Finance Has Entered the Chat: Innovative Cost-Savings Solutions w/ Steve Santangelo

Speaker A: M this is Benefits Influencer. Each episode we hear from the leaders who are impacting, innovating and elevating employee benefits and hr. If you're looking for actionable insights for your business or your clients, you'll find them here. Here's your host, Dennis Carlson.

Speaker B: Hello and welcome back. I am joined today by Steve Santangelo. Steve is the Chief Revenue Officer for Garner Health. Steve, how are you today?

Speaker C: I'm doing great. Excited for the conversation and appreciate you having me on.

Speaker B: Yeah, happy to have you. Garner Health, um, is a pretty unique solution in the marketplace. We're going to get into that a little bit. But before we get into Garner Health, uh, kind of your view on the market, especially with that chief Revenue officer role where you kind of have the whole view of the, the broker market and the employer market. Um, I'd love for you to just introduce yourself Steve, give us a little bit of your background, how you ended up at Garner Health, and then give us a snapshot of what Garner is.

Speaker C: Yep, yeah, happy to do it. So as mentioned, Steve Santangelo, chief revenue officer here at Garner Health, um, I've been here for four years now but come from a carrier background myself. So I spent a decade with one of the largest health insurance companies prior uh, to joining Garner. So during that 10 year career I found a lot of ways to learn the business. So I did everything in 10 years from small group community rated plans to mid market, all the way up to enterprise, uh, selling. And in that time I got a really rich understanding of the market, what benefits employers, what doesn't benefit employers, where some of the secrets are hidden or the dollars go unnoticed. And so I really found that as a very useful education session on understanding the business that we are all in. Um, and then from there was uh, approached about this opportunity at Garner Health. I basically joined as actually the first full time sales hire. Um, and now we employ over 300 uh, employees, uh, around the country. So I've gotten to see a different side of healthcare from a startup standpoint. And so uh, it's really exciting for me to see that growth and really kind of take my education from my prior life and bring it on over here. And really at a core here at Garner, what we are is a data and technology company that has really kind of cracked the code, we think, to understanding individual doctor performance. So we analyze physicians on over 500 different metrics. We have claims data that represents over 320 million patients. And what we found is if you can connect patients upstream to the best qualified provider in their geography, in their underlying network, that's really the biggest lever to pull to have an impact on not only the quality of care that's delivered, but the cost as well. And so we've developed a unique model and incentive strategy around that. But at our core that's really what we're about.

Speaker B: Awesome. Well, yeah, let's dive right into a little bit of what Garner Health is again. Um, you and I talked offline prior to hitting record. Um, you know, this is not a paid Garner Health commercial by any stretch, but I do think it's a pretty unique solution in the market and I, I think it's helpful to understand a little bit of the mechanics of how it works. So could, would you mind just for particularly for our broker, consultant, audience, um, or, or you know, higher level benefits, um, administrators at an employer level, um, explain a little bit of where it fits into a health plan and actually what the mechanics are. Like how do you actually save money? So you get. So, and just to be clear, you mentioned, um, scoring providers, you know, making sure you're getting best in class providers. How does that drive down to lower costs for an employer health plan? Yep.

Speaker C: Yeah. Uh, awesome. Yeah. So if you think about Garner, I would think about us as basically three key buckets. We have this data and analytics engine and so what we've been able to do is amass 75% of all of the medical claims out there. We then package that with a really easy user experience app, uh, web or phone supported by live concierge team members. So us based full time staff to really help members digest that information and understand really, you know, the why behind any of the recommendations we're making. And then what we've done is introduce this incentive model, this third bucket here that really rewards behavior. So if a member is to utilize our tool, whether it's the app, the website or the phone line and follow through with one of those recommendations that we're making, they actually get a meaningful sum m of money to cover their out of pocket costs associated with one of those high quality doctors. And so the interesting thing that a lot of your audience is probably aware of is that actually in health care it works on the opposite of other consumer goods where higher quality actually leads to lower costs. And so you find savings with these providers in a bunch of different ways. First, making sure that these doctors are providing clinically appropriate care, eliminating a lot of that wasteful care that we always talk about in the industry. I think the latest number I saw is about a third of all healthcare in the country is in that bucket of low value or wasteful care. So making sure they're following clinically appropriate guidelines, we're then going to look at the hospital and health plan transparency data as well as the sites of service of where these providers are practicing to really get an understanding of the actual cost, the unit cost associated with that provider. And then the third bucket as it relates to cost is really on the outcomes. And so anytime you're having a service that is clinically appropriate and in the right setting, making sure it's done with a really solid outcome, think lower readmission rates, complication rates, revision rates, things of that nature. And so if you take all three pieces of that cost bucket and you sum it up, what we found in our data is that doctors that are top rated are performing well in all three of those cost buckets. In addition to the quality on average are saving 27% on the entire healthcare episode. And so to your question on how do we actually save money, think of us being able to financially reward people to seeing doctors that actually lower cost. And that's how kind of the model really works.

Speaker B: And can it sit on top of a fully insured or self funded or any kind of anything in between?

Speaker C: Yep, yeah, that's the one thing that's really great. It's not only funding arrangement agnostic, meaning goes all the way down to fully insured groups as small as 50 lives. We work with mixed and level funded employers as well as some Fortune 10 self funded organizations and everything in between. And so it's not only funding arrangement agnostic, it's also carrier agnostic, meaning we can sit on top of any carrier and any network and we really just tailor the recommendations to whatever network that particular employer has partnered with.

Speaker B: Okay, so even like a captive, you could, you could institute it for.

Speaker C: Exactly right. We have many captives where we're working in the entirety of the captive, and then we also work with individual employers inside of the captives as well.

Speaker B: Okay, great. Well that's a, paints a real good picture I think. And, and obviously yeah, your reps aren't too hard to find. So if people want to get information a little uh, deeper dive on Garner Health and if it might be a fit, they, they can do that. But moving more into more of a macro view of the, of the world of employee benefits. Um, again, when we were chatting earlier, you were talking about we're being, we're uh, at a tipping point. I just had a guest on um, in the Captive Space who called it a watershed moment. Um, I think a Lot of us are seeing this point in time right now where uh, employers are just really done with the cost increases. Um, they're looking for solutions and maybe a little more proactively looking for those solutions. Um, I assume you're seeing that. Um, but I'd love to, to unpack. Um, really when you look at the employer market and um, as a Chief Revenue officer, specifically your go to market strategy around that employer market, what you're seeing and what's changed, you know, you've been with working in the carrier space for, for well over a decade, so you've seen a lot of change, um, over the years. And I'm curious kind of what you're seeing right now and where you think that's headed.

Speaker C: Yeah, it's interesting. In my early days, um, in the carrier world, in the small group market, I remember someone saying, man, if a single premium ever got to $500, I think the whole system would collapse. I think anyone listening to this would sign up for a $500 single premium today. Um, because that's where we've gone. So you are right, spot on. Costs are exponentially rising year over year. And the watershed moment or the tipping point, it is really here. And so what I'm starting to see is employers kind of put their hands up in some instances and say, we're done, we can't do this. Five years ago we were really worried about providing benefits for everyone and anything they asked for we were approving. Now it's really getting the attention of the CFOs and even earlier on in the conversation. So as we think about go to market, particularly in the employer world, we're starting to see CFOs join even some preliminary early demos. And five years ago that was never the case. And I think again, it just amplifies where we are. We're at this crossroads now where benefits has become the second, or third, uh, line item on a CFO's budget. And whether they like it or not, they are now in the benefits business. And so they're going to have to make some tough calls here and figure out what is best from a financial standpoint in order to maintain profitability and the livelihood of their business. And so I think where we're at now is you're starting to see some of these things that were viewed as too disruptive five, seven years ago. Think about reference based pricing. Ichra is getting a lot of time and attention now. And in my opinion, Ichra's really, you know, employers throwing up their hands and saying, hey, here's a defined budget, good luck, we can't do this anymore. And so I think you're starting to see things like that really start to come at the forefront. And, and I think they're gaining a lot of momentum again just because of these cost pressures that are out there.

Speaker B: Yeah, yeah, no, I been noticing uh, for these types of solutions there's far less need for kind of that demand generation right now. It's much more demand capture. But then really helping an employer sort through all these different types of, call it alternative funding arrangements, something different than just the typical fully insured plan. Um, when you think about kind of that broker role in this, um, what do you think again from a broader market perspective, what do you think is being kind of undervalued, um, around that, that broker component and that, and that in particular their ability to really help employers through this, this tipping point, watershed moment, whatever we want to call it.

Speaker C: Yep. Yeah. I mean it's a hard spot to be in if you're a broker or consultant. And you know, I've seen renew now, the highest one I saw last year was a 52% fully insured increase. And so your livelihood gets called into question by employers when they're seeing that type of increase. And so a, it's a really tough spot to be in when you are a broker or consultant given these cost pressures. They're coming to you saying help, we need a solution. And I think on the flip side of that, every vendor out there is peppering brokers and consultants with mass, you know, uh, marketing. Uh, you know, think of all the emails you get and you get the follow ups two or three days later and it's really hard to keep a pulse on all the things that are out there. So I think brokers and consultants really need to think about kind of what are my key strategies that I'm going to represent to my clients that I think are sustainable not for just one year, but you really need to start thinking about 2, 3, 4, 5 year strategies because there's been lots of things that were a, uh, temporary band aid that you can implement this year you save 10% but then next year you get a 25, 30% increase and then what? And so I think those that are thinking in advance multi year strategies are really going to be sitting in a strong position. But again, I think also the vendor community has done them no favors by kind of undervaluing the influence they have and the ability for them to help uh, implement some of these creative solutions. And so I think it really starts with forging great relationships. And so we're very intentional on making sure that we are engaging brokers and consultants at the local level, meaning meeting them where they are. We're not spamming them from New York to a broker in Oklahoma or somewhere, uh, out in Arizona or wherever it might be. We want to have boots on the grounds that are going to come to the office, make sure that they understand the value of the solution that we're delivering. And again that's not just at the pre sale standpoint. We're there to support our brokers and consultants throughout the life cycle of clients. And I think that's another lost art too is everyone focuses all of their go to market on the sale and then maybe kind of uh, sidesteps brokers and consultants once they have an active client. And we all know a good relationship with a client that has a case study and it makes the broker and consultant look good in that 15, 20% renewal increase scenario. Really helps you actually gain a lot of velocity in your sales motion with these folks versus a poor experience in the broker and consultant world might shut a whole bunch of doors for you. That was an unintended consequence. And so we make sure we're very thoughtful and I think anyone listening should be very thoughtful on not only the pre sale promise, but also the pull through promise of making sure that everything that was talked about up front is delivered on the back end.

Speaker B: That's really helpful to kind of walk through, um, you know, the whole spectrum from the initial sale all the way through the, you know, servicing and administration. And in talking about this being a long term relationship, right. I mean no one, no one really wants to purchase a health care plan for a single year and then have to reinvent everything the following year. Right? That's nobody's dream. Um, that's, that's not the process anyone wants to go through. Um, but when you, you know, you spent a decade at a, at a massive insurance carrier, um, working with I'm sure consultants and employers and then you came over, um, first sales hire I think you said, at Garner Health. Right. Um, so I imagine, and you know, fill it, fill in all the details here, but I imagine that when you, when you took a look at the market, you saw a lot of companies come into this market try to circumvent the broker and consultant relationship, most likely fail. Um, but what was your thought process, um, with Garner Health especially like setting up those initial go to market, uh, strategies. Um, what was kind of the thought process about what? Like why include the broker why not go direct? Because I, I, I say fail and it's easy for me to say like everything in hindsight, like why various companies that tried a direct strategy didn't succeed. And not to say none of them can or none of them have. But, um, but I'm really curious like, like you guys made a real concrete decision. I think you said well over 90, 95 of your market is through the broker channel. Um, like what drove that initially?

Speaker C: Yeah, so, I mean, I think there's definitely been some case studies and lessons learned. So there are a lot of vendors and point solutions out there who said, hey, sales team, here's your top 100 list. And they grabbed the Fortune 1000 companies and everyone just tried to direct their way into those employers and at the end of the day, benefits and health care or employer sponsored health care is so complex that there's very few employers that are willing to purchase or take on a different strategy without the guidance of someone else. And so a lot of the times what happens is these employers then bring this idea or whatever they heard to their broker and consultant and it kind of feels like you got sidestepped. And again, I have not been in the broker shoes. Um, you know, I know you have as well as a lot of the audience here, but it's not a good feeling when your client's coming to you with a new and innovative idea. You want to be viewed as the thought leader there. And so that's one reason, I think, why it's, you know, you want to make sure that you have this relationship. Otherwise sometimes they can come in with a defensive posture. Well, I didn't tell you about this thing because of X, Y and Z and so that does you no favors. I think the other thing too is that these folks, if you have a strong relationship, can be a huge influence for you and what you can and cannot implement. So I think that's really important there. And I think you want to just make sure that when you go to a broker or consultant that represents 20 clients, 15 clients, whatever it might be, you gain efficiencies there. If you can get a broker or consultant to truly understand the, the value prop that you're delivering and why it's going to be meaningful to their client, you now have 15 prospects versus the direct to employer world. You send thousand or spend thousands of hours direct outreaching to these groups and you look them up on LinkedIn and you see what interactions they've had and what their dog's name is and all of these things to try and like get one little tagline that'll get you a 30 minute meeting and after all of that work you're left with one prospect and one 30 minute meeting. Whereas if you can really get a strong relationship built with that broker or consultant, you've now got 15, 20 prospects. And so that's another reason why we were intentional about it is quite frankly it was a sales team of one and we had to be really efficient as we hired more folks and it made a lot of sense to place our bets on the 1 to 30 or 15 relationship versus the 1 to 1.

Speaker A: Yeah.

Speaker B: And have you seen uh, just more, more reception from brokers just in the, even in the past like 18 months to this type of model? Because again I, you know, like I said at the beginning, it's, it's, I don't know, maybe, maybe there are competitors, I don't know. Um, this model, I feel like it, it fits in a category, but it doesn't fit neatly in, in a category of, you know, five, six other vendors that you could go to, unlike a lot of the solutions that we can bring to the table every day as consultants. So I'm curious, like, yeah, from, from like how do you, how do you even position it in a, in a spot where getting a broker interested and then have you seen um, just more, more intrigue about it in the, in the past year or so?

Speaker C: Yeah. So it's a blessing and a curse for what it's worth to not be in a defined category. So you miss out on R if they're doing an RFP that maybe you're not viewed as doing some components of that. Um, but then again we are kind of creating a lot of the demand by coming to market with a new solution and an innovative idea. So I would say the broker and consultant community in general, you know, early days, right. You're a, you're a company with, you know, five, six clients. It's really hard to get FaceTime in general. I think that's where you have to bring in credibility and experience of your salesforce quite frankly. Um, when you know, a broker or consultant understands that you understand what their life is like, you gain a lot more friends than if you're just, you know, a typical SaaS vendor that's just cold calling and emailing someone and don't understand that hey, you're actually reaching out to them in the middle of fourth quarter when their hair's on fire and they've got 30 client renewals. So like little things like that I think start to build some rapport and credibility with the consultant market. And then once you get that meeting, once you're in the room, what's in it for them? A lot of the times people talk about the value to the end buyer, the employer, which is great, but you're not on the phone with an employer, you're on the phone with a consultant. And so when you think about that, I think your messaging needs to speak to them. And so that's one thing we were really intentional about and I would recommend everyone do, is really display the value to the brokers or consultants. And for us, and why I think it's so receptive is there's a million things you can do as it relates to impacting cost of care. Whether it's, you know, focusing on the pharmacy or just create this one solution for MSK or mental health or whatever it is, all of those things are really just tackling a sliver of the cost equation. And so you can implement 30 different solutions to get all of the claims dollar or you can actually just look at the data and say, well, hey, all of those things are controlled by the doctor that you see. And that's why we're hyper focused on that. And I think that message is resonating really well with the broker and consultant community is yes, there's a lot of things you can do, but you could also just do one thing and have the same impact as implementing 15, 20 different solutions. And so it's taken time, but I think the market is really receptive to that. And one of the great things is seeing the results right? Everyone wants case studies, they want to see 2, 3, 4 years of a client's results. And that unfortunately takes time. And you need to get one before you get four, and you need to get four before you get 20. But we're at a point now where a lot of these brokers and consultants, even if it's one particular market, I've had clients now with us for two, three, four years and then it's very easy to leverage those relationships to introductions to other offices. So think of any national brokerage agency and maybe you're doing really well with them. In Chicago, you've got the case studies, you've built the relationships. At that point you have the ability to ask them, well, hey, what about the New York office? Is there any way you can make an introduction there? And that's kind of where we're at now is we're getting a lot of referrals actually from brokers and consultants who maybe are going to their national conferences and talking to their peers about what's resonating with your clients. And fortunately, we've done a really good job and are starting to see a lot of that traction that way as well.

Speaker B: Yeah, that makes a ton of sense. Um, let's move into one more topic before we, um, before we wrap this up. And there's, there's a lot of talk around price transparency. Um, we, you know, we know that there's, you know, in a typical fully insured program, there's very little transparency period, on everything from your healthcare claims data to your pharmacy, um, and, and everything in between. And so, and so even putting in some of these solutions, um, without price transparency, you, you're like, yeah, I don't know. I don't know if, if this works. And I will might never know if it worked because I, I don't have insight into, into the data. But when we were talking, um, earlier you had mentioned to me, um, that you have some, some maybe differing views on kind of what, what price transparency looks like in the market and what it actually, what it actually does, um, to overall prices. So I'd love you to expand on that a little bit.

Speaker C: Yep. Yeah. So, I mean, price transparency has been all the rage for the last several years. It started with the hospital publishing of transparent data, for what it's worth. I don't know if you spent any time there, but it really wasn't very actionable, uh, at all. Um, and then there was the health plan transparency data that was published and that was a little bit more useful and meaningful for what it's worth. And so we've actively ingested a lot of that information to really start to understand the unit cost differences amongst providers and facilities and things of that nature. But I think what happened is a lot of folks thought that price transparency was going to be the silver bullet to solving the problems. But what's interesting is the data that we're seeing, and I think you're seeing it play out in real time, quite frankly. Um, I happen to live in New Jersey, but right outside of New York City, where, you know, I think it was last year, there was a battle between each of the major carriers and one of the major hospital systems around negotiated rates. And you see those play out and it gets pretty ugly. And members get letters that, hey, your hospital is no longer in network effective this date, all that stuff. And I think that's actually a byproduct of not only inflation hitting these hospital systems that are now coming up from air after being under a three, four year contract. But the price transparency data that they get shows where they are compared to their competitors. And now they're going to health insurance companies and saying, hey, the hospital down the street's got a 15% better negotiated rate. They're not going to come down 15%, I'm going to come up 15% otherwise we're going to drop out of your network and good luck selling your commercial product without a major hospital system in network. And so the jury's still out on what the outcome is going to be. But I think in general what you'll probably see is an initial, actually increase in cost as they all kind of come up to par. And then I think at that point you'll probably have less price variation, meaning hospital C to hospital a won't be a 15 or 20 point swing, maybe 3, 5%, something like that. Then the question becomes, well OK, if the prices are all the same, how do you actually win? And it's on value. Quite frankly, the price transparency might help bring the unit cost side of the coin into a uh, parallel. But really then okay, well if everything costs the same, how do I know that I'm getting the right value? And that's where I think the quality side of the coin is really important as well. So again I think price transparency is needed, but maybe have a little bit of a differing opinion that it's not going to be an immediate solve and actually might have the inverse outcome in the short term.

Speaker B: How much uh, leverage do you think larger self insured employers have? Uh, around that as, as transparency ramps up? Um, obviously their incentives are very differently aligned from the major insurance carriers, particularly the for profit insurance carriers. What, what, what is the difference between what you're, you know, and what you're talking about between a fully insured carrier versus a uh, large uh, self funded employer?

Speaker C: Yeah, I mean, so I think obviously leverage is in numbers, right? So whoever has the most lives, so to speak, in an area will have the leverage. And you know, the hospitals gain leverage if they have a lot of volume with that carrier or that employer or whatever it is, um, you know, on the fully insured side, and then on the flip side a self funded employer, particularly what I'm seeing is a lot of those that have concentrated membership. So if you're a large self funded employer, but everyone's scattered Evenly across all 50 states, a little bit harder to have some influence. But what you've probably seen, and I'm sure has been talked about is when you have concentrated volume where your employer represents a meaningful percent of the spend going to a particular system, it gives that employer a ton of leverage. And I think what they're saying is, well, if I can't rely on my self funded TPA to help me, I'm going to go out and start direct contracting with these facilities directly. And so you're seeing a lot of that obviously popping up, particularly for employers, again, large in nature that have a concentration in membership. Um, and then I also think that you're also starting to see a lot of claims repricing take place and audits and things of that nature where these self funded employers have access to their data, um, and can share that with third parties that are going to start to call out some of these discrepancies as well. So I would say those are the two distinct advantages of a self funded employer versus fully insured as it relates to a lot of this data is the ability to direct contract and then the ability to actually dig into their own claims data and figure out what's going on.

Speaker B: Yeah, no, and you make a great point. I mean it, it may seem, seem obvious, but it's not always obvious to employers that I talk to that if you have a high concentration of folks in one area that makes a difference compared to remote workers. I mean we, we're in an age where we absolutely need to know, um, where your workforce is based for more than just you know, local payroll laws and things like that. I mean it's really got a massive impact on, on um, how you position healthcare inside the organization. Uh, Steve, uh, this has been a great conversation and I, I really, like I said this is, this is on um, unpaid. I really encourage folks to check out Garner Health. Um, I think you'll, you'll find that it's a pretty neat, unique solution if you look into it, get in touch with a rep, get a quick demo and understand it. It's, it's, it's not super complicated to understand if you've been doing this for any amount of time. Um, but it is, it is another tool, uh, in the toolbox that, just like you said Steve, that actually kind of sits over a lot of the point solutions that we end up bringing to the table. Um, it kind of sits above, above that to really help drive I think some of the largest cost levers that we have inside a health plan. So um, that's my little free commercial for Garner Health. But Steve, if people want to get um, maybe in touch with you or learn more about Garner Health, um, what would your suggestion be? To stay in contact.

Speaker C: Yep. Yeah, you can reach me on my LinkedIn. Also, our website is getgarner.com There's a submission form on there that you can, uh, get a hold of the sales folks as well. And, yeah, again, uh, unpaid, but really appreciate the support here, and, uh, we would love to talk to any of you. Again, experiencing the cost pressures, which I'm sure every listener on here is. I think, if anything else, we have an interesting perspective on it. And I always say, are you a product or a solution? And I'm biased, but I think we're actually a solution to the problem and not just a product. So it's worth giving us a shot.

Speaker B: Yeah.

Speaker A: Awesome.

Speaker B: Uh, thanks so much, Steve.

Speaker C: Thanks, Dennis.