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

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

• 0:00
  I just want to take a second and thank Cornbread Ham for supporting today's episode.
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  That's cornbreadhemp.com slash success code success for 30% off your first order of these
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  amazing gummies. In this lesson's episode, discover why the U.S. healthcare system remains
• 1:12
  broken and profit driven incentives drive up costs. Understand why insurers and hospitals thrive
• 1:17
  on rising premiums. Explore how opaque claimed denials burden families with crippling debt and
• 1:22
  uncover innovative community based models offering a more sustainable approach to health care
• 1:26
  financing. Why is insurance still broken? So you know I'm Canadian and when I came down here,
• 1:42
  I had to navigate all of this because yes some things are covered in Canada but obviously nothing
• 1:47
  is covered down here. So I'm still learning as I go. So I don't have the 30, 40, 50 years of
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  experience dealing with this system. So it's very near to me and it's something that's obviously
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  very topical. So why is why is healthcare so broken in the U.S. First like walk me through that
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  because I think that's interesting and even that one thing that you mentioned where I'm paying
• 2:07
  $1200 a month for insurance and then I go to the hospital. 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
• 2:17
  rectified in the history of the United States? It doesn't make sense to me. No it doesn't make
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  sense to me either unfortunately. I think you know look the problem with healthcare to answer
• 2:27
  your first question is you know some a lot of people think the rising healthcare cost is a
• 2:32
  result of a very complex system but it's not all that complex. If you think about the fact that
• 2:41
  health insurance plans actually have no incentive to reduce costs and in fact they're
• 2:47
  and they have an incentive to increase costs in the affordable care acts. So what is that seven,
• 2:53
  eight years ago? They maxed out the amount of profit that a health insurance plan can make
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  to 15% of premiums. So if you think about just using easy math my premium is a thousand dollars
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  they can only get a hundred and fifty dollars worth of profit out of that profit and administrative
• 3:11
  cost. So they actually have to raise premiums to be able to raise their profits. So they are
• 3:16
  incentivized to see your monthly premium to go up. So in essence you have the buyer of healthcare,
• 3:23
  the health insurance plans, wanting healthcare costs to increase. You have the seller of health
• 3:33
  in big hospital systems. Clearly they want the price to go up because they want their profit to
• 3:38
  go up. So now you have the buyer and the seller of healthcare both wanting the price to go up.
• 3:43
  It doesn't take a brain surgeon to figure out why healthcare costs go up. And here's the other
• 3:48
  thing too is even if United Healthcare wanted to negotiate right now our system is ruled by big
• 3:57
  hospital systems. So I live in Austin, Texas. We have two hospital systems. United Health Group,
• 4:02
  even if they wanted to negotiate with the local hospital they can because they have a duopoly.
• 4:07
  If they lose one they lose access to most of the companies in Austin so they have no negotiating
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  power. So there's this mutually beneficial thing that the hospital systems and health insurance
• 4:20
  have going on here that they just raise prices every single year and there's no market forces to
• 4:26
  actually reduce those prices. And that's why healthcare expenses are so high.
• 4:32
  And so there's just perverse incentives within our system to increase prices. And that's
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  ultimately what the problem is. So it's not great. I understand that we live in a society that
• 4:51
  is driven by profit and that's something that is pretty standard with business. Now I'm not saying
• 4:55
  it's good but I mean it is the fact that it's kind of how the US, how the US works people want to
• 5:01
  make more money and they have to find ways to make more money and that seems to be unfortunately
• 5:05
  something that is going to impact somebody's health while being but the part that I really don't
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  understand is even if they are making money off you how can they justify denying that claim.
• 5:16
  So that like I'm already upset that they're they're making a lot of money that's fine. I can't
• 5:21
  complain about that. You know everybody needs to make more money they'll stay colders that they
• 5:25
  have to to make happy fine. But how do they justify when you are paying something like that?
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  What's the what's what what would make it a medical necessity versus a non medical necessity?
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  It seems like somebody having a constant recurring significant health event should be something
• 5:42
  that could be considered a medical necessity. Yeah it's so opaque like there's no clarity and
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  transparency into why they will agree to pay some medical bills and and not agree to pay other
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  medical bills. And I think it kind of goes back to this you know 15% if they're hovering at that
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  85% of of your premium being paid on bills they get pretty stingy with that you know that last
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  amount of dollars so they got to keep it to to 85% the maximize their profit. Here's the here
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  the crazy stat that I didn't know before really diving in one out of every six healthcare claims
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  from plans on healthcare.gov which is where most people go and get their their healthcare if
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  if you're not getting it through your company are denied one out of six are denied right if you
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  live in Tennessee it's one out of three if you live in Texas it's one out of five I mean one out
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  of six doesn't seem super high but if you have an eight thousand dollar 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 eight thousand dollars you don't have eight thousand dollars
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  laying around in an account somewhere that's like oh just in case I have a big medical bill my
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  insurance plan will pay for it I have this eight thousand dollars like it just doesn't exist
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  right and so that's why we're seeing 250 thousand people last year who had health insurance when
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  bankrupt due to medical bills like the whole point of health insurance is so if you have a big
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  catastrophic event you won't get into financial distress and we had 250 thousand families last year
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  go bankrupt even though they had health insurance because of medical bills that just doesn't seem
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  right right and that's just entirely the progative of the insurance provider and there's is there no
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  is there no like um ombudsman or anything you can do to appeal that decision or
• 7:32
  stew them like what's is there any recourse whatsoever there there is fortunately I mean there
• 7:36
  you can take it to the state um you know if this if most of these plans on an individual level are
• 7:42
  regulated by the state and so you can take it to the state but that's just a big pureocratic
• 7:47
  you know regulatory agency and so to pay you to pay a rat next month and yeah and if and if the
• 7:52
  bill collectors are calling you right and and are just going to want to ding your credit score like
• 7:58
  I mean all that happens before us the state can typically engage right and so you're you're
• 8:04
  you're having sucked into a big bureaucratic you know black hole um so there are some but it takes
• 8:11
  a long time and and oftentimes it's you know you never hear and things like that so it's it is
• 8:16
  not an efficient process for sure I just want to take a second and thank cornbread ham for
• 8:20
  supporting today's episode now cornbread ham CBD gummies have been this really nice addition
• 8:26
  to my wellness toolkit I don't use them every day just when I want to win wine after those
• 8:31
  extra busy weeks but they're perfect for those moments when you want to take the edge off and
• 8:36
  just find your balance really just shut off from work now what makes them special is how cornbread
• 8:41
  ham perhaps them they only use a flower of USDA organic hamplants that's the best part for the
• 8:47
  purest most potent experience no fillers no artificial fluff just clean full spectrum goodness
• 8:54
  and delicious watermelon berry and peach flavor I keep them in my night stand for those moments when
• 8:59
  I just need a little extra help relaxing and I love how transparent they are too every batch is
• 9:03
  third party lab tests it's you know exactly what you're getting and they put together a special
• 9:07
  offer for all success story podcast listeners all listeners can save 30% off their first order
• 9:14
  just head to cornbread ham.com slash success and use code success at checkout that's cornbread
• 9:20
  ham.com slash success code success for 30% off your first order of these amazing gummies so
• 9:29
  you you after that event with your your daughter okay I'm done with this I'm not paying for
• 9:35
  insurance does not do anything for me but I have to figure out something in case yeah a 500,000
• 9:41
  or a million dollar bill happens then I do have to figure out how to to deal with that event in my
• 9:47
  life so this is this is the inception of proud hell correct this is this is you were figuring
• 9:52
  that on your own you actually tried to do your founder you realize there's an obviously a huge
• 9:56
  opportunity there but that's still not in a salad easy anywhere we were talking before we started
• 10:01
  recording like building out this category so walk me through building out a category and then
• 10:08
  building out a company in that category sure and so yeah so one of the things I was thinking about
• 10:13
  is like okay so what happens if I get a big bill you know what happens if I have cancer or you
• 10:17
  know a big surgery or whatever you know basically 2% of people you know have those big catastrophic
• 10:24
  feel so it's so it's a very low probability but it could happen right and so you know as I was
• 10:29
  thinking about how other people get their bills paid you know when they don't have the money to do
• 10:33
  that you know a lot of people go on these crowdfunding websites like go fund me you know and so you
• 10:38
  submit your bill and and so and most of the time those bills get paid I think it's probably the
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  number one category and go fund me as these big medical bills because people can't pay for them
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  again L insurance plan a lot of times are not paying for these things and so they go to and so what
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  if we can build a a crowdfunding site that has some incentives for people to actually go and fund
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  these right like a young child having cancer is you know much more emotional and you know worthy
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  of giving right then my five-year-old has a broken arm or you know my two-year-old or one-year-old
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  means that your tubes are yours those aren't nearly as emotionally kind of and they're not as
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  they quote unquote sexy problems that yeah as somebody who has says cancer right exactly exactly
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  so but what have we built a system where if I give to you right when you need help you're more
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  likely to give to me what I need help so we build in a system where there's a law reciprocity
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  right so the way that ours works is you will submit money into an account that account is yours
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  every month and so if you're between the ages of of six and fifty four it's 175 bucks a little
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  bit more of your old or a little bit more if you're younger and then you can use that money to
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  fund others when they have needs and so organite will ask you every month is like hey here's
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  ten people that have needs this month will you fund them yes or no so it's totally voluntary
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  if you say yes to everybody then you are one of those people that will step up when others are in
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  need if you say no to everybody you are one of those people that is stingy and will not step up
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  when everybody else is in need and so when you have what I have a bill right and I've been stingy
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  the probability of other people being like yeah I'm going to give to the stingy guy is really low
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  right the probability of somebody giving to me if I'm this super generous guy is really really high
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  and thus far everybody who's been generous has gotten their bills paid right and so you build
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  this reciprocity and it's actually look it's the way communities have worked for thousands of years
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  right if I'm in a community of people and something happens to me and I'm the Grinch then there's
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  not a whole lot of other people stepping up and unless you're you know Lucy Lou or whatever
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  her name is in the Grinch I don't know if I ever do what her name is but but if you are the
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  nice person on the block who will who brings you cookies when you moved in like the probability
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  of me coming and helping you is much much higher and so we're using that that reciprocity
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  within a crowdfunding type of platform to pay for medical bills and the beauty of this is
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  we're getting bills paid at about 50% of what health plans are paying for bills so that $8,000
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  tubes in my daughter's ear I put that out on LinkedIn and somebody a doctor and your
• 13:43
  nose and throat doctor read it and came back to me and says we do those all day long for $1,500
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  if you'll pay in cash right so if I paid in cash I could have got once this your nose and
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  throat doctor and save $65 a box right that's you know 80% savings and so these doctors are
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  willing to take significant discounts to what the health plan will pay them if you pay them in cash
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  at the point of sale and so that's where we're getting the vast majority of our our savings is
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  physicians hate health insurance as much as we do and and so they will take significant reductions
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  so they don't have to wait 90 days to get paid they don't have to haggle with the health insurance
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  company 30% of their time is spent with health insurance companies and so they now have 30%
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  more time to focus on patients which is as opposed to paperwork which is what they really love
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  right and that's where we're getting our savings so you're doing two things so the so the
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  crowd health is a community it's a platform and it's not only leveraging the fact that you're
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  speaking directly with physicians and specialists to give a reduced cost but then it's also a crowd
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  funding component that allows other people in the network to to pay for pay for whatever it is
• 15:00
  that you need and and I guess you know if I'm if I'm trying to the the concept is great it makes a
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  lot of sense I actually think that when somebody dives into this for for the first time I sort of
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  take my perspective and I look at it the first time I always think like well to love reciprocity
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  and it's not guarantee but there seems to be almost an incorrect assumption that insurance is
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  guaranteed that insurance is safe because it's a it's an entrenched institution that has been there
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  forever so there seems to be like a false sense of security with insurance based and if you haven't
• 15:37
  been screwed like you've been screwed then you won't understand that that that nothing is a hundred
• 15:42
  percent so that's that's where I see people looking at this alternative form of I don't know what
• 15:49
  you call it is it's not insurance because insurance is it's a different thing so that's own
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  category yeah it's its own category I mean it's it's really an alternative way to play for
• 15:59
  healthcare right it's it's a you're taking personal responsibility over your your healthcare bills
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  as opposed to you know giving that responsibility to a health insurance plan and as a result of that
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  you're going to save 50 percent right and it is a guarantee that your bills are paid no you know
• 16:17
  is the probability really high we think so we think it's way higher than you getting your bill paid
• 16:23
  from a health insurance plan given the one in six that I just mentioned and that's from the Kaiser
• 16:26
  Family Foundation like that's not my number it's a legitimate you know think tank coming up with
• 16:31
  that number so that's where I think people are really not misunderstanding or the other thing is
• 16:36
  you've got these masses massive deductibles that you have to pay before the health insurance plan
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  pays a dollar right so many of them are six eight ten twelve thousand dollars before you pay
• 16:47
  before the health insurance plan plan pays a dollar for promars you know one of our key metrics is
• 16:53
  we want zero people going bankrupts using crowd health due to medical bills right as opposed to
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  250 thousand using health insurance and so the the what we'll ask you to do is you pay the first 500
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  bucks and so you step into the hospital you pay the first 500 bucks right and then everything else
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  we're going to submit to the crowd for funding and so you don't have to worry about how much is this
• 17:16
  going to cost what is my co-pay what is my co insurance what is my deductible what is my thing it's
• 17:20
  like it's five hundred bucks right and you can have solace in the fact that you know most people
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  have five hundred bucks in the bank that this is not gonna bankrupt you and that's the whole point
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  of health insurance and so that's what we're really really trying to push is is that just kind
• 17:39
  of simplicity I know that the mechanics on the back end are a little more complicated because
• 17:43
  this is the first time people have heard of this probably but in essence it's super simple
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  you pay the first 500 bucks you everything else is submitted to the crowd for funding
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  you can choose whatever doctor you want there's no doctor networks anymore which is a huge
• 17:58
  benefit right and so it's just way easier to use after you used to it than your typical health
• 18:06
  insurance plan thanks for tuning in if you found this valuable don't forget to hit that subscribe
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• 18:15
  the links in the description to watch the full episode see you in the next one