If you dig deep enough about the healthcare system, you’ll find how it has been built against the consumer. This episode’s guests are putting the power back into the consumers’ hands by bringing to light the actual costs of healthcare. Allison DePaoli interviews James Walsh and Thomas Wagner of Medxoom—a healthcare benefits platform designed to reduce costs, organize care benefits, simplify payments, and help employees save money. Tune in to learn how they are bringing affordability back to employers while ensuring quality care. Find out how technology can save your budget and improve your user experience. Plus, rediscover the value of advocacy and giving everyday healthcare plan users the tools to have better outcomes in their health plan.
Watch the episode here
Listen to the podcast here
Medxoom: Overcoming The Actual Costs Of Healthcare With James Walsh And Thomas Wagner
We talk all about health insurance this time and things that you can do to both improve your user experience and your spend. I am talking to James Walsh and Thomas Wagner from Medxoom. We are going to talk about how technology can save your budget, improve your user experience, and keep you out of the Department of Labor at the same time. Thank you so much, you two, for joining me.
Thank you. We are excited to be here.
We share a love of a common quote, “If you want to pay less for healthcare, you got to pay less for healthcare,” from our friend Dutch Rojas.
Who doesn’t love Dutch?
Tell me a little bit about how Medxoom helps us pay less for healthcare.
I’ve used that quote many times after learning it from Dutch. It’s a great quote because when you think about the discovery of prices for different procedures or CPT codes in healthcare, the entire system has been built against the consumer. When you can bring to light that there are actual costs for procedures and there are different costs for procedures, it puts the power back into the consumer’s hands and into the healthcare plan’s hands as well.
Do you see people get a little freaked out at the variance of cost?
Yes and no. I say no because I’d say the vast majority of people still don’t know.
I get some pretty irate people saying, “What do you mean it costs this and we can get it for this?”
I think the best analogy I ever heard about it is, and this relates, I believe, to pretty much everyone. You need to put gas in your car. You go to a gas station, put your credit card in, put the gas in, and when you’re done filling up, you get a bill and you see you pay $10 a gallon. Yet the store or the gas station next door, it was $2.50 a gallon. That is the most perfect analogy as to how healthcare prices for the exact same procedures are different from one building to the next and even within the same building. It’s very true.
You’ve been around for some time and your model mostly comes from the payment side, but I think you’ve grown quite a lot lately. How many more employers are coming to you and saying, “We have a problem and we’d like to fix it now?” I think employers have had a problem for a long time, but many more seem willing to fix it.
You’re seeing it a lot more now. Medxoom, as a business, has looked more at the enterprise level. That’s not in terms of the size of the client, but it’s how we go about obtaining our clients. We’ve worked with the health plans and the third-party administrators to get those employer groups onto the platform. We don’t go directly to an employer, but we do see third-party administrators bringing on hundreds, if not thousands of groups given time because the overall platform and the capabilities resonate across their entire book of business now.
To me, you are the missing connection piece between alternate payment methods and employers because there have been a couple of points that have made it very challenging for an employer to do those things, even if they want to.
It’s a great way to say it. The way I look at our business is we work with a lot of smart organizations, smart brokers and health plan administrators. What I’ve found and learned because I come from outside of the healthcare space is that these people have amazing ideas as to how to solve the challenges that the everyday American and employers are dealing with, but they’ve never had the tools.
One thing that our platform brings is it gives them additional technology tools to now execute the ideas that they’ve had for years on end. That’s what’s been so rewarding to see some of the success stories, not from our standpoint, but from our client’s standpoint. I was up with one of our clients in Wisconsin and two of his employer groups were nominated to receive national awards where both CEOs are going to be honored on Capitol Hill. It’s because of how they’ve shifted their entire health paradigm and brought more affordability back to their employers. I’m not going to say that the reason is, but we are a component of it and it’s pretty neat to see.
In my experience, we’ve been fortunate to work with some interesting clients. They don’t lack for ideas. They lack for how to, and I think you solved that. Thomas, I think you agree with that. You were in the advisor space for some time before moving on to Medxoom.
I’m into employee engagement. If you have 5, 6 or 7 different platforms that you’re using for that to be able to utilize and lower cost, you’re going to confuse people. If you confuse members, they’re not going to want to do it. It’s already difficult to understand. Healthcare is already difficult to understand and you’re going to add all these different platforms, which, in theory, lowers cost, but it’s now more confusing.
Everyone’s going to throw their hands up and be like, “I don’t know what to do. I’m going to do what I’m used to doing what I’ve always done in the past.” You have to be able to integrate everything together to be able to deliver something that keep it simple stupid, that KISS type of model, and be able to have people utilize it.
You do something that I think is the bee’s knees. Single-use credit cards that aren’t actually credit cards. Let’s talk about those.
I’ve used them myself personally. There are some fun stories to talk about. When you think about the cost of healthcare, traditionally, most people, when they walk into a facility or doctor’s office, they hand over a plastic ID card to their insurance carrier. There are certain costs associated with handing that card over. Network rates and pre-negotiated rates for different codes and procedures. You can simplify a healthcare transaction, a member walking into a doctor’s office saying, “This is what I need.” It’s prescheduled. That facility informs you ahead of time what the price is. You can simply have a closed-loop transaction where you’re a member walking to an office and paying for a service and walking out and that’s it.
There’s no claim. There’s no administration. The member wins, the plan wins, and the facility usually wins even though our data shows that almost 100% of the time, accepting less money for the cost of that care. They don’t have any administrative work on their end to go capture member responsibility, to go pay their revenue cycle management company and process the claim. It’s much easier. We’ve created a technology where plans have the ability to load plan dollars onto virtual single-use credit cards that members can use at the time of service. I’ve used a couple of them for myself and for family members.
In my mind, that solves two problems. The first is it is not that difficult to negotiate a cash price with most providers. I know that is an alien concept to most people, employers, employees, patients, and almost all people that don’t do what we do. That is an alien concept, but it’s not that hard, “I’m here to have this. How much does it cost? I don’t have insurance.” After you get over the two-headed look, it’s like, “It costs this.”
It is almost always less expensive than a PPO discount. That is also very surprising to people. The challenge there has been arranging payment at the time of service. We’ve solved that problem. The other problem that often happens that you may or may not see, but you have solved is that there are other companies that will help you do that, but the employer also has to pay for the service before the member enters the building.
That has proven challenging. I know that because the final price is not done until the day before the surgery. It’s hard, even for a willing employer. You have to get somebody, they have to transfer the money and it has to go to the facility. With the single-use credit card or virtual credit card, literally, the person comes in with their app. You have to use an app. Here’s the credit card, the person behind the desk types it in like any other credit card and the service is paid for.
You work it out with the TPA, who works it out with the employer. There are some technicalities there, and the gist, you’re fronting some money. You get paid pretty quickly. The provider gets paid on the same day. They don’t have any revenue cycle problems. The revenue cycle is probably the biggest problem that facilities have. They’ll take a cash price. Money in hand is a powerful thing.
You made it sound simple. It is almost that simple. It doesn’t need to be complicated or difficult for the member of the plan or for the plan administrator to be involved in that transaction. What we found is that these are highly utilized in known scheduled and upcoming procedures. They haven’t been used often in an emergency-type situation or you’re standing in the office right now at the time of service and they can’t see you. They haven’t been used much, but they have been used and they’ve been successful. If a member is having an access to care issue and they can’t get past the glass window to see the doctor, we have been successful in working with our clients to get cards created in as little about 7 to 12 minutes to get that facility paid to get that member seen.
I am not surprised to know that is possible. You do need a relatively well-educated member in order for that to happen. Let’s talk a little bit about how members are educated and you have some very positive and some little bit tougher solutions for that.
Here’s the cool thing. Remember when I said that I’ve learned and worked with some smart people and we’ve been able to help them work on their ideas? That’s what it comes down to. In situations where a member is having trouble gaining access and need to get seen quickly, they’ve been educated by the broker, by the administrator ahead of time, “In case this happens, do this,” so they know exactly what to do. Here’s the other part. All of the member support help is directly in the application as well. Whether it be a concierge, advocate, member support or whatever terminology our clients want to use, the members know if I run into an issue, press this button and it’s going to get me connected to the person my plan wants me to speak with to solve my issue.
If you’re an employer reading this, I think it’s important that you know the it takes a village part. This is a little bit of a different workflow. It’s less work over time. Health plans have their own challenges. This work is a little bit different, but it happens less frequently. With a little bit of support, it is a diminishing issue. You might see it a few times at the beginning of when you’ve made changes, but as time goes on, people know what to do. They understand what to do. I also think having one app rather than 8 or 9. Everybody has an app. The network, TPA, the carrier, mental health and PBM have an app. You can eliminate all of that. You can wrap it into one ecosystem.
I am a huge believer in 24-hour advocacy. I know that often is a very unpopular opinion. It does cost a little bit, but the return on it is remarkable and it gets that work out of your office. If your message as the employer is, “Call this person. They’ll take care of you. It doesn’t matter what time it is.” Your leadership team is saying the same thing and using the same tools and your advisor is saying the same thing, what you can do is remarkable. I’ve seen zero out-of-pocket health plans come out of this kind of arrangement. We do it often where the member has no responsibility at all. They do have to engage a little bit differently in the system, but they like it once they do it. No more ID cards. They can go where they want to go and it doesn’t cost them anything. It can be remarkable.
What we’ve seen across our book of business is the clients that are utilizing unique payment alternatives or methods almost always are waiving any remember responsibility, “Mr. or Mrs. Member, if you use this card and we’ve negotiated what this price could be, it costs you $0.”
There are enough tools now where you don’t necessarily have to call somebody. You can build that into your plan. People are having a love-hate relationship with the CAA. I think it’s fantastic execution. This is a little challenging, but I think that the rule is fantastic. As an employer, do you buy anything else that you don’t know what it costs before you pay for it?
I don’t, either. Do you?
No. You go to the grocery store and look at the milk and eggs.
It’s before you put it in your cart. Most people have no way of doing that.
The CAA has the potential to change the overall landscape of healthcare as we know it for the country. It does bring consumerism to the forefront. There are a couple of challenges that I’ve already seen. The machine-readable files and we can both laugh at the matrix of It. I think what you’re seeing is the execution of plans publishing the machine-readable files on a website where a member would have to 1) Know it’s there. 2) Be able to read a JSON file. Good luck. It’s impossible. 3) Find any tangible data of it. It’s impossible. The intent of being able to do that lands flat where Medxoom and other organizations are using the data now readily available to make positive outcomes with these machine-readable files for members is neat to see.The CAA has the potential to change the overall landscape of healthcare as we know it for the country. Click To Tweet
If I’m a member, I can search for a provider and if it’s 1 of the 500 shoppable CPT codes seen directly in the application, I can see what the cost is. I can see what the plan would pay for this procedure, what my responsibility would be and what my remaining deductible and out-of-pocket max would be as well. It’s as simple as typing in, “I need a knee procedure.” Typing in KNE, it’s going to autofill and going to show you all the different codes that could be associated with it.
As a member, you’re probably not going to be educated on exactly what it is, but if you can then make a phone call or two and talk to support, saying, “This is what my ortho is telling me I need. Can you point me in the right direction?” Not only is your member support can have access to the same tool that you as a member have, but they’re probably going to be able to decipher that, “This is the CPT that you’re going to have.” Now you can see exactly what the cost is going to be before you have it done.
That’s 500 services.
It’s whatever that machine-readable file says,
It can change on a regular basis.
There’s my little disclaimer.
Those pricing changes. Pricing is a little bit dynamic. I would imagine pricing is a little bit more dynamic than it’s been in some time. People are settling themselves with the supply chain issues and all the other costs that are changing. What are some of your best practices for engagement? We’ve talked about advocacy. What about taking away somebody’s physical ID card?
What we found, and I think if you look back to January, which is traditionally the highest renewal period for any plan, is a large portion of our clients did eliminate the plastic ID cards to get all the members to utilize, or not even utilize because they’re using it, but to get everyone to download the application. Their benefits wallet or their digital ID card is now housed in there, along with their plan documentation and all of the integrations. As you said earlier, you have an app for this and that. Now all of those different unique components of your health plan are now located in one single spot.
Let’s go back to the CAA. Once we get past the machine-readable file issue, which machine-readable files, they’re not meant for you or me to read them, they’re meant for TPAs to read a machine. The last I checked, we were human. They’re not meant for us to read them, but when you give people that tool, they can literally find their surgeon and then you can bundle the pricing from there with whatever service the employer is using because that is not your domain, but it is your domain to let that live in your application. How much do people like that?
Thomas has used the application not only by himself but also for groups that he represented as well. I’d love to hear your take on it.
They love it. You get the capability to be able to search for different medical procedures. You get to see that, “This Hospital A can be right across the street from Hospital B and they can have two varying different procedures.” At Hospital A, we’re not going to pick on anyone. It could be $3,000 for a particular MRI and Hospital B across the street that has an outpatient and surgical center can be $1,500 for an MRI. If you incentivize those members to go to those places, going into your scenario earlier where you can build a plan design to incentivize members to go there, we create a little widget inside the platform that says, “Call now. This may be free or $0 copay.” They’re able to click on that. Who wouldn’t? I would rather pay zero than $3,000 for a procedure.
I would as well. Some people would not, apparently. What do you see next? Where are your biggest growth opportunities? I know some of them and I’m looking forward to them.
When you look towards the future, what’s most commonly asked is how do we see quality scores coming into play now? You’ve had some good companies that have made some strides in the past, but I think we’re seeing the next iteration of how we take quality components, not only just the five CMS publicly known ratings but how you then take readmission rates. How do you then take all the different data points that are now out there? There are some companies doing some pretty cool stuff. How do you take that? How do you layer it into the machine-readable files with cost and then paint a picture as to whether this is the highest quality, the most cost-efficient facility you can go to? That, to me, is probably at the top of the priority list as to where I see healthcare going.
We use advocacy quite a lot and for our advocates, we use some of those data sources and they don’t look at price at all. They only look at the quality of the provider or the facility. The conversation has been both, “You’ve got a high-quality provider, but I see he or she wants to do the procedure at this facility. We’d like you to go to this facility over here. It has a better quality score for this, that, or the other. We’ll cover that at 100%.” At no time does price enter that equation because, honestly, nobody wants cheap healthcare.
Nobody wants cheap. Most people value expensive better. You don’t get high quality when you’ve got somebody that does twenty knee replacements a year. You get high quality when they do 300. Maybe not when they do 1,000. You have to balance that. When you’re doing 300 or 500 of something, you know what the complications are. You know what to look out for. You don’t want to see the person that you have on your table again, so you tend to do a better job. To put that into the hands of an individual person is something remarkable.
What’s unique and where we’re starting to see it now is provider-level quality data, not just facility, because it’s what you said. If you can get the surgeon that does 300 knees a year as opposed to the surgeon in the same facility that does 400, that’s a big difference. To figure out and know why that happens and then be able to look at that data on those 300 procedures, that’s the goal.
It’s key to not only containing costs but getting care to actual people. The purpose of a high deductible health plan was to make people better consumers, but they don’t know how to be.
I come from outside healthcare, so this may sound naïve, but what high deductible health plans have done has basically created uninsured members because regardless of HSA, members can’t afford the deductible. If you can’t afford to pay your deductible, you’re technically uninsured, but yet you’re still paying premiums.
It creates catastrophic events that feature down the road because then people delay treatment and as you delay treatment, you’re kicking the can further down and then you have a heart attack or stroke because you never went and got the preventative stuff done because you looked at it and said, “I’m an hourly worker and make $20 an hour. I can’t afford it. I don’t even want to go to the doctor because I’m afraid of what the doctor’s going to tell me.”
“I’m afraid of what it’s going to cost or what they’re going to tell me.” then rather than dealing with my X at a minor level, it’s a $40,000 emergency room. I have a client and they have done a lot. They have options for coverage at 100% and low premium. Manufacturing, very blue-collar. They have had three people over the last few years who have had some metabolic syndrome issue. They spike and get sick, they start losing body parts, they end up in the hospital and they die. They cost a lot of money and it’s terrible for the human. It’s atrocious. I’ve also found that if you give people the tool, they’ll use it. People want to be good consumers. You do have to explain it a few times, though.
It’s confusing. I’m an everyday healthcare user because I don’t come from the industry. It’s interesting. A couple of years ago, one of my clients used me as their test case of running ideas past me. I got so confused, I stopped the conversation. I’m like, “I just went to the emergency room,” because it was confusing. If you can make it simple for the everyday American, the everyday healthcare plan user, the ideas work and it’s being able to say it easily. Give them the tools necessary to be successful and you will have a better outcome in your health plan.
Let’s talk about how you build a health plan around because I think you do have to build a healthcare plan around it to harvest it effectively.
I’m going to defer to Thomas on this one because he’s the genius behind that.
I can tell you another thing that we did from a plant design standpoint. We had a cabinet manufacturer that had 200 employees outside of Dallas. We were doing their analytics. We saw that their male population had a preventative visit of about 10% over the age of 40. It’s horrible. These guys are hourly blue-collar workers. What it came down to was HR, their company handbook, they could take the time off, they go to the doctor, but they weren’t getting paid.
They’re not going to take the time off when they make $20 an hour. They’re not going to take those 1 or 2 hours off to go to the doctor to get a preventative check-up. We created a system to where they would get paid their normal hourly rate, plus they would get a bonus because it wasn’t about going to the doctor because preventative is free. It covered 100%, but it was losing that income during that time period. You got to create that.
It’s not just about the plan, but it’s also the whole HR culture and compensation package for a company to look at that from a holistic point of view of how we are incentivizing members to utilize the plan to be able to drive those costs to be able to lower overall costs. It’s all about incentivizing and different areas that you can incentivize from a catastrophic level. You got to have those measurements in place, but then also from a day-to-day use standpoint as well, because those are your nickels and dimes. If you can save pennies on the nickels and dimes and then you can save dollars on the thousands, then you’re driving home change.It's not just about the plan, but it's also the whole HR culture and compensation package. Click To Tweet
What was the result for the cabinet company?
They went from 10% to 38%.
A lot of people would look at that and go, “That’s terrible.” I think that’s great.
That’s a 20% increase and that’s a big thing.
You’re getting people seen, so you’re catching high blood pressure, high cholesterol or elevated A1c early and then you can make plans to address that.
The whole thing was like, “Your preventative visits are going to go up.” Your $200 office visits are going to go up. I would rather you pay $200 more for office visits that have a $200,000 heart attack come up next year. Wouldn’t you pay a little bit of preventative? That’s what insurance is for.
The key to this is sitting down with the employer and the stakeholders and walking through what employee procedures have to do with a health plan. Regularly lower-income workers often get caught in that, “I understand that the visit is free except I have to take off two hours from work. I can’t afford to take the two hours off from work.”
When you look at it holistically like that, I think you can change the dynamic of how a health plan works for people. There’s a lot of conversation, right, wrong or otherwise about, “This is part of the DEI conversation. It’s part of the health equity conversation.” A lot of these things are simple to fix. It’s just that you have to have a conversation about it and somebody has to ask.
It’s the social economics of it. If you look at the people that majority of the time have metabolic issues and those different types of health concerns, it is people that have lower social economic status and so they’re not financially literate when it comes to that. I wasn’t, and so it’s about educating them about learning that and understanding from a holistic point of view of working with the company of, “How do we take care of everyone, not just in a plan design, but outside of the plan design to be able to incentivize them and get those things done to protect themselves?”
It requires the engagement of HR and the C-suite leadership as well. I’ve always been a big proponent of executive leaders doing what they’re asking everybody else to do. It works remarkably well.
It creates loyalty with employees. If you can create loyalty with those employees, if you show those employees that you care about them by doing those types of things, you understand their socio-economic status and how this impacts their families. You’re going to create that loyalty and that loyalty’s going to create long-term tendered employees and then you don’t have to worry about turnover. That turnover now is very aggressive from a retention standpoint of employees.
One thing that is always surprising to people is that 90% of medical issues are not medical issues. They’re social determinants of health issues. If you’re addressing the social determinant of health issues, then you’re cutting down on your large claims so you can cut the cost of healthcare because you’re paying well.
We always come back to Dutch.
I think we’re going to leave it there. Thank you.
Thank you. It’s been awesome.
We will see you next time.