wasn't able to make the kind of what I would call magnitude of order change that I wanted. I mean, you're in an entrenched system that's making good money. Let's not kid ourselves. On the healthcare side, everything's happy. Don't rock the boat. You'd have minor sort of innovations that could happen, but not wholesale shifts. So I thought, okay, look, maybe I can get on the, you know, look at, you know, half of the country's purchasing of health care is done the commercial side, the employer side, you know, who directs employers to do that? Insurance advisors, consultants, brokers. Right. So can I, can I have an impact there? Joined a group that I thought was pretty progressive. Quickly realized, you know, a decade and a half of quick realization that again, that's, you know, herding feral cats is probably, you know, what was going on there. Again, follow the money. Always follow the money. And it's if, you know, you'd think an old guy like me would learn a little quicker, you know, but, you know, we all have, you know, hindsight is 2020 sort of thing. But it's, you know, these entrenched revenue streams, revenue sources, you know, most of the time people are allergic to, to change and they are, you know, status quo. Is this opium den so that's how I moved on. And I thought, hey look, I'm going to get into just business, you know, making businesses better in general. Had no intention when I did that last, you know, sort of jump that I would wind up back in healthcare and maybe it's a way to frankly atone for former sins. I don't know.

It's kind of a full circle you didn't expect. Right.

Circle. And now I, I definitely am, I'm pleased that I didn't just, just retire. My wife is also pleased, but getting to do some real good now and, and it's kind of a true north thing.

Awesome. And we got Chris Fisher joining us on, on today's episode. I know you've been on, you've been on Chris's three by three by three.

If you're, if you haven't seen Chris's three by three by threes, by the way, you got to go check those out. Those are fantastic. Let's talk about Vittori Health now. Being a brand guy, you know, I've asked you this question offline. What does vittori mean?

We get asked this. It's frankly unusual that we don't get asked it more. But you nailed it. So vittori is a linguistic derivation of victory. So in Italian and other, you know, other languages, Romance languages, vittoria in Italian is victory. And so we just kind of clipped it, made it short, shorter, easy to say. And our, our, you know, view of, of that is that employers, it's high time employers became victors, not victims and certainly their people as well.

I was going to go the other way and say, so what you're telling me is you guys built a romantic health plan.

Hey, you know what? A little, little rom com goes a long way.

Right?

Let's talk about. So you, so you guys are in the self funded space. And one thing I want to talk about with you especially is, you know, when you look at the self funded world in the industry right now, number one, I think there's a lot of advisors out there who are trying to do the right thing. But then they start diving into the world of self funding and see the complexity that is involved with it. And it does cause some advisors to like just, I know I want to do this but it's still easy just to sell the all bundled in one package. But we also see advisors who are going down that path and they're just kind of putting things together nuts. You know, like they're like they're putting Frankenstein together. Right. And they're putting all these pieces of a self funded plan together, they may not all work well together. Let's start here.

If I'm an advisor who wants to build a health plan for my clients, help my clients build a health plan plan for the end consumer, the employee, where should they start?

That's a great question. So. And for all the advisors out there, many of whom are, have radically changed the way they advise clients and kudos to them. I meet them every day, as do you Andy. And these are folks who have dissembled, sort of dissembled the components and they have built, you know, sort of curated this, this artisanal erector set because they understand that the current system is broken and you know, but, but then they are, you know, you know, you, you, it's when suddenly, you know, you're moving from having the painting done or at least the paint by numbers done for you, you're actually doing the full, you know, the full portrait. And that can be really, really tough. So one of the things that we realize quickly and maybe the advisors on the call here can relate to this is that while there's great latitude and license in being able to use existing components and pieces and sort of putting a mosaic together for a health plan that drives lower cost, better quality value, better member experience.

Those kinds of things, it's a lot of work, it's a lot of moving parts, there's a lot of coordination, integration. You can have multiple contracts. When things go well, it's great when they're maybe not going so well, lots of finger pointing. So we actually addressed that in the construction. We actually thought it was a failure point. We didn't want to bag advisors with that. We felt like, hey, can we achieve the same sort of comprehensive integrative offering where it's really just one, you know, one entity to hug us or maybe one throat to choke? Hopefully not. And make it easy, kind of have an easy button. However, recuse ourselves from what we saw as legacy system components and legacy system economics, sort of whole cloth pieces that just, you really want to, want to build a house, you know, from. So that's, that's kind of, that's sort of where we are. That's how we came into this. And then just to your original question, in terms of, you know, being maybe having some trepidation around self insurance, I think we make, we make everything that we do as easy as possible. We actually do a lot of hand holding and I mean that in a positive way. Collaboration, walking arm in arm with the advisors to help them move Clients from fully insured to self insurance. And it's one of those things that's not as scary as it sounds like if you're going to move to self insurance, moving with a vehicle like ours that has significant cost suppression for the plan and people makes it a lot easier. So it takes the whole, well, you know, is the juice worth the squeeze off the table?

I was going to ask you that. That's actually a really good point I'd love you to expound on, which is.

A lot of employers out there, they just hear the phrase self funding and they go because a broker has told them not to. They've heard about too much risk, all this stuff. If you're an advisor who is trying, because we're in renewal season right now, they're trying to, maybe they're trying to get some of their clients to move to a self funded model. Maybe it's winning a piece of business with a self funded strategy. How can advisors better, I don't want to say best better. Better help employers make that paradigm shift that it's okay to move to a self funded plan.

So you know, there is the, it's, it's, it's having the skill set as a coach, as a consultant and some tough love, being educated. Of course, I mean they're going to have to be educated about self insurance, which isn't difficult to do, but being skilled in helping to deliver that education to their client to move them along this continuum from being comfortable with the devil, you know.

To down the continuum to alternatives that can really be liberating and create freedom, create control and allow them as fiduciary health plan sponsors to do the right thing for their plan participants, which is actually the raison d' etre for having a plan. They, they must do this. So I think it's probably there's a couple of two, three tenets in this one. They need to, I'm assuming they need to, you know, present the case well and we'll help them do that. So what does current state look like? What is what risk is being transferred? What's that cost of insurance and what's the freight on that? And then what does self insurance look like? And really when we're talking about risk, financial risk or exposure, what is that and how do we quantify that in a way that, that, that, you know, that gets that client or that prospect to say, oh, oh, this is why so many of my peers went to self insurance a long time ago, are going to self insurance now, or have told me wherever at lunch or the golf course or where have you that they're planning to do it, you know, in the near future.

So let's, let's talk about, if you don't mind going into the details a little bit because then you get part two of this, which is an advisor going okay, cool. I know I should, I know, I know I should talk about this more because I think that's, that's problem number one. A lot of advisors, if they're not comfortable in their own knowledge, they're not going to talk about it. And what they're, what they're, what they're missing is an opportunity to bring somebody like you in who is an expert in this field and because they feel like maybe they're losing a little of the thunder by bringing someone else in. But at the end of the day what they're doing is they're enhancing their credibility because they're bringing the right people to the table. Now the question I get a lot is what? You know, self funding as you and I both know is just a vehicle. It is not the destination. It allows you to create the strategies you can create to help your clients not only contain cost but give their members good access to the system, healthcare system. So my question I, the question I get a lot Neil is well then what, what should I have in a good self funded plan? Like what strategies should I have? Because here's, I want to bring this up before you answer the question. I see a lot of advisors who throw the kitchen sink at a self funded plan. It works, they save 30, 40% but at the end of the year they get fired because they did too much, they threw too much, there was too much confusion. Even though the strategies actually worked. When the members are frustrated on how to use them at the end of the day the management team making the decisions are also frustrated. Even if you did what you promised you were going to do, so how can an advisor, what components of cost containment should an advisor start with when building the right, an effective self funded plan?

So I mean it's a great question. Let me give you a one sentence preamble. I actually no one wants to hear this and, and as a person who wants to sell our health plan, you'll be shocked I'm saying this but I would tell you that one or two cycles and unfortunately in the benefits world this means years.

You know, our kingdom, right? To be able to sell365 and to move somebody on any given day. But plan years are plan years. It really takes education, discussion in the seeding S E E D E D C.

This education about the opportunity, you're not going to do it in some compressed at time of renewal when they get their current renewal and they've got three weeks. This is not lost on advisors. That's when it can go horribly wrong. And then you conflate that with, as you said, throwing a whole bunch of a box of pieces and parts at this and expect that their executive team and their HR and benefits team are going to swallow this. So I know that sounds strange from somebody who would like to sell something tomorrow rather than one, two years from now, but for cost containment. Let's get into that again. This is going to sound rhetorical, but I can't tell you how often it happens. You cannot get fixated on fixed cost. Don't get fixated on fixed cost. The lion's share of cost in any plan, you know, any plan, especially when you're moving, you're actually laying it out on the workbench for self insured opportunity is not fixed cost. By fixed cost I mean administrative fees, you know, fees to administer the claims if you will and stop loss. That's fixed cost. Oh my goodness, maybe 8 12%, you know, of the cost of the plan. The rest, you know, not surprisingly, is claims. It's claims. And so, you know, there's supply side pricing and payment to claims and there's utilization. How much is being used? It's just, you know, units, time, volume. So we really want to construct plans that focus. I tell you again, the first and foremost thing is it's the price, stupid. You've got to get to a different payment point. You just have to, you'll have people that are, are willing to sort of do what I call, you know, just a little bit of change. And that's okay. That's okay. I think sometimes when plans achieve only a little bit of savings when they go to self insurance, it can, it can feed that, that sort of, hey, you know, we can still go back to fully and being fully insured, we're not getting that much benefit. So it's that balance. You've got to figure out how to drive enough cost savings without, you know, coming in and radically overhauling things. And so we've got a kind of a, what I call kind of a flagstone stepwise approach. It's a kind of a durable chassis. So we could act, we could have someone come over to us and we'll run a self insured plan with a national network that's, you know, comfortable. Maybe it's familiar you know, it gives that sort of member comfort, gives the client comfort and then we can graduate them. And even in the first year we could also offer a dual option. So our fair market payment plan, which is the answer to what I would call sort of old school RBP plans and BUCA plans, you know, for cost savings and let people decide at enrollment and then graduate them to plans that save more money for both the plan sponsor and members over time. So I think there's a. You kind of got to meet the client where they are. It sounds so trite and cliche.

Well no, I think your point's well made because I think a lot of people feel like they're going to come in and right away change a group to the self funded platform. And sometimes that takes a year or two. And I talk to advisors every week who feel like they've got to move them to self funding to win the business. And my message is win the business and then become the man or the woman that moves them to self funding in the next year or two. But let the cost containment strategies drive your three year plan. You're not going to put all five in this year. Start with one or two and every year add on a new strategy that if you want it to be effective, that is how you got to do it. Quit trying to do so much so quick and just work on one thing at a time and get damn good at that one strategy.

Yeah, I think.

The caution there is that and they're kind of two roads to take here. And so maybe a little self serving. There's the hey, I want to work in kind of a traditional environment. This is the advisor thinking to him or herself. And so which could mean that they're going to stay with a BUCA like network, you know, Blue Cross United States, you know, Sigma, Aetna, etc, and as you said, they're going to sequentially add on some control, they're going to try to do some steerage to lower cost, higher value providers, they're going to try to do something with pharmacy, they're going to. But there it still is a collection of entities and I will say vendors that need to be managed to make the whole greater than the sum of the parts. And it can, it can still been used. You and I are fans of using the term Frankenstein and trying to get the monster to behave. It can work. I think ultimately.

You know, the other path, and this is what we do is to jettison most of the whole cloth components because we wanted control at the subcomponent level. Whether it's claims paying or prepayment integrity or, you know, pharmacy overhaul, we needed component level, subcomponent level control. Sort of like building a custom car. I mean, you know, if I can mod the engine, mod the transmission, you know, do something with brakes and handling, it's a lot different than if I'm just getting, you know, whole cloth pieces. If I'm really going for optimal performance and the experience, the driving experience. So I think there are two paths. Obviously we'd encourage, you know, our path where it's all integrated. There is, there's literally, it's like you're buying and I hate to use the analogy, but it's apt. You're, you're working with a fully insured plan that's been completely optimized from the bottom up to drive the kinds of savings that you would see way down the road, maybe with the sort of, that collection of parts and pieces. Probably not, not even getting there or with the, you know, sort of pay and fight sort of, you know, Hellraiser RBP plans.

Well, and I will wrap up because I'm going to let you do a little pitch here at the end about Vittori and what makes you guys different and why advisors should reach out to you guys. But the example you just gave there saying Frankenstein, but I'll use a better one. You and I are both cyclists. A lot of people, a lot of, A lot of people in the cycling world love to go buy the parts and build their own bike. That ain't me. I'm gonna go to the bike shop and find the bike that's right for me that's already built. And that's, I think the analogy you're using there is Vittori, is that bike already built. Quit trying to put the pieces together because, because that takes longer. They often don't work in conjunction with each other the way you want to. Why not just go to the bike shop and find the bike that's a fit for you? And that's, that's Vittori hell. So let's wrap up here with. Tell us a little bit about Vittori. What, what makes you guys different in the, the self funded world and how can, other than your email address right here, how can advisors reach out to you guys right now?

Sure. Absolutely. And I love the cycling analogy. I think it makes sense. And it's all about, you know, it's about having a bike that you enjoy riding that's friction free, pardon the mechanical pun there.