Speaker 1: 0:00

450 million claims are denied each year, but fewer than 2% are ever appealed. And though the majority of those appeal denials are overturned, only 2% are ever appealed. What's up with that and what can be done to even up the odds? We'll find out on this episode of Shift Shapers.

Speaker 2: 0:21

Change either energizes or paralyzes. The choice is yours. This is the Shift Shapers podcast, bringing the employee benefits industry interviews with individuals and companies who are shaping the industry shifts. And now here's your host, david Saltzman.

Speaker 1: 0:42

To help us answer that question, we've invited Neil Shaw, chairman and co-founder of a new company that's looking to solve that problem or help consumers solve that problem called Counterforce Health. Welcome, Neil. Thanks for having me. David, it's our pleasure. We always like to start out talking about what your journey is. How do you get to be doing what you're doing? Because almost nobody's got a straight line, Like nobody woke up one morning in their crib and said I want to be in the insurance business. How'd you get here?

Speaker 3: 1:11

Yeah, sure, so I actually have a completely squiggly line to get here. Most recently, I have actually been running one of the largest and fastest growing elder care platforms in America called Karyaya Health Technologies. We're caring for thousands of older adults across the country, many of whom are living with dementia. And then, to give you kind of like the full backstory, you know most of my career. Up until my mid-30s I was in the finance business and I was a hedge fund manager.

Speaker 3: 1:40

I actually experienced a tremendous care needs within my own family, starting in my early 30s of taking care of my grandfather through dementia, kidney failure, cancer and serious illness and then end-of-life care where I really coordinated a lot of the care. But really my mom left her career to be his full-time caregiver and at that point it really opened my eyes to how broken kind of our healthcare and home care industry is in the country. And then I became kind of obsessed with the care economy broadly speaking and the patient experience and the family caregiver experience. And at that time I was still like very focused on running my fund. I worked really hard all my 20s and 30s and I'd become a partner at a multi-billion dollar fund and then I'd been fortunate enough to have one of those investors back me and I was running my own $250 million fund, so I wasn't prepared to kind of like leave to do this. But then, at the peak of my fund in my mid 30s, my wife became severely ill and went through years of a cancer battle, and at that point I kept taking several sabbaticals from running my fund to be her full time caregiver. And ultimately I actually had to make the difficult decision to wind down my fund to become a full-time caregiver for a couple of years, because I thought it would make a huge impact on her ultimate outcome and recovery, which you know, knock on wood, it did. You know she's now been in remission for a few years and I think that's in no small part to just managing her care very closely.

Speaker 3: 3:00

And at that point, you know, I left behind my finance career and decided to start a care company. I thought that the home care market in the country was really broken. I wanted to make innovations to improve it and so I started Keriaya, which has now become one of the fastest growing startups, helping care for people in their homes and connecting them with great caregivers who are all college students going to the health care field. We did that.

Speaker 3: 3:23

And then that whole journey and really seeing what my experience was and my wife's experience was as a patient with the system and how many times we fought, denied health insurance claims for legitimate treatments and procedures and medications that were needed during a difficult and dark journey of cancer, and then in three years of running Karyaya and seeing how many people at varying illnesses you know, starting with dementia, terminal cancer, you know kind of many other chronic conditions are facing this kind of like insurance battle them and their family caregivers. I think that really inspired me in recent months to start Counterforce Health. You know, I thought that there was a huge gap in the market, nothing built to improve the patient experience as well as geared towards small clinics, and I thought that there was a huge opportunity. So that's been kind of like it's been really a personal journey and then also recently a professional journey of seeing just where there are gaps in the market.

Speaker 1: 4:20

It's unsurprising how many entrepreneurs get into trying to solve a problem because they've experienced it themselves. With all due respect to Simon Sinek, I don't think a lot of people start with why. I think they find their why, but I think they start with why not? Why isn't there a way to solve this problem? Why isn't there a way to do this easier and just for our listeners and viewers on YouTube? We will do a second interview with Neil. All about CareYaya, but that's C-A-R-E-Y-A-Y-Aorg correct.

Speaker 3: 4:52

Yes, that's right.

Speaker 1: 4:54

If you want to go get a jump on our podcast. If not, we'll be talking to Neil again soon about that. But today we're talking all about counterforce health, and when we first talked about this, Neil, one of the things you did was you used an analogy of a restaurant and meals and whatnot. Can you share that with the audience?

Speaker 3: 5:12

Yeah, I wrote an article about it recently that I kind of put out on LinkedIn Pulse. Can you imagine if somebody sells you a subscription that you can eat at a restaurant or other restaurants twice a week for a year and pay me a couple thousand bucks a year? And you can eat at a restaurant or other restaurants twice a week for a year and, you know, pay me a couple thousand bucks a year and you can enjoy this privilege? And then you show up and they're like oh, actually, no, you can't eat today. Like do you actually need food? Oh, we're only serving this and this.

Speaker 3: 5:37

You know, and I think that's kind of like that's been the real, you know, kind of like people really needed to still what health insurance is, to kind of um, you know other analogies of things they might use in life, like subscription services for food, subscription services for meal delivery, where, if you pay up front, and then when you go to capitalize on, like, ok, I need this and you don't get it, especially during moments of extreme duress that people are under, whether it's they're managing care for a mother or father through dementia or they're managing care for a spouse through cancer. You know these are not situations where you want to deal with financial stress and existential stress of like am I going to be able to get this? You know that's why you're paying. You know during good times you're paying, so during bad times you can kind of have the coverage and I think then people are really shocked that they can't get it when they need it.

Speaker 1: 6:29

Well, because you know, as we've said frequently on the program, there's only three things you can do with risk you can keep it, you can take it, you can share it, rather, or you can give it away and you know, to a certain extent you expect that you've given it away and you shouldn't have to deal with all this nonsense on the back end. So we talked a little bit about the number of claims that are denied 450 million claims, that claims like, of all types.

Speaker 3: 6:54

Of all types.

Speaker 3: 6:55

Yeah, I mean I think basically, the statistic from the American Hospital Association is that one in five American adults with health insurance have had a denied claim within the last year Right, shocking, I think.

Speaker 3: 7:07

The other interesting statistic is that about 10 to 15 years ago, the average denial rates at many large insurers were less than 2% and now they've turned into anywhere from 15 to 25%, and you know that was kind of Kaiser Family Foundation had put out a detailed research report on it. So it's that a lot of people are experiencing this issue and the issue has gotten notably worse in the last five to 10 years. The third interesting statistic is that when they surveyed physicians as recently as 2022, something like 23% of physicians said claims denials are a major problem for me, and then from 2022 to 2024, when the survey was done, now 74% of physicians are saying claims denials has become a big problem. So this has been growing kind of throughout the 2010s and the early 2020s, which I have a theory on that, you know, related to kind of Obamacare and a variety of other things, but it has skyrocketed in the last three years and I believe that is fully on the part of AI and weaponization of AI by health insurance companies and asymmetric warfare.

Speaker 3: 8:17

You know where?

Speaker 1: 8:18

patients and providers have a conversation that's going on with UnitedHealthcare and you know they're kind of in the front of that, but there are others as well, so I'm interested. You mentioned that you have a theory about why this has skyrocketed. Would you share that with us?

Speaker 3: 8:29

Yeah, sure, I mean I think the theory is multifold. One I think Obamacare, while it may have been a well-intentioned policy to get more people covered, in reality it became a big kind of boost to private health insurance and really for-profit health insurance, right Like getting a lot more people on insurance plans. Combined with a relatively lax approach to regulation and specifically antitrust and mergers, created this kind of like monster. And if you kind of think about, like you know, many, many times, you may think who really benefited from Obamacare and you can say yes, you could say sure, people who didn't have coverage before or whatever. But if you look back at the policy 15 years, it's almost like UnitedHealthcare could have written that policy, because how did they benefit? Twofold One they got a lot of customers. They got kind of risk covered where government paid them out if there was too much risk. You force people to buy private health insurance for profit and then you allowed a series of mergers with no check or regulation, so these guys could not only gobble up other insurers but kind of go and vertically integrated and buy up PBMs and other parts of the healthcare value chain and buy, even buy up physician practices. So I think that that Obamacare was kind of like the start of it.

Speaker 3: 9:42

In my opinion, if, like, you can see insurance claim denial rates and how the insurance industry is operating because it's been around since whatever 60 plus years before, but starting in the early 2010s, the which is just happened to be coincidental with when Obamacare passes the behavior starts going a little bit off. You know off skelter right where it's like okay, denial rates start rising, then mergers start happening like crazy, and then now you have it where, like you know, between a handful of you know four or five guys you know United, humana, cigna, whatever they effectively control the market. You know you don't have a lot of choice and, depending on what employer you are or what state you're in, sometimes you're limited to a handful of choices. So market share concentration has gotten absurd. Then many of them have vertically integrated in other parts of the healthcare value chain. So you know they're kind of like flexing power on even what physicians are able to do, what pharmacies are able to do, et cetera.

Speaker 3: 10:31

So I think that it has been like really a complete regulatory and market failure that's resulted in this kind of like, almost like I wouldn't even call this capitalism, like I'm a hardcore capitalist, but like capitalist in the sense of free markets and competition. I would consider this almost like crony capitalism, where a handful of mega companies are taking part of the regulatory infrastructure to then flex market power and then keep competition out and then also have no responsibility to consumer, who is the ultimate end buyer, and then using a government as a way to force people into their product. So, yeah, I mean, I think it's absolutely disaster. So I mean I think and it's bipartisan, right, I mean I think it's not Democrat or Republican. I think there have been tons of administrations, obviously not just at the presidential level, but even, you know, people in Senate and Congress, you know kind of like thinking about what to do about insurance. But yeah, I think it's been a bipartisan complete disaster and I think that's going to have to change.

Speaker 1: 11:31

Interesting. I wish I could disagree with you, but I unfortunately can't. And I've been around this for 40 plus years and I've done I mean, I've run TPAs, I've paid claims. I see the correlation and causation, both. And it's frightening because if you take this out on a line, where are we going to end up and is something just going to implode as we go along? But let's get back to counterforce. So you saw this problem up close and personal, especially with your wife's struggle, and you decided, okay, there's got to be a better way to get people to easily appeal claims. What does Counterforce do? Is it aimed at the patient or the physician, or both? Give us a little background, and I know you're using AI to craft the solution, so tell us a little bit about that.

Speaker 3: 12:19

Yeah, yeah, sure. So I think you started the interview with kind of like the statistic that I thought was, like you know, the most capturing. It's like less than a few percent of people appeal claims, right? So there's so many denied claims across America, you know, in the hundreds of millions, something like 49 million individuals have had a claim denied within the last year. And depending on which stat you read, it's like some people say 2%, some people say 1% that actually bother appealing, so vast majority of people are not appealing. Some people say 1%, that actually bother appealing, so vast majority of people are not appealing.

Speaker 3: 12:45

If you kind of get into the reasons why, it's really 70% of people don't fully know their appeal rights. So they don't know they can do it or how to do it, things like that. 40% of people say they're too intimidated or lack the time or the resources or expertise to do it. So you know, and of course there's an overlap, like 70 plus 40 is more than 100, right. So some don't know how to do it and some of those are also I don't know who to get for help. So we kind of thought there's two things you could do here. You know you could do mass public awareness combined with tools to make it as easy as possible or one click as possible. So what is the current appeal process like for most people, let's say the 70% of people are like I don't know how to do it. I'm too scared For the people that do know how to do it are like okay, I can try. You know I feel like you need to have a doctor in your family to sit down and do hours and hours of research. You know to fix. You know billing codes are.

Speaker 3: 13:37

24% of denied claims are because incorrect billing code. Another 40% are due to medical necessity. So billing codes are something that you could look up in billing code databases, fix yourself right. That's something theoretically the insurance company should you know, theoretically maybe even fix for you, but you know it's maybe a frivolous reason to deny. So that is something where, if you had a doctor in your family, you could do it. If you had the time and the bandwidth, you can go search databases, you can use AI yourself.

Speaker 3: 14:08

But most people are intimidated. They won't do it, especially most people who are like less affluent, maybe less educated, in more rural areas. They're going to be like I don't know how to navigate this stuff right. So there's a health and a tech literacy component to that of why people aren't appealing, and then it happens that those are probably the people who can least afford to have the thing denied. So that's a perfect use case for somebody doing it for them. And then medical necessity that's one where you have to kind of go get doctors to detailed site why something is needed, you know, pull references from medical journals or other cases and say this treatment is needed for X, y, z, and that's another thing where most kind of lay people will be like I lack the expertise to.

Speaker 3: 14:42

So over the last several months we built a set of AI tools training them on a lot of databases of seeing what successful appeals have worked, which things have even gone to independent review, which have worked, even training it on legal databases that have things all the way gone to court and then learned successful appeal strategies and been able to real timetime access journals and medical literature databases as well as billing code databases. To say, for any person who comes in, whether in a rural area, urban area, uneducated person, minimally educated or super well-educated you know you could even be a doctor yourself. Come into Counterforce Health and upload your policy document, upload your denial letter, upload any relevant information, and just one click and sit there and in less than two minutes, a super detailed, well-crafted, eight plus pages appeal letters with detailed citations will be done for you at no cost, and we run it completely for free. By the way, it's a social mission, you know. I really just wanted to offer it to individuals for free. So you know that I think can't be beat. I think a lot of individuals, even if they had a brother that's a doctor might still have their brother. Take, you know, six hours, 10 hours, to write something like that, and we can do it with AI in a matter of you know seconds. It, having trained on tons and tons of databases, absorb really good information.

Speaker 3: 16:07

And then to your point about who the users are, believe it or not, clinics are also using it and there, ultimately, that'll be the path to sustainability is that we find many clinics, especially small practices. You know we don't kind of like initially start and gear towards big hospitals. I think a lot of them are trying to do this stuff in house, and good for them, you know they need to be, but there's many, you know. We have a rheumatologist you know it's two doctors running a small practice here in a small town in North Carolina and they see tons of patients and they're averaging something like 35 to 40 denials per week and they have one administrative person that handles kind of scheduling, billing, payments etc. And then whenever she has time she will write a few appeal letters.

Speaker 3: 16:48

And you know I was talking to her a couple weeks ago and she was like, yeah, typically we'll write maybe three, four letters, if I can, per week. You know it takes me a couple hours each. It's a lot of work and she, you know she has a full time job doing other stuff. This is an example where they started coming to Counterforce Health. Now she's writing 40 appeal letters a week. You know kind of like this and she would say they're better than what she was writing by herself because they're much more detailed and, you know, kind of much better cited. So I think that's really kind of the power of AI. I really believe that democratizing access to this. You know it's like if the insurers have weaponized AI, it's now time to provide individual patients and small clinics the same weapon to fight back, because I think it's been asymmetric warfare until now.

Speaker 1: 17:33

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Speaker 1: 18:27

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Speaker 3: 19:24

Yes, yeah, yeah. So we're keeping stats and so far it's surprisingly good. Now there might be an adverse selection bias, like people who are more intending to fight come to the thing, but on average it's averaging over 70%, like 72% as of last set, which is like surprisingly good, I think. Average appeal you know, average appeal win rates in the country, depending on which stat you look at, are somewhere like 40 to 50%. So there's already kind of an incentive of if you simply bother to write a letter, even if you don't use counterforce health, write it yourself, do whatever right, use chat, upt, I don't care, just bother doing an appeal, you'll win 40 to 50% of the time. Then the better the appeal letter is, the more you'll win. So yeah, like it's really cool to see 70% plus win rate. I mean that's, that's unbelievable right. And it's like billing code error related appeals. I mean those are extremely, extremely easy to fix and address and there it's just a matter of taking the time to do it, medically necessary a little bit harder. In many cases it just won't be done, but again, easy enough to address. And then there's sometimes back and forth. But what we find in many situations is that people just due to inertia, intimidation. We're just simply not bothering to do it. And then post care denials are even. I mean, I think those are, you know, terrible right, like where people have these $100 bills, $200 bills, where insurers is like frivolously denying and most people like I'll just pay it out.

Speaker 3: 20:44

You know, I was actually. I was talking to a lady actually that we helped through our care platform, living with a metastatic breast cancer in her mid 70s, and she's been taking this one routine med for the last couple of years, 50 bucks a month, and it got denied. And this is before she knew about counterforce and she just paid it. And I was like why did you pay that? Like, why did you bother? And she's like, well, she's like calculating, she's like calculating. She's like, yeah, the stress of writing a letter, the stress of researching, you know fighting. She's like I just don't want to deal with all that. I'm already going through cancer. I'm thinking about how much longer I got. So she just kind of said it's easier to pay the 50 bucks. So it's like those things in my opinion that should be a close to 100. A thing that spits out a letter in one minute, then sure that's worth 50 bucks at a time.

Speaker 1: 21:38

So I like building innovations like that. Well, what's interesting is the post-care denials are particularly stinging, I think, because as one of our guests over the last couple of years coined the term we've created people who are functionally uninsured. They may have an ID card in their wallet, but deductibles and personal responsibility amounts have gotten so high and convoluted that they're out of pocket for a bunch of money anyway. And so you're taking a population that can least afford to have these claims denied because they don't have avenues, they don't have huge savings, maybe they don't have credit card availability or whatever, and they're getting saddled with this debt. And you know that the initial study back years ago from, I think, steffi Wohlhandler when she was at Harvard, about medical bankruptcy was kind of questioned. But there have been a couple of new studies about the number of bankruptcies that are caused by medical debt, and if you can overturn some of this stuff, it'll make a huge difference in people's lives. And I'm interested to hear that you're doing it as a passion project.

Speaker 3: 22:39

Yeah, no thanks. I mean it's a passion project that's actually turning into a startup Like we've been approached by a bunch of venture investors. People kind of realize there's like a twofold thing that you can make and we really all our innovations are like impact innovation. So even Keriaya itself it's not like a traditional kind of like venture funded caregiving company. We're all backed by impact innovators. So Keriaya itself has funding from the American Heart Association, aarp, as well as several other smaller impact investors.

Speaker 3: 23:05

And I think same thing with Counterforce Health. We're being approached by impact investors like that who want to build something sustainable but aren't really sitting there trying to profit maximize and they're just like OK, as long as it can survive on its own. So you know, kind of like the model is free to people indefinitely, like we spent upfront costs building it, the ongoing cost is not very high. And then really clinics as they see value and really from a clinical perspective it's revenue cycle management right that a lot of the denials, especially post-care denials, will end up going into collections. Something like 10% to 15% of those will just not be paid and then that's a problem for the clinic that they're going to lose. You know, if you kind of like do the math on these couple of providers experiencing 50 a week, you know, just, even if averaging is $200 over the course of a month and seeing 200, 300 denials, that's going to be $40,000 plus. And if 15% of those go to collections, that's a disaster. Right, that's a multi-thousand dollar problem per month. So over time, from a sustainability pathway, it's going to be okay.

Speaker 3: 24:01

Will places like that say, hey, it's worth 5% of my, how much revenue I'm capturing back to spend on a product like this. So I'd say early, you know, kind of like how much revenue I'm capturing back to spend on a product like this. So you know, I'd say early conversations there, but like no real pressure to monetize. But I think investors really see the potential and I think that passion project can turn into something huge.

Speaker 3: 24:18

Because I do believe, from a patient side, if you charge it's tough, you know, because now all of a sudden you have people who are already hesitating or don't want to fight it and then you say, hey, five bucks to use this. People are like, nah, even if it's on a success base, I just feel like charging one isn't the right thing to do and I'll say from the inside, not to market against myself. But the cost is not very high. The cost per generation is fairly low. It's a fixed cost business that requires a lot of software development upfront and it requires constant training and retraining of models, but the variable cost of the business is absurdly low. So you want to just go for maximum usage and maximum scale, and I think that's also how you can make maximum impact.

Speaker 1: 25:01

So yeah, Well, I think you're right. I think you know it's a good deed to do it on a public basis, but the sustainability is really going to be at the doctor's office level and at the clinic level. I cannot tell you how often I hear you hear it too the system is broken. No, the system's not broken. The system is working perfectly. It was just never designed to work for you.

Speaker 1: 25:23

Yeah, and so if revenue cycle management is one thing, but certainly the 30% that they reclaim on claims that go into collection would more than pay for somebody to do this if they had a system to do it, and I love the idea of okay, you're using AI, here's AI back at you.

Speaker 3: 25:43

Yep Agreed, and I didn't even get to the most fun part. And I didn't even get to the most fun part. The other AI and I'll send you a video of this if you want to include in the YouTube is we even fully built a voice AI and even a video avatar AI. That's in beta right now but some people are using because just sending the letter, you know, faxing that or mailing that isn't where the battle stops. Everybody knows you got to get on the phone with these insurance companies, waste a ton of time on calls, right? You see all these patient advocates doing this on behalf of people, right, and you know? So we were like you can even AI that.

Speaker 3: 26:18

So we built Maxwell, which is a voice AI assistant. That actually the goal is upload all this stuff, generate the letter and then have sick Maxwell on the insurance company and he'll call the insurer on your behalf and deal with the process for you of just like wasting time with the claims and billing people. And I think that is interesting because they've deployed AI bots. So you know, whenever you call insurers, like and we do this all the time just as like a passion project where we have people using our thing, and if it's like a massive claim, we're like, okay, let us help you manually, just kind of for learning and for fun. And you know you call one of these insurers on behalf of someone and you spend minutes and minutes going through the AI bot conversation. Then you get the rep on the line. You know the rep is just wasting your time asking the same questions.

Speaker 3: 26:58

This is another perfect use case of AI, because the insurers have weaponized voice AI on you and you can weaponize it back and say, okay, my AI Maxwell is going to call and then one click the whole thing. The benefit there is if you're a cancer patient, you're somebody living with dementia, you're somebody who really doesn't have the resources or the ability to handle all the stress to manually fight this back, you can just have kind of the AI do it for you. And I think that that's going to be a big thing of AI agents. I know a lot of people have been talking about this, but I think in these kinds of fields, from a consumer standpoint, not enough people have developed AI agents and I think that's really the opportunity of like have the AI do as much of the grunt work and the dirty work for you. And I think at that point it makes it more of a fair fight.

Speaker 1: 27:37

What a fascinating journey you're on. I do hope, as you grow out, you'll come back and we'll talk some more about all this, and we will do another separate episode about CareYaya and what it does, because people who are caregivers are the unrecognized heroes in healthcare, and it is a huge burden and sometimes can become as debilitating for the caregiver as it can for the people who are receiving care, and so I'm more than happy to have you back to talk about that. Neil Shaw, chairman and co-founder of Counterforce Health. Neil, thanks so much for a fascinating conversation.

Speaker 3: 28:11

Thanks for having me, david, really appreciate it.

Speaker 1: 28:19

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Speaker 2: 28:38

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