Discovering the Hidden Costs of BUCA Black Box Insurance

Good morning, everybody. Welcome to the NextGen Ultimate Sales Kickoff Conference. I'm going to talk this morning about deconstructing a fully insured health plan and what the BUCA black box is. Um, I think you're probably familiar with the idea that a lot of money goes in and maybe not as much money as should comes out the other side. So we're going to talk about how that happens and some things that you can do about it. And how to talk to your employers about it. So what is the book of black box? So this is everything that is in the black box. Really, it is all the components of any health insurance contract— fully insured, level-funded, captive, pay-as-you-go, self-funded, whatever you want to call it. Every plan has these components or a version of these components. So when you start down here on the bottom, this is the third-party administrator. Ultimately, a carrier is only a third-party administrator. They set the plan rules, they administer the plan rules, and they process claims according to what the plan says it is going to pay or not pay. Then we've got a pharmacy benefits manager. Insurance companies do not manage that themselves. They're mostly vertically integrated in that they own their own PBM, but there is a separate pharmacy benefits manager that administers drug costs, what's covered, what's not, how it gets paid for, what needs PA rebates, manufacturer coupons, all that kind of stuff. Then you've got medical management. Every fully insured, level-funded, self-funded plan has medical management. Sometimes it's effective, sometimes it's not. In the fully insured environment, it's almost never effective. You've got reinsurance. Big insurance companies have reinsurance. They do not take on all of that risk by themselves. So even in your smaller groups, there is a reinsurance policy that is protecting the carrier. Then you've got a network, right? That can be any carrier. There are rental networks. There's a zillion networks. Some of them we know, some of them are a little less famous. Not necessarily household names, um, but you can access that. You may choose something different, but a fully insured plan will have a PPO network. And then you've got program manager, coordination, service, sales, marketing— that would typically be an advisor. So you've got big box advisors, the Marshalls, USIs, Brown and Browns, of the world, and, um, those are typically the big box brokers. As you see from this slide, a Next Gen health plan is exactly the same, but the components probably look a little different. So let's talk about that for just a second. Maybe. Okay, so When you unbundle a plan— and a NextGen Healthcare plan is an unbundled health plan— basically you are replacing each of these components with an entity that acts in the interest of the employer and the employees. So you're going to use an unbundled third-party administrator, you're going to use a transparent and pass-through pharmacy benefits manager rather than one of the Big Three, You are going to use medical utilization management. So the important thing to remember here is that you are engaging not just in a financial transaction, but you are engaging in a clinical transaction as well. Not only do you want to make sure that the service is priced right— in fact, that should be the second, third, or eighth item that you're thinking about— you want to make sure that you can get your plan members to a high-quality provider, because not everybody is, and I think we've all experienced that. NextGen Stop Loss— you want to work with a stop loss vendor that is transparent and knows how to underwrite for the solutions that you're putting in. There should be stop loss decrements for proper medical utilization, for transparent PBM, for for an independent third-party administrator, as well as some other things we're going to talk about. Next, you've got a provider repricing mechanism that may be a PPO, or it may not be a PPO, or it may be a combination of a PPO and some other services. So typically in an unbundled health plan, you might start with a PPO. You may or may not move into reference-based pricing, and you definitely should be considering direct contracting. Direct contracting, I feel, is the best of both worlds. You've got a fair price for the provider— the provider sets the price. You've got fair payment terms for the provider, and those payment terms are typically 40 to 80% less than what a PPO will cost. So if you've got questions, we'll talk about that in the Q&A. And then next, you have, um, healthcare supply chain management. When you create a plan like this, this is not a throw the thing out and forget it. This is making sure that the vendors are working together properly, that the vendors are delivering what it is that they have promised, that you've got good communication tools for employees, that they know who to call and what to do. That's not a one-time throw it at the wall activity. That's an ongoing activity. And it— the function is a little bit different than a traditional broker. As somebody that has done both traditional BUCA plans and still does some traditional BUCA plans, and somebody that builds unbundled plans, I will tell you that building an unbundled health plan and watching people get their drugs, watching deductibles go down, watching premiums stay the same or get reduced for employees, and helping them get access to high-quality care is very satisfying, but it is a different type of work. All right, so this is the complete picture. Unbundled third-party administrator, transparent and pass-through pharmacy benefits manager. A quick tip here: if you are working with a pharmacy benefits manager, you want a contract that's 8, 10, 12 pages, not 35. If you've got a 35-page contract, you probably don't have a transparent and pass-through contract. Medical utilization management Deb, AIM was just talking about that a little bit ago. There are some other vendors, but AIM is probably the gold standard there. Next-gen stop-loss— there are some great stop-loss opportunities. You can have a traditional self-funded stop-loss policy, you can move into captives, you can do single-parent captives, you can do a whole lot of creative things to help stop-loss insurance become not just an expense, but you can conceivably turn that as an asset onto your employer's balance sheet. And it's very interesting what happens when you tell an employer that you're going to take this expense and flip it into an asset on their balance sheet. They typically like that quite a lot. Provider repricing mechanism, we talked about that. And, um, healthcare supply chain management, um, that's the whole pie there. So it works like this: communication strategy first so people know what to do, and it wraps around all of the components of the plan.. It wraps around the TPA and the pharmacy. Most importantly, the utilization management. Stop-loss is typically something that is only an employer conversation. The provider repricing mechanism, it's important that that work properly and that you communicate whatever an employee needs to know multiple times. And then you try to— you have to communicate your own strategy for managing all of this. Next, you need somebody to advice and somebody with some experience on what happens in the black box situation of a, of a carrier plan and how to unbundle that and make it work for an employer. Then the next thing you've got is a plan sponsor. So you need to make sure that your plan sponsor is on board, and, um, that is the complete picture. So it's a pretty easy concept. It is deceptively simple and very satisfying to help an employer walk through this journey. And I'm going to bring on the panel in just a second, and we are going to have some interesting perspectives on people that have unbundled self-plans, and we're going to talk about their most interesting experiences with employers, how they explain it to employers, how employers typically respond. And we're very fortunate that we have Terry Shook with us today, and we might get a nugget or two about what happens internally at a carrier in a renewal situation. And I think that is always surprising to people. So we've got Terry Shook from Premium Risk Strategies, Paul H. Flowers Jr. from Superior Insurance, and Rachel McLachlan from Evergreen. Welcome everybody.

Hello. Hello.

Thanks.

Did I do it right with my explanation?

Spot on. Great job.

Okay, so, uh, Terry, I want to start with you, and I want to talk about, do employers ever understand what's happening with their fully insured plan? And can you talk a little bit, as much as you're comfortable, about internal renewal conversations at a carrier? Sure.

The first part of that question is, do they ever understand the inner workings? And in my experience, both as 20 years as a BUCA executive and as my experience as an advisor, I would tell you they don't. A big part of that is probably the broker they're working with who works primarily with BOCA, they don't understand it either because they don't have to. They're not paid to understand that. Their focus is on new and renewal sales without understanding how the plan, how the program works. A little bit about the inner workings, particularly at renewal. If you're a BUCA broker, you probably know this. You may not know all of the inner workings, but most BUCA plans allow some level of executive leadership within their organization to actually impact rates by manipulating them. During my time, it was a common practice to allow someone outside of underwriting, an actuary, to have an impact on the rates that are different than what the risk actually calls for. That's a really fancy way of saying that a lot of times I reduced rates on certain groups and took that reduction and added it on to other groups. And that is a common practice that happens all the time.

Can you talk a little bit about why that happens?

Wow, OK. The basic premise is it's called marketing intervention. And it allows the executive who is, you know, face-to-face with the marketplace to be able to attract and retain business for reasons other than actual risk of the business. So it's a marketing ploy. But I'll also tell you that in my experience, the majority of that action was taken because of politics and favoritism to certain brokers. If you're listening to us today and you're not one of the big box brokers, I will tell you that in my experience that it was commonplace to discriminate against you for their, for their benefit.

So, Rachel, how do you respond when that happens to you? Because I know it has.

I don't know, I have like a million things going on through my mind right now. You like opened up a black box that you may not be able to like stuff stuff back inside of it. Um, I do find it funny in the sense that, um, I have definitely sold against brokers before, especially from larger national agencies who advocate that they can have a better renewal for their clients than I have. And I'm like, that's bullshit. Like, there's no way that's possible.

And yeah, well, I'll tell you that. Yeah, I'll tell you that, um, if I were in that position with you, I would absolutely deny that I played favoritisms with the big box brokers, and then I would not tell you the, the real truth is I did.

So, so have you had any conversations? And I'm going to throw this out to all of you. Um, I've been having more and more conversations with people who are like, I just don't understand, we're a healthy group. And they typically are not terribly ill, or they don't have necessarily big claims, and they feel that they're being penalized. Is that when you open the door to the conversation about unbundling their health plans?

Well, I'll hop in on that one. The basic understanding is when you talk about the risk pool, and so you have the dirty pool and the clean pool sort of thing. I've watched employers literally not necessarily go to tiers but get very, very upset when they see a 15-20% renewal. And like you said, with a relatively healthy population, they don't know why. So I just share with them a story, and, you know, not to put any of those national brokerages out there, but I did come from one of those, uh, on how we sat in a room with one of the, you know, buca carriers, and they literally negotiated which company would get what type of renewal., and it had zero, zero, big fat zero, uh, to do with the health of the group. It was literally whether or not the broker liked the company. I had one broker say, man, this particular HR staff, their C-suite, they're a pill. They can take a few more points. They did really well from a sales standpoint. They actually had a banner year. They're okay with taking 15, 18%.. And I'm just sitting in the back like, oh, this is how it's done. Okay. So when, when I share that story and the truth ultimately begins to come out, it then, like you said, opens up the door to how you can actually begin to deconstruct— excuse me— how you can actually get a deconstructed plan that's for their benefit, not for the broker or the bukas. Their benefit, right? So there's a few pieces at play. And Allison, on that last slide that you were going through, you saw right in the middle was the patient. That's where, from a NextGen perspective, that's where the focus should always be. And I think that, and again, coming from that big national brokerage, we lose sight of that. And I won't say, you know, I'll put myself in it because I was in it. We lose sight of the patient, but instead take the instruction from up above to sell a particular type of plan. And I'm sure as we continue our discussion, a little bit more will come out. So I'll pause on that one and turn it back over to you.

So, Paul, I want to give you a good example of a real-life example of that goes along with what you talked about. And I love talking about this, but I once gave a regional beer distributor a 30% rate decrease because I liked their beer.

I love it.

And I—

let's be honest about it.

And the— of course, the important part about that is an understanding is that I had the authority to do that.

Terry, you— and we want to talk with you offline about a little bit more of these stories, but for everybody listening, he liked their beer. And their rates went down. I hope that is crystal clear.

And don't forget, if their rates went down, some, some other employers' rates went up, up.

Balancing, reducing overall profits, you definitely want to have year-over-year increases in terms of profitability. And it has to come from someone.

At the end of, at the end of the day, my book had to balance.

Exactly.

So, but I wanna, as I want to point out Paul's point as well, that it was happening not just with the carrier, it was happening in the broker's office. Who was easy to work with? Who wasn't easy to work with? Who do we like? Who do we not like? And I, I think to a certain extent, I think that's just life, right? But I also think that it's worth understanding that that game is being played with your health insurance renewal. Most employers don't think about that.

Yeah. And, and to pick up on that, it's extremely important as a broker to understand how the black box works from the inside, the 6 components. And to further understand, those same 6 components are the exact same components that we use in NextGen strategies. The difference is you help the employer control those 6 components to work for the employer's benefit instead of them working for the carrier's benefit.

Rachel, can you talk a little bit about how you broach that conversation with an employer? Because it can be a hard conversation to have.

So, I actually dumb it down a lot. It's very funny because my team like laughs at me the way that I explain it. And I do this literally in meetings with clients, prospects, because I think it's the most simplistic way for them to understand the differences in funding mechanisms. Because to your point with your last question, Allison, when somebody's a really good risk and they're like, why the heck am I still getting increases? I always suggest to employers, when you are a good risk, it's like having an 800 credit score. Like, that's when you should be shopping mortgage rates. You don't want to do it when you've got a 540 and you've already been declined by 15 people, which I think is like the biggest shift we need to make in employers' minds is like, just because things are working doesn't mean we keep it as status quo. Because that's the time when you're like, I need to explore other options. I've been working so well that I should probably see if there's something else better out there. So the way that I explain it to employers, and I'll try and do this in the quickest way possible, is basically doing an analogy where— and sometimes I'll actually pull out money onto a table, which is kind of funny— but I'll get 4 quarters and I'll be like, this is your fully insured premium for these 4 quarters. A carrier basically will take your, you know, claims costs, admin costs, you know, their profit, and they'll tell you how much healthcare they think you're going to consume. They're a casino. The house is always going to win. So when you take those 4 quarters, you are giving them to the carrier. That's the premium that you're paying. You have no anticipation of getting any of that money back, but it's 4 quarters. It's predictable. You know, you won't have any harm, any foul if you have worse than expected claims, but that's fully insured. With level funded, you take the same 4 quarters and the carrier keeps, let's say, 3 of them, because most of the time, you know, with level funded it's like 60% for fixed costs, right? So we'll say 3 just for safekeeping. One of those quarters is actually your claims cost. Now instead of fully insured where you have no idea where your healthcare cost drivers are coming from, with level funded at least you'll get a little bit of a peek underneath the hood to see where your health— high, you know, care cost drivers are coming from, what drugs you're on. You can basically start to see what's going on. And that's really just a way for you to be able to see how healthy of a group you are in a lot of different ways. Similar to fully insured, it's the same though, that if your claims are worse than expected, you have a fixed premium, no harm, no foul. The positive for it is if you have money left over at the end of the table, most of the time you get to share in that savings. So maybe 50% with the carrier back. With captive, I like to tell them maybe it's like 50/50 where, you know, 2 of the quarters are fixed premiums, 2 of them are for claims. Explain it the exact same way. You have a little bit more risk in it, obviously, because you're self-funded, but similar to a fully insured, you have that pooling point, you have that stop loss. And so it's almost like having a specific deductible with a pooling point. And so talk about that. And then self-funded, I'll say 1 quarter versus 3. Obviously, the lower your fixed costs are, the more opportunity you have in order to get more of that money back, right? And so I try and dumb it down as much as possible. And people laugh at me when I pull out quarters, but I'm like, this is the easiest way I can explain to you because it's the same amount of dollars. It's just split a different way. And one of them you have a potential to save money and one of them you don't. And either way you have a risk. One of them is just a more calculated risk.

How do HR teams typically respond when you, when you frame it in terms of risk?

Well, first off, they tell me they've never seen anybody do what I do. They're like, nobody has ever pulled up 4 quarters. I'm like, why wouldn't they think they have? But they also like love the fact that I'm including them. So obviously, I'll talk to CFOs, obviously, I'll talk to HR managers. HR managers actually love it when I explain the risk to them because they're like, nobody has remotely once explained this to me in the way of a risk. And nobody shared that with me. They talk about the fluff of like, What about your wellness and trying to make your employees feel better and attracting and retaining? But they're like, nobody explains it to me like I'm part of this decision-making team, which I am. And if I understood that it was a risk and I understood that the risk was calculated, I wouldn't be as scared of it.

I firmly believe that you cannot do what we do without the support of HR. And I think sometimes we kind of leave HR off to the side and then kind of drop this thing in their lap. And then they're expected to deal with it. And we have no idea why they're upset with us. Can you, can you, maybe Paul, can you talk a little bit about how you manage that conversation? Because I've never heard of the 4 quarters and I gotta tell you, I'm going to steal it. Just, just so you know, I think it's excellent.

Good.

It's a very simple, clear way of helping somebody understand risk.

Well, I think Rachel had the phrase down pat, which was dumb it down, and not saying dumb in a disrespectful way. However, when you take into account that there are various learning styles, I'll literally ask a person, how do you best learn new information? And I phrase it as new information because it's going to be something that they normally are previously hadn't had the exposure to. Uh, Rachel, you, you use Four Quarters? I literally bust out the black box, right? And then within that back black box, we've got the pieces to it. And what I'll do is go through and talk about each piece and then swap out a box. And when I swap out a box I'll show them their savings, right, with a stack of money. And this way they can actually, from a kinesthetic standpoint, from a visual standpoint, from an auditory standpoint, they will be able to understand exactly what's going on. So to the point of risk, dumbing it down and being able to attribute, hey, look, you might learn a different way. I know it seems kind of silly, rudimentary, but much like Rachel said, they will remember you and more importantly, they get it, they get it. And as long as they get it by the time I leave, whether they buy today or not, I've done my job. Which, if we're truly taking this on from a patient-centered standpoint, then what we should be doing is focusing on the education, not the commission, not the payment on the back end. And I think coming from, from that perspective, it really helps both the HR, C-suite, CEO, CFO, all of them to understand that integrated approach to how we rebuild these prayers.

Terry, are you like me and we're doing traditional conversations? I think we need to pick up the box and the quarters.

That's ingenious. And yes, I'm going to use that too. My approach, and I totally agree, This, this isn't as hard to understand as the BUCAs want you to believe. Um, and it— the one thing I want to say to our audience, which I'm assuming there's a good number of BUCa brokers in, in the audience, what we're doing works on any size group. And I'll give you a live example of that. And part of this is the traditional speak of, well, we're too small to be self-funded. My smallest self-funded group is an electrical contractor of 5 employees, 9 total members. He's been on a plan like this for 5 years. He's got a claims refund every year but one.

It works.

That should be typical.

Yeah, exactly. And it It works on any size group. Don't be afraid by traditional rumor that this strategy isn't for everyone. The only, the only groups that it may not be good for are the groups who don't want to save money.

So I have a wild card question. What is the most interesting most outrageous, head-scratching response you've received when you've asked, maybe not a tiny employer, but maybe somebody 100 lives or more, why they're not self-funded?

What's that?

Yep.

So mine was, I was talking to a woman and it was not a business situation. And finally, she She asked me what I did and I said she worked for— she was the CFO of a company that had 4,000 employees. And she said, oh, our broker told us we're too small to be self-funded.

4,000 employees, you said?

4,000. Wow. So anybody else have any unusual comments, responses from employers? How do you— I think it's one thing to help an employer understand what self-funding is, but to get them, hey, I understand what the quarters are, I understand how the box works, but I still don't want to do it. How do you overcome that?

You know, in my experience, particularly the last couple years, if I've gotten to that point, it's that I probably haven't explained the risk to it, and most importantly, help them understand that our strategy, Next Gen strategy, is absolutely— and, you know, Nelson mentioned this this morning in his opening talk. It's no more risky than being fully insured. And to that point, I'll show them how fully insured works. And in fact, within their— in their own black box, there is a reinsurance or a stop-loss component to every group that's fully insured. The only difference between being fully insured with a BUCA carrier and doing this without them is if there is non-spent claims fund money at the end of the year, the employer keeps it. If you're fully insured, the carrier keeps it. There's the simple truth of what's different.

Rachel, how do you handle those conversations?

So I think a lot of times, and you do get the objections, right? Even when you feel like you've explained things very well and you get the buy-in, I think that it starts from the beginning of the conversation. Like in discovery, I almost never talk about insurance tools or products. It's so funny because people will be on meetings with me and they'll be like, I don't get how you like didn't talk about any like solutions or anything. And I'm like, people buy from people they like and trust, right? And people only work with us because of what's between our ears. And no two brokers have the same ideas about what you should be doing, and no broker has the market on the corner of good ideas. And so I think oftentimes just sharing with people the fact that the 12-month reactive cycle of you know, you've got a January 1 renewal, September rolls around, you find out you got a 15% increase and you're like, oh shit, I've got to like look at my different options. That's like a carousel that you can't be on all the time. There's no long-term sustainability in that. And I think if COVID taught people anything, especially like in the business world, it's that like there is no such thing as like a sure thing. And so I think many more people have been open to the conversation. When you frame it as, you know, we're going to get away from the 12-month reactive, and we're going to put you on a 3 to 5-year glide path where we're basically helping you to chart your own course. Are you gonna go, you know, excuse my French, like balls to the wall year one? Maybe not. But like, we're going to start to make incremental changes so that we can do two things for you: help you to have that long-term sustainability of good benefits, and have more control because self-funding really is the only way you can have control of it. And secondly, help employees to be better stewards of their healthcare dollars since they're the ones who are driving the cost. And right now, as you're having to figure out your renewal increase, you're either thinking about shifting costs to employees, the employer taking it on the chin, or making benefits worse. Like right now, you've got 3 bad options. What's the harm in looking at a fourth that potentially is an upside? And so I think when you frame it and like really give people the lay of the current land and like the fact that there is no going back, the days of the zero, you know, $500 deductible, like those days have disappeared. So like, how do we figure out the new normal in order to have much more control and chart our own course?

Paul, are you framing the conversation the same way, or are you framing it a little bit differently?

I was going to say, you all are so kind. So I come from a— I have my Series 6 and 63 and come from fiduciary standpoint. I look at it as carrot and stick. I express to them that because of the media, televisions, telephones, all this stuff, employees are catching wind, right? YouTube, you can hop on there and you see Fat Joe talking about the issues with healthcare. Well, once we bring up that Johnson Johnson lawsuit, it becomes a little bit more apparent that someone needs to do something before the rest of the people find out. So I like the way that you all frame it. I'm, I might just be a little bit more in your face about it, where if you don't do something different and your employees find out, somebody's going to be in trouble. A lot of trouble. Exactly.

And by the way, it's not the carrier who's going to be in trouble because they do not have a fiduciary responsibility to the employees.

Um, we got a question, and I, I, I know I'm not one for really round-robin questions, but I do want each of you to take an answer because— a crack at this because I think your answer it's going to be a little bit different. How about the dreaded, we got a 0% renewal, and, you know, maybe say we got a 1 or 2% renewal.

Terry, I'm sure you're going to laugh. Yeah, I'm laughing because in the carrier world, truly, there is no such thing as a 0% renewal. If you got a 0% renewal, That means that your claims experience was so favorable that they could get away with just giving you a pass rather than the traditional some sort of an increase. If you get a 0% renewal, run! Go find something like what we're doing because you're in, you're in the best position economically and by risk that you could probably be in. There's no such thing as a zero renewal.

Rachel?

It's similar to them— well, similar to Terry, but also similar to the mortgage thing where I tell you if you're getting a 0% renewal, that's the best time to look at other options because somebody else wants the business. I also tell them you're so good of a risk, you really should be getting a 30% reduction probably. But because they know you'll stay at 0% because it's a path of least resistance, they're willing to give you a 0%. And oftentimes people are like, what do you mean I should have been getting a 30% reduction?

I think that, that, that's what I was— I think that's really key. People don't understand that when they get that 1, 2, 3, that, that is the time to run. It's somewhere, anywhere, even if you're running to another buca, right? Because that buca will buy that, right? And that may not be the best long-term solution, might be a good short-term solution. But, you know, go get some money back somewhere. Are you having that same conversation, Paul H. Flowers Jr.?

I apologize ahead of time for the pop culture reference, but what I share with them is winter is coming, right? Winter is coming. So if it's zero today, zero tomorrow, oh, you're getting set up for something massive going forward. Again, with educating them on how those risk pools work and also sharing the story about how the negotiations behind the scenes work, I tell them it's only a matter of time before your time is up. And again, it's kind of straightforward to them, but I've seen it before where companies had very low renewals and then boom, out of nowhere, 25%. You're like, but wait, we were doing so well. Well, I told you, winter is coming.

Have you ever had the conversation, any of you, where the renewal isn't awful? It's not great, but it's not awful. And it's when you're competing for a piece of business because you would know this otherwise. And an employer has been told, well, our claims are so bad, or we've had— we had this one cancer claim and they really took it on the chin for us. How do you respond to that?

I, first thing is I'd ask them to show me the data they got from their carrier, uh, because I can guarantee you it's opaque and, um, probably doesn't paint the most factual picture.

Mm-hmm.

Sometimes I'll, if that happens, I'll request the renewal workup, which they don't always give you. But if they do, I can see how many claims were actually paid above the pooling point, and I can show them like, you didn't even have any claims that were above this, or you did, you had one. Okay, not really justifying, you know, the increase.

Do you ever address the cost of care in those situations?

That, that's where I was headed with that one. So Realizing that you can have a cancer treatment for $150,000 versus that same cancer treatment for $15,000 makes a difference. And in sharing that, I literally have pulled out the— I've got some documents that have shown cost of care in Place A versus Place B versus Place C or D. And with such a drastic difference, from one to the other, right? It's really eye-opening for them to see that they could have had that care for less had they had the proper care management in place. I think you mentioned before, uh, AIM being the gold standard. Uh, absolutely, absolutely. Having that care management that can use the tools and tech that are done behind the scenes in order to actually say, hey, this doctor has a quality score of 18 and it's likely going to lead in some sort of, you know, the patient coming back to that doctor for additional care needed versus the physician that has a quality score of 99, and they're going to get it done right the first time, right? So just again, relying solely on education to be able to give them the, the right insights.

Yeah, and it's, it's good to understand too from, from inside the black box of the carrier what medical management is. And medical management is usually nothing more more than a nurse counting bed days to reduce inpatient hospital stays versus what we do. And with AIM as a good example, we're really helping with cost and quality issues, patient safety, as well as making sure that they're not being overpaid.

So how do employers respond to you when you talk about health and quality and safety. I think some employers respond very well to that and some do not.

Yeah, I have a story that I've put together. And I actually put it together right out of boot camp, NextGen Boot Camp. So here's my, by the way, here's my advertisement. Everyone listening to this, if you haven't been to boot camp, you should check it out. Okay, so I'm done with that. My story talks about a situation where your spouse has a heart attack and going to need heart surgery. And I ask, how do you choose a heart surgeon for your spouse? And of course, the general answer is, we look it up on the internet. I kind of then insert the fact that I start a statement and I say, if you think about it, aware of that half of the doctors in the United States are below average? Um, stands to reason if the other half are above average. You know, it's simple math. How do you get to those above average? And that's when I explain what AIM does and how they look at at outcomes, um, and as well as cost, and, uh, pay particular attention to— now we're talking about patient safety. The doctor you choose may be the difference between life or death. It may be the difference between whether you have a second surgery or a second hospital admission. So you need to know those things. Not all doctors are created equal, and that's just a fact.

So we have just about a minute or two left. Will you each give me your best advice for how to talk to an employer about, about this subject, right? That you have no idea what's going on in here and you would like to get you over here where you can take more calculated risks and when to push and when to walk away. Rachel, you want to start that?

Sure. Um, okay, so what was the first part of the question?

How, how you, how you know how to talk to an employer about this risk. Okay, you're going to talk to them about it, but how hard to push and when to know when to walk away, and either walk away from a prospect or just leave somebody in their buca environment. I have 3 clients with one particular buca and I could vomit, but it's the right thing for them.

Yeah. Well, so I think that you're exactly right, Alison. I think that it's listening to people and meeting them where they are. I think it's really easy to push your own agenda and what you think that a group should do, but if they're not ready to go there, chances are you're losing the business the following year anyways, because the moment shit hits the fan, everybody's blaming you because they didn't want to go there anyways. And so I think it's super important to understand what the culture of a group is. Are they super paternalistic? You know, you're not going to take somebody from fully insured to reference-based pricing, rip off the Band-Aid all the way, and, you know, their employees don't have a high school education and you're doing no communication. To our, like, pictorial from earlier, like, you can't— you have to know so much about the group before you make recommendations to them. And when you do make recommendations, it has to be like a group effort. I think the walk away is when— here's the only time I really walk away. It's not when somebody doesn't go self-funded and I want them to go self-funded because I think it's what they should do. When I walk away, it's that somebody's philosophical ethos with the way they treat their employees doesn't align to how I would treat my own.

Yeah.

And I firmly believe that if you just want to have bare bones benefits and you don't care how your employees get caught in the crossfire, I don't care how much commission you make me, I'm not going to bed good at night and I'm not laying my head down and feeling amazing. And so I think that the only walking away is when I don't really agree with the way that people treat their employees.

Yeah, I would agree with that. Paul, Terry, you want to weigh in there?

Sure. I'll refer to Exhibit B here, Dale Carnegie's How to Win Friends and Influence People.

Well-read version, right?

Continuously learn how to connect with people. And like Rachel said, if it's not a match from an ethos standpoint, like if your heart's not in the right place, we don't need to do business because like you say, you'll lose it anyway. But ultimately, being able to just simply communicate with them from a heart-focused place, from a patient-centered place, should make the difference. And if they don't feel it, hey, there's always next year.

Terry?

I go back to what Rachel mentioned earlier. And of course, the first thing is, is the client or the potential client has to know, like, and trust you. So if you haven't established that yet, you should slow down and work on that. Um, if you're currently the, the broker on, on the case and you're the traditional booker broker and you're looking at, uh, and trying to move in a next-gen, uh, direction where you stop being a broker— my definition of a broker is, uh, the guy who sits on both sides of the table in a transaction. That's a broker. An advisor is one who represents one of the parties and provides expertise to one of the parties because they're interested in that party's best interest. So that's kind of a change, a mindset change to what we do. You become the advisor to your client instead of the employee of the carrier.. And of course, I'm expanding on what the definition of employee is there. So that's— I think that's where you start. And if you do that, don't expect every one of your fully insured groups to fall in love with this concept right away. Sometimes it takes time. Maybe you do nothing more in, in the first year of attempting a Next Gen strategy is keep them with a help them monitor what's going on throughout the plan year and give examples of if they decide next year to change, how that would impact what's going on with their group plan.

I think that is excellent advice to get us all started, and I want to thank you all for joining me today. And we'll be— I think you can reach us for questions. We do have a question about