Changes with brokers: I believe brokers need to operate differently. Currently, at least 99% of employers get their insurance from an agent or broker. 90% of them are in one type of product, and that’s a fully insured program. 80% of them are with one specific of carrier, Blue Cross. All these statistics show that the broker market is not displaying all the options available. As a result, it is likely that more than 50% of these employers are being overcharged by millions in premium expenses each year by their broker / carrier by not being shown more carrier options.
Today, we’re talking to Russ Carpel, CEO of LevelFunded Health. His company provides a national, tech-enabled insurance platform that was developed specifically for employers to be able to offer their workforces low-cost, high-quality insurance. In some of its earliest deployments, his platform showed that it can save businesses anywhere from $100,000 to $2 million a year while providing better services. These savings and benefits are generally passed onto employees, giving them access to better coverage that improves their lives.
Thank you so much for joining us Russ! Can you tell us a story about what brought you to this specific career path?
Sure. I have had a range of experiences in the insurance industry, but I got started on my current path during one of my earliest interview processes. At that time, I was talking with insurance giant Marsh & McClennan about a potential job as a commercial health insurance broker / producer. As they were talking about what they did, I realized that while they were looking to participate in insurance in a typical way, there was a different opportunity they weren’t talking or thinking about. The opportunity I saw was based in technology and better for both the employers and their staff. During those interviews, I wondered why brokers couldn’t use technology in the same way that a lot of other e-commerce websites/platforms, like Kayak or Trivago, do to reduce costs through competitive bidding. Those kinds of sites offer customers a range of options and they can choose what they need at the best price.
Can you share the most interesting story that happened to you since you began leading your company?
The most interesting thing that has happened to me in my current role is that I found mid-sized businesses are the places that can make the most out of what we have to offer. I started out expecting to develop along a logical continuum that focused on small and micro business. But when we bucked that continuum and pivoted right into serving companies ranging from 100 to 1,000 employees, our business exploded. That’s because we can save this sized employer between $100,000 and $2 million almost overnight, while improving medical benefits for all employees of companies of that size
Can you tell your readers a bit about why you’re an authority in the healthcare field?
I’m an authority because I have enough knowledge to work fluently in the insurance space, but I see things very differently than some of the long time insiders. This vision can be disruptive, making a positive change for health insurance consumers and the businesses they work for. Where most elements of the insurance industry have bought into the way things have been done for decades, I haven’t. I’m not satisfied with the status quo. Instead I believe this tech-enabled way is better for employers and better for consumers that have a huge stake in the insurance decisions made by their workplace.
Can you share with our reader something about the innovations that you are bringing to and/or see in the healthcare industry? How do you envision that this might disrupt the status quo? Which “pain point” are you trying to address?
For the most part, employers currently choose from an extremely limited range of carriers provided by their insurance broker. These brokers are in control of what set of carrier possibilities each of their employers/customers sees. Typically, brokers are only showing their clients (employers) 2 to 3 carriers to choose from. This limits the carrier bidding process and keeps premiums (costs) very high for both employer and employee. Mind you, brokers work on a commission, as a percentage of premium, so therefore they have zero incentive to curb costs for the employer / employee.
What we do is a game changer and is turning this traditional model on its head. Just like Kayak and Trivago use technology to disrupt the way that consumers shop for travel and purchase the elements of their trip, we use technology so that employers can shop for the health insurance benefits that they give their employees. We have tech that allows over 60 insurance carriers to fight for each employer’s business, each year. By employing this competitive bidding process , we can guarantee that employers see the best products, at the absolute best price every single year.
I’ve got a real-world, customer example of how this plays out. One of my clients is a 500-person auto dealer group that is comprised of 20 “rooftops” or car dealerships. They used my company’s technology to browse through more than 60 insurance carriers and work with carriers to design competing proposals that reflect what their employees needed and nothing more. Ultimately, one of these competing insurance carriers (bidders) won the business. Once my client chose and implemented their new insurance program, they saved $2.3 million in the first year alone.
What are the five things I wish someone had told me before I started?
According to this study cited by Newsweek, the U.S. 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?
I’m happy to. Here are my thoughts:
As a healthcare insider, can you share 5 changes that need to be made to improve the overall US Healthcare system?
Sure. Here are my thoughts:
What steps might you suggest taking to make these changes?
I think that technology has an enormous role to play in leveling out the field of health insurance so that employers can get better pricing while still receive better health benefit options. I also believe that there’s a huge education piece that needs to happen so that both legislators and voters understand how the industry works and what change can be made AND should be made. In addition, I believe that reducing middlemen will help with drug costs. Furthermore, I would like to see the concept of a “ network” ie relationships between health insurers and hospitals completely outlawed, so that we can quit seeing the kinds of price establishing that’s happening now, which is severely hurting consumers and employers from a financial standpoint.
What books, podcasts, or other resources inspire you to be a better healthcare leader. Can you explain why you like them?
There are two books that I’m a pretty big fan of. I like them both because they show differing approaches to explaining the same kinds of problems in healthcare. The first of these is called America’s Bitter Pill: Money, Politics, and Backroom Deals by Steven Brill. The second book is called An American Sickness: How Healthcare Became Big Business And How You Can Take It Back by Elizabeth Rosenthal.
How can our readers find you online?