Dr. Nick van Terheyden aka Dr. Nick
Host of News You Can Use
LinkedIn: Nick van Terheyden, MD
X: @drnic1
In this week’s special edition of “News You Can Use” on Healthcare NOW Radio I sat down with Adam Russo, CEO and Founder of Phia, to explore the company and its benefits program and rethinking the way you offer benefits to your employees. This is part 1 of a 6 part series “Straight Talk, Better Benefits”.
Listen to the Conversation
Adam’s journey into this space is personal. As a first-generation American who watched his mother struggle with the legal system, he became an attorney to be a voice for the voiceless. That drive took an unexpected turn when, as a teenager, he began working for a self-funded health plan legal expert. There, he witnessed firsthand the staggering waste, fraud, and lack of transparency in a system that consumes over 50% of our economy. As he pointed to me while you can find every quality metric and price comparison for a toothpick on Amazon, getting that same information for a knee surgery is nearly impossible. Based on this, he launched his own missions to use data analytics to help self-funded employers cut through the bloat and take control of their healthcare spend. A mission that grew from an $8,000 investment in his mother’s basement into a company serving over 20 million lives.
We reviewed the foundations of the system and why healthcare costs continue to spiral while everything else, like his recent purchase of a new television or LASIK surgery, gets cheaper and better. The answer is universally depressing and one we have heard before, since there is little to no consumerism in healthcare purchases. When a procedure isn’t covered by insurance, like LASIK, prices plummet due to market forces. But when insurance is involved, the system rewards the status quo. Employers, for whom healthcare is typically the second largest expense behind payroll, often spend less than five hours a year innovating their plans. Yes, you heard that right – 5 hours per year on the second-highest cost of running a business.
Instead, they rely on brokers who are incentivized by a percentage of the rising premiums, a system where “reasonable” simply means doing what everyone else is doing, even if it means costs continue to climb. Adam challenged standardized plan designs, asking why a yoga studio and a union of truck drivers should have the exact same benefit structure. Spoiler alert – they should not. Employers must stop accepting the same old trope and start looking at their raw claims data to see where the real money is being spent.
Free Health Insurance Isn’t a Dream – It’s a Blueprint
But if you listen to nothing else and are looking for a real-world step out of the ever-rising costs cycle, we see in employee healthcare benefits.
Mobilize your entire workforce to solve this problem.
Pay them to seek waste in their healthcare benefits. A simple incentive with cash rewards of 20% of any billing error or overbilling they find in the services they and their family members consume. You should listen to the first instance that was caught in this program in his company, with the head of human resources catching a private room overcharge on her son’s bill. The payout, a $50,000 check. That kind of incentive spreads like wildfire, turning every employee into a vigilant consumer. This approach is a cornerstone of his own company’s success, where they’ve turned the model on its head. By eliminating premiums, deductibles, and copays for employees and their families, they’ve created a culture of retention and loyalty. The savings from reduced turnover and lower healthcare costs have made this “free” model financially sustainable.
This is a long-term approach with real steps to start you off and get your employees motivated to steer towards the readily available, high-quality, low-cost hospitals, and best of all, embracing direct primary care for better physician relationships
Listen in to hear how Adam proved that with a clear plan and a commitment to innovation, the goal of providing better healthcare for less isn’t just a dream, it can be your winning blueprint.
Until next week, keep solving healthcare’s mysteries before they become your emergencies.
This article was originally published on the Dr. Nick – The Incrementalist blog and is republished here with permission.
About the Show
News You Can Use gives you a quick insight into the latest news, twists, turns and debacles going on in healthcare with Dr. Nick and Dr. Craig and where every diagnosis comes with a side of side-splitting humor. Your hosts are Dr Nick a long-time host, innovator and healthcare wizard who can prescribe a digital dose of innovation to cure even the most ailing operational inefficiencies. And Dr. Craig Joseph is the healthcare guru who can diagnose both patient and software glitches with equal precision, making sure hospitals run smoother than a well-oiled robot doc.
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