Today I had the pleasure of speaking with Mark Galvin, President and CEO of My Medical Shopper, a robust medical care comparison shopping platform. Mark is a serial tech entrepreneur with several successful startups over the course of his career. Along the way, he became increasingly troubled by the cost of healthcare and the lack of transparency in the healthcare delivery system. He started doing some research and tried to advocate for legislation that would solve the problem. When it seemed like the legislative approach would take too long, he and his partner Matt Robinson started MMS Analytics, dba My Medical Shopper to try to address the problem from a commercial perspective.
I asked him how MMS can help employers save money on healthcare. He said, “We start by taking a claims file from them, and we analyze that file line by line to find out where the employees went for care, and how much they ended up paying. Then we go into our database, and we find that same procedure, and we reprice it at the lowest price in the local area. If they had shopped, how much could they have saved?” Then he can tell the employer the total amount of savings the employees could’ve generated if they had all been “perfect shoppers.” He went on to say, “That will never happen, but it’s a real shocker…a real eye-opener… because the answer usually comes in at 35% to 55% of the total claims cost can be saved just by shopping the shoppable procedures.”
“The next thing is, ok, how do you get your employees to care what these things cost? If they don’t care what things cost, they’re never going to shop. We came up with a system called the Consumer Interest Calculator. The specific plan design of the employer can be entered into this calculator. You can imagine that different plan designs change the optics of the plan to either slow consumer interest or speed up consumer interest. It’s really important to structure the health plan design so there’s consumer interest. Now, you want to do this without hurting people, and you want to do it without making it a pain in the neck.”
Mark promotes what he calls, “The Ultimate Health Plan.” Basically, he suggests trying to find the highest deductible HSA compatible plan you can find, funding the HSA accounts for employees to the highest extent possible, then layering a health reimbursement arrangement (HRA) on top of that to further defray out of pocket costs for employees. Then, you can use a tool MMS has developed called My Medical Rewards, where you can actually create financial incentives for employees for good consumer behavior by dropping reward dollars into the HRA. He explained, “In our case, we start with a $0 balance HRA at the beginning of the year, and as we have health care needs and we’re spending some of our HSA dollars, if we’re really good consumers, our company drops 65% of the savings into the health reimbursement arrangement.” He likened this process to “paving the road ahead” with HRA dollars, so even those with larger health care needs can have nearly $0 out of pocket costs to utilize the plan.
Mark argues that proper plan designs and aligned financial incentives create really good medical consumers. Once they become better consumers, the MMS app provides members with real data about the cost of services in their local area within seconds. He describes this scenario: “Fifteen seconds with your doctor, just to make sure he knows you care about what things cost…should I get the MRI across the hall in the hospital and pay $2800 for it, or should I get the MRI on the other side of the street in the strip mall where they have a bigger magnet potentially, and the imaging may even be better, and it’s $350. I mean literally, it’s that dramatic a difference.” He went on to offer other examples. One was, “Lipid panel…$7 or $70.”
The app has a quality indicator as well, but Mark was cautious to point out that people shouldn’t choose doctors on cost alone. “I would bring this (the app) with me to my doctor, and when I’m with the doctor, I’m not trying to choose doctors based on price, I assure you, and there’s no reason to. You should find the best professionals you can.” However, having this information in the palm of your hand when you’re with your PCP will allow him or her to review the lower cost options and give members informed recommendations. Mark said, “Once you show them that you care (about price), then they will care too.”
I asked Mark about where his solution fits the best – which types of employers would get the most bang for the buck. Mark said it works well for fully insured plans that are experience rated (50 or more eligible employees in Massachusetts) or any plan that is self insured. “Where it doesn’t work well is a fully insured small group,” since impacting utilization for those plans won’t change the pricing.
MMS essentially has four parts along with the app:
- Claims Hindsight
- Consumer Interest Calculator
- SPARC Plan Analysis (creates a pro-forma analysis cost analysis for employers)
- My Medical Rewards
When I asked about the cost and if all programs were wrapped into one, Mark said, “They get the whole kit and caboodle for $100 per employee per year.”
To conclude the discussion, I pointed out that most of the insurance companies already have a shopping tool available at no additional cost. Why would an employer want to pay more for another shopping tool? When somebody tells Mark that they get a free price transparency tool from their carrier, he asks, “Can you show it to me?” More often than not, they can’t. With MMS, their app is in the palm of an employees hand, right when they are meeting with their doctor. He also argues that his data is also more accurate and unencumbered by carrier-provider contracts.
I’m thankful that Mark was willing to spend some time and answer some questions. As always, if you’d like to discuss creative ways to control your health plan costs, give us a call at (866) 724-0008 or click the link below.