David Contorno, founder of E Powered Benefits, sheds light on how business leaders can significantly reduce healthcare costs while improving employee outcomes. Contorno explains that the current healthcare system is not broken—it’s working as designed, benefiting insurers and hospitals while leaving employers and employees with skyrocketing costs. His solution? Leaders need to start asking different questions. By challenging traditional assumptions, Contorno’s strategies—such as direct primary care and transparent provider relationships—help businesses save up to 50% on healthcare costs. This leadership approach empowers companies to provide better care at lower costs, ensuring long-term sustainability.

Want to learn more about David Contorno's work? Check out his website at https://www.epoweredbenefits.com/.

Connect with David Contorno on LinkedIn at https://www.linkedin.com/in/dcontorno/.

Think you'd be a great guest on the show? Apply at https://podcast.allies4me.com/podcast-guest/.

Want to learn more about Craig Andrew's work at allies4me? Check out his website at https://allies4me.com/.

Key Points and Timestamps:

• [00:00:30] Introduction to David Contorno’s work in healthcare leadership.
• [00:02:42] Healthcare system insights: “It’s not broken, it’s working as designed.”
• [00:03:54] Misconceptions in healthcare: separating health care from health insurance.
• [00:05:02] Why rising healthcare costs benefit insurance companies.
• [00:09:00] Importance of direct primary care and the incentives driving the system.
• [00:22:16] Real-world examples of cost savings and high-quality care.
• [00:24:00] Strategies for employers to reduce healthcare costs by 50%.
• [00:28:20] Immediate steps employers can take to take control of their healthcare expenses.

Transcript

00:00:00:00 - 00:00:30:16
Craig Andrews
I was in a coma for six weeks while the doctors told my wife I was going to die. When I woke up, she told me the most fantastic story. My team kept running the business without me. Freelancers reached out to my team and said, we will do whatever it takes. As long as Craig's in the hospital. I consider that the greatest accomplishment of my career.

00:00:30:18 - 00:00:51:07
Craig Andrews
My name is Craig Andrews and this is the Leaders and Legacies podcast where we talk to leaders creating an impact beyond themselves. At the end of today's interview, I'll tell you how you can be the next leader featured on the show.

00:00:51:07 - 00:01:21:06
Craig Andrews
Today I want to welcome David Contorno. He is the founder and president of E Powered Benefits. And he's been actively engaged in health care since his teenage years. And one of the things that we're going to be talking about today is how employers can reduce their number two or number three line item, double digits. David's story is important to me because of my story.

00:01:21:06 - 00:01:38:13
Craig Andrews
And many of you know that I learned some very expensive lessons in the hospital three years ago. And one of the things that David said is that he wants people to start asking different questions in the airline. So much with, you know, one of the things I published in my

00:01:38:13 - 00:01:43:21
Craig Andrews
book was my two biggest mistakes of 2021 were that I was asking.

00:01:43:21 - 00:02:05:09
Craig Andrews
I didn't ask enough questions, and I was asking the wrong questions and nearly cost me my life. And so I'm glad that that's part of David's mission. One of his goals is to give birth control and savings to to you and your employees. And one of the ways he does that is through transparency. So David, welcome.

00:02:05:11 - 00:02:06:23
David Contorno
Thanks for having me, Greg.

00:02:07:01 - 00:02:08:15
Craig Andrews
Yeah. And,

00:02:08:15 - 00:02:28:09
Craig Andrews
you know, again, I'm just I, you know, I've talked to some of your colleagues that are doing the same things as you, and it's I think it's unknown to some businesses out there. They just assume, hey, here's here's the deal. Health care costs are going up double digits. We need to figure out how to pay for that.

00:02:28:11 - 00:02:31:11
Craig Andrews
Or we have to start cutting back services.

00:02:31:11 - 00:02:42:17
Craig Andrews
To the employees and the things that you are opening my mind, my mind to is. No, that's a false choice.

00:02:42:19 - 00:03:01:02
David Contorno
Yeah. They the a lot of people say that our health care system is broken. And I disagree with that statement. It's not broken. It's working exactly as it was designed to work. It just isn't designed by employers, doctors or patients. So it's not working very well for those three stakeholders. But it is working really well for a lot of people.

00:03:01:03 - 00:03:07:03
David Contorno
I mean, look at how much these carrier execs make. Look at how much the hospital execs make. Even the nonprofit hospitals.

00:03:07:03 - 00:03:09:00
David Contorno
Just the other day, a,

00:03:09:00 - 00:03:22:12
David Contorno
CEO of Steward Health stepped down because the FTC had been suing them for claiming bankruptcy while he was doing all these lavish gifts to himself. And he finally got subpoenaed before Congress and then stepped down.

00:03:22:12 - 00:03:54:22
David Contorno
And so, you know, here's this hospital that's trimming down patient services, claiming close to bankruptcy, while the CEO has a jet purchased for him, and luxury homes and so on. So the system is working really well for a lot of people. And the reason asking different questions is so important is because you wind up getting different answers. And I think there's two massive misconceptions in health care and health insurance that employers need to fully understand.

00:03:54:23 - 00:04:16:17
David Contorno
The first is that health care and health insurance are two separate things. I mean, if I ask most of America who provides their health care, they're going to say Blue Cross and Blue Shield. Yet Blue Cross and Blue Shield provide zero care. Your doctor provides care. Your nurse provides care. So that's misconception number one. We understand cars and car insurance are different, but for some reason we intermingle health care and health insurance.

00:04:16:19 - 00:04:46:11
David Contorno
The second thing is in what's known as the commercial market, which is where all employers of any size sit and where individuals who buy their insurance on the exchange, for example, sit. That's all the bucket called commercial insurance. And since the Affordable Care Act passed in 2010, there's a provision of that called the medical loss ratio provision, which says that carriers must spend 80 to $0.85 of every dollar they collect on in their premiums on health care costs of the people on the plans.

00:04:46:12 - 00:05:02:14
David Contorno
Well, this means they get to retain 15 or 20%. 15 or 20% of a bigger number is a bigger number. And so the only way for carriers to increase their profit is for a premium to go up. And the only way for premium to go up are for claims to go up. And I wish

00:05:02:14 - 00:05:06:07
David Contorno
these successful CFOs, they think the opposite is true.

00:05:06:07 - 00:05:23:11
David Contorno
They think United Healthcare's profit goes up if they deny claims, if they negotiate better reimbursement rates. And that is true on the Medicare side of the House, which is what happens. Costs go down on the Medicare side. But on the commercial side, the incentives are cost to go up. And so really the system we have and Charlie Munger said this best.

00:05:23:11 - 00:05:31:22
David Contorno
If you show me the incentives of any system, I'll show you the outcomes. Our incentives in our system are designed to give us the exact outcomes that we're getting.

00:05:32:00 - 00:05:36:10
Craig Andrews
Well, let me give an example to that. That really surprised me in my own journey.

00:05:36:10 - 00:05:37:19
Craig Andrews
There was a,

00:05:37:19 - 00:05:40:02
Craig Andrews
company that supplies oxygen, usually,

00:05:40:02 - 00:05:50:15
Craig Andrews
oxygen concentrators that are, you know, portable and taken home with patients. They started billing me for portable oxygen when I was on the ventilator. And then,

00:05:50:15 - 00:05:56:18
Craig Andrews
coma. And this went on for two years, and it took me a while to discover it.

00:05:56:19 - 00:06:15:12
Craig Andrews
You know, there was one time where my wife, you know, those would come in and my wife would just pay the bills, and it seemed appropriate we were on oxygen, then figured out I'd never been their customer. I was getting oxygen from someone else. I contacted them, they said, nope, you got the equipment. We're continuing the charge. I went back to them twice.

00:06:15:14 - 00:06:36:10
Craig Andrews
Then I contacted Blue Cross Blue Shield, my carrier, and they actually found in the record they're like, oh yeah, I see you're being billed for oxygen here and you're being billed for oxygen here. Let me look into that. They did nothing. And this company, which by the way, is a bona fide scoundrel, they had to settle a case with the DOJ in 2018.

00:06:36:12 - 00:06:46:20
Craig Andrews
They paid $10 million in fines and admitted that they were fraudulently billing people for equipment they never delivered. And that I sure didn't fix it.

00:06:46:22 - 00:07:11:09
David Contorno
Well, it was for them. It was fixed because what exactly happened benefits them. The only reason that they deny claims there's two reasons why they, quote, deny claims or try to lower costs, or two circumstances under which they do it. The first is if their costs are inflating more rapidly than their competition, because then that filters down to premium, which prices them out of the market.

00:07:11:09 - 00:07:15:10
David Contorno
So sometimes they put a little pressure down a little bit to,

00:07:15:10 - 00:07:38:07
David Contorno
not inflate faster than their competition. But the other reason, and the much more common reason is what they're actually making very painful to do and get is what we call high value care. Give you an example, primary care. The reason primary care is called primary care is because it is where you are supposed to go primarily, but we don't.

00:07:38:09 - 00:07:58:12
David Contorno
We have a back pain, we go to a back surge and we have a skin rash. We go to a dermatologist. Things in which much more severe care is much more likely to occur at a much higher cost than if we could go to a primary care doctor and get to see him or her in a reasonable amount of time, and see him or her for a reasonable amount of time.

00:07:58:14 - 00:08:18:11
David Contorno
But the carriers have made primary care very miserable, intentionally, in my opinion, by lowering and lowering and lowering the reimbursement rates to primary care. By doing so, they made these primary care doctors have to see more and more patients every day to have the bill for more and more services. And even then, the rates went so low that these practices were still losing money.

00:08:18:11 - 00:08:33:15
David Contorno
So a lot of people listening to this podcast, how many of you experienced where you go to your doctor one day and you're speaking to the owner of the practice, and then you go back for your physical year later and all of a sudden the local health system logo is on the door. And now he's a hospital owned employee.

00:08:33:17 - 00:08:54:03
David Contorno
Now, my question to you is if these primary care practices are losing money, which most of them are. Why are hospitals buying them up? Well, they're buying them up because they become the milk at the back of the store. They become the loss leader. They become the entry way into pushing them into more expensive services. And they pay doctors to do that.

00:08:54:03 - 00:09:16:21
David Contorno
There's a little known publicly metric of doctors pay called reviews or relative value units, which is a measurement of how much money they're helping generate in other parts of the health care system. So when they send you out for an expensive test or even where a surgery is more likely to occur, they make more money. When that occurs, the carrier makes more money when the rates go up.

00:09:16:21 - 00:09:28:07
David Contorno
Because that occurred, the broker makes more money because most brokers are paid commission. So again, you have a lot of people benefiting from this really broken system. Whereas we're big,

00:09:28:07 - 00:09:39:02
David Contorno
endorsers of a model of primary care called direct primary care. And these are doctors that charge a monthly membership fee. They never bill insurance. So their office overhead is way, way, way lower.

00:09:39:02 - 00:09:51:11
David Contorno
Their patient panel size is one fifth or one seventh what a traditional doctor has. So you get in the same day. The next day. You never pay a copay. They never bill insurance. And now I have unlimited time with my direct primary care.

00:09:51:11 - 00:10:00:13
David Contorno
And I go to her for everything. And it's only if she thinks that I truly do need, without her being paid to give me this advice, that I need a specialist, that I go.

00:10:00:15 - 00:10:17:12
David Contorno
And so these primary care doctors are the most broadly trained doctors of any doctor in the in the medical space. And yet we've devalued them just like we've devalued pharmacists. I say all the time pharmacists have been devalued to the point where all they do is take pills at a big bottles and put them into smaller bottles. They're doing nothing clinical.

00:10:17:12 - 00:10:21:23
David Contorno
We've we've taken that all away from them, even though they have clinical training.

00:10:22:01 - 00:10:41:16
Craig Andrews
Yeah. And let's, let's kind of pause there on, on the pharmacists because there's something that I still don't think I fully understand, but sounds like a money racket between the insurance carriers, the pharmacy benefit managers and the pharmacists in the pharmacies, if I understand, get screwed.

00:10:41:18 - 00:10:59:12
David Contorno
Yeah. So there's another entity which is starting to become a little more talked about in the political and employer ether, known as a PBM or a pharmacy benefit manager. And just like there are four big carriers, there are four big PBMs. You have Optum,

00:10:59:12 - 00:11:08:02
David Contorno
which is owned by United Health Care. Now I say owned by UnitedHealthCare. But really Optum does more revenue and more profit for United Health Care than the insurance division does.

00:11:08:02 - 00:11:27:23
David Contorno
So this entity who largely just processes a transaction of a prescription, is making more money than the entire insurance company. Now, why is that? Well, they do the number one source of revenue for the big three. And the other two, by the way, are Express Scripts, which is owned by Cigna, and Caremark, which is owned by CVS that also owns Aetna.

00:11:27:23 - 00:11:57:23
David Contorno
So do you think it's any coincidence that these large carriers are owned by or own a PBM each? And even Ella Vance, which used to be called anthem? Gail Boudreaux is the current CEO there. She used to be the CEO of UnitedHealthCare, and she's one of the reasons Optum became such a driving force within the company financially. She's now at relevance, and they didn't own a PBM, so they started a PBM, and within a few years, they had incentivized brokers to the point where that PBM was doing several billion dollars in revenue in a very short period of time.

00:11:58:01 - 00:12:17:12
David Contorno
But the number one source of revenue for these PBMs is what's called spread pricing. And spread pricing is where whoever's footing the bill now, that might be the employee or the patient, because maybe they're in a high deductible health plan and they haven't reached their deductible, or maybe they have a co-pay. So they're paying $20. And the plan, their employers plan that they also pay for is paying the difference.

00:12:17:14 - 00:12:42:13
David Contorno
Wherever it's over, they're covered 100%. And the plan's paying 100% of the drug wherever it comes from. Doesn't matter. What does matter is that these PBMs are charging a higher price to whomever is paying for it. Then they're paying the pharmacy. So not only are these employers and patients incurring administrative fees for that PBM to process the transaction, which is they do provide some process within this.

00:12:42:15 - 00:13:03:03
David Contorno
But on top of that, they're inflating the cost of the drug to where the drug is. And we've seen drugs marked up 4 or 5 or 600% like we're not talking 2% or 5% or 10%. And so now their rates are going up faster. As a result, they're out of pockets, are going up faster as a result. And we know the number one reason Americans don't adhere to their medication is because of affordability.

00:13:03:05 - 00:13:07:04
David Contorno
And that's no different with those with insurance than without.

00:13:07:06 - 00:13:17:01
Craig Andrews
So the thing that confuses me is why do we need a pharmacy benefit manager if I if a doctor prescribes me a drug and it's covered by my insurance, why can't I just go to,

00:13:17:01 - 00:13:24:18
Craig Andrews
for me it's H-e-b, the, you know, the grocery store, big Texas grocery store, and I get my drugs. Why do I need a middleman?

00:13:24:20 - 00:13:25:07
David Contorno
Well,

00:13:25:07 - 00:13:38:02
David Contorno
you don't, but the the the reason they were put in place, I think, was again, there was good intention, but it sort of got perverted over time. But initially they were put in place to number one,

00:13:38:02 - 00:13:45:11
David Contorno
aggregate many employers into a single bucket to increase purchasing power against the drug companies to pay lower pricing for the drugs.

00:13:45:11 - 00:14:05:17
David Contorno
That was one of the initial promises, and the other was to be a second check, both from a clinical perspective and a financial perspective to ensure, hey, wait a second, is this person filling drugs somewhere else that might have a contraindication with the drug they're about to fill? Are they abusing opioids? And how do we get a more holistic picture?

00:14:05:19 - 00:14:20:17
David Contorno
And then also from a financial perspective, did they try these lesser expensive treatments first because no generic drug manufacturer, according doctors, the only ones that, according to doctors, are the brand name and the specialty medication manufacturers. And so,

00:14:20:17 - 00:14:25:07
David Contorno
they get told that this is the newest, greatest, best thing when clinically that may not be the case.

00:14:25:07 - 00:14:52:00
David Contorno
And so the other purpose of the argument say, whoa, whoa, whoa, before you try this $10,000 a month drug, let's try this $20 a month drug. First. But again, because of how they're paid, those rules got perverted to benefit the PBM. And here's the thing about PBMs. They don't have to follow the medical loss ratio provision so they can generate much, much more than 15 or 20% margins on the drugs they fill.

00:14:52:02 - 00:14:57:20
David Contorno
Then the carriers side of the house can make on the drugs they pay for and the care they pay for.

00:14:57:22 - 00:15:08:12
Craig Andrews
So it's basically a financial shell game when the carrier has been limited to, you know, 15% of of revenue,

00:15:08:12 - 00:15:11:06
Craig Andrews
they just move the profits over the PBM.

00:15:11:08 - 00:15:29:08
David Contorno
And I believe and I don't have any proof of this, but man, my all my years 30 plus years of doing this tell me I'm right. So this medical loss ratio provision, they have to run at 80 or 85%. And the delta by the way, is the size of the groups. If you're over 100 employees, it's 8515. If you're under 100, it's

00:15:29:08 - 00:15:31:21
David Contorno
8020.

00:15:31:23 - 00:15:50:05
David Contorno
But here's the thing. If they run under that, so if they spend less than they anticipated, they have to give the difference back to employers who then have to filter back to employees. When this first passed, the first couple of years, my some of my employers would get these token checks that weren't even worth distributing. But I don't see that happening or hear that happening now.

00:15:50:07 - 00:16:22:12
David Contorno
And if they go over the 80 or 85%, that's on them financially and that's a loss for them. How is it that these carriers are insuring millions and millions of people with highly unpredictable health care needs and health care costs, but yet every year they come in right at 80 or right at 85%. It doesn't seem possible to predict it with that level of exactness when you have to do it 18, 20, 24 months in advance.

00:16:22:12 - 00:16:43:14
David Contorno
It doesn't seem possible. And so I really believe that they're playing with that spread pricing up and down, where they have practically unfettered ability to mark up or mark down medications to make sure that they come right in at the 85%. I think it's I'm sure there's other levers, but I think that's one of the major ones and one that's very easy for them to pull.

00:16:43:16 - 00:17:03:02
Craig Andrews
Well, is I'm hearing all this. I mean, I'm just getting anxious listening to it because it leaves me with a sense of hopelessness and, and I guess the question is, you know, for employers that are seeing these, you know, the, the employee health care costs skyrocket, do they need to feel hopeless?

00:17:03:04 - 00:17:03:22
David Contorno
They do not.

00:17:03:22 - 00:17:28:01
David Contorno
And you know what I'm about to tell you that we've been doing, we've been doing for 14 or 15 years. And thank goodness we're not the only ones anymore. There are consultants around the country, but what you need to do as an employer, and then we'll talk about a patient separately. But what you need to do as an employer is you need to make sure that every entity within your health plan, that and there's really six primary entities within the plan itself.

00:17:28:01 - 00:17:52:03
David Contorno
You have a plan administration, you have a way to reprice the claims or to price the care. You have the pharmacy piece. You have medical management that's supposed to determine what's medically appropriate and what's not, and what follows the plan documents and what doesn't. And then you have some sort of risk mitigation for large claims. And these five components exist within every health plan, even if you're fully insured with Aetna, those they're all owned by Aetna in that case.

00:17:52:03 - 00:18:15:10
David Contorno
But those are the five main components of the plan. And I said six because the sixth one is where you're getting your advice on which one of those five to do. And what you need to do is similar on all six. You need to understand how they get paid each entity within there. And you need to make sure that at the very least, they don't make more money by cost going up.

00:18:15:11 - 00:18:33:07
David Contorno
Ideally, they make more money as costs go down, which is how we're paid by our clients. The more we lower cost for the employer, the more they pay us. Typically a small piece of the savings. And it's amazing how when you turn the financial incentives around, you get different results. You get the results that the incentives are meant to induce.

00:18:33:07 - 00:19:07:14
David Contorno
It's it's I get really frustrated by doctors and brokers in particular traditional doctors and traditional brokers claiming they're not influenced by the commission. Bonus review patient volume game that determines their paycheck when they keep on delivering in aggregate, the exact results that those incentives are meant to deliver. So from an employer perspective, you need to really listen. You may think you're in the widget making business, but when health care is your second or third biggest spend, I'd argue you're in the health care business first and the widget making business second.

00:19:07:16 - 00:19:29:07
David Contorno
But you understand how to make widgets a heck of a lot better than you. Understand your health care and health insurance. And so break those five components apart, six with the broker and say, where do you make money? How do you make money? That's not acceptable to me. I mean, if fire departments only got paid when there were fires and the bigger the fire there was, the more money they made in their budget.

00:19:29:09 - 00:20:00:08
David Contorno
We wouldn't have sprinklers in commercial buildings, we wouldn't have fire hydrants every block or two. The financial incentive would be the fires to incur, but instead the fire departments get a fixed budget, which is, by the way, how Medicare works. And the less fires there are, the more money they retain. You need to get into a situation where when the right care is doled out at the right time, at the right place, at the right price, that is highly incentivized, rewarded, or mandated.

00:20:00:10 - 00:20:22:04
David Contorno
And let me give you guys some difference here to understand. We have found and we have quality metrics of almost every doctor and almost every hospital across the country. And when we go, let's say, to an orthopedic surgeon in an area in for orthopedic surgery, and we look at all the surgeons in that area and we sort them by highest price on the left, lowest price on the right.

00:20:22:06 - 00:20:42:06
David Contorno
We're also sorting them by lowest quality on the left to low to highest quality on the right. In other words, there's an inverse relationship between cost and quality and health care. And that inverse relationship not only drives outcomes, but has a massive difference on the cost of care. And so what we do is, is we either directly contract with providers.

00:20:42:06 - 00:20:57:08
David Contorno
We have tens of thousands that we're directly contracts with, and they love direct contract providers, hate dealing with insurance companies too. So within our direct contracts we make it better for the hospital and or the doctor by number one, not having to deal with filing a claim. Number two,

00:20:57:08 - 00:21:03:07
David Contorno
they get paid in full. They don't have to worry about collecting or usually not collecting from the patient because their deductible and they're out of pocket.

00:21:03:07 - 00:21:30:13
David Contorno
So we're able to identify these high quality providers. We're able to incentivize numbers to go there by saying, hey, if you go to this doctor, here's the reason why he or she is better. Better lower infection rates, lower mortality rates, lower readmission rates, whatever. And if you go there and we don't say this part to the patient, but if they do go there, the cost is so much less that the plan, their employers health plan that we helped create for them, is going to pay 100% of the cost.

00:21:30:14 - 00:21:52:12
David Contorno
So now they're getting better outcomes. And in the case of orthopedic surgery, I mean a bad orthopedic surgeon surgery can leave, keep you out of work for weeks or months. Even so, having a good orthopedic surgery with a shorten recovery time with less complications means that employees back to work quicker. Or if it's a family member, they're back taking care of the kids quicker so the employee can get back to work quicker.

00:21:52:14 - 00:22:16:00
David Contorno
They're also doing it where they're not paying anything. So they are employers. Health plan looks like a hero, and the employers health plans paying a lot less than it would have had it shared in the cost and gone to a different place or a more traditional place to do it. So there's this win win win trifecta that can occur, but the carriers don't let you do it because it doesn't benefit them.

00:22:16:02 - 00:22:38:17
Craig Andrews
So one of the numbers that you threw at me, you said that you've been saving employers up to 50%. Yep. And you know, if I put myself in their shoes, I'm sitting here listening. I'm like, I'm missing something. There's there's there's a hitch here. I just need to figure out what the hitches, and I'll figure out how I'm screwed by this other method.

00:22:38:19 - 00:22:41:07
Craig Andrews
What? What are they missing?

00:22:41:09 - 00:23:06:22
David Contorno
First of all, the statistics are that $0.22 of every dollar that is spent on health care actually goes to health care. So I would argue if I were better at my job, I should be saving employers 78%, not just 50%. But if you want to really understand how this works, then what I recommend people do. And I know not everyone can do this or will do this.

00:23:07:00 - 00:23:33:00
David Contorno
Present yourself as a cash pay patient, even for something major, because the cash pay price is remarkably lower than the insurance price. I am a cash pay patient. I'm a 30 plus year health insurance salesperson veteran who hasn't had health insurance on my family for 6 or 7 years. Because I don't believe in traditional health insurance. It doesn't serve a purpose.

00:23:33:00 - 00:23:54:01
David Contorno
As a matter of fact, it harms people. So think about this for a second. If you go speak to a hospital CFO and you say, what are your five main sources of revenue, they're going to list them out. You have commercial insurance, which we describe before you have Medicare, Medicaid, cash pay and charity care, which they have to do, especially if they're nonprofit.

00:23:54:03 - 00:24:15:17
David Contorno
And if you ask that CFO, which one of those five brings you the highest rates for your services? They're going to say commercial insurance. In other words, when you throw down your blue cross and blue Shield ID card, you are at that point contractually pre ordaining the health plan and the patient, usually a combination of the two to paying the highest price in health care that hospitals receive.

00:24:15:19 - 00:24:38:19
David Contorno
So if insurance is forcing us to pay the highest price possible. And I don't mean just in the US, but we have the distinction of it being the highest price for health care in the entire world ever. What's going to happen to your insurance? So when you get all that stuff out of the way and we build health plans that don't do that 100%, but they work a lot better.

00:24:38:21 - 00:25:00:23
David Contorno
Saving 50% is not hard and doesn't take very long. Usually we're doing 35 to 50% at the end of the first year. Now, this doesn't come at people not getting care. Quite the opposite. We are getting them medications and imaging and primary care and surgeries with nothing out of their pocket. We're just going to the right providers who are high quality.

00:25:00:23 - 00:25:07:15
David Contorno
We can demonstrate that with data and are willing to give a fair upfront price. It's really that simple.

00:25:07:17 - 00:25:09:13
Craig Andrews
You know, I had that experience,

00:25:09:13 - 00:25:23:22
Craig Andrews
a couple of years ago. Few a couple of years ago. I'm trying to remember exactly when, but I was talking to Nir about who's We live, you know, just a few miles from each other. And I have, you know, I have a condition where I get these, little bumps on my eyelids, consolations.

00:25:23:23 - 00:25:42:13
Craig Andrews
And they're real easy, you know, when you see them, you know what they are. They're really easy to deal with. You just land some and drain them and what have you. So I called three different ophthalmologists, and, you know, they all want me to come in for multiple visits. I'm like, look, this when you see it, you're going to know where it is.

00:25:42:13 - 00:26:07:19
Craig Andrews
You're going to know what to do. The first one, when they charge me $350 and they wouldn't break it into two different visits. So I called the second one. I got the craziest run around with them. Never got a direct price, but stitching the dots together, I think it was going to be about $800. And the thing that I figured out with them was like, oh, they've built an insurance money extraction machine.

00:26:07:20 - 00:26:30:02
Craig Andrews
That's how they've structured their practices to get more insurance money. And then I called this third way. I'm still in there about this. I said, they quoted me, it was like $240. I think it included a half hour with the nurse, 45 minutes with the surgeon, and a follow up appointment with the surgeon for $240. And he said, I know the one you're talking about.

00:26:30:06 - 00:26:35:21
Craig Andrews
They're independent. And it was great care.

00:26:35:22 - 00:26:56:08
David Contorno
Yep. Yeah. We're the only country in the world in which the more health care that's provided, the more money the system makes. Every other health care system works opposite. They have a finite set of resources and the less they spend. And that's why even though we spend more on health care per capita and per country, I mean,

00:26:56:08 - 00:27:01:12
David Contorno
if our health care system works on its own as its own economy, it would be the third largest economy in the world.

00:27:01:14 - 00:27:17:08
David Contorno
Just our health care system. And it is strictly based on us being sick if we all got healthy, if I could wave a magic wand and all of a sudden we stop going to the doctors and hospitals, or maybe we cut it by 75%, much like the,

00:27:17:08 - 00:27:21:04
David Contorno
airline industry was brought to its knees.

00:27:21:04 - 00:27:22:22
David Contorno
When people stopped flying,

00:27:22:22 - 00:27:24:16
David Contorno
it also,

00:27:24:16 - 00:27:26:14
David Contorno
would do the same thing to our health care system.

00:27:26:14 - 00:27:28:22
David Contorno
It would literally be brought to its knees within days,

00:27:28:22 - 00:27:35:18
David Contorno
if we got healthy. And so this manifests itself in many ways, but one way is, I don't know of a single,

00:27:35:18 - 00:27:43:07
David Contorno
drug manufacturer of cancer drugs that's researching cures for cancer. They researched treatments for cancer, not cures.

00:27:43:07 - 00:27:53:15
David Contorno
So if you again, if you look at the incentives of the system, you will know that we're getting the exact results that they were intended to give.

00:27:53:17 - 00:27:56:11
Craig Andrews
So as for as we're wrapping up,

00:27:56:11 - 00:28:21:00
Craig Andrews
you know, we speak to later in leaders, usually business owners as the audience. And my fear is that they're walking away feeling a little bit overwhelmed. What are a few, you know, 2 or 3 simple things that a business owner should do right away after listening to this episode, that will change their outcome.

00:28:21:02 - 00:28:38:06
David Contorno
The first is, you know, part of there was a couple of bills passed over the last few years. The Consolidated Appropriations Act, abbreviated the CIA, and the No Surprises Act, abbreviated NSA. And there is a few things in those two things that employers are just not demanding. They get.

00:28:38:06 - 00:28:56:07
David Contorno
Number one is a broker compensation disclosure of anything, I think over $25 if it's a meal, if it's golf, that has to be disclosed and it happens all the time, all the way up to several six figure checks, oftentimes being written by the carriers to the brokers.

00:28:56:09 - 00:29:14:09
David Contorno
So the first is get that disclosure from your broker if you're not already getting it. And I've not found one who's getting it without demanding it. The second thing is, is get your data now. Carriers have long held data over where your money is being spent close to the vest. And they cried. HIPAA,

00:29:14:09 - 00:29:15:22
David Contorno
didn't let them do that.

00:29:15:22 - 00:29:37:21
David Contorno
Well, that's not true. HIPAA doesn't say who can have this data and who can't. What it does say is if certain entities have certain data, they must protect it in certain ways. Well, employers already have this data. In other words, they have information that needs to be protected under HIPAA even if they don't have health information. So they already have to have these protocols in place or should

00:29:37:21 - 00:29:46:22
David Contorno
so ask for your claims data in a full, detailed dump and get that to someone who can analyze it and show it to you and say, this is where your money's going.

00:29:47:00 - 00:30:14:06
David Contorno
Once you see that, and once you are showing the alternative ways to spend money on health care, you will not stand for the same results that you've been getting. And just imagine from an attraction and retention perspective, if I am able to reduce an employer's healthcare costs by 50%, that means most employers could pay 100% of that nothing out of the employee's paycheck, and still be paying less than the employer spending today.

00:30:14:06 - 00:30:30:07
David Contorno
And when I'm able to deliver on the promise of a plan that provides for care and medication with nothing out of the employee's pocket, how easy is it going to be for you to attract and retain employees? When you say nothing comes out of your paycheck, and often nothing comes out of your pocket when you consume health care?

00:30:30:07 - 00:30:34:14
David Contorno
Under our health plan and family businesses love that.

00:30:34:15 - 00:30:42:16
Craig Andrews
Yeah. Wow. So how can people reach you to to learn more?

00:30:42:18 - 00:30:48:02
David Contorno
I mean, certainly googling my name, David, I'm pretty active on LinkedIn is the most social media,

00:30:48:02 - 00:30:48:06
David Contorno
the

00:30:48:06 - 00:30:49:23
David Contorno
where I'm active the most. We,

00:30:49:23 - 00:30:51:10
David Contorno
have our own podcast. But,

00:30:51:10 - 00:30:53:07
David Contorno
if you are an employer,

00:30:53:07 - 00:30:54:14
David Contorno
you can reach out to me,

00:30:54:14 - 00:30:55:20
David Contorno
directly or,

00:30:55:20 - 00:31:08:01
David Contorno
we have a co consulting program. So if you're a broker consultant or you're an employer that has a strong allegiance to your current broker consultant, we partner with brokers and consultants around the country and teach them how to build these types of plans for their clients.

00:31:08:01 - 00:31:15:16
David Contorno
So we just want these solutions out there in as many hands of employers, employees, family members and brokers consultants as possible.

00:31:15:16 - 00:31:17:22
David Contorno
How that happens don't really care.

00:31:17:22 - 00:31:32:01
David Contorno
But either reach out or have your current broker consultant reach out. But remember, if you're going to involve your current broker consultant, this may seem even more impossible to them than it does to you, because they've lived in this system for a long time.

00:31:32:01 - 00:31:32:06
David Contorno
And

00:31:32:06 - 00:31:52:16
David Contorno
when I did, everywhere I went, I got the same answers. And so they may still very well be in that world. I had to really step outside and burn a lot of relationships with the carrier people that I had become friends with in order to fully move into this model. And it's really hard to live in both the traditional world and this, whatever you want to call this world to be.

00:31:52:18 - 00:31:58:10
Craig Andrews
All right. Well, David, Ken Torno with E powered benefits. Thanks for being on Layers and Legacies.

00:31:58:12 - 00:32:01:07
David Contorno
Thank you so much.

00:32:01:07 - 00:32:28:02
Craig Andrews
This is Craig Andrews. I want to thank you for listening to the Leaders and Legacies podcast. We're looking for leaders to share how they're making the impact beyond themselves. If that's you, please go to Alize for me.com/guest and sign up there. If you got something out of this interview, we would love you to share this

00:32:28:02 - 00:32:29:21
Craig Andrews
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00:32:29:23 - 00:32:53:07
Craig Andrews
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00:32:53:09 - 00:33:01:13
Craig Andrews
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00:33:01:13 - 00:35:03:14
Craig Andrews
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