Businesses all over the country are searching for answers and different ideas to help contain the cost of health care. Wellnet is a company with a pretty different approach, and I’m pleased that John Augustine was willing to participate in this interview. Hope you enjoy it.
PM: Can you tell me a little about WellNet and what makes you different than other health plans?
JA: WellNet offers level-funded and traditional self-funded health plans to employers. We help our members identify the quality of providers before they see them and also help them understand the costs of the services they need before they receive the service. Since within the same PPO network, the quality of every provider varies and the PPO payment to each provider varies for the exact same service, by helping members understand quality and cost in advance of care we are helping families get the best possible outcomes while keeping the cost of claims as low as possible. Since insurance premiums are mostly driven by the cost of claims, this process is working to reduce / reverse the cost trends for our clients while simultaneously improving the quality of care for our members.
PM: Can you give me a few details about how WellNet helps members understand quality and cost in advance of care?
JA: WellNet makes available to our employees a concierge which can assist members with virtually anything they need, from helping members find the best facilities and surgeons based on 36 different metrics all the way to coordinating the full continuum of care for an employee or their family. They are truly there to support employees through our confusing and opaque healthcare system.
Since medicine is a practice, all providers, surgeons, facilities, etc will all have different outcomes. By using the concierge, employees can improve the predictability of great outcomes by ensuring they are seeing higher quality providers to begin with.
In addition, since virtually all providers charge a different amount for the same service, the use of the concierge also helps both employees and employers lower their claims expense. Lower claims means lower renewals since insurance premiums are based on the cost of claims.
PM: What is the smallest sized company you can work with?
JA: 25 enrolled employees.
PM: How can employers and employees reduce the cost of health care?
JA: Every provider and facility has their own secret and private contract with each PPO network. Every provider and facility gets paid something different from the same PPO for the same service. If we help employees understand the cost of each provider before they see them and reward employees for choosing lower cost providers (but also higher quality providers), then collectively we can minimize the amount of money spent on claims. Since insurance premiums are mostly driven by the cost of claims, this process is working to reduce / reverse the cost trends for our clients while simultaneously improving the quality of care for our members.
PM: How does a level funded plan work?
JA: Level funding is a partially self-insured arrangement that includes stop loss insurance. Stop loss insurance helps to stop losses for certain members if their claims exceed agreed upon thresholds and also if the total claims for the entire group of members gets too high. When stop loss insurance is purchased, employers can see in black and white what their claims risk is since the stop loss insurance provides coverage when claims reach certain thresholds. If you know what your claims risk is in advance, and you know what the cost of that stop loss insurance is, then it is very easy for a Third Party Administrator (TPA) like WellNet to put together a plan called Level-Funding, where we invoice the client each month for 1/12 of their total maximum claims risk (the worst case claim scenario’s provided by the stop loss coverage), 1/12 of their stop loss premium, and 1/12 of their TPA fees. This allows smaller employers to reap the benefits of being partially self-funded while still maintaining the safety and security of a flat, budgetable monthly payment. Since in this example, the client is pre-funding their worst case scenario for claims each month, at the end of the year, most Level Funded TPA’s will return at least a portion of the claims surplus (any monies left in their claims fund after paying for all claims that were incurred by members) to the employer.
PM: What is population health management?
JA: Managing the health of a population in an effort to reduce the frequency and severity of claims. Lower frequency of claims and reduced severity of claims translates into lower claim costs.
PM: Can you give me some specific examples of ways that WellNet can help an employer with population health management?
JA: If an employer has a population of employees with diabetes, we can provide employees glucose monitors that monitor blood sugar in real time. This service also includes remote monitoring by registered nurses. This allows companies to ensure that their employees’ health is always at the forefront.
Think about the power of this type of program for a trucking company where a large portion of their employees are on the road several days at a time. When you couple a program like this with the continuum of care that our concierge can help provide, it ensures that employees are always getting the health care that they need when they need it. In addition, it can improve health, lower risk for the health and worker’s comp plans, and lowers cost by avoiding emergency room claims through effective preventive care.
Another common example would be an incentive based program where employees earn incentives for building healthy habits. Healthy habits lead to improved health, lower risk, and lower cost. There are an endless amount of ways we can build incentive-based programs.
PM: How can your company help an employer reduce the cost of prescription drugs?
JA: There are alternatives to the 3 major publicly traded pharmacy benefit managers that provide far more proactive ways of reducing drug spending. The 3 major players control over 70% of the market and have every reason to allow costs to continue to climb since their revenues are largely based on that cost, and their shareholders require continued share price growth and revenue growth. Alternatives to these 3 vendors are often paid based on their performance (lowering cost), which means they represent a vendor that has their financial incentives in line with your employer’s expectations. In addition, in many cases there are more effective drugs at lower price points to treat many conditions. Most drug training that providers receive comes directly from the drug manufacturers, who also benefit when providers prescribe their most costly medications. This is counterproductive if cost control is an objective. There are ways of providing peer to peer provider education to providers regarding the efficacy and cost of alternative medication therapies for members. Additionally, many drugs can be sourced at much lower price points using strategies like pooled purchasing, international sourcing, and manufacturers assistance.
PM: What types of health questions, if any, do you ask of employees during the application process?
JA: If historic claims information can be provided, then health questionnaires are not necessary. Individual medical questionnaires are only required when historic claims information is unavailable. It is recommended that all employers fully understand their claims risk before entering into a self-insured arrangement of any kind. Some of the national insurance carriers have made it very easy to enter into the self-insured marketplace by offering level-funded plans with little / no initial underwriting, which is resulting in wildly unpredictable renewals and market instability.
PM: Can you give me a couple of examples of success stories?
- 620 employee auto dealership on a level-funded platform saved over $4,000,000 with WellNet over a 2 year period versus the premiums they would have paid to Blue Cross had they remained with Blue Cross.
- Member was about to have surgery at a wrist surgeon when they called our concierge for a second opinion. We uncovered that the surgeon that the member was about to go to had 2 malpractice lawsuits still open for the exact same surgery the member was about to have. The member changed their surgeon based on this information and had a very successful surgery.
- Existing WellNet client in Northern New Jersey asked WellNet to implement everything we could possibly do to save them money. This required them to make some changes but these changes resulted in savings of over 50%.
- Lots of other examples.
We hope you enjoyed this interview. If you’d like to discuss creative ways to control the costs of your health plan, give us a call at (866) 724-0008 or click the link below.