Direct Primary Care (DPC). Physicians increasingly are abandoning — partially or fully — the insurance-based fee-for-service model in favor of a subscription model in which patients, or their employer, pay a monthly membership fee. Members of the physician’s practice generally have unlimited access to the doctor and lab & imaging tests are usually included under the fee. Most important, DPC doctors can spend 30–45 minutes or more with each patient to learn about his or her personal situation, home and work life, and other factors that might contribute to health problems. Only by putting primary care doctors back into a primary role with the patient can the U.S. health care system begin truly to heal.
I had the pleasure of interviewing Nelson Griswold, Managing Director of the NextGen Benefits Network. The NextGen Benefits Network is a national alliance of business consultants who work with CEOs and CFOs who want to take control of their health care spend to manage costs, improve the quality of care, and eliminate their employees’ out-of-pocket health care costs.
Thank you so much for doing this with us! Can you tell us a story about what brought you to this specific career path?
Although I now work in health care, my professional background is in public policy. I ran two public policy think tanks promoting free market, limited government principles. As a nationally recognized policy expert, I testified before legislative committees, wrote legislative bills that became law, led lobbying efforts in support of free-market legislation, and served as a gubernatorial appointee on several high-level policy task forces. During this time, health care policy was a major focus for me.
Despite a string of policy victories, after I angered our governor one time too many by filing a lawsuit challenging another of his policies, my career in public policy came to an abrupt end when he pressured my board to fire me. As I was looking for a job, one of my former think tank board members recruited me into the employee benefits industry, which ultimately brought me into health care, since the primary purpose of employee benefits is making health care accessible and affordable to employees. Fully half of Americans are covered by employer-sponsored — also called group — health insurance. As I became an expert on employer-sponsored health care insurance, I realized that the out-of-control costs of these plans — an average 8–12 percent annual increase — had nothing to do with insurance. The real culprit was the ever-increasing cost of health care. So, if I ever hoped to solve the health care cost problem, I had to become an expert on managing health care costs. Interestingly, my health care policy expertise from my think tank days, which I thought I never again would need, has now become extremely helpful as the threat of government-run health care grows.
Today, I’m leading a Benefits Revolution that is a burgeoning rebellion against the health care industrial complex — also known as the Cartel — to eliminate the misaligned incentives and unchecked price gouging that is making health care unaffordable, inaccessible, and unsustainable. The failures and abuses of the Cartel are driving increasing numbers of Americans to look to the government for a solution, in the form of a single-payer model, now styled as “Medicare-for-All,” which would be the beginning of the end of our free-market health care system and would usher in intolerable wait times for care and the rationing of care by government bureaucrats. My goal and that of the Benefits Revolution is to stop single-payer in its tracks and to preserve and improve the free-market health care system.
Can you share the most interesting story that happened to you since you began leading your company?
A benefits broker with a leading national insurance brokerage was summoned to the Area President’s office after saving an account by moving the company’s health care plan from an insurance company’s plan to a self-funded plan. When his boss asked about the account, the broker explained that, by disintermediating the insurance company and taking the employer self-funded for their health care, the employer was saving a large amount of money for the same health care plan. The Area President nodded and said, “Don’t ever do that again.” When the broker protested that it was the best move for his client, the Area President responded, “You don’t get it, do you? It’s not about what’s best for your client, it’s about what’s best for our company’s bottom line. DON’T DO IT AGAIN!”
This true story — told to me by the broker himself, who soon after quit that brokerage — illustrates perfectly how misaligned incentives drive up health care costs and result in employer-sponsored health insurance costs increasing every year. The financial incentives of the insurance companies and insurance brokers are 180 degrees out of alignment with the employers they serve. The only solution is for employers to break with the status quo model and adopt a new model, known as NextGen Benefits, that aligns the incentives of all the stakeholders: the insurance company, the adviser, the employer, the health care providers, and the employees.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
When I opened my own consulting practice, I received a number of invitations to speak to groups. Initially, my presentations were very instructional and focused on data and statistics. In other words, I would have made Sgt. Joe Friday, from the TV show Dragnet, extremely proud: “Just the facts, sir.”
I began to notice members of the audience nodding off into dreamland; not the effect I nor the person who booked me intended. So, I reworked my presentation, adding stories, which made a dramatic (pun intended) effect. Another notable addition to my presentation was a total accident. I had just related the remarkable outcome of a specific strategy and decided to add a loud “BOOM!” to serve as a verbal exclamation point. That “BOOM!”, amplified by the sound system, launched one woman about a foot out of her chair, to the amusement and laughter of the others in the audience. After that, “BOOM!” found a permanent place in my presentation arsenal, serves to keep my audience attentive, and has become a personal trademark (my audience members often shout “BOOM!” when they see me later during the conference).
What do you think makes your company stand out? Can you share a story?
Our NextGen Benefits model and its strategies and tools, along with our unique focus on the C-Suite, produce remarkable bottom-line results. It benefits both the employers that adopt this new model and for the benefits advisers who reject the status quo and embrace NextGen Benefits.
Employers who adopt NextGen Benefits find 10–20 percent year-over-year savings on their health care spend — usually their second-largest operating expense — in the first year alone and save 40 to 60 percent by the end of year four.
Recently, Chief Executive magazine, the premier publication in America’s C-Suites, featured three CEOs along with their NextGen Benefits advisers in a five-page spread that highlighted these employers’ success in improving the quality of care for their employees while reducing the cost of health care — by as much as 60 percent compared to their old ‘status quo’ plans.
NextGen Benefits advisers benefit greatly by zigging while the rest of the industry continues to zag. Our adviser clients are growing their firms at an average of more than 20 percent annually in an industry that averages just seven percent organic growth.
NextGen Benefits advisers have become among the most recognized and honored in the industry, including three of the last six Benefit Adviser of the Year honorees, selected as a finalist for Broker of the Year three of the past four years, nine who have been named Rising Stars in Advising, and ten recognized as Top Women in Benefit Advising.
What advice would you give to other healthcare leaders to help their team to thrive?
With the ‘status quo’ model for employee benefits and health care system both mired in outdated practices and defined by misaligned incentives, any progress improving both quality of care and cost must look to new models for the delivery of health care. Fortunately, these new models not only exist but are proven, from NextGen Benefits for employers to value-based care for providers.
These new models produce remarkable results for all stakeholders, and while the status quo noisily touts marginal and incremental changes that never move the needle, a scalpel has proven inadequate for the job of effecting real and meaningful change in how America pays for and delivers health care.
Conscientious health care leaders who truly desire measurable improvement in our health care system must make a radical break from the failed status quo and adopt the proven models and innovations that are producing better medical outcomes and lower costs for health care.
Ok, thank you for that. Let’s jump to the main focus of our interview. According to this study cited by Newsweek, the US healthcare system is ranked as the worst among high income nations. This seems shocking. Can you share with us 3–5 reasons why you think the US is ranked so poorly?
Many factors contribute to the low — and, I would argue, somewhat misleading — ranking of the U.S. health care system vis-à-vis other wealthy nations, including a hugely heterogeneous population, an emphasis on advanced and sophisticated treatments for the most serious and complex diseases and conditions, and a misguided focus on treating illness instead of promoting health. In fact, the U.S. actually has a “sick care” system, not a “health care” system.
I say that the low ranking is misleading because the U.S. health care system provides the world’s most advanced and sophisticated treatments for serious diseases and conditions. I would suggest that the advances and innovations in medicine and health care in this country are the result of a free-market system that rewards creativity and entrepreneurial enterprise. In the other wealthy countries that score higher than the U.S., there is little reward for industrious and innovative inventors and creators.
Experts and the conventional wisdom bemoan the complexity of the challenges facing our health care system; the multifaceted and nuanced problems that plague it; and the immense, perhaps impossible task of fixing it. I contend that the conventional wisdom and expert opinions are nonsense. The real problem with the U.S. health care system is quite simple, readily understood, and easily fixed.
The U.S. metrics that fare so poorly against other high-income nations are the result of three significant factors, all related to misaligned incentives:
- The failure of employers to manage their health care supply chain
America’s employers provide insurance to half of Americans, which means that their employees purchase a large share of the health care in this country. Yet the C-Suite executives and business owners in these companies treat their health care spend differently than every other part of their business. While ruthlessly managing the sourcing of every other purchase the company makes, these business leaders ignore the quality and cost of health care, usually their second highest operating expense. By not subjecting health care to market discipline, to standard supply chain management, employers allow health care providers — physicians, hospitals, surgery centers, and drug companies — to overcharge, gouge, and profiteer, resulting in annual increases in health care costs that drives up the cost of insurance every year. Business leaders ignore their health care spend because they make the mistake of trusting their benefits broker and health insurance company to manage the quality and cost of health care.
2. The misaligned incentives of health care’s middlemen
Health care’s middlemen, the insurance companies and insurance brokers, come between the employer that sponsors a health care plan and the health care providers who treat their patients. Both of these middlemen benefit financially when the increasing cost of health care drives up health insurance premiums. Higher premiums increase the insurance company’s profit and increase the broker’s commission compensation because the commission is a percentage of the premium. With these misaligned incentives, who can expect either the insurance company or the broker to work to lower the cost of health care, which would reduce income for both? With the employers delegating control over their health care costs to these two middlemen, it becomes clear that no one is managing the quality and cost of the employees’ health care. With no market discipline and no accountability, it’s easy to understand why health care costs — and insurance premiums — have increased every year since 1999.
3. The fee-for-service model in health care
In another example of misaligned incentives, doctors and hospitals are paid for each service they provide, which provides a financial incentive for over-testing, over-treatment, and a focus on treating illness as opposed to promoting health. This prioritizes patient and treatment volume, with no financial incentive to keep patients healthy. Compounding the problem, primary care physicians (PCP) — medicine’s front line of defense in the battle to keep patients healthy — are paid such low fees by insurance companies that they must see a large volume of patients each day just to make a living. Required to rush through each patient examination, the typical PCP doesn’t have the time to find out what really is going on with the patient, what might be the actual cause of the patient’s illness or condition. The financial demands of the fee-for-service model prevents the primary care doctor from providing the essential primary care that patients need.
You are a “healthcare insider”. If you had the power to make a change, can you share 5 changes that need to be made to improve the overall US healthcare system? Please share a story or example for each.
1 . Disintermediation of the Insurance Company. For the employer-sponsored group health plans that insure almost 50 percent of Americans (about 19 percent of Americans have private individual health insurance and 34.1 percent are covered by Medicare or Medicaid), disintermediation of the insurance companies, or carriers, whenever possible, is essential due to structurally misaligned financial incentives. Thanks to a provision in the Affordable Care Act that limits a carrier’s gross profit margin to 15 percent, carrier profits can increase only when revenues increase. And carrier revenues increase when health care costs go up. So, expecting a health insurance carrier to work to lower health care costs would be asking it to work against its own financial interests, nothing a successful company does for long. With no check on price inflation, health care costs have risen 261 percent since 1999, driving health insurance premiums for single employee coverage up by 293 percent. Meanwhile, carrier stock value growth 1999 through 2019 has been nothing short of spectacular, with Cigna experiencing the lowest growth rate at just 849 percent and UnitedHealthcare setting the pace with a whopping 4,729 percent growth.
2. Supply Chain Management. Just as employers manage the quality and cost of every other purchase made by the company, they must begin to apply these supply chain management techniques to the health care purchased by their employees. Not only is it the fiduciary responsibility of the C-Suite executives or the business owner, it’s the right thing to do for their employees. Applying supply chain management to health care purchases can reduce the cost of that health care by 20–80 percent, depending on the type of care and provider.
When a company needs new computers for its employees, does the CEO give every employee a corporate credit card with instructions to go buy themselves a new computer? The very idea is ludicrous. The employees likely wouldn’t know how much computer their work requires, the best brands for quality and price, the best sellers, and they couldn’t leverage a volume purchase to negotiate the best price. But every year, employers hand any employee who wants one the riskiest corporate credit card in America — the insurance card — with permission to buy any health care they can, from any doctor, at any facility, at any time, for whatever price the providers decide to charge…and the employer pays the bill without recourse or complaint.
3. Cost & Quality Transparency. Health care is the only consumer good that Americans purchase and use without knowing the quality or the price until the doctor or hospital sends the bill weeks later. And the quality of the care provided isn’t known until the patient gets better…or doesn’t. What consumer would purchase, let’s say, an automobile without knowing the price? And what company would purchase critical parts for its manufactured products without knowing the quality of those parts? Because of the mutual self-interest of the insurance companies and health care providers, individual consumers and employers are in the dark on price and quality until after the fact, when it’s too late. Our status quo U.S. health care system forces employees to play Russian Roulette, with their health and their company’s money. Only when both price and quality information is available can consumers determine the high-value — high quality at a reasonable price — health care providers.
Maureen Pacheco of West Palm Beach, FL, retained Dr. Ramon Vazquez for a spinal surgery in 2018. After his initial incisions, Dr. Vazquez noticed a large pelvic tumor, which he removed. Following the surgery, Ms. Pacheco discovered that, in addition to some fused vertebrae, she had one kidney, since the “pelvic tumor” Dr. Vazquez removed was actually a pelvic kidney, which is one that never migrated to its normal spot in the abdomen. While Dr. Vazquez’s academic and social reviews were exemplary, a leading health care quality rating service showed Dr. Vazquez with a score of “10 (inferior)” out of 100 possible points. Yet Ms. Pacheco wasn’t made aware of Dr. Vazquez’s quality score by her insurance company, which listed him in its Preferred Provider listing with no warning or notice of his low quality rating. If fact, no insurance company lists any quality information on any of the physicians or hospitals in their network.
4. Direct Primary Care (DPC). Physicians increasingly are abandoning — partially or fully — the insurance-based fee-for-service model in favor of a subscription model in which patients, or their employer, pay a monthly membership fee. Members of the physician’s practice generally have unlimited access to the doctor and lab & imaging tests are usually included under the fee. Most important, DPC doctors can spend 30–45 minutes or more with each patient to learn about his or her personal situation, home and work life, and other factors that might contribute to health problems. Only by putting primary care doctors back into a primary role with the patient can the U.S. health care system begin truly to heal.
When I was a speaker at the DPC Summit in Washington, D.C. a couple of years ago, I asked several doctors in attendance why their interest in DPC. Each separately gave me the same story: “With fee-for-service, I have 5–7 minutes with each patient, which gives me just enough time either to write a prescription or write a referral to a specialist. That’s not primary care.”
5. Value-Based Care. The fee-for-service model in health care perversely incentivizes physicians. Replacing the fee-for-service model based solely on volume, value-based care holds health care providers accountable for outcomes, rewarding providers based on the quality, rather than the quantity of care they provide patients. The U.S. Centers for Medicare and Medicaid (CMS) has recognized the importance of moving away from fee-for-service and has instituted several Medicare programs that incorporate value-based care. Until value-based care is the norm in the U.S., waste, fraud, and abuse will continue to lower the quality of care delivered and increase the cost of that care.
A surgeon who now is working in a value-based care model told me he was thrilled to be paid for 1) doing a great job with a patient’s surgery and 2) keeping that patient from returning to the hospital due to complications from the surgery. Previously, despite his higher quality outcomes, he was paid the same as less competent surgeons whose patients suffered frequent and severe complications.
Ok, its very nice to suggest changes, but what concrete steps would have to be done to actually manifest these changes? What can a) individuals, b) corporations, c) communities and d) leaders do to help?
- For the disintermediation of the insurance company and implementation of supply chain management of the employees’ health care purchases, CEOs, CFOs, and business owners must step up and take control of their second largest operating expense from the insurance carriers and the status quo brokers who effectively work for the carriers. A new breed of benefits advisers are working with progressive business leaders to leverage next-generation strategies — including alternative funding arrangements and supply chain management — to finally take control and manage the company’s health care spend like every other purchase.
- To encourage company owners and C-suites to take control of and exercise their fiduciary responsibility for their health care spend, the U.S. Department of Labor (DOL) can extend their current regulatory oversight of company retirement plans to the company’s health care plan, which is squandering and wasting far more of the employees’ money than any retirement plan. Currently, DOL regulators are stepping over health care dollars to pick up retirement pennies. By enforcing employers’ fiduciary responsibility for their health plan, the DOL would force employers provide the executive oversight of the health care plan that will align the currently misaligned incentives in the system that are the real problem in our health care system.
- Recent federal rules issued by the Department of Health and Human Services are requiring transparency on health care prices from both providers and health care plans. If implemented, these rules have the power to transform the cost equation of U.S. health care, by enabling health care consumers to shop for the best price for the needed service or procedure. While quality transparency is not addressed in these rules, employers — as the largest health care payers — have the power to demand and require quality data from health care providers as a qualification for inclusion as an approved provider in the company’s health plan.
- The increasing popularity of direct contracts between employers and health care providers show how to replace the outdated and ineffective Preferred Provider Network model used by the insurance companies. Whether with a Direct Primary Care physician practice, an ambulatory surgery center, or a regional health care system, direct contracting eliminates the insurance carrier intermediary and provides a mutually beneficial arrangement that serves the interests of the provider, the employer, and the employees. Recently, as part of this larger trend, General Motors established its first direct contract, with Henry Ford Health System, to serve the 23,000 GM employees in the Detroit area. In their contract with GM, Henry Ford Health agreed to a value-based arrangement, accepting risk based on the health outcomes of their patients. Already being implemented across the country by even some mid-sized employers, the direct contracting model must become the norm in setting the price and quality expectations of health care providers.
I’m interested in the interplay between the general healthcare system and the mental health system. Right now, we have two parallel tracks, mental/behavioral health and general health. What are your thoughts about this status quo? What would you suggest to improve this?
Our health care system’s siloed approach to general vs. mental/behavioral health is largely a problem of the failure of our primary care system, which has been disabled by the fee-for-service model that turns the primary care physician (PCP) into nothing but a referral machine for medications or a specialist. By eliminating the time constraints placed on the PCP by the current model, the primary care doctor can spend the time (30–45 minutes or more if needed) with the patient to treat him or her as a person, to begin to identify possible environmental or mental health issues that are contributing to the patient’s physical ailments. By providing a more wholistic approach to the patient’s care, the PCP can identify mental or behavioral health issues earlier and intervene earlier to prevent more serious and severe consequences. Again, returning the primary care physician to a primary place in our health care system is an essential reform if we are to improve the overall quality of care and lower the cost of health care in the U.S.
How would you define an “excellent healthcare provider”?
While conventional wisdom focuses on quality of care and medical outcomes to define excellent health care, the most critical component is “appropriateness of care.” The least expensive medical claim is the one that doesn’t happen; conversely, the most expensive medical claim is the one that should not have happened. For a patient, quality of care is critical, but no one wants to undergo a procedure or surgery that is not necessary. Quality of care and high outcomes are important, yes, but the best hip-replacement surgeon in the world who sees every hip as a replacement surgery is not providing excellent care. That surgeon is complicit in the waste, abuse, and, arguably, fraud that plagues our health care system. Walmart recently announced an initiative to incentivize its employees to use the top 20 percent of doctors in each specialty, based on the physician’s commitment to providing both quality care and, most important, appropriate care. Appropriateness of care will become the key metric for determining provider excellence in health care.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
One of my mentors once told me, “Done is better than perfect.” As a now-recovering perfectionist, I struggled with that statement, until I realized that, while perfection is unattainable, my efforts to reach it deterred me from both finishing the project at hand and, more important, starting and finishing the next project. Accepting 100 percent instead of 120 percent has freed me up to accomplish so much more in my life. A commitment to quality is critical, but a commitment to perfection is a massive hindrance to productivity and achievement.
Are you working on any exciting new projects now? How do you think that will help people?
We are creating an ambitious outreach campaign to the top company decision makers to educate them on their opportunity to take control of their second largest operating expense, health care, and to improve the quality of care, eliminate their employees’ out-of-pocket health care costs, and lower the cost of health care. Only as CEOs, CFOs, and business owners exercise executive and fiduciary oversight of their health care spend will the quality of care increase and the cost of care decline to reasonable and sustainable levels.
What are your favorite books, podcasts, or resources that inspire you to be a better healthcare leader? Can you explain why you like them?
Books include Breaking Through the Status Quo and NextGeneration Healthcare, both written for business leaders by some of the top NextGen Benefits advisers in the country; Unaccountable by Marty Makary, MD; The Company That Solved Healthcare by John Torinus; and Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne. Podcasts include “Dr. Death” and “broken Healthcare.” Other valuable resources are FierceHealthcare.com and Modern Healthcare magazine.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
Actually, I have the privilege of leading a movement, known as the NextGen Benefits Revolution, that is helping business leaders change how they purchase, manage, and utilize health care in their company. This movement is growing rapidly as employee benefits brokers recognize their opportunity to be a change agent, to help their employer clients improve the quality & lower the cost of health care, and to eliminate the out-of-pocket health care costs for employees. Some of our movement’s results were featured in a five-page article in Chief Executive magazine, highlighting the success of three CEOs who are using our NextGen strategies and a NextGen Benefits adviser to achieve remarkable results in cost savings and quality of care.
How can our readers follow you online?
Thank you so much for these insights! This was so inspiring!