Taking Back the American Dream

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by Emma Passé

David Contorno was a featured speaker at the 2019 FMMA Conference in Dallas. Attendees were a standout blend of doctors, surgery center representatives & self-funded employers.

David Contorno took casual strides onto the stage in a room full of curious watchers while his first slide, emboldened on each screen beside him, read “Restoring the American Dream”.

He began with a light-hearted reference to his own personal challenges and immediately drove home the idea that change is an integral part of restoration.

He introduced the idea that employers around the country, from all industries, are engaging in the healthcare business whether they know it or intend it. In this hour-and-a-half presentation, he moved from cause to effect with startling statistics that brought to light the real reason employers are struggling to keep their business financials in check…healthcare.

While most employers are well intended when the time comes to choose their deductibles, networks, and consultants, we now know this “same old” strategy is contributing to the nationwide damage our healthcare system is inflicting upon employers, and the people they’ve been tasked to represent; the employees.

Contorno highlighted a grim metric—most personal bankruptcies are due to medical debt, and even more disturbing is 75 percent of those medical bankruptcies are filed by consumers who held and maintained health insurance. So, we must ask, how is having a standard health insurance plan really protecting consumers?

Further, he explained the rate of rising deductibles and out-of-pocket exposure far outweigh the wage growth for the average American and, as healthcare costs continue to rise, we do nothing to help our populations afford coverage, both in payroll contributions and cost share liability at the point of service.  Contorno went on to share that he and his colleagues are part of the problem.

Consultants in the insurance industry are handsomely compensated by the same insurance carriers we are all intimately familiar with, but he swiftly points out the looming conflict; if a consultant is paid by the seller to represent the buyer, how can the consultant really represent anyone but the seller?  In a recent article published in ProPublica, Contorno outlined the many ways in which consultants get paid by the very entities that work to drive up the cost of healthcare to line their own pockets with profit, and it starts with the finger pointed directly at himself.

 

Brokers and consultants can account for up to 10 percent of the financial waste within the healthcare value chain—is that value at all?  When consultants are financially incentivized to sell the same products from the same carrier, and their bonuses increase as the volume of sales do, what do you think they’ll sell the most?  He submitted his own revenue model to the crowd, which showed he gets paid directly by his client to represent his client and, as if by magic, he does a better job at achieving their goals once his paycheck is attached to that effort.

As we began to unveil the competing interests we moved on to the preferred provider organizations (PPOs) where, once upon a time, a network provided a narrow pathway into a deeper service discount but, as Contorno pointed out, our networks have become so broad with the demand from employers to expand that the efficacy of these networks, touting 95 percent of all providers participating, has become massively diluted.

Then we get into quality…

How are we able to measure the quality of the healthcare we receive and relate it back to cost? Contorno showed examples of the correlation between the two and, somewhat surprisingly, the trend is that lower cost care is most often of better substance.

In almost all cases, a facility that is efficiently run and structured around delivering performance healthcare to its patients is far less expensive than your average hospital system.

Ambulatory surgical centers, outpatient settings, and pre-arranged elective procedures all contribute to improved experiences and outcomes for patients.

Contrary to popular opinion, our big insurance carrier giants are not credited with this anomaly of lowering costs for better care; quite the opposite, in fact.

Contorno dove into how the medical loss ratio provision of the Affordable Care Act contributes to the carrier’s profit model: as costs rise, so does their profit; he showed exactly what those margins look like and how the carriers perpetuate this broken and unaffordable system. The intakes of breath from the audience broke a stunning silence as we began to understand what was really transpiring in front of us, but it didn’t stop there.

We were barely through the sensational exposé of healthcare injustice when we pivoted to the drug industry’s play in all this. Hold on to your complimentary coffee beverages—it is about to get real.