Dave: Welcome to unsuitable on Rea Radio, the award-winning financial services and business advisory podcast that challenges old school business practices in the traditional business suit culture.
We’ll hear from industry professionals and experts. Our guests will challenge you to think beyond the suit and tie by offering you meaningful modern solutions to help you enhance your company’s growth. I’m your host, Dave Cain.
This past week I heard a statistic regarding healthcare costs were going to increase by double digits. The idea of implementing on-site medical clinics, as a way to better manage healthcare costs used to be an idea that only applied to larger companies. It appears that could be changing as many smaller companies are beginning to see the value of bringing this type of program into their business.
Rick Pipes of Pipes Insurance will join us today. Rick is an independent insurance agent from New Philadelphia, Ohio. He will share his expertise on employee benefit plans and healthcare clinics with us on today’s episode of unsuitable. Welcome to unsuitable, Rick.
Rick: Thank you for having me.
Dave: Rick, I understand your business is in New Philadelphia. Certainly they don’t let you in Dover if your business is in New Philly.
Rick: I actually have a lot of business in Dover, but we keep our sports separate.
Dave: You do. We always like to have someone who is creative and innovative in the industry bringing new ideas and your firm is well positioned to do that.
Rick: I appreciate that, thank you. Glad to be here.
Dave: I want to just take a minute to obviously, with your last name being from Pipes Insurance, your name’s on the sign, you must be the owner. Can you tell me a little bit about the history of Pipes Insurance?
Rick: Certainly. Actually it goes way back. My father was a property casualty agency, Paul’s Insurance at the time. My brother had, Scott Pipes, had an insurance major from Bowling Green. My father said, “Where are you going to go get a job at?” and basically told him to go get a job in a different location.
He went to Findlay, Ohio, and worked for the Mass Mutual Company on the investments side and the benefits side and then later joined my dad on the property casualty. When my dad got sick I came in as a partner as well.
Dave: Great, great. It’s always good to hear entrepreneurial stories and you guys have a great one. I’m looking forward to the next few minutes and talk to us about healthcare clinics.
What I always say, in my mind I’m thinking it’s a Minute Clinic, but I’ve seen larger corporations that have a health clinic inside the business. Now one of the recommendations, or strategies that you guys are talking about are bringing that down to smaller companies. Can you share that concept with us?
Rick: Sure. The idea is to have a capitated version of healthcare, where the separate company is working with the employer, but the employer is choosing the staffing with the physician, or nurse practitioner as well as a wellness and a health coach, that are all being paid by the hour.
The incentive isn’t a Minute Clinic. It’s actually the opposite. We design the plans. We change the behavior. We want the physician to get back to what they practice medicine for, spending time with the families, spending time with the employee, getting to know them, and working with them individually on behavior choices as well as their health.
Dave: Let’s hang on for a second. My first thought is, healthcare costs are climbing, escalating at a fast rate. The concept that you just described may be adding more cost to my bottom line. Somehow I don’t think that’s the case. Am I off base with that thinking?
Rick: Initially there is an investment to be made. The idea is if we can … Basically about 40 to 50% of the employee population does not have a general practitioner, does not have a doctor.
They’re going to Urgent Cares. They’re going to emergency rooms. They aren’t seeking help. They’re not maintaining their medicine. They’re not diagnosed with hypertension before it happens. They don’t control their diabetes.
What we want to do is, at the same time, we want to increase the cost on the preventative care as well as the practitioner and eliminate some of the cost on the back ends, on the shock claims and on the larger volume claims.
Dave: Pipes Insurance and Rea & Associates, first glance, we’re too small for that. How can we make that work, or are we too small?
Rick: That’s a good question. The employers that are building the on-site, building a facility on their location, because we literally want to smack them in the face with it, so the employees have convenience, immediate access can spend time they need, they’re not waiting to see a doctor. We want them to go to the doctor.
Those have ranged about 250 employees with maybe 400 we call them members including family members, as well as, I have 1 we’re working with about 1,000 members, about 500 employees.
For the smaller employers, such as Pipes Insurance Service and others, the regional clinics are coming popular where we would work with their plan design on higher deductibles perhaps. We save them on the premium costs and then they pay a per member rate to access this clinic.
At the clinic, the healthcare would be free for the employee. We want them to go. We want them to have a good experience. We want them to have the care they need. There’s employee benefit side to that that it’s very attractive for employers as well.
Dave: Again, one of the items you mentioned is it’s not only for the employees, but it could be for their entire family. Now we’re thinking if a company’s maybe 100 employees, that could be maybe more lives going to the clinic, more individuals going to the clinic.
Rick: Correct. In a regional model, again because they may not have the overhead for 1 facility that is all for their members only, that would be true as well. We would want them to go. Again, family members actually make up a majority of the claims in most cases, not the employees who are actively working at your facility.
We want them to maintain their health. Again, we want an experience for them that shines a positive light on the employer because of their immediate access to a physician that cares about them and their family.
Dave: Let me give you a couple examples. Maybe you can respond. You’ve met our production crew here. They have a tendency to stay out late at night. On a Friday morning, if they want to go to the clinic for an IV and some aspirin for a hangover, could they benefit from that?
Rick: It’s completely HIPAA compliant. No one will know the motive why they go. None of the information gets back to the employer. If they needed to go get an IV, yes, that would work.
Dave: I knew HIPAA was good for something here.
Rick: That’s right.
Dave: You hit on a good question, though. As the employer, we’re hiring the doctors, the nurses, the practice assistants. They would be on our payroll.
Rick: No. We’ve been partnering with companies that administer this. It’s their liability, their backroom, but we have the choice in the hiring process.
Our payment flows through them to pay the practitioner, the nurse practitioner, and again, a health and wellness coach is very important in this model.
Dave: Does my liability as an owner of the company, does that change at all? Now I have HIPAA to worry about inside my clinic. I have maybe misdiagnosis inside my clinic. Am I absorbing any additional liability?
Rick: Actually I believe it’s less liability. The reason I believe this is the backroom has their own liability of the physician’s practice just like they normally would have.
They’re a separate organization. They’re a separate location. Their information is not being affiliated with the human resource department, which now gets a lot of that HIPAA information.
I’m keeping it away from my company’s eyes and putting it into the clinic’s eyes, which is being managed by an organization that is designed for a backroom in the healthcare business.
Dave: Let’s go back to this regional concept that, again, in my mind, I’m thinking, “It’s a group of smaller employers coming together to form a regional clinic.” Is that the concept?
Rick: The concept is that the companies that are doing this have to have a certain amount of members to be able to fund this regional clinic. When the members are organized by consultant, like myself, or somebody in that region, then the clinic can be designed around the need and the population that’s willing to participate.
Dave: You refer to the term clinic. What type of services would one of these clinics offer? Am I going to go in traction? Are they going to put me in traction in one of these clinics?
Rick: It was a great question. No, again, we’re talking about general practitioner. We’re talking about health and wellness. The idea is to start with the health and wellness portion. We do help with the colds, the flus.
We want to maintain chronic conditions such as diabetes, such as COPD. We want to help monitor those. We also can and will prescribe out of these, through the general practitioner, which not only helps us with funneling the drugs that are the best value for our members, but helps to fund the clinic cost because of the savings that we’re getting by running our pharmacy though there as well.
Blood testing, everything we can within reason, we would like to negotiate a rate with the facility, or the pharmaceutical companies that manage this, so that we are paying that direct from the employer and not through the insurance program. We can then use that data to strategize on that effort.
Dave: Is clinic the right …? Am I using the right term? Is there another term we should be using? It’s a doctor’s office.
Rick: It’s a doctor’s office designed for the employer. The clinic is just the term its came with. We market much nicer names when it comes down to it.
Dave: Would there be X-ray machines on-site? Would that be a little beyond and above the concept here?
Rick: Mine do not have them at this time. There are those out there that do have X-ray, some imaging. Usually, what happens is we are working with a local facility on the cost in advance to funnel our imaging through one facility.
Dave: I would assume this may make it much easier to refer a patient on to a specialist. As we know, specialists sometimes won’t receive a patient without a referral from the family doctor, let’s say.
Rick: That’s correct. We do not want to go beyond the means of the people that are employed. Yes, we would be using specialists. We’d be sending people to the hospital. As a matter of fact, some hospitals and doctors look at this as a little bit of a competition threat.
Our local hospital in New Philadelphia, is also coming up with a model very similar where they’re using a rate with employers pre-paid and then has the same design on health and wellness and the same result-driven practice as these clinics are. It is becoming more standard even through the hospital systems.
Dave: What about the emotional impact on the employees?
Rick: We found it to be very well accepted. Again, in the world of rising healthcare costs and the only remedy was higher deductibles and higher contributions on the employer side.
What we’re doing is we’re saying, “Hey, we’re going to give this to you at no cost in these models. You can go there. We’re going to spend time with you and we’re going to take care of you.” It’s actually been a really good tool in the tool belt of the employer to hire and attract employees.
Dave: Could a possible service be to help an employee stop smoking, or lose weight? Would that be in line?
Rick: That’s a great example. It goes beyond the clinic. The idea is to combine the clinical side with the health and wellness side, as well as the data collection. All the data is being funneled through one source. We can identify it.
My one example, I have a firm in Kentucky that started this. They’ve had 20 people in southern Kentucky stop tobacco use after years, and years, and years of doing this.
We found a brain tumor in an infant that was misdiagnosed, that was then operable. These are the stories that we like to think of and that we talk about.
The reason the health and wellness coach is there is the plan design, which is what I do on the healthcare side is all going to be designed around that. We have the fitness person, the wellness person working with the clinician in the right way to work with associates on their behavior changes.
In the past, these weight loss programs, or these …. They would just be 1 time shots to trying to lose weight, Biggest Loser type competitions, those are great, but there’s not follow-up, or maintenance. The idea is working with people on behavior changes over a period of time on a 1 on 1 basis.
Dave: What if I like my doc and I just don’t want to use the clinic? Is there any cost to me if it’s still in network? Is that a problem for the employee?
Rick: Your insurance plan hasn’t changed at all. It’s still a PPO. You can go to whatever doctors within that network and get the benefit that the insurance offers. If you go to this doctor, there’s no cost.
Dave: Do you see these clinics five days a week on-site, on campus in some of the companies, or would they be several days, or Monday, Tuesday, Friday type thing?
Rick: It depends on the size of the organization. The group that I spoke of with 400 members, 250 employees, they have a physician once a week, a nurse practitioner there twice a week and then the health and wellness coach there 5 days a week.
The other one I’m working with 1,000 members, probably the formula only recommends 3 days a week. They’re going to go with a 40 hour work week with either a nurse practitioner or a general physician because they’re committed to it.
Dave: If I’m going to get sick, I guess I better get sick on Tuesday to go see the doctor. Don’t get sick on Friday.
Rick: We wrap these programs typically with a Teladoc type system so that they have access to a doctor 24/7 as well.
Dave: You said something else that caught my attention. Health and wellness coach?
Rick: Correct.
Dave: Tell me a little bit about that. That seems to maybe be a benefit that we’re talking about somebody being ill, or needing to stop smoking. What about just general health and wellness? That seems to me something that could really take off.
Rick: Exactly correct. When you do the health profiles and the risk assessments, we find out what people’s chronic condition is, or maybe they’re a candidate for blood pressure, or their behavior. It ends there. They may sign up to see a nurse and that nurse checks with them four times a year.
In this case, it’s actually an employee of this right on-site that they’re job is to use this data, work with the clinician, and politely, in a partnership fashion, work with the participants, who want to, and their families on behavior changes.
I found out the depth of these people. These aren’t the gym guy with huge muscles that’s there telling them to bench press more weights. What it is is somebody that’s very good at nutrition. They’re very good at fitness. They’re very good at programming. They’re very good at data evaluation. That’s a well-rounded person in these situations.
Dave: How much can you bench press?
Rick: Lately, or when I was younger?
Dave: Why don’t we just move on off of that?
My liability is not going to change. It may go down is what you … Recap. My liability is not going to increase. I don’t have HIPAA responsibilities. Eventually, my overall healthcare benefit costs are going to either stay stable, or maybe go down. What’s stopping me from looking at this? Why aren’t more people doing this?
Rick: I think, in the past, it’s been the employers with 5,000 or more employees. When you think about that model, it’s successful in some ways. They’re busier than a doctor’s office.
We’re taking this to a more personal level. That takes a lot of risk. There is upfront capital cost. Some of the statements you said, I can’t say that there’s not liability. I can’t say that there’s not HIPAA, too. We’re working worker’s comp. It is being detached. I see the positive side of having a detached office with a backroom.
I have seen the ROI on my clients go down over time. You have to focus on things like the pharmacy, the cost negotiations on the front side, as well as the behavior changes and the shock claim potential of those changes.
Dave: It’s more of a package benefit that goes together. It’s just not the clinic, but it’s all the other benefits that go together with that that eventually would provide just a super benefit for the employees and their families, I would think.
Rick: That’s correct. Again, it has been … I can’t tell you. The biggest problem we have is I’m handing out renewals and telling employees to be happy about a $5,000 deductible.
In my world, if I can tell an employee, “If you go here, and we have a person that we handpicked that cares about you and your family and it’s not going to cost you any money, and you can get in right away and spend time.” yeah, it’s a great perceived benefit.
Dave: It sounds like employee morale would actually be on the increase.
Rick: It has been. The clinic in Kentucky literally has 98% of the people using this doctor.
Dave: What’s that percent again?
Rick: 98% …
Dave: 98%?
Rick: … of the people using the doctor, yeah.
Dave: Is that way above normal?
Rick: Yeah, yeah.
Dave: How did you manage that?
Rick: The right person. I can’t tell you enough that this model only works with people who care. It has to be somebody that’s doing it with the patient’s best interest at hand. It has to be the employer that’s doing it for those reasons first. That is the key to the success. They like it. You give them the access. You put the place in a convenient area and give them good service.
Dave: That’s a really interesting benefit. Like we talked about in the opening, it’s unsuitable. You’re challenging the normal business thinking. I think this does, this concept does. It sounds like Pipes Insurance has a great handle on this and can help someone who wants to explore whether to go to the next step.
Rick: Yeah. Again, this is really innovative and is exciting in my business. To see employers embracing it and putting that capital forward with the same thought process is something new. In a world of hardships frankly, in my industry, this is something to get excited about.
Dave: Before we wrap up, we always like to ask a fun question to put you on the spot. Can we get a little more insight? I’ve already asked you one question about bench pressing. You wouldn’t answer me. I got to come up with another question.
Outside your current job, if you could pick any job in the world, what would it be?
Rick: I actually was a commercial recreation guy when I was a kid, for Marriott. I helped people have fun on vacations. When you ride a bike on Hilton Head Island, I helped design that. People were having fun. It was a fun job.
Of course, I was working when they were playing, so that was difficult. I don’t say I’d go back to it, but once in a while I reflect on it.
Dave: Good answer, Rick. Thanks again for joining us on unsuitable. Thanks you, to our listeners for joining us on this episode of the podcast.
Listeners, if you need any information, certainly jump on Pipes Insurance web site. It’s a tremendous web site. I was there prior to today. A lot of good information. You look much younger on the web site than you do in person.
Rick: I appreciate that.
Dave: You look a lot wiser here …
Rick: Exactly.
Dave: … in person.
Rick: That’s what I was going for.
Dave: Our listeners can check you out. Certainly, I’m sure you’d take an email, or a call on the concept. Also, feel free to visit the Rea & Associates web site at www.reacpa.com. Rea is spelled R-E-A. There’s several articles and insights on this subject.
Don’t forget to subscribe to unsuitable on Rea Radio on iTunes, or SoundCloud. Until next time, I’m Dave encouraging to loosen up your tie and think outside the box.
