#497 Replay: Can a Throwback TPA be a Better Option? — With Bob McCollins

Speaker 1: 0:00

With all the changes in the innovation in the industry, is there still a place for a self-professed throwback TPA? And what does that mean anyway? We'll find out on this episode of Shift Shapers.

Speaker 2: 0:15

Change either paralyzes or energizes. The choice is yours. You're listening to the Shift Shapers podcast. You're about to learn firsthand from businesses and entrepreneurs who have successfully shaped the shifts in their industries. Get ready to become the change you want to see. This episode is brought to you by Shift Shaper Strategies. In sales, if you confuse, you lose. Clarify your message so you win more clients. Crush your sales goals and build your practice. Learn more at shiftshapersstrategiescom. And now here's your host StoryBrand Certified Guide and Chief Transformation Strategist at Shift Shaper Strategies David Saltzman. Transformation Strategist at Shift Shaper.

Speaker 1: 1:05

Strategies, david Saltzman. We've asked Bob McCollins, vice President of Sales at Edison Health Solutions, who is the self-described throwback TPA, to kind of help us understand that a little bit and learn what's going on in the TPA universe. And as a former TPA I won't weigh in at all because I did stuff back when we were still making notes on cave walls. But welcome Bob.

Speaker 3: 1:25

David, great to be with you. Thanks for having me.

Speaker 1: 1:28

My pleasure. So let's level, set a little bit for the audience and start a little bit with your background. How do you get to be where you are and doing what you're doing?

Speaker 3: 1:35

Well, boy, this pushes the memory bank. This is my 36th year in the employee benefits business and I actually got started working for a boutique TPA back in 1983 in Ohio. I had been doing individual life sales for Metropolitan Life Insurance and realized I wasn't very good at that at all and I saw an opportunity for a group service representative at JW Didion and I took a chance, took a leap, dropped my resume off there was no internet back then I hand-delivered my resume and, lo and behold, I got into the TPA business and since then it's been a great ride, working for third-party administrators, for Blue Cross, Blue Shield plans, consultants and, most recently, this great experience with Edison Health Solutions.

Speaker 1: 2:21

Well, that's great. Thank you for that. Now we know that we've had other folks talk about TPAs and it seems like everybody's in a rush to modernize and do everything in different ways and whatnot. So let me ask you the salient question here when you talk about yourself as a throwback TPA, about your firm, what does that mean?

Speaker 3: 2:40

You know and it's something I've thought a lot about since joining Edison in January and there are a lot of great TPAs out there and some are technology-driven.

Speaker 3: 2:49

Everybody delivers great customer service and can provide reporting. But as I look at the makeup of Edison Health Solutions and coming up with this TTPA, this throwback TPA, it reminds me back of when I got started back in 1986 with the folks at Didion. We were an independent, family-owned third-party administrator. We were heavy on putting the patient and the customer first. We were overloaded with staff and customer service. Data was keenly important to us in helping our customers and being innovative, flexible and able to customize. That is what I consider the throwback part of the throwback TPA and why I represent that truly respond to what the customer wants through their broker benefit advisor and really customize for them without hesitation of the investment which, of the consolidation today, a lot of venture capital money, a lot of private equity we're not beholden to them. We're beholden to the old-fashioned TPA, which is take care of the people, give great data, help the people achieve the goals that they want to and be able to do it on green paper every other Thursday if they want it.

Speaker 1: 4:12

That doesn't sound too throwback to me. That sounds like what you ought to aspire to if you're a TPA. So with your roots planted in the great service of the past and I remember that because we used to try to do that as well Our clientele was less commercial and more Taft-Hartley at the time, but a whole different set of wrinkles, but still the same customer desires, the same customer experience that you strive for. Are you finding that the advisors the benefit advisors are bringing you lots of unusual requests to connect to all kinds of unusual services that have been popping up in the self-funded universe?

Speaker 3: 4:47

Yes, and again, I think this is where the industry has changed, where back in the old days in our world, the brokers and benefit advisors, they leaned on the TPA to bring the different pieces and parts.

Speaker 3: 5:01

Bring the PBM, bring the stop loss, bring the medical management, bring these pieces to us. We don't really understand it. And as the industry's evolved, as the capabilities and scope of services of the benefit advisors have evolved to take care of their customers, and the explosion of solution partners to the self-funded industry, the benefit advisors saying, hey, we want to work with this organization, this PBM, this medical management, we want to plug in this HRIS. They have gone out and done a great job of finding those solutions and vetting those solutions to meet the needs of their customers. They're bringing that to us and saying we need you to be the hub, kind of quarterback, all of this, keep it all together. But they're bringing the solutions to the table and looking to the third-party administrator to be the one to kind of coordinate that and keep the glue together for the benefit of their customer and prospects. It's a different world and different approach.

Speaker 1: 6:06

You mentioned that back in the day, data was king, and data is more king now, I guess, than it ever was. How difficult is it for today's TPA to work out the send and receive from all of these different best-in-class services that the benefit advisors bring you and want to connect?

Speaker 3: 6:24

You would think it would be very complicated, but it probably was five, six, seven years ago. But today, the integrations. And again, look, I have to admit I'm the sales guy right, so my knowledge of what all needs to happen behind the scenes is pretty minimal. My job is to kind of make the introductions, set the calls and be quiet, make sure the follow-ups get done. So I can't take credit for the technology work and effort behind the scenes, but it really is.

Speaker 3: 6:53

With the solutions providers and their recognition of having to be flexible and provide data in different formats to meet the needs of their broker customers, the employer customer, the TPAs, everybody has kind of evolved into this open architecture type of system which is similar to what it was back in the old days. Roger Warner taught me that many, many years ago. He said Bob, all you need to know as a salesperson is the term open architecture and that's really where we are today in the TPA space. It's an open architecture system. There's virtual this, there's all. You know all the different pieces and, quite frankly, you know it doesn't take a lot to integrate to meet the needs of the broker advisors and their customers.

Speaker 1: 7:36

I wonder, you know, in our agency we're doing an awful lot of continual training about self-funding because there are, you know, new folks coming into the business who can't spell ERISA and I wonder are you finding yourselves in that position, with the renewed interest in self-funding, even in some smaller groups, that years ago you or I might not consider to have been credible? Are you finding that you're doing an awful lot of advisor, education and kind of what are the areas that they're most lacking and that they need to know more about?

Speaker 3: 8:06

You're absolutely correct and you know I've kind of identified the benefit advisor broker distribution system into two buckets. 10 to 20 percent of the benefit advisors their agency has the bandwidth, they have the intellectual capital, they've been doing it for a while and they have the ability to manage all these pieces and parts of solutions providers to build this kind of unbundled solution. Then there's 80 to 90% of the benefit advisors. They've lived in the fully insured world. They're graduating to alternate funding. And when I say alternate funding, that could be level funded, which the carriers have done a great job of promoting, level fundedfunded as a product. There's employee benefit captives, which is kind of a new thing that's out there, and then there's the old-fashioned traditional self-funded and what I find in that 80% to 90% that are graduating to educate their employer prospects on alternate funding solutions. They're not ready yet and maybe their agency doesn't have the bandwidth to manage all the unbundling pieces, but they want those pieces as a part of the alternate funded solution.

Speaker 3: 9:16

So you kind of have to build for lack of a better term kind of an unbundled bundle that has the transparent PBM, the medical management, the data reporting, the wellness, the risk management pieces. It's all packaged together. It's got all the pieces and parts, but it's all packaged together and it's kind of a plug and play easy button for alternate funded that the 80 to 90% of the producers out there are looking for. So you've got to, again, as a TPA, be flexible or choose one path or the other. I'm just going to work with the 10% to 20%, or I'm just going to work with the 80% to 90%, or you can build a product that is a plug and play but yet have the ability to respond to the larger opportunities or those benefit advisors that want that unbundled solution, and I just want you to do what the TPA does.

Speaker 2: 10:10

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Speaker 1: 11:11

Are you finding a lot of requests for reference-based pricing? I know it's something that was really hot a couple of years ago and it seems as though it's kind of come back again and more people are talking about it and more people are asking about it. What's been your experience with that?

Speaker 3: 11:24

A lot of interest again in reference-based pricing. The first evolution a lot of people took it on the chin. I believe it's a great solution, but we learned a lot from the noise and the non-noise and the success and the challenges of reference-based pricing in the first round. This round, people are aware of reference-based pricing and how to present it, how to promote it, how to communicate it. So there is a much, much renewed interest in reference-based pricing, even more so direct contracting and innovative solutions like direct primary care or virtual primary care. So again, I think the education, the evolution, quite frankly, the bruises and the cuts and getting bloodied under the first version of reference-based pricing, people are aware now about how to present it to an employer, the pluses, the challenges, what they need to do to make it be successful. And, yes, there is a definite renewed interest in reference-based pricing and or direct contracting as solutions to present as a part of the alternate funded package.

Speaker 1: 12:34

Well so less so with direct contracting, but I wonder, with reference-based pricing, in the event that folks get balanced build, are your benefit advisors referring people back to you guys to straighten that out and to intercede, or are there other mechanisms that you're employing?

Speaker 3: 12:51

Primarily, david. The reference-based pricing companies have again really expanded their services, both in product offering and in concierge support. They're really handling that negotiation, they're handling that contract, they're handling that quote, fiduciary you know, co-fiduciary situation and doing everything to take that off the patient's plate, keep it away from the employer, and handling that themselves. And, quite frankly, the majority of the vendors in the reference-based pricing world are doing a really, really good job of eliminating the noise and making that, for the most part, a non-issue for the patient and the customer as they're going through that. So again, they've learned, they've adjusted.

Speaker 1: 13:39

There's also an educational burden, right and I guess they take care of that as well with making sure that if a member gets a balance bill, they don't blast off like a rocket ship. They know who to call and they understand what it's all about.

Speaker 3: 13:52

It is, and to a point the TPA is involved in that, because many times people are calling the TPA first. So again, the multiple solutions and multiple vendor partners, tpa being kind of the hub, a great solution involves all the stakeholders great communication between the TPA, the broker, the reference-based pricing organization, the PBM, whoever, to really minimize the noise for the patient so that they don't get frustrated and then they end up in HR and then it just escalates and elevates from there. So everybody is doing, I think, a great job of supporting each other and open lines of communication so that the noise is much, you know, much less than what it was before, and collaborating to make sure that the patient's taken care of.

Speaker 1: 14:44

Now, are you guys also providing going back to throwback, the throwback part of it? Are you guys also providing plan documents? Or do you have a partner that you work with, because you know a lot of benefit advisors who dip their toe into this pool aren't aware of pretty much any of the ERISA requirements, much less having plan documents and having a fiduciary and what that means and always operating in the best interest of the plan and all of that stuff. Do you find that you're doing plan documents and ERISA education?

Speaker 3: 15:11

The answer to that is yes, and this is going to sound like a little bit of a commercial and I don't mean for it to, and it's not a commercial for us. But that's complicated. I mean, it is complicated and I live in a world of do what you do best. And we do contract out with the FIA group to help us with all of those types of plan documents, gap analysis, employee handbook, to make sure that everybody, as best as we can, everybody is covered and protected, most importantly the employer payer, they're the purchaser, they're the payer. But we do lean heavily on that partner for the protection of the plan, for the protection of us as a TPA, all the parties that are involved. That's how we work to accomplish that solution for that compliance part that sleep well at night piece.

Speaker 1: 16:06

Yeah, adam Russo is one of our favorite guests on the podcast and in large measure because, bless his heart, he takes the burden of conversation off of me, because you ask Adam a question and he's so smart and he's so good at explaining stuff. He'll talk for 20 minutes just about that one question. As a matter of fact, he's going to be on the podcast, I think, two or three weeks from now. So whenever we have a risk of questions, we we ring up Adam and he's not only really smart, he's entertaining as hell. So we love having him here and that's great. So we've got about five minutes left. I'm interested in again, since my dinosaur days, what's changed in the base functions of the TPA? You're still adjudicating claims and you're adjudicating them from providers and also from facilities. What's changed in that regard? I mean we were just starting to automatically adjudicate or electronically adjudicate claims. What percentage of claims are adjudicated that way these days?

Speaker 3: 16:56

Potentially up to 90% of claims are automatically adjudicated. But you have to watch. You don't want to rubber stamp and run things through, and especially in a reference-based pricing approach. So I think what's changed from an operational standpoint is look, a basic PPO plan design, not a lot of frills. You can adjudicate 80% to 90% of those claims, put in a little trigger on a dollar amount, but that's really simple.

Speaker 3: 17:26

But with the advancement of independent medical management, prior authorization, mandatory second opinion, reference-based pricing, a direct contract here, some narrow network type of functions, here Auto adjudication still has a place.

Speaker 3: 17:42

But again I think in the TPA world, going back to that throwback, that ability to say okay for this employer we might only auto adjudicate 40 or 50%, it's not because we can't do it, it's because we're not supposed to do it because of the checks and balances that are put in place from a risk management standpoint that this benefit advisor wants for this customer. They've got problems in these areas that we're trying to solve and auto adjudication, running this thing through, does not support the goal of the solution for this employer. So again, the flexibility in the TPA world is still needed and operationally that's really where it comes down to being different than maybe what it was. Back in the old days we didn't have all of these options and there's a lot more vendor solutions and unique solutions that are being built into plans. That does impact auto adjudication, but at the end of the day, it's for the benefit of the patient and the customer that these checks and balances are put in place.

Speaker 1: 18:47

Yeah, I mean in the old days it used to be kind of a one-size-fits-all environment and now everybody wants bespoke plans. They want to kind of build them the way the employer wants them built and they want to bring their own unique twist. Do you guys also facilitate stop-loss for benefit advisors, or do you have certain relationships where you just farm that over to those folks and let them do that? What's the experience like from a benefit advisor who doesn't know how to deal with stop loss?

Speaker 3: 19:14

We do fully support the benefit advisor that if they don't have the experience in stop loss or maybe not the markets, when I get a proposal request in from a benefit advisor, I'm asking them those follow-up questions you want us to shop a stop loss? Are you going to shop a stop loss? We've got a couple preferred markets. So again, it's that conversation with the benefit advisor what are you looking for? What's this prospect's pain, what are we looking to solve and how do we want to go about doing it together? So, yes, we have preferred stop loss markets that we work with.

Speaker 3: 19:48

Yes, we have benefit advisors that say, and this is wonderful, hey, I just need an admin-only quote, I'm going to take care of shopping the stop loss. That's easy. Even I can put that proposal together pretty quickly. So again, it depends on the agency, depends upon the advisor and their experience, and they may have great stop loss markets, have great relationships there that, quite frankly, are going to get better numbers than we are. So again, we can support 100%, we can do it all. We can shop the stop-loss, we can find you the PBM, we can find you the medical management, or we can do what we can do, which is we'll be the hub and you tell us the pieces and parts that you want us to connect with, and we'll support you in that way.

Speaker 1: 20:33

So we've got about a minute left. I'm curious where do you see TPA services going in the next four or five years?

Speaker 3: 20:41

What do you see coming down the road? Well, that's an interesting question. I don't know that there's going to be a lot changed over the next four to five years, but I think we're going to get better at the component pieces of managing risk for the employer. Look, the administrative fees, as we all know, are a small percentage of the dollar that goes to healthcare, and what people need to focus on is managing my claims, taking care of my patients, getting them to the highest quality providers to generate the lowest possible cost, and I think as an industry we're doing a good job with that.

Speaker 3: 21:17

But there continues to be more solution providers that take it and narrow it down to be even more target, specific and generate savings. So I think we're going to continue to see advancements in disease management and I think we're going to see a little bit more of a return to the prior authorization and second opinion to kind of help people make sure that you have the right diagnosis to get the treatment that you need, and we've kind of softened that, I think a little bit. I'm starting to see a return to the mandatory second opinion, the prior authorization, not to be penile in the process but to make sure that the patient is getting the right treatment and getting the right diagnosis. So I think we're going to see a little bit more of a return to that narrowing of those services and just being more precision in providing solutions to address that specific employer's health care cost, challenges, problems and needs.

Speaker 1: 22:16

That wouldn't be the worst thing to happen, and we'll have another conversation on another day and we'll maybe dive into that a little bit, because I think that's very necessary, especially with all the centers of excellence that are now coming up and the way that we want to incentivize employees for taking certain healthcare paths that are better for them and better for the plan, and, ultimately, if it's better for the plan, it's better for them. So it's a great circle of life. Bob McCollins, vice President of Sales at Edison Health Solutions. Bob, thanks so much for sharing your expertise with our audience.

Speaker 3: 22:47

David, thanks for the opportunity. It's been a blast.

Speaker 2: 22:51

The Shift Shapers Podcast is a production of Shift Shapers Strategies and may David thanks for the opportunity. It's been a blast.