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Should you enroll enhanced benefits yourself, or can a professional enroller help to create clear communication while maximizing enrollment and delivering better client satisfaction – and what are the financial considerations of that decision?

That is the question that Allison De Paoli discusses in this episode. Her firm, De Paoli Professional Services, specializes in becoming an extension of your office, enabling a more direct and in-depth communication about employees’ enhanced benefits in an effort to maximize participation.

We explore whether (in some situations) using benefits enrollment software makes more sense than doing in-person enrollments. Allison also explains that success in this practice area represents a combination of art and science – exactly the kind of nuance needed to help employees make the best choices for themselves and their families.

Finally, we discuss how some employers are making the choice of baking enhanced benefits into their plans, and what that means for advisors.

What You’ll Learn From this Episode:

  • Why you can’t simply use benefits enrollment software on its own.
  • What market sizes can benefit from professional enroller help.
  • Whether advisers should handle smaller cases themselves, or send someone from their office to manage them.
  • How much of enrollment is “art” and how much is “science”.
  • Why some employers are baking enhanced benefits into their plans.

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Listen to the Full Interview:

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Episode Transcript:

David:     How can using professional enrollers help increase revenue and client satisfaction? We’ll find out on this episode of Shift Shapers.

Change either paralyzes, or energizes. The choice is yours. You’re listening to the ShiftShapers 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 that you want to see. Here’s your host and chief transformation strategist, David Saltzman.

David:      This episode of the Shift Shapers Podcast is brought to you by Captivated Health. A captive insurance arrangement, that helps small and mid-market companies escape the fully insured marketplace, and deliver stability, control, and savings, without watering down employee’s benefits, or increasing their premium share. If you have clients in the Educational Institution, or the Engineering Vertical, go to our website at captivatedhealth.com, or click on the company logo on the Shift Shapers website.

For a lot of really interesting reasons, there’s been a renewed interest in enhanced benefits, and there’s always the question when you talk to Benefit Advisors about that. About what the best way is to enroll folks to be both effective and efficient, and our guest today, Allison DePaoli, who’s the Founder and Benefit Enrollment Expert at DePaoli Professional Services, practices in this area, and has studied extensively, and we thought that Allison could help us answer some of those questions.

So, with that welcome Allison …

Allison:       Thank you, pleasure to be with you today.

David:        There are lots of Benefits Administration Systems, and some of them have pretty decent decision support tools, but you still counsel that one on one enrollment is best. Why is that?

Allison:       I do. One on one enrollment is best for a few reasons. First, it is still the crème de la crème of communication. There is nothing that beats a person sitting with another person to have a full explanation of their benefits. Today, forward thinking brokers are talking more and more about medical management, cost containments, scheme-e networks, RX discounts, where you go to get the best care. That is a lot for a C-Suite to absorb, let alone a regular employee. Even mid-level and senior level executives. Most people spend about 10 minutes a year on their benefits, and when you start to insert services like this, they do require a fair amount of communication, not just on a one on one basis, but in a variety of manners.

So decision making support, in an online benefits enrollment, an app on your phone that will help you find a provider, regular communication from HR, as well as the traditional group meeting. So, when you piece it together, one thing at a time, if you’re getting to six or seven forms of communication, you’ve fully addressed the communication needs of the group.

David:        So it’s not an either/or? It’s kind of more of an “All of the above?”

Allison:       I think it’s an “All of the above.” I worked for a gentleman who I just loved, who gave me the rule of 8’s, when I was teaching a group of people something new, and I’m not an overly patient person, and I was not allowed to express my impatience until I had explained something 8 times. Once I explained it 8 times, I could lose my patience. Rarely, did I get to 8 times.

So when you’re communicating in a variety of fashions, and over a period of time, people start to absorb what they need to do better, most people want to control their cost, they want the best care, they want to pay the least for their prescription drugs, they want to know what to do, when they need to do it, and they need to know how to piece everything together.

So, the more tools you give them, the easier it is for your employees to appreciate the benefits that you’ve worked on.

David:        That makes perfect sense, now are there certain market size segments that lend themselves more to one on one enrollment, as opposed to other methods?

Allison:       Traditionally, there has been a lot of public sector and large employer focusing on one on one enrollment. A lot of that has been product driven, sort of in the enhanced benefits arena. That is changing. With the advent of so many new tools, and so many different kinds of ways to piece your benefits package together, it is becoming a more holistic communication mechanism, so when we send a team, or when the industry standard now for sending a team is that they’re going to communicate all the benefits.

They’re going to get your medical questions answered, they’re going to refer where you need to go to find this piece of information, they have their own tools to make sure you understand how to use an app, or an advocacy line, or an RX discount plan. So, it’s much more holistic, and as that becomes more prevalent, you see more and more employers engaging in that service. So, used to be 1,000, maybe 500. Now you’re dropping that into the 500, the 200, the 50, and for small employers it’s always been more personal. Maybe you weren’t talking about a whole host of products, but if you have an employer with 20 or 25, or even 40 or 50 employees, and it’s been your case for a while, you know who those people are, and they’re going to come to you with questions.

David:        Would you recommend in that kind of situation that the Benefit Advisor do that enrollment themselves, rather than sending somebody from their office because they are so visible and so familiar to the case?

Allison:       I think that all Benefits need to be sold, not in an uncomfortable high pressure way, but I do think that they require some explanation, and sales education are very similar tools. You are explaining something to somebody so that they see the value in it. I think a professional salesperson is best suited to that, and I think it also allows that professional to see what is actually happening, and what people like, what they don’t like. If you don’t do that, there’s a lot of miscommunication, or misinformation, and you can solve a lot of problems in that sort of one on one environment, or a small group meeting environment, when it’s a small employer.

David:        So, if I understand you correctly, what you’re saying, especially in the smaller segments, is for advisors who are being asked to do more with less, who’s staffs maybe have gotten paired back a little bit because of commission compression, it’s critically important for them to do those one on one’s, because they will ultimately lessen the service burden of their office staff?

Allison:       I think it does lessen the burden of their service staff. It also gives them a pulse on what is happening, and I know it can be a little scary to do a one on one enrollment yourself, you can hybridize that, you can do some one on one, benefit platforms are getting more and more user friendly and useful for smaller case sizes, you can introduce that into your case as well. That is a great opportunity to grow the benefits package.

David:        Is this one on one enrollment, is it art or science, or some place in between?

Allison:       I think the technical aspects are science, but I think there’s a lot of art to it. I think it’s a sales process. The best sales processes are structure and personal delivery, and personal delivery is all art. I think it’s very important to know and to be able to read your audience as to what is important.

There’s a lot of research about the generational differences, and how people like to be communicated to. The reality is that the baby boomer generation, and the forgotten generation, as well as the millennials, they all want information, they just want to receive it differently. But when they want a question answered, they want a question answered by a person. They don’t necessarily talk to artificial intelligence or into a chat box, they want to talk to a person who can explain it fully.

David:        So, would you change your approach having the same conversation with a boomer vs a millennial, even though ultimately you’re going to deliver the same information?

Allison:       I think you should always tailor your communication to the person sitting in front of you. I think one of the big misconceptions is that older people and younger people have different risk tolerances. The millennial generation actually has a risk tolerance that is much more similar to the greatest generation, than to my generation.

David:        It’s interesting, because they’re also savers like the greatest generation.

Allison:       They are.

David:        As they’re becoming more and more part of the middle of that bell curve of the workforce, that’s becoming more and more apparent, and it’s fascinating that you make that connection as well, in terms of risk.

Allison:       Yes, they are very risk averse, for the most part. Not every person. They are also very interested in understanding what they have. I think it’s really important to explain it to them.

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Now, the personal responsibility amounts on all of the plans that are being sold these days are going up. Is that driving a particular set of enhanced benefits, a particular set of products that you’re seeing more interest in, than we might have five years ago?

Allison:       Absolutely. Gap insurance is becoming more prevalent. It’s becoming more something that the employer might pay for, or there might be a cost sharing arrangement between the employer and the employee. That will help alleviate some of the out of pocket burden. Accident and critical illness are still the standards, and if you bake those into the planning process, so when you’re sitting down with your renewal, and you’re deciding how you’re going to manage for the next year, if you’ve got a good accident product, and a good critical illness product, you can eliminate risk for a significant number of medical events, and a good Gap or hospital indemnity plan depending on what your clients’ needs are, will help eliminate a little bit more of the risk.

It can be a real challenge to be a young family, and starting your family. You know, newly married, and starting your family, and your maximum out of pocket is $4500 if you want to have a child. That’s a pretty big hit. So, baking the Gap plan or the hospital indemnity plan into the coverage can help eliminate that.

David:        So, when you say baking in, is it kind of an opt out situation? Everyone is assumed that they’re going to get this? Or is it everybody gets it, whether you want it or not?

Allison:       I think it can be either. In some situations you want a Gap plan that’s baked in, and everybody who goes into the medical plan gets that, and then that needs to be discussed in your group meeting, and your one on one follow up, but it doesn’t have to be particularly for smaller employers.

What offering a Gap or hospital indemnity plan on a voluntary basis allows, is for the employer to have a little more flexibility to increase their deductible, or their out of pocket, and offer this alongside. I think it works best when those decisions are made when the plan designs are being reviewed, and the funding is being reviewed as well. Then you know how you can pivot, and how you can move, and to be truly effective, it’s helpful if you can watch that plan develop over 3 to 5 years, so don’t plan just for this year, plan for next year, and the year after, and 3 and 4 years down the road.

David:        Does the culture of a particular employer pay in to the decision of how those baked in benefits are offered?

Allison:       It absolutely does. Most employers really try to do the right thing by their employee. Employees are a valuable asset, and they really do try to do the right thing, and they may not understand how to both do the right thing for their employee, and do the right thing for their operating budget.

If you have all this on the table to start with, you have more flexibility in both situations.

David:        In your practice, do you find that, can you generalize?  Are there certain types of employers that tend to go one way vs certain types of employers who maybe tend to go in another direction?

Allison:       More forward thinking employers tend to look at a more holistic package, and employers and industries that are very competitive for talent look at more holistic benefit packages, and what they can add that will attract or retain an employee. Talent can be very difficult to keep, talented employees, you want to keep them. It costs 20% on the low end to replace an employee if they leave. It can be a substantially higher cost for a more high level employee, so you want to do what you can to retain them, and by enhancing your benefits package, you have an opportunity to do that.

The other thing that I’d like to point out, employees don’t necessarily expect an employer to pay for everything, or even to contribute to everything. Particularly with younger employees, they want to know how many dollars they have to spend, so more like a defined contribution, or defined contribution for this, you’re going to get that, and the other things they will participate in them or not, whatever it is that works best for their situation. Not everybody’s the same, but everybody wants a benefits package that works for them.

David:        Of course, and what I’ve started hearing, especially millennials, are keen on tailoring that for themselves. Would that be an accurate statement?

Allison:       Absolutely. Much more so, than older generations.

David:        So, is this like an awful lot of other employer based initiatives? Would it be fair to say that communication and education, even prior to enrollment, are really key in a commitment from the C-Suite?

Allison:       Commitment from the C-Suite is the most important indicator of success.

David:        Fascinating. So, if you’re talking to a Benefit Advisor, long before the enrollment happens, how do you counsel them? What’s that conversation like? What should they be talking to those C Level folks about?

Allison:       They should be talking about benefits packages as a capital expense, and not an operating expense. For the most part, employees are considered a capital expense, and not an operating expense, and benefits packages need to be managed. Every process in most businesses is managed. Everything you buy, everything you sell, has a purchase price, a value, everybody’s looking for how to reduce their costs. How can I buy it more effectively? How can I use it more effectively? How can I buy it more inexpensively?

By considering benefits to be a capital expense, you put some of that thought right into the process. You’re starting there. It’s not coming later. So you want your unit cost to be as low as possible, by considering it a capital expense, that is a C-Suite understanding of what that is. Oh, I should look at it as a business expense, how do I manage it?

David:        It’s fascinating that, back in the days when I was selling, it’s fascinating that employers will spend months evaluating a $200,000 piece of equipment, but they don’t want to spend more than more than an hour, talking about their $4,000,000 medical plan.

Allison:       Correct. That $4,000,000 medical plan, if it’s not being managed can probably be delivered for a significantly lower cost.

David:        Absolutely. So, back to advisors. Some advisors have a perception that using an Enrollment Firm, using Professional Enrollers is too costly, but if a one on one enroller is more productive, where is that cross over point, and where do they figure out where that line is?

Allison:       Traditionally, enhanced benefits have been used to fund a one on one enrollment. There are some costs, and there are some risks. You do need buy in from the C-Suite, there does need to be a commitment to making sure that every employee is communicated to on a one on one basis. So, there is some skin in the game for an employer. There’s some time, there’s some making sure people get through the enrollment, so the cross is, how effectively do you need your benefits to be used? How much do you value how your employee is using their benefits?

If an employee can feel more satisfied in their job, because they’ve had this experience, which realistically takes about 20 minutes per employee, and that increases your retention by 3%, 5%, 8%, what is that worth to you? What I think you’ll find is that, that cost, at one on one enrollment, is well under that in cost.

David:        One of the things that you’ve been nice enough to do is provide for Shift Shapers listeners, a link. If listeners click on the link to your logo, that’s on the left hand side of the Shift Shapers online page, or they look in the show notes there, you’ve made available a couple of calculators that will help advisors figure that out. Can you talk a little bit about those two different calculators, and why you use them, and how they help?

Allison:       Sure. There’s two calculators there as you said. One is for use if you are conducting your own enrollment, using enhanced benefits, some traditional products like accident or critical illness, that have a fair amount of heaped first year commission built in, and you can see what revenue you can drive, and that will help you determine how much expense you want to use when you’re doing your one on one enrollment.

The other calculator there is for if you’re using an enrollment partner, to help you with your enrollment. The commissions are lower if you’re using a partner, but those dollars are completely expense free. So, if you’re looking at increasing your revenue about 15 or 20%, that is revenue that will go directly to your bottom line.

If you prefer to do it yourself, there will be some costs. There will be some time out of the office, you will probably need an online enrollment platform, those are very cost effective and becoming a standard of business like good customer service. Whereas, five years ago that was a newfangled toy, and you might need some of your own staff out of the office for groups that are a little bit larger.

Your call. You may want to mix and match that up. You may find that with this group of employers, you want to use that yourself, so you’ll understand how much revenue you’re driving for yourself, and there may be other instances where you want to use a partner for that, and you’ll see how much the enrollment actually costs, because there is a commission split built into that, and you’ll see how much revenue you’ll drive directly to your bottom line.

David:        So, at the end of the day, it’s really a balance between being effective and being efficient, right?

Allison:       Correct. Isn’t it always?

David:        Well, Peter Drucker thought it was, but other folks not so much. You know, Benefits Advisors, one of the nice things that I think is happening, if you can say there’s a nice thing that’s happening from the commission compression that’s going on, and from being asked to do more with less, is that I think a lot of Benefits Advisors are really starting to look at their businesses as a business, rather than just going out and dropping product on folks.

I think ultimately, that’s a very good thing. But this notion of being effective and efficient, hasn’t always been part of the calculus of all Benefits Agencies, as you know, and today I think it’s more. I presume you’re seeing that as well in your discussions?

Allison:       I am seeing that in my discussions, and I think in every market there are some brokers that are more forward thinking, and thinking more like businesses, than about just running an insurance agency, which I agree with you, has often not run as a traditional business.

David:        So, we have about a minute or two left. We always like to wrap up our interviews by asking our subject matter experts, where do you see the future? What do you see happening with enhanced benefits, and then how firms such as yours, and other in the industry interact with Benefit Advisors?

Allison:       I think one of the most important things to understand about enrollments, is there are basically two parts. There is the project management. How do I execute, and deliver this project? You know, I need a timeline, I need materials, I need some structure, and then it’s a communication piece. How am I communicating to all of the different parties? Because there’s the C-Suite, the HR Suite, there’s an employee, there’s a management staff, there’s on the other end, there’s carriers, how am I getting this information back to carriers?

So, there’s a whole host of tools that you can play with. To me, that’s the interesting part. There’s apps now, where you can provide advocacy service, and you can provide access to medical management, to telehealth, to drug discounts, where is the most effective place for me to get my drug? My ID cards can be in there, you can do a text messaging campaign, “Hey everybody, wellness fair is next week, please come we’re going to make sure that your wellness benefits get filed.”

Those are all different kinds of tools, so the fun to me is integrating them all together.

David:        It looks like there’s going to be a lot more fun, as we get deeper and deeper into this world of enhanced benefits. It certainly has become something that for all the reasons we discussed, is becoming more prevalent, or there’s a resurgence I guess you might say, in that area. But a great place to leave our interview.

Allison DePaoli, Founder and Benefit Enrollment Expert at DePaoli Professional Services.

Allison, thank you so much for sharing your expertise with the Shift Shapers audience.

Allison:       Thank you for having me, it was a pleasure.

The Shift Shapers Podcast is a production of Strategic Vision Publishing and David Saltzman. This podcast may not be reproduced in any form, in whole or in part, without the express written permission of the producers. All rights reserved.

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Deb Ault and some of her fellow RNs were against managed care when they were working at patients’ bedsides – but now she thinks it could help innovate and improve care while saving money.  

Nurse Deb is the President of Ault International Medical Management and a pioneer in the medical management field. As an advocate of proactive and predictive case management, she helps patients and their case managers navigate the diagnosis, treatment, and financial aspects of healthcare.

Deb defines and discusses the four types of medical management and explains why she thinks predictive management is the model of the future. She shares how she realized care management could both improve care and reduce costs when done correctly. Deb also emphasizes the importance of employer engagement in health plans, and why they must balance the cost of care with the health of their employees.

What You’ll Learn From this Episode:

  • Why Deb had a change of heart about medical management and how she discovered its potential.
  • The four types of medical management and which Deb finds most effective.
  • The monetary advantage of each type of case management.
  • Why it’s difficult to lead Americans with a carrot or pay them to behave the way you want.
  • How to get employees and employers alike more engaged and compliant in healthcare.

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Listen to the Full Interview:

This Episode is Sponsored by:

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Episode Transcript:

David:      How can understanding the four modes of medical management help you to deliver exceptionally better value for your clients? We’ll find out, on this episode of Shift Shapers.

Change either paralyzes, or energizes. The choice is yours. You’re listening to the ShiftShapers 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 that you want to see. Here’s your host and chief transformation strategist, David Saltzman.

David:        This episode of the Shift Shapers Podcast is brought to you by Captivated Health, a captive insurance arrangement that help small and mid-market companies escape the fully insured marketplace and deliver stability, control and savings without watering down employee’s benefits or increasing their premium share. If you have clients in the educational institution or the engineering vertical, go to our website at captivatedhealth.com or click on the company logo on the Shift Shapers website.

We often think about medical management as something that’s kind of a behind the scenes activity, but it’s starting to move to front stage and for some very, very good reasons. One of the people who’s making that happen is our guest on this episode of ShiftShapers – Deb Ault, otherwise known to those near and far as Nurse Deb. Deb is president at Ault International Medical Management and so with that, welcome Deb.

Deb:           Thank you for having me.

David:        It’s our pleasure. You’ve had an interesting path to get to where you are today and I think that informs a lot of our conversation. So if you wouldn’t mind, would you spend a minute or two talking about how you got to where you are?

Deb:           Well sure, I’m happy to do that. I am first and foremost a registered nurse. That’s how I started my career at the bedside. Worked in the ER, ICU, critical care kind of areas, moved around as a lot of nurses do exploring other areas, home health and doctors office. Landed at a telephonic nurse on call program, which was kind of good because it gave me an opportunity to further my education. It also was my first experience of working with patients over the telephone and I was always intrigued with the kind of impact that you could have not being face-to-face with patients. So that’s how I wound up on the telephone side of working with patients.

I got laid off from there unfortunately when some cost-cutting initiatives came into play. You guys probably remember that time of the market when all of the big hospitals were having all these great big consulting companies come in and show them how to cut their costs. At that point in time, I was very convinced that managed care was the reason that cost-cutting was necessary on the provider side. I was very vocal about it and was involved in the nurses’ union. I had been interviewed for television, spoke with many politicians about the cost-cutting that hospitals were doing, and became more and more dissatisfied at the bedside because of that, and feeling more and more pressure like a lot of nurses do to compromise patient care. So I was very anti-managed care, but then when I got laid off, having been so vocal about the cost-cutting that the providers were doing, I found myself having difficulty getting a job at any of the other large hospitals in the city.

So my husband pushed me to apply for managed care position. I kept telling him, “No, they’re the evil ones. They’re the reason were having to cut all these costs.” To make him be quiet, I applied. Fortunately, I wound up at a company that was nurse-led and they were following the teachings of Catherine Mullahy and were doing good case management. The problem that they were having was that they were having difficulty explaining to the bean counters, especially in the self-funded major medical health plan world which is where I am, how that was having a positive financial impact for the plan.

I’d continued my education, and I’d gotten my bachelors in business with a minor in math and statistics. So they hired me essentially to learn case management because of that math background and being able to come in and define savings and explain how getting the right patient to the right care at the right time in the right place would naturally result in the right price for the health plan. So that’s how I started my career in managed care and have the typical spinoff sell merger acquisition moving around in different roles in the managed care industry.

Then about 15 years ago, we had gone through one of those buyouts by venture capital and said to my husband, “This is crazy. These guys are not the kind of people that I want to work for. I’m going to have to look for another job.” He said, “No I think it’s time that we do this for ourselves.” So he convinced me to open AIMM about 15 years ago. We’ve been working in the self-funded major medical health plan arena ever since.

David:        To level set a little bit, you break managed care down into four different types. I’d like to take a moment and explore each one of those. The first one is reactive. What does that mean?

Deb:           Reactive is what we kind of traditionally think of when we think case management. So something happens. A patient becomes ill, has a catastrophic condition. They’re diagnosed with something or they’ve had a huge amount of claims spend happen. Then a case manager steps in to react to that. I affectionately call this also a “paid historian” model, because once that diagnosis has already hit, once those claims have already arrived, it’s very difficult to do anything that’s going to be impactful on the clinical quality of care or on the financial control side. So reactive is kind of responding to things that have already happened, often very far back in the timetable.

David:        The next piece you talk about is real-time. What is that and how does that differ from reactive?

Deb:           Real-time hit the market about 20 years ago. It was predominantly nurses who were doing case management who were frustrated with reactive and who were saying, “Listen, I need to get out in front of this. I need to be able to respond right away.” So as soon as somebody gets diagnosed with cancer or MS or any kind of life altering condition, I want to get involved real time at that point in time. That was more effective than reactive, but not still not everything that it possibly could be.

Reactive – when I think of the reactive model and the impact that it’s going to have on clinically a patient, it’s minimal. The horse is already halfway across the stream; telling them to change paths is difficult at that point. It’s disruptive in a negative way. They’ve already established relationship with care providers. Financially, what you see happen in groups that have reactive case management is they follow trend. If the trend increases 8%, they’re going to financially perform at 8%, 9%. If they’re really lucky, maybe 7%.

When you get into real-time and you start getting engaged with members at the time of diagnosis, then you can begin to have an impact clinically because you’re educating them. At least getting them to understand what questions they need to be asking their care providers. You’re also able to have more of a steerage in that which specialists are going to be chosen. Yes, maybe the doctor who diagnosed them with cancer told them a doctor he was going to refer them to but they haven’t seen that doctor yet. So if there’s another option that they need to be thinking about, they’re more open and receptive to it.

It also has a better impact financially. So those groups typically are going to beat trend not by a huge amount, but they will come in a couple of points under trend in comparison to everybody else in the market. So it does have an impact. It’s better than reactive, but it’s still event-driven.

David:        Then there’s proactive, which I guess means what it sounds like, but how does that happen in practice?

Deb:           So proactive is, if you remember a couple of years ago, we went back to expanding the list of things that require precertification. So there’s been this big back and forth and back and forth in the market for things like imaging studies. So maybe you get a pre-cert request for somebody who’s going to have an MRI and that MRI is highly suspicious of a catastrophic diagnosis. At that point, you get the member engaged. Start having conversations with them and say, “Hey I have gotten your precertification completed. When will you get the results back?” You’re building rapport much earlier in the course of illness.

Now, of course, sometimes those will come back no big deal. It was negative. Everything is benign. It’s fine. They’re not going to need any treatment. So, yeah, there is a little bit of “waste” there, but the benefit of doing it that way is in those instances where it does truly come back important, catastrophic, serious, you’ve already got rapport built with the patient. They already know that you’re there to help them. Making sure that they’re getting the right care, making sure that the timing is flowing smoothly, making sure that they’re getting care in the right place.

So because you’re able to do that, you’re able to have a more active role in helping them get the care that’s right for them. Doesn’t always mean that they’re going to do what I would do or what you would do David, but they’re going to make an informed decision. They’re going to have all of the tools and resources and support and guidance at their fingertips to help them through that. So you’ve become proactive because you’ve gotten in front of that date of diagnosis. Something is suspicious, there’s a high likelihood. There’s a potential coming down the pike, now we’re being proactive about getting that person engaged.

David:        Now a word from our sponsor.

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So then we go from being in front of the date of diagnosis to actually in front of the diagnosis altogether with the fourth piece which you call predictive.

Deb:           Absolutely. I love predictive and I think that it is where everybody should be and probably everybody will be before too much longer. There are great tools out there and have been for quite a while. The problem has been that not a lot of people have wanted to adopt them. Some people are averse to the cost even though it’s a minimal cost to do any kind of claims data mining or predictive risk modeling. There’s been questions about, “Is this clinically valid? Is this mathematically valid?” I think we’ve overcome all of those hurdles with a couple of products in the industry. So you can now begin to actually do predictive risk modeling. Guess what? You can initiate case management based on prediction.

Again, is every person that you predict is going to spend $25,000 in claims next year, definitely going to spend $25,000 in claims next year? No. Nobody has got a crystal ball that’s 100% accurate, but it’s worth the time and energy to invest in doing predictive risk modeling and the medical management that goes along with it. That’s really where you can begin to have a maximum impact on people’s lives, on what happens to them clinically and what happens to the plan financially.

So with the proactive model of medical management, we talked about where a group is going to perform in comparison to trend. You can really begin to have a good impact on spend. If you do predictive, then you can not only have the impact of proactive which will continue, but you can also flatten that trend out long term. So if you think of reactive as being right about trend, real-time slightly below trend, proactive cutting trend off, cutting that in half or stopping the flow of dollars, and then predictive as leveling that out long term.

David:        You say there’s products that are out in the market that do a pretty good job with predictive modeling. I remember years ago when I was with Humana. It was one of the things we chased and the number we always looked at was R squared – more colloquially I guess, how often you predict correctly. Where are those numbers at today? I know there’s a lot more data that’s flooded into those models that should have increased that.

Deb:           So it depends on whether you’re looking at clinical prediction or financial prediction. Most of the ones that are really worth using are going to be at least 80% accurate both clinically and financially. There’s always going to be that 20% the guy who drives his Lamborghini around the curve too fast and ends up in the side of the mountain that you can’t predict. At least 80% accuracy should be the threshold that you’re looking for as you’re shopping for those.

David:        So one of the things we talk about a lot on the podcast – and you may have heard us talk about it – is compliance, and how you get folks to actually engage. I know that you feel that Americans are kind of unique in that they don’t really respond to carrots. So that being the case, what do you use? Sticks, or orange sticks, or some combination of the two or…?

Deb:           It’s different from group to group to group. I think that’s one of the key characteristics. If you want to be successful in continuing to provide health benefits, but being able to do that in a financially feasible way, you have to understand your population and what works for them. Don’t get me wrong. I’ve got a group or two that their members will respond to a drawing for a $5 movie coupon. But those are pretty few and far between. Generally speaking, as Americans, we’re pretty affluent. Even offering somebody a big-screen TV may not be enticing to them. For the most part, you’re not really able to buy behavior. You may be able to buy participation, but participation isn’t going to generate the outcomes that you want if people don’t change their behavior. So it’s a real challenge.

I think the only thing that has truly worked in my experience… what I’ve seen work is an intensive education campaign and a culture shift within the organization, the employer organizations, since the employer is the one that’s providing the health plan. When you begin to get that happening, then your engagement rates go up. Engagement results in behavior change. Behavior change results in cost reduction. So it’s really appealing to the nobler motive as Carnegie would say. That seems to work best with the most of our groups or most Americans.

In other countries, things are different. As we travel the globe, we find that different cultures have different motivations. Most of the people that I work with…again, I work in a self-funded major medical health plan arena. So these are all people who are gainfully employed and they can pretty much afford the things that you would offer. Although I will tell you that I have seen groups be very successful, especially with the younger generation….so if the population of the plan is very young, offering incentives for things like extra days off, because we find that a lot of people in that millennial generation are seeking better work life balance, but again that’s not always as effective at getting the behavior change which is the real outcome that you’re striving for.

So it really boils down to education and changing the culture of the organization. It really has to start at the top of the organizations. So the C suite has to be on board and they have to be focused on this. They have to be focused on a combination of a couple of different things. They have to be focused on how do we improve the health of our members and simultaneously control the cost of our health plan. So that’s a balance that they have to be focused on. If they focus just on cost, we’re back in the old HMO world and that’s not going to get us where we want to be.

If they focus just on health – especially if the tenure of the population isn’t a long one – they may be investing in making that person healthy for their competitor when they leave and go to work for somebody else. So there’s a real balance there. The C suite has to be involved in setting up what that balance is going to be for their organization.

David:        There’s a lot of conversation going on around a topic that you may have bumped into called noncompliance. Where do you stand on noncompliant and working with noncompliant individuals as a tool to help move trend and to move claim spend?

Deb:           So that’s an interesting topic because as nurses we work with patients. The whole noncompliance issue is continual. You have to really step back and start thinking about things like Prochaska method and where somebody is on the stages of change scale and those kinds of things. There’s noncompliance for a lot of different reasons. We have to determine whether that noncompliance is what I call the result of free will. “I’m fully educated about the ramifications of my choice but I’m going to make this choice anyway,” versus noncompliance that comes from a position of lack of knowledge.

When it’s coming from a position of lack of knowledge, there’s a lot that can be done, by case management and in particular, medical management, to make sure that that person is equipped with all of the information, resources, support, guidance that they need so that they can make the best choice possible. I talked a little earlier about the HMO world. Most self-funded health plans at least don’t want to dictate treatment. They don’t want to be in the business of practicing medicine for their employees. They’re in the business of making widgets or whatever their core business is. They do want their people to have the information to make the right choices for them.

So distinguishing noncompliance into two different categories, the categories I call it a free will versus lack of information and education and then applying Prochaska method and motivational interviewing techniques and things to make sure that that patient has everything that they need.

David:        So we’ve got about a minute or two left. We always like to wrap up by asking our guests where they see the future. You certainly are out on the edge and doing some things that other folks maybe haven’t embraced yet. Where do you see your field going? Where do you see the future?

Deb:           I really feel like we’re at a great crossroads right now. I’m not sure that everybody in the industry recognizes it. I think especially with everything that’s happening politically, one of two things will happen. Either we, meaning those of us in the industry, will step up and revolutionize healthcare or we’ll end up with a single-payer nationalized healthcare kind of system. I think were at that point that in the very short term we’re going to have to make a decision as a country and go one way or the other.

I think that we as an industry have the capability. We have the tech. We have the mind power. We have the resources to truly revolutionize healthcare. I think that the tools are there. The question will become whether those who are providing health plans, the employers that are sponsoring health plans will get on board with it and will grasp it, and whether the big carriers will embrace it or not. Whether the big hospital providers will embrace it or not. I think that’s yet to be seen. I think we’ll go one of two ways. We’ll either revolutionize it and it will be a beautiful thing or we’ll end up in a nationalized system.

David:        Well that certainly is a stark choice and we’d love to have you back as that unfolds and talk to you more about where the direction is. Deb Ault, president at Ault International Medical Management. Nurse Deb, thanks for sharing your expertise with the Shift Shapers audience.

Deb:           Thanks for having me. I look forward to talking again sometime soon.

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