Justin Fallein - VP of Strategic Partnerships with Vitori Health:

"I hope that the participants take away from today's session is really the inspiration to realize that there is a better and a different way to go about administering your health plan the old way that we're going to get into. We know it's not effective. It's not working. And we'll talk about why. But I hope that everyone can kind of understand that there are better ways. That there's innovation happening in this space every day that makes it possible for employers to do things differently, achieve savings and have success, and have happy employees, too."

Blake Erickson - Advisor with DSP Insurance:

"One of our recommendations for employers is to put themselves in more control of their specialty drug spend. If not, you'll continue to see runaway spending, as these drugs increase in prevalence in our nation's chronic disease burden continues to grow."

Blake Erickson - Advisor with DSP Insurance:

"There's no shortage of challenges in today's healthcare ecosystem mixed up in it all your major medical carriers, Blue Cross anthem, United Cigna and Aetna and all of their regional fully insured counterparts, and it's worth remembering that many of these are now tightly linked or outright owned, or are owned by their pharmacy counterparts.

Under the Affordable Care Act. These carriers must maintain an 85% medical loss ratio (or MLR) for large groups.

That means for every dollar of premium collected. They have to pay out 85 cents towards the cost of claims. What's left? Just 15 cents. It has to cover everything else. Administration, technology, sales, marketing overhead, payroll, broker compensation and PROFIT. 

When the rule launched in 2014, the intention was good limit. Margins to protect consumers on paper that makes sense in practice, it created a rather predictable problem. If your profit can only come from that fixed 15% of your business, how do you grow your business. How do you grow your profit?

2 ways.

First, you grow the total premium. If the pie doubles, so does your slice, even if your percentage. Your profit margin doesn't change.

Second, you go vertical. You buy up providers, you buy up pharmacy companies, specialty pharmacies, and you control more of the stack that allows you to redirect profits internally. You're now profiting on that 85% of claims that 

isn't in that 15% bucket that you used to profit on. That's not greed. Unfortunately, it's fiduciary responsibility for these insurance carriers. That is their duty to their shareholders. Just like as a plan sponsor. Your fiduciary duty is to act in your plans' best interest.

That's the conflict. Carriers are incentivized to let claim costs grow. Keeping health care affordable, it's not in their financial interest. Most employers want lower premiums, stable deductibles, and predictable out-of-pocket costs. Your carriers. On the other hand, they want growth, and that math doesn't align.

That misalignment shows up really in 3 broken branches again, with the medical loss ratios being at least somewhat to blame as the root cause.

1.) Network Inefficiencies

2.) A lack of pharmacy transparency

3.) A failure to prioritize health over profit, continually propping up a sick care system rather than building and enabling a healthcare system."

Justin Fallein - VP of Strategic Partnerships with Vitori Health:

"PPOs were initially started, they began, and  were designed with an intentional you know, idea of being able to have an exclusive provider organization where you could have specific rates and discounted reimbursements and ultimately control costs. But just like most things over time, the system has evolved and figured out a way to maybe exploit that particular situation. And what's happened is there's been a huge disconnect ffrom what the original intent was, and so there isn't the cost control that was intended originally.

And so, as a result of that, there's there's been, you know, the market has had to pivot and try to find alternative ways and innovative ways to address the challenges caused by PPO networks. One of the things one of the biggest challenges is the element of just the opaque, pricing nature of PPO networks. You don't really know as a plan sponsor, what your bill is going to be for any procedure, and when you make a change you're really just swapping out a random, varied pricing schedule for another random and varied pricing schedule. And so you're going about it blindly and then hoping at the end of the year that maybe it worked out."

Justin Fallein - VP of Strategic Partnerships with Vitori Health:

"You know, there is a different way to do things other than just paying blindly into a network schedule, because providers do get paid a number of different ways. Medicare is the most prominent way they get paid. That's their largest payer. They also get paid by Medicaid, which is a lower payment. They get network reimbursement rates like we're talking about here with PPOs. They have self pay. They have workers comp claims. They have direct contracts in some situations with certain employer groups or certain Third Party Administrators (TPAs). there's faith-based pool programs. There's all kinds of different methods that providers get paid by. What we've done at Vitori Health is we've tried to take what's out there and do something innovative with the data that's available because there's a ton of it out there. 

As I just alluded to, providers, get paid in a number of different ways, and as you can imagine there's a ton of variance across all the ways they get paid. And then, furthermore, that variance exists at the Zip code level as well.

So a claim in Los Angeles is much different than a claim in Dallas is different from a claim in Kansas City is different from a claim in Boston is different from a claim in Miami.

The amounts are going to vary greatly for the exact same procedure, and so it's important to us to be able to capture all of those elements, all the things I just talked about, all the different ways. They're paid also by the Zip code element as well."

Blake Erickson - Advisor with DSP Insurance:

Any employers that are willing to proactively manage this reporting requirement are going to find themselves in a much better spot moving forward. Why is that? Let's break down. What's really happening with this requirement?

Okay for fully insured employers. 1st and foremost, unfortunately, this data remains locked away. It's gate kept. Your carriers are going to submit this data on your behalf. And while it's arguable that they might be required to share the results with you, they're going to be filing an aggregate on behalf of all of their clients, and they will not share the results with you. You, as an employer, are technically still compliant with the guidelines. But you're completely in the dark as a fully insured employer.

Fortunately for self-funded employers, you have a choice and a real opportunity. You can file the Rx data collection requirement yourself.

Or, better yet, you can work with a 3rd party partner who will gather that data submitted on your behalf and give you one of the things that your Pharmacy Benefit Managers (PBMs) and carriers rarely do. They're going to give you a comprehensive report and analysis reflecting that data.

Yes, some PBMs might charge you to access this front end data. They might charge you a thousand dollars. $500. We've seen costs as high as 10,000 that pharmacy benefit managers want to charge to provide this data to their clients. That's absolutely insane.

That being said, you can partner with a 3rd party.

1.) talk to your broker

2.) talk to your pharmacy benefit manager, and request the information that you need in order to file your RXDC reporting yourself.

Doing so is going to open up some additional information for you, namely, the rebates that have been collected and the rebates that were paid to you versus retained by your pharmacy benefit manager as well as any pass through and spread pricing paid by your manufacturers to your pharmacy benefit manager. That was not again passed through to the plan. Basically, it's going to show you how your pharmacy program is profiting off your group health plan and is going to give you the data you need to either go back to your pharmacy, benefit manager, and renegotiate.

Or to turn around and realize you're not necessarily being a great fiduciary to your health plan today, and you may need to fire your pharmacy, benefit manager and replace them with someone that can be more effective for your members.

Most employers are still flying blind here. But you don't have to.

This is your data. You can get your hands on it. You can request it directly through your pharmacy benefit manager. You do not need to rely on them and your 3rd party administrators to complete the filing. If you need help, you need a 3rd party assistance to get this done, reach out. Let us know we're happy to make those connections."

Blake Erickson - Advisor with DSP Insurance:

"You need to gain clarity on your PBM's rebate practices. You may have contracted with a 3rd party consultant that's negotiated certain guarantees on your rebates. Rebate guarantees are great, but they're not the end all, be all.

There's challenges in guaranteeing certain minimum rebates as well. If my PBM guarantees me that they're going to rebate me $100,000 over this upcoming plan year. Okay, they guarantee they're going to rebate us $100,000 on our drugs over the upcoming Plan year. Do you think that they are encouraged in any way, shape or form, to have our members take less expensive drugs that don't provide rebates?

No, they're going to want our members taking drugs that get them to meet their minimum guarantees, so they don't cut a check back to the company (health plan) for not validating their guarantees when we put them in those situations.

We're forcing an incentive on one thing, or forcing alignment in one spot while remaining completely broken in another. Give us a minimum guarantee in rebates. But that doesn't mean we're going to get the net lowest cost. It actually probably means we're going to spend more because they're going to be funneling drugs into these pharmacy programs and into these formularies that are going to provide higher brand rebates and pay more in rebates back to us at the cost of having spent more money overall."

Steve McClung - CEO of Hines & Associates:

"It's just the system working the way that it should. Doctors, of course they don't want to be double checked. They want to be efficiently and effectively treating patients.

But if you're not getting in there early on and doing some of these pre-certifications (pre-certs), sometimes things that don't need to happen are going to happen, or that don't need to happen in that specific way. ...

I'll give you kind of a specific example of that where location matters a lot. And this was actually the story.

Young lady, 9 years old, single mother, who had just relocated from New York to the Chicago area. 

She had hypogammaglobinemia...Which basically just means she had a very low antibody count, so she was immune, compromised. This was in the middle of Covid, and the doctor in New York had said, you need to come back here and get that treatment at our Infusion Center. And so she was flying. This mother and her 9 year old would jump on a plane fly for 1 day, a month, or one trip a month, 2 days.

Spend those 2 days in New York getting the treatment in an infusion center and then fly back home. And so she's jumping on a plane in the middle of Covid, already terrified, already immune compromised.

And so, you know, our nurse got involved and kind of said look, I understand that your doctor back in New York is saying, you've got to get it done there. 

I have some patients here locally who have similar conditions and are being treated locally. Would you mind if I helped you out and tried to find somebody that could do this here in the Chicago area? And you know the mother was a little bit nervous, apprehensive at first, st but you build trust over time, and eventually said, Yeah, absolutely. Why not? Let's see if we can find it here. Not only did we find someone locally. We found someone who would come to the to the 9 year old girl's home and do it in her.

So she didn't even have to go out to an infusion center. So not only are you giving back this 9 year old girl her life a little bit. She's not having to jump on a plane, and of course the family cost of, you know, flights back and forth, the hotel...saving on her monthly expenses from that perspective which is not covered by the plan.

But you're also making a huge reduction in the plans cost, going from $26,000 times 2 down to 4,000 times 2, which is an annual savings of half a million dollars to the plan. But you've given this 9 year, old girl a good chunk of her life back. She's not having to jump on a plane and be super nervous about everything. So it really matters the location, same care same medication at the end of the day, just done in a different setting."

Steve McClung - CEO of Hines & Associates:

"This is actually one of my favorites. 42 year old lady who had come to us one of the plans that we help manage. They have a program that says, before you can get any kind of bariatric surgery and anyone who's following the GLP one things going on you'll know that GLP1s are another approach to helping people with their weight loss before you can go into any of those programs. 

You've got to work with Hines for a period of time. And so this lady came to us, not wanting to have surgery, but of course her doctor had recommended:

"Hey, you're struggling with your weight loss, I'd recommend bariatric surgery."

And so the question was, which specific one would you like? Not, hey, is bariatric surgery even the right thing? Our nurses were able to work with her and just help with weight loss. So she was over 300 pounds. She was 4 foot, was she? 4 foot 3, I believe it was, and weighing over 300 pounds when she 1st started working with us over a period of about 6 months, just checking in with her on a regular basis.

Actually, one of the things I remember that stuck out to me her walking. She was doing a fair bit of walking for work. But you know our nurse kind of said, Hey, but are you getting your heart rate up? Are you really walking?

She said: No, I walk around. I get in lots of steps, but I'm not really kind of getting the exercise out of it. And so a little bit of diet change, but then also saying, Hey, why don't you get your heart rate up? And she did. She came back to us the following month, saying, Hey, here's what I did:

"My son and I now go out for a walk together every weekend, and we spend about an hour and a half just chatting, catching up on life. And so not only am I getting in better exercise, but now I've kind of rekindled the relationship with my son."

That stuck out to me. I was like, Wow. So not only is this lady kind of improving her life, but she's helped build that relationship with her son. So after 6 months, she says:

"You know, I don't want the surgery."

She was down to 235. Her goal was 1 80. She still had some room to go, but our nurse was able at that point to kind of say, you're on the right track. 6 months. You've made huge progress. Let's go ahead and close this one out, which is $36,000 of savings to the plan."