Latest / Success Story with Scott Clary / Andy Schoonover - CEO & Founder of CrowdHealth | Why Healthcare Is Broken

Transcript

Andy Schoonover - CEO & Founder of CrowdHealth | Why Healthcare Is Broken · Success Story with Scott Clary

• 0:00
  You have the buyer of health care, the health insurance plans, wanting health care costs to increase.
• 0:05
  You have the seller of healthy, big hospital systems.
• 0:08
  Clearly they want the price to go up because they want their profits to go up.
• 0:11
  It doesn't take a brain surgeon to figure out why health care costs go up.
• 0:17
  An incorrect assumption that insurance is guaranteed that insurance is safe because it's
• 0:22
  an entrenched institution that has been there forever. One out of every six health care claims are
• 0:28
  denied so there seems to be a false sense of security with insurance. You've got these masses,
• 0:33
  massive deductibles that you have to pay before the health insurance plan pays a dollar.
• 0:37
  What we'll ask you to do is you pay the first 500 bucks and then everything else we're going to
• 0:42
  submit to the crowd for funding. And so you don't have to worry about how much is this going to cost?
• 0:46
  What is my co-pay? What is my co-insurance? What is my deductible? What is my thing? It's like
• 0:50
  it's 500 bucks. We want zero people going bankrupt using crowd health due to medical bills.
• 0:55
  As opposed to 250,000 using health insurance.
• 0:59
  Welcome to success story. I'm your host, Scott Clary. The success story podcast is part of
• 1:04
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• 2:41
  Andy, bring it back. What's your origin story? Where'd you come from?
• 2:44
  Yeah, I was running a healthcare technology company. We were doing remote patient monitoring.
• 2:50
  So we were monitoring folks directly from their home, those folks with chronic conditions. So if
• 2:55
  you had high blood pressure, diabetes, whatever it may be, we were monitoring your blood sugars,
• 3:01
  your blood pressure, your weight, all of those things. And had a call center of nurses who would
• 3:06
  watch that information. And if your blood pressure spike, or your blood sugar spike,
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  you would call you to intervene prior to go into the hospital. I sold that company in 2014
• 3:17
  to a private equity firm. And as many people do when they leave their companies, they lose their
• 3:23
  health insurance. So I went to healthcare.gov. I thought it was the only place I could get health
• 3:28
  insurance. And I got a plan for me, my wife and my two girls that was about $1200 a month.
• 3:35
  And it worked until I actually had to use it. So my little one who was one at the time was
• 3:40
  having her recurring ear infections. And so we went to the ear and I was a throat doctor who
• 3:44
  told us that she needed tubes in her ear. She had perforated ear drums. And so we went to the hospital,
• 3:49
  got tubes in her ears. It's a 15-minute procedure. And we got the bill soon thereafter. It was
• 3:55
  $8,000. I was just blown away by the fact that a 15-minute procedure in our current healthcare
• 4:00
  system could be $8,000. And not only that, my health insurance plan set me a note via snail mail
• 4:09
  interestingly. And so it wouldn't pay for it because it was medically unnecessary. And so at that
• 4:15
  point, I was fed up. I was pissed off. I called my health insurance plan. I said, I quit. If you
• 4:22
  guys can't pay my bills, then I'm not interested in being your customer. And so I quit. And me,
• 4:29
  my family have been uninsured for the last two years. And during that time, we built tools to
• 4:37
  allow people to operate outside of the existing health insurance system. And we've saved about
• 4:43
  $10,000 a year by doing that. And the culmination of those tools is crowd health, which we
• 4:49
  raised a $6 million seed ground back in April to start and launched marketing back in April.
• 4:55
  And excuse me in October, and have been flying since. It's been an incredible experience to see
• 5:01
  people really resonate with the fact that health insurance is not serving them well. And that they
• 5:07
  can do something else that are much lower cost. So that's a great succinct or just sorry, I
• 5:14
  appreciate it. So let's unpack why why is insurance so broken? So you know, I'm Canadian. And when
• 5:21
  I came down here, I had to navigate all of this because yes, some things are covered in can,
• 5:26
  most things are covered in Canada, but obviously nothing is covered down here. So this is,
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  I'm still learning as I go. So I don't have the 30, 40, 50 years of experience dealing with this
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  system. So it's very new to me. And it's something that's obviously very topical. So why is
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  why is health care so broken in the US? First, like, walk me through that because I think that's
• 5:44
  interesting. And even that one thing that you mentioned where I'm paying 12 hundred bucks a month
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  for insurance. And then I go to the hospital, I get a, I get a procedure done for my daughter,
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  and then it's not covered. How is that justifiable? How is that something that hasn't been rectified
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  in the history of the United States? It doesn't make sense to me. No, it doesn't make sense to
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  me either. Unfortunately, I think, you know, look, the problem with health care to answer your first
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  question is, you know, some, a lot of people think the rising health care costs is a result of a very
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  complex system. But it's not all that complex. If you think about the fact that health insurance
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  plans actually have no incentive to reduce costs. And in fact, they're and they have an incentive
• 6:28
  to increase costs in the affordable care act. So was that seven, eight years ago, they maxed out
• 6:36
  the amount of profit that a health insurance plan can make to 15% of premiums. So if you think
• 6:44
  about just using easy math, my premium is a thousand dollars, they can only get a hundred and
• 6:48
  fifty dollars worth of profit out of that profit and administrative costs. So they actually have
• 6:52
  to raise premiums to be able to raise their profits. So they are incentivized to see your monthly
• 6:58
  premium to go up. So in essence, you have the buyer of health care, the health insurance plans,
• 7:05
  wanting health care costs to increase. You have the seller of health in big hospital systems.
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  Clearly, they want the price to go up because they want their profit to go up. So now you have
• 7:19
  the buyer and the seller of health care, both wanting the price to go up. It doesn't take a
• 7:24
  brain surgeon to figure out why health care costs go up. And here's the other thing too is
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  even if United Health Care wanted to negotiate. Right now, our system is ruled by big hospital
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  systems. So I live in Austin, Texas. We have two hospital systems. United Health Group, even if
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  they wanted to negotiate with the local hospital, they can't because they have a duopoly.
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  If they lose one, they lose access to most of the companies in Austin, so they have no
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  negotiating power. So there's this mutually beneficial thing that the hospital systems and
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  health insurance have going on here that they just raise prices every single single year.
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  And there's no market forces to actually reduce those prices. And that's why health care expenses
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  are so high. And so there's just perverse incentives within our system to increase prices.
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  And that's ultimately what the what the problem is. Now the so it's not it's it's not great. I
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  understand that we live in a while, at least in this part of the world, we live in a society that
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  is driven by profit. And that's something that is pretty standard with business. Now I'm not
• 8:35
  saying it's good, but I mean, it is the de facto. It's kind of how the US how the US works. People
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  want to make more money and they have to find ways to make more money. And that seems to be
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  unfortunately something that is going to impact somebody's health and well being. But the part that
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  I really don't understand is even if they are making money off you, how can they justify
• 8:54
  denying that claim? So that like I'm already upset that they're they're making a lot of money
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  that's fine. I can't complain about that. You know, everybody needs to make more money the
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  health stakeholders that they have to to make happy fine. But how do they justify when you are
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  paying something like that? What's the what's what what would make it a medical necessity versus
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  a non medical necessity? It seems like somebody having a constant recurring significant health
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  event should be something that could be considered a medical necessity. Yeah, it's so opaque. Like
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  there's no clarity and transparency into why they will agree to pay some medical bills and not
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  agree to pay other medical bills. And I think it kind of goes back to this, you know, 15%. If they're
• 9:38
  hovering at that 85% of of your premium being pallied on bills, they get pretty stingy with that,
• 9:45
  you know, that last amount of dollars. So they got to keep it to to 85% to maximize their profit.
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  Here's the here's the crazy stat that I didn't know before really diving in. One out of every six
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  healthcare claims from plans on healthcare.gov, which is where most people go and get their their
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  healthcare if you're not getting it through your company are denied. One out of six are denied.
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  Right. If you live in Tennessee, it's one out of three. If you live in Texas, it's one out of five.
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  I mean, one out of six doesn't seem super high. But if you have an $8,000 bill and there's a one out
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  of six chance that they're not going to pay for it, the vast majority of the American population is
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  not going to be able to pay that $8,000. You don't have $8,000 laying around in an account
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  somewhere that's like, oh, just in case I have a big medical bill in my insurance plan,
• 10:35
  well, pay for it. I have as $8,000 like it just doesn't exist. Right. And so that's why we're seeing
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  250,000 people last year who had health insurance when bankrupt due to medical bills. Like the
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  whole point of health insurance is so if you have a big catastrophic event, you won't get into
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  financial distress. And we had 250,000 families last year go bankrupt even though they had health
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  insurance because of medical bills. That just doesn't seem right. Right. And that's just
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  entirely the prerogative of the insurance provider. And there's is there no
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  is there no like ombudsman or anything you can do to appeal that decision or sue them like,
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  what's is there any recourse whatsoever? There there is. Fortunately, I mean, there you can take it
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  to the state. You know, if this if most of these plans on an individual level are regulated by the
• 11:23
  state and so you can take it to the state, but that's just a big bureaucratic, you know, regulatory
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  agency. And so to pay, you need to pay it right next month. And yeah. And if and if the bill
• 11:33
  collectors are calling you, right. And it's going to want to ding your credit score. Like you
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  I mean, all that happens before us, the state can typically engage. Right. And so you're you're
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  kind of sucked into a big bureaucratic, you know, black hole. So there are some, but it takes a
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  long time and oftentimes it's, you know, you never hear and things like that. So it's it is not
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  an efficient process for sure. So you you after that event with your your daughter, you know, okay,
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  I'm done with this. I'm not paying for insurance does not doing anything for me, but I have to
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  figure out something in case yeah, a 500,000 or a million dollar bill happens. Then I do have to
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  figure out how to to deal with that event in my life. So this is this is the inception of
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  crowd health. Correct. This is this is you were figuring it out on your own. You actually turned
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  it into your founder. You realize there's an obviously a huge opportunity there, but that's still not
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  you know, Salad easy and even we were talking before we started recording like building out this
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  category. So walk me through building out, building out a category and then building out a company
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  in that category. Sure. And so yeah, so one of the things I was thinking about is like, okay,
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  so what happens if I get a big bill, you know, what happens if I have cancer or you know, big surgery
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  or whatever, you know, basically two percent of people, you know, have those big catastrophic
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  feel. So it's so it's a very low probability, but it could happen, right? And so, you know, as I was
• 13:01
  thinking about how other people get their bills paid, you know, when they don't have the money to
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  do that, you know, a lot of people go on these crowdfunding websites like go fund me, you know,
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  and so you submit your bill and and so and most of the time those bills get paid. I think it's
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  probably the number one category and go fund me as these big medical bills because people can't
• 13:19
  pay for them again, Alvin Scherne's plan. A lot of times you're not paying for these things,
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  and so they go to and so what if we could build a a crowdfunding site that has some incentives
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  for people to actually go and fund these, right? Like a young child having cancer is, you know,
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  much more emotional and, you know, worthy of giving, right? Then my five-year-old has a broken
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  arm or, you know, my two-year-old or one-year-old needs ear tubes in our ears. Those aren't nearly as
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  emotionally kind of and they're not as they quote unquote sexy problems as somebody who has
• 13:56
  says cancer, right? Exactly. Exactly. So what if we built a system where if I give to you, right,
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  when you need help, you're more likely to give to me what I need help. So we built in a system
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  where there's a law reciprocity, right? So the way that ours works is you will submit money into
• 14:16
  an account that account is yours every month. And so if you're between the ages of six and 54,
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  it's 175 bucks. A little bit more of your older, a little bit more if you're younger. And then you
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  can use that money to fund others when they have needs. And so we're going to ask you every month,
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  it's like, hey, here's 10 people that have needs this month when you fund them, yes or no. So it's
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  totally voluntary. If you say yes to everybody, then you are one of those people that will step up
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  when others are in need. If you say no to everybody, you are one of those people that is stingy and
• 14:52
  won't step up when everybody else is in need. And so when you have what I have a bill,
• 14:58
  right, and I've been stingy, the probability of other people being like, yeah, I'm going to give
• 15:03
  to the stingy guy is really low, right? The probability of somebody giving to me if I'm this
• 15:09
  super generous guy is really, really high. And thus far, everybody who's been generous has gotten
• 15:16
  their bills paid, right? And so you've built this reciprocity. And it's actually, look,
• 15:21
  it's the way communities have worked for thousands of years, right? If I'm in a community of people
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  and something happens to me, and I'm the Grinch, then there's not a whole lot of other people stepping
• 15:33
  up. And unless you're Lucy Lou or whatever her name is in the Grinch, I don't know if I
• 15:39
  know what her name is, but if you are the nice person on the block who brings you cookies when
• 15:47
  you move in, like the probability of me coming and helping you is much, much higher. And so we're
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  using that that reciprocity within a crowdfunding type of platform to pay for medical bills. And the
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  beauty of this is we're getting bills paid at about 50% of what health plans are paying for bills.
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  So that $8,000 tubes in my daughter's ear, I put that out on LinkedIn and somebody of doctor,
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  and your nose and throat doctor read it and came back to me and says, we do those all day long
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  for $1,500 if you'll pay in cash, right? So if I paid in cash, I could have gone once this
• 16:24
  ear nose and throat doctor and save $6,500, right? That's 80% savings. And so these doctors are
• 16:32
  willing to take significant discounts to what the health plan will pay them if you pay them in cash
• 16:39
  at the point of sale. And so that's where we're getting the vast majority of our savings is
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  physicians hate health insurance as much as we do. And so they will take significant reductions
• 16:53
  so they don't have to wait 90 days to get paid. They don't have to haggle with the health insurance
• 16:57
  company. 30% of their time is spent with health insurance companies. And so they now have 30% more
• 17:04
  time that's focused on patients, which is as opposed to paperwork, which is what they really love,
• 17:09
  right? And that's where we're getting our savings. So you're doing two things. So the crowd health
• 17:15
  is a community, it's a platform and it's not only leveraging the fact that you're speaking
• 17:21
  directly with physicians and specialists to give a reduced cost, but then it's also a crowd funding
• 17:26
  component that allows other people in the network to pay for whatever it is that you need. And I
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  guess, you know, if I'm trying to, the concept is great. It makes a lot of sense. I actually think
• 17:40
  that when somebody dives into this for the first time, I sort of take my perspective and I look
• 17:45
  at it the first time I always think like, well, to love reciprocity and it's not guarantee, but
• 17:50
  there seems to be almost an incorrect assumption that insurance is guaranteed, that insurance is
• 17:58
  safe because it's an entrenched institution that has been there forever. So there seems to be
• 18:04
  like a false sense of security with insurance. And if you haven't been screwed, like you've been
• 18:10
  screwed, then you won't understand that nothing is a hundred percent. So that's where I see people
• 18:17
  looking at this alternative form of, I don't know what you call it, is it's not insurance because
• 18:24
  it's a different thing. So it's own category. Yeah, it's its own category. I mean, it's really an
• 18:30
  alternative way to pay for healthcare, right? It's a, you're taking personal responsibility over
• 18:36
  your healthcare bills as opposed to giving that responsibility to a health insurance plan. And as
• 18:43
  a result of that, you're going to save 50 percent. And is it guaranteed that your bills are paid?
• 18:48
  No, you know, is the probability really high? We think so. We think it's way higher than you
• 18:54
  getting your bill paid from a health insurance plan, given the one in six that I just mentioned.
• 18:57
  And that's from the Kaiser Family Foundation, like that's not my number. It's a legitimate,
• 19:01
  you know, think tank coming up with that number. So that's where I think people are really not
• 19:06
  misunderstanding. You know, the other thing is you've got these masses massive deductibles that
• 19:11
  you have to pay before the health insurance plan pays a dollar, right? So many of them are six,
• 19:16
  eight, 10, $12,000. Before you pay before the health insurance plan, plan pays a dollar. From ours,
• 19:23
  you know, one of our key metrics is we want zero people going bankrupt using crowd health due to
• 19:28
  medical bills, right? As opposed to 250,000 using health insurance. And so the, the, what we will
• 19:35
  ask you to do is you pay the first 500 bucks. And so you step into the hospital, you pay the first 500
• 19:41
  bucks, right? And then everything else we're going to submit to the crowd for funding. And so you
• 19:46
  don't have to worry about how much is this going to cost? What is my co pay? What is my co insurance?
• 19:50
  What is my deductible? What is my thing? It's like, it's 500 bucks, right? And you can have solace
• 19:56
  in the fact that, you know, most people have 500 bucks in the bank that this is not going to
• 20:02
  bankrupt you. And that's the whole point of health insurance. And so that's what we're really
• 20:08
  really trying to push is that just kind of simplicity. I know that the mechanics on the back end
• 20:13
  are a little more complicated because this is the first time people have heard this probably.
• 20:18
  But in essence, it's super simple. You pay the first 500 bucks. Everything else is submitted
• 20:23
  to the crowd for funding. You can choose whatever doctor you want. There's no doctor networks
• 20:28
  anymore, which is a huge benefit, right? And so it's just way easier to use after you used to it.
• 20:36
  Then your typical health insurance plan and walk me through this because the other question that
• 20:42
  I would have going into something like this is what about people that abuse the system or perhaps
• 20:47
  flip the question, maybe people that do they don't mean to like quote unquote abuse, but they do
• 20:51
  have recurring significant health expenses. Is that the target customer? Is that someone that
• 20:57
  should even be in this network or are there people that makes sense to be in this network and
• 21:02
  people that it doesn't make sense? Yeah, I mean, now we want it to be fair health care. You know,
• 21:06
  not unfair health care, which it feels like with insurance plans, that's the case. And so
• 21:11
  it will accept anybody with the exception of two groups. One is smokers because your costs are
• 21:17
  4x, what the normal non-spokers are. And then if you are over 300 pounds,
• 21:23
  again, your costs are massively higher than everybody else. This is not fair for you to
• 21:27
  participate in this. If you have a pre-existing condition, then the fair thing we think is for you
• 21:34
  to be responsible for those, 100% of those in the first year. And then the crowd will help you
• 21:39
  fund those after the first year. So 25,000 in the second year, 50,000 in the third year, 100,000
• 21:46
  in the fourth year. So it's just a fair way of doing this. And so no, it's not for everybody,
• 21:52
  but we think that the vast majority of the population fits within a range that makes sense for us.
• 22:04
  Most of the folks who are signing up right now are 1099 type of folks, or they're solo
• 22:09
  preneurs, or they are in a small company that doesn't offer health insurance. And our existing
• 22:17
  customers are mostly those types of folks. That makes sense. So you're an entity of entrepreneurs
• 22:22
  basically. Yeah, no, it sounds like it. Well, that's the thing. I feel like somebody who is just
• 22:28
  an entrepreneur who loves to try new things out. For me, I love to try stuff out like this because
• 22:34
  it's so new and it's just a different way of doing things, actually sort of segues and dovetails
• 22:38
  into another question. As an entrepreneur, I am curious, how do you build something? How do you
• 22:46
  build this category? What are the actual steps that you took? Because again, when you spoke about
• 22:51
  you're disrupting an entrenched institution, you're disrupting insurance, they have tons of money,
• 22:57
  like they're not going away anytime soon. They can lobby governments and they can do whatever they
• 23:02
  need to do. Insurance is not new. So how do you build something and how do you attract people to
• 23:07
  this? And what was your thoughts when you first started this company? Yeah, well, I think one of
• 23:13
  the big, big hurdles, right? Anytime you're starting a company, it's just fear. You know, a lot of
• 23:17
  this, I operate out of a sense of fear. And so I'm, I can't say I'm like this fearless leader because
• 23:24
  I've been super fortunate. My last company did great. We had about 400 employees when we sold the
• 23:29
  company. So it went awesome. So I'm in a position now where, you know, one, I can take that risk.
• 23:35
  And two, you know, a lot of the people in healthcare are fed in some way by health insurance plans.
• 23:42
  And so there is a, a disincentive to go after the people who feeds you. Don't bite the hand
• 23:48
  that feeds you, right? And so that's why no other companies out there are trying to do this.
• 23:54
  And that's why a lot of the other entrepreneurs aren't trying to do this is because they,
• 23:57
  they rely upon health insurance plans to do this. And so I'm in a pretty unique position to be
• 24:02
  able to go out there and and give this a shot. And you know, when I start things, it's because
• 24:10
  there's a gap. You know, there is a gap there that's that's so big that it's worth a swing.
• 24:18
  Right? This is a, this is a home run swing. And I think that we, we will connect and
• 24:22
  and the last couple of months have been crazy in terms of people getting signed up and,
• 24:26
  you know, open enrollments been in the last couple of months. And so it's been the feedback has been
• 24:32
  incredible. And so we've been lucky in that way. But for me as an entrepreneur, it's
• 24:38
  go swing at something that could have a significant impact on the people around me. You know,
• 24:45
  and this is one of those companies that can have a significant impact. You know, I'm,
• 24:50
  I consider myself and even everybody on my team are missionaries. I mean, we are, we are on a
• 24:55
  mission to change the way that health care is paid for as opposed to mercenaries, which is just,
• 24:59
  they're in it for the money. And I tell most entrepreneurs, I'm like, hey, if you're just in this
• 25:04
  for the money, it's going to get really hard. And so, you know, is money a big enough of a
• 25:10
  motivator to drive you to do something, you know, that is game changing. And a lot of times it's not,
• 25:18
  it doesn't make it through. So if you're, you're mission driven, that's where I get, you know,
• 25:22
  really, really excited about, you know, the companies that I build. So this has been number two,
• 25:28
  my first one was, you know, helping old people, you know, with their chronic conditions. And
• 25:33
  my grandparents were a huge influence on my life. And so they were in their 80s when I started
• 25:38
  at that company. And, and they were primary driver of that. And that was my mission to help them
• 25:43
  live, you know, a more healthy, healthy life without having to go to a nursing home. So that was,
• 25:50
  you know, be missionaries for your, for your, your, your start out. And that's, that's to me
• 25:55
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• 26:41
  You, you, you mentioned the missionaries versus mercenaries. And one of the other interviews that
• 26:47
  you did, you actually had five, five key things that you wish somebody told you before starting
• 26:53
  company. And I was actually one of them. You had a couple of really smart hiring lessons in
• 26:57
  this in these group of five, five lessons. Another one that you mentioned was beware of big company
• 27:05
  experience. And I completely agree with you. But walking me, walking through why that's so important
• 27:09
  as a founder trying to hire their first few employees. Yeah. I mean, it wouldn't you see a big company
• 27:15
  on somebody's resume. You ultimately think that, you know, part of the success of that company has
• 27:22
  to do with the person that you're, you're talking to and forget oftentimes that these big companies
• 27:27
  are big. There are thousands, tens of thousands, hundreds of thousands of people. And they have tons
• 27:34
  of resources. And they have everybody doing, you know, lots of stuff for them. So they don't have
• 27:40
  to do a whole lot, right? You have executive assistance for executive assistance, right? And so, you
• 27:47
  know, I have just, I have learned throughout my, I guess, you know, 20 years now being, being
• 27:53
  entrepreneur real, you've hiring somebody from a big company is a really hard thing. They have to
• 27:59
  overcome a lot of the big company bad habits. They are not as gritty oftentimes as, you know,
• 28:09
  people in startups. And I mean that by like, just get it done, right? Like forget about who gets
• 28:16
  it done, you get it done. And it may not be totally in your lane, but just get it done. And
• 28:21
  just big companies just don't oftentimes allow people to do that, whether it's because of your
• 28:27
  accuracy or administrative or whatever. And so I like the grittiness of people who are, you know,
• 28:34
  in startups and have been in startups or fresh out of college, right? Who are like, I don't know,
• 28:39
  just tell me what to do it. I'll get it done. Like I, I love that. I love those, those gritty,
• 28:44
  and I'll take gritty over super high horsepower, you know, any day. One of the other things I've
• 28:51
  said, it might have been that interviewer, maybe maybe somewhere else, but give me, give me
• 28:56
  somebody who's will work their ass off over a straight A student any day, right? The people who
• 29:03
  work their ass off know what it's like to fail. They get back up and they keep going after it,
• 29:08
  right? The guys who get straight A's, they don't know what it's like to fail. And when they fail,
• 29:14
  and they get a B, it's like the end of the world. And I'm like, dude, we're in a startup. We fail
• 29:19
  every single day. And if we're not failing, then we're doing something wrong. You know, we're,
• 29:24
  we're not driving fast enough. How do you, how do you find that in somebody though? How do you,
• 29:28
  how do you actually find that in somebody when you're interviewing them? How do you find, I guess,
• 29:31
  like a little bit of like a grit plus chip on the shoulder plus, you know, just, just figure it out
• 29:37
  curious person. What's the interview question to get that person in? I think it's, it's less interview
• 29:43
  questions. I'm terrible at interview questions. I'm just, I'm bad. And so I actually have them do
• 29:48
  stuff. Right. I'm interviewing somebody right now. And I said, okay, build me a corporate financial
• 29:54
  model. And he kind of looked at me like, I was like, Hey, you're going to get it wrong, right? But
• 29:59
  like, how do you even think about that? Right? And so it makes it, it requires them to ask really
• 30:05
  good questions, right? It asked them to really think about what drives the business. They,
• 30:12
  they have to dig into the business and really try to understand it. They have to be good at excel,
• 30:17
  which I think is the most important tool of business from my perspective. And if you don't know how
• 30:22
  to do that, it's really hard to, to excel. And so, you know, I'm actually having them like do
• 30:30
  some work. You know, the other thing I said is like, Hey, here's crowd health. Here's what we're
• 30:34
  who should I go after? Right. Write me a two page on who I would go after and how would go
• 30:38
  after them? Right. And it forces them to create some ideas, to do things on paper. And it's between
• 30:45
  those two activities, I can tell most of the time how they think, right? And can they think outside
• 30:51
  the box, get creative? Or do they think really very much inside the box box and have a really hard
• 30:59
  time with, um, with great, the gray, right? And that's where we are in startup land. It's, it's
• 31:05
  just gray. Like it's not black and white. Like you just kind of figure out and operate in the land
• 31:09
  of gray. And if they're not comfortable with that, it's probably not a good fit. And do you do that
• 31:13
  for, do you do that for all roles that you bring in just most to, to, that's smart. It's, no,
• 31:19
  it's hard idea because I mean, look, I mean, part of this is like, you got to think analytically,
• 31:25
  right? Regardless of what role you're in, I don't care if it's a sales person or a marketing
• 31:30
  person or an operation person or whatever, it's like, you need to think analytically and you need
• 31:35
  to have some kind of comprehension on how to do Excel. And if you don't know how to do a financial
• 31:39
  model, like a P and L, like, you're going to go figure it out, right? Which is a big part of, of,
• 31:44
  of a startup. Like, this is not, you know, in a 100 page user manual, right? Like did she have to go,
• 31:52
  it's like, no, no, we just have to figure this stuff out. So go figure it out, right? Go out,
• 31:56
  figure out how to make a P and L. And you don't expect as much from some positions as other positions.
• 32:03
  But I think it is a good tool to, to get a really good sense of how people think and, and
• 32:09
  can operate. And let's, let's flip that when you're building a company in a category, you're
• 32:13
  looking for certain people, certain mindsets that you're bringing in, but also walk me through
• 32:19
  how you market something that no one's ever heard of before or they've only had their first
• 32:23
  exposure to what's, what's the, the playbook for that? Yeah, you're going to be so different and
• 32:28
  so much better than the alternative that people were like, duh, like, why did I think of that? Right?
• 32:35
  Duh, you know, and that's hard oftentimes. Like, and it's hard now, right? Because I'm marketing,
• 32:40
  and we spent our all million boxes over the last three months, you know, marketing. And we've
• 32:46
  gotten some really, really good feedback, but a lot of people just look at you like, what the heck
• 32:50
  are you talking about? Right? And so, you know, one of the things you have to realize is that you have
• 32:54
  to pick a group of people that you think will really resonate with your, your brand, right?
• 33:02
  And what I'll tell you right now is the people who are resonating with our brand or the people
• 33:05
  who are typically very high and kind of personal responsibility. They're like, I want to take care
• 33:10
  of my own healthcare bills and not have a health insurance plan get in the middle of this. And so
• 33:15
  we've been all in on those those types of people. They are the Bitcoin people. They are Libertarian.
• 33:21
  They are those types of people and they're entrepreneurs, right? Like entrepreneurs are tend to be like,
• 33:27
  hey, let me control my own destiny, destiny as opposed to just relying on a health insurance plan.
• 33:33
  And you never know what they're going to do, right? And so we've been all in on those types of folks.
• 33:38
  And it really has resonated with them. So it's really like find your customer who does it resonate.
• 33:45
  With and go from there. I will say that we spent a million dollars of unmarketing, but
• 33:52
  we tried about 20 different distribution channels to get our message out. And we tried
• 34:01
  digital to traditional to print to all kinds of different things. And even within those,
• 34:08
  we've segmented a lot of different ideologies and political spectrum and thought all of those
• 34:17
  just to see if is there a group here that this tends to resonate with? And I think we've found
• 34:23
  who those early adopters are going to be. And so that was our approach.
• 34:28
  Very interesting. I just know how difficult it is. So I can only imagine
• 34:32
  building a marketing strategy for an industry that doesn't exist yet. I can't imagine it's easy.
• 34:40
  I'm just looking at you.
• 34:41
  Kind of emotional getting fired up, right? I mean, because if it's not an emotional
• 34:48
  cell or purchase, it's going to be really hard to get people to actually buy, especially
• 34:54
  like something like health insurance, which is typically like, oh my god, I don't.
• 35:00
  Though the last day of the month, every month has been our biggest day because people wait
• 35:04
  into the very last moment to figure out what they're going to do with paying their health
• 35:09
  care bills for the following month. And they find us and they're like, oh wow, this is really,
• 35:12
  really cool. But it is the last thing you want to deal with. And a part of that is because
• 35:18
  health insurance sucks. I mean, it really does. And so we really want to make something where it's like,
• 35:22
  no, no, this way to pay for your health bills is actually pretty cool. And you're just going to
• 35:26
  save a ton of money and you're going to help other people. And you know, that's great, right?
• 35:30
  That's a great alternative to what we've been forced into. One other thing that you mentioned,
• 35:37
  and I've heard this, I've heard this said different ways before, but I'm curious to understand
• 35:41
  how to apply to to crowd health. So do things that are unscalable and then learn how best to scale
• 35:46
  them. So what does that mean in a broader context than how did you actually apply that to crowd
• 35:51
  health when you quite literally need, you need a certain mass of people to make the entire
• 35:58
  business model function? I mean, it's hard. And it's like, we're almost like threading a needle,
• 36:03
  right? I mean, you really are. And I think I've said that in that interview, too, is doing
• 36:08
  things that are unscalable. I mean, there is a, there is a desire from the beginning to automate
• 36:16
  as much as you can, right? And, you know, for me, it's like, man, everything that has to do with
• 36:23
  the customer, I want to own and manually do so that I understand what that customer is like and
• 36:31
  what they're thinking and how they're reacting and things like that. And so there was this idea
• 36:35
  internally at the company of, you know, there's these little chat bots down in the, the lower right
• 36:40
  hand corner of your website. And so they're like, okay, well, let's just come up with all the
• 36:44
  questions that we think people like, you know, have and what the answers are to all those questions
• 36:48
  and we'll chatbot it because that's the best way to scale all the interest that we'll get. And I
• 36:53
  was like, no, no, no, let's not do that. Let's all get on the chat and all the answer to these
• 36:59
  questions, you know, all 10 of us, including the CEO, I think I've spent more time on that chat
• 37:04
  bot than anybody else answering questions from prospective customers because now I know what they're
• 37:10
  asking. Now I know what their objections are. Now I understand our customer a lot better and
• 37:16
  that's an unscaled way of doing something that I think will help us scale because now we understand
• 37:22
  the customer a lot better that you just don't get from a chat bot, right? And plus us chat bots
• 37:28
  are so annoying if you type in one letter wrong and drives it bonkers, right? And so one of the things
• 37:34
  that we, you know, are on scaling too is we have your personal care advocate like you will have
• 37:40
  somebody that you can talk to every single time that you call into crowd health, right? The same
• 37:46
  person. So you're not going around, you know, a big call center and you have to explain your
• 37:52
  daughter has tubes in her ears and they're cost me $8,000. You don't have to do that 20 times to
• 37:56
  get an answer. You're talking to the same person every single time, right? And that's an unscaled
• 38:01
  way of doing things. But we think in the long run, if you have a health condition, you will call
• 38:07
  that person and we can help you and guide you to a really good doctor who in the end of the day
• 38:12
  is going to be way less expensive than if we did it in a way that, you know, his call center
• 38:19
  oriented and you may not have gone to that great doctor. And so we think in the long run,
• 38:24
  it's going to save us a bunch of money. It's just a way better customer experience. Some of these
• 38:29
  things that these big companies do to scale is a terrible, terrible customer experience.
• 38:33
  I mean, call into your cable company, right? I'm trying to cancel my security sister right now and
• 38:38
  I can't freaking get somebody on the line, right? As a terrible customer experience, we want to have
• 38:44
  an awesome customer experience and we think in the long run, that's going to allow us to scale a lot
• 38:50
  faster than if we had lots of automation or lots of outsource call centers and all that kind of
• 38:54
  stuff. And as this industry, this category grows, there's obviously going to be other competitors.
• 39:00
  So what do you think is going to be the defining factor that differentiates crowd health when
• 39:04
  there's 20 other alternatives that also do a crowdfunding healthcare coverage, spends coverage
• 39:10
  model? Yeah, I mean, I think we got to grow fast quick. What is differentiating Tesla and Apple
• 39:20
  and all these other companies that have kind of defined categories, right? To find their own
• 39:24
  category, you didn't find their own categories. I mean, it is a huge, it is a big base of people
• 39:30
  who are relying upon you. And if the more we faster we scale, the more people we have, the lower
• 39:36
  costs we can then get. And so you're actually driving costs down as you scale up. And as you're
• 39:42
  driving costs down, you can actually lower the price for your customers. So that's kind of the core
• 39:48
  goal here is to scale up, to get the price down even lower than what we currently have. And we
• 39:53
  think there's probably 20 or 30% that we can drop it from where we currently are. So
• 39:59
  and then I think again, we're not going to get swayed by the, you know, do it, do it quick and
• 40:05
  cheap. We're going to do it slow and probably a little bit more expensive on the administrators side
• 40:10
  because we want an awesome customer experience. I mean, I may ravage customer experience
• 40:17
  person. And I think that this is going to scale with people telling people others had crowd
• 40:24
  health. It was so easy and they care about me and they pick up the phone when I call them. And
• 40:29
  they're not declining bills and all these things like that's what I want crowd health to be.
• 40:35
  And if you can kind of build up that brand, then I think that goes a long way from some of these
• 40:40
  other, you know, wannabes. I want to, I want to pivot and ask a couple of rapid fire questions
• 40:46
  to close out and just get some insight from from your career and your experience. But
• 40:50
  where do you, what do you want, what's the impact that you want to have on the world as an entrepreneur
• 40:55
  with crowd health? If you could summarize it, what do you want to be known for when you're all,
• 41:00
  you know, you're all set and done? Yeah. So as an entrepreneur, I mean, I really think and
• 41:07
  that my current gig, I think hopefully this is a 25 year gig. It is, you know, significantly
• 41:11
  reducing the way we are significantly changing the way we pay for healthcare costs. Our goal is
• 41:16
  400,000 people saving a billion dollars over the next five years, a year. And so that's our,
• 41:21
  our goal. I really truly believe that we can change the way that healthcare is paid for, which
• 41:25
  will alleviate so much suffering in this country. That's what I get fired up by.
• 41:30
  Great. Amazing. If people want to connect with you, go check out crowd health,
• 41:36
  socials, website, where do they go? Yeah, join crowd health.com is our website. We're on all the
• 41:42
  socials at join crowd health. So come and visit us there for sure. Do you want to drop your
• 41:49
  socials too? I don't know if yeah, what's your favorite? Like your LinkedIn or whatever it doesn't
• 41:52
  matter. LinkedIn is ad join crowd health, Instagram ad join crowd health, Twitter and Facebook are
• 41:58
  all the same join crowd health. I meant, I meant like for you for you. For me, yeah, for you, yeah.
• 42:03
  You're the, you never know. I think you have a great, listen, you have a great story. And this
• 42:09
  is like not your first rodeo. Like you just, I put it out there in case, I don't know, you're into
• 42:13
  building your own brand or whatever you're on your own podcast. I just want to get a, you're
• 42:17
  out social. Twitter. Yeah, go, you can go Twitter. It's scoone over and then Andy. So let last
• 42:22
  name first name. And then you can find me on Andy's scoone over at LinkedIn and my, I'm not an
• 42:27
  Instagram person. So go to join crowd health on, on Instagram. That's me. Like I post everything
• 42:33
  on, on Instagram because I wanted to, to control that voice. So I think you can go on it. It's kind
• 42:39
  of, it's kind of fun. I mean, we take a fun approach to healthcare as opposed to, you know, this,
• 42:43
  you know, old-white guys and suits. We are a, a young crew at our 30s and 40s who are having fun
• 42:48
  and we think we're, we're gonna change the world with this. Good. Awesome. Yeah, I was looking at
• 42:53
  the Instagram. You got some memes on there. It's a length of vibe. It's good. Very good.
• 43:00
  All right. Let's, let's go through some rapid fire. Biggest challenge that you had to overcome
• 43:04
  in your own personal and professional life. What was it and how did you overcome it? Yeah, man.
• 43:10
  Not to maybe TMI, but my wife and I, we lost our first daughter about 10 and a half hours after
• 43:16
  she was born. So talk about, you know, just incredibly huge challenge that people can take and
• 43:24
  let it destroy them or it can take and say, okay, how does this, you know, impact me as a human being
• 43:30
  is, you know, a person who's, who's in a marriage and, you know, our marriage is in much stronger now
• 43:37
  than it ever would have been without losing, without losing grace. And like I said, we had two,
• 43:42
  two daughters after her. And so a huge challenge. If you had this used one person, obviously,
• 43:47
  there's been many, but one person has had a major impact on your life. Who was that and what did
• 43:51
  they teach you? Oh, man. Yeah. So my first, not real boss, but my boss's boss, Chris Nassetta,
• 43:59
  out of college, I was working for a hospitality company. Chris was the CEO of a post hotel
• 44:05
  and resorts is the largest hospitality rate in the country. He, uh, man, his focus on people
• 44:13
  and just like loving on his people and, and not treating them like crap, but he see a lot of people
• 44:19
  doing nowadays. The love of people is incredible to me. He's now the CEO of Hilton hotels. And I'm
• 44:25
  seeing it, even when he's at Hilton, he's just, he figures out a way and a company of, they must have
• 44:29
  hundreds of thousands of employees to just make his people feel loved from, from the CEO's seat is
• 44:34
  just an incredible thing. Amazing. And that's like super, super, super important to you. He sounds
• 44:41
  like a very, a very good person because that's hard to do as CEO, very hard to do as CEO.
• 44:48
  He had to choose one source to learn or grow. It could be a podcast, audible, something that you've
• 44:54
  loved, and you just help join your journey and you would recommend other people go check out.
• 45:00
  Man, it's sitting on the shelf behind you. The book is Playbigger. By a number of authors,
• 45:06
  you'll find it on Amazon. Yeah. Yeah. It is such an incredible read if you want to build a company,
• 45:13
  especially trying to totally disrupt, you know, not even disrupt an industry, building a new category,
• 45:20
  something brand new that's never, ever been thought of. Go look it up on Amazon, Playbigger.
• 45:24
  It's an incredible, incredible read. You could tell your 20-year-old self one thing, what would it be?
• 45:30
  Man, my 20-year-old self, I would probably say nowadays, don't do college and go work at a
• 45:38
  business. Interesting. Why is that? Yeah. I mean, I think that, you know, college was pretty much a
• 45:44
  good school have fun. Anything, as I saw Elon Musk the other day, say anything you really want to
• 45:49
  learn, you can learn on YouTube for free. And I truly believe that's the case. I mean, college
• 45:54
  was a great time. You have fun. You get in the trouble. You do stupid stuff, which may be just a
• 46:00
  part of maturing and maybe I was a late matur. But I don't believe you learn a whole lot in college,
• 46:07
  and I can't tell you a whole lot of things that I use today that I learned, you know, back in
• 46:12
  college. Especially the first couple of years, you know, when you start being specific in finance
• 46:17
  and things like that, you start learning things. But I would probably not do college and try to work
• 46:23
  at a startup, even if it's at an intern or something and learn by doing. And last question,
• 46:30
  what is success mean to you? Yeah, it's people, number of people impacted. I think too many times
• 46:38
  in today's day and age, we worry about how many zeros are at the end of our bank accounts.
• 46:43
  And to me, it's like, how are you changing the way that people are living in this world for
• 46:50
  the better? And health care for me is the clearest example. And so I really think that,
• 46:59
  yeah, I mean, success is how many people you can impact in the short life that we live.