The Connective Tissue of a Health Plan - Planned Administrators Inc

This video provides an in-depth exploration of the evolving role of Third-Party Administrators (TPAs) in the self-funded healthcare landscape, featuring George Stiles, President and COO of Planned Administrators Inc (PAI). The discussion centers on PAI's approach to TPA services, emphasizing partnership, flexibility, and leveraging data analytics to optimize health plans. Stiles shares his career journey, highlighting the value of foundational understanding in the complex healthcare industry and the concept of "corporate entrepreneurship" within a large organization like Blue Cross Blue Shield of South Carolina.

The conversation delves into PAI's core services, including traditional Administrative Services Only (ASO) for groups ranging from 250 to 1500 lives, and their growing focus on level funding for smaller groups (down to 10 members) as a stepping stone to full self-funding. A significant portion of the discussion is dedicated to the benefits of Direct Primary Care (DPC) models, with PAI's successful partnership with Proactive MD serving as a key example. This model, which prioritizes quality care and tight coordination, is presented as a powerful tool for reducing overall medical spend and improving member outcomes, even for geographically dispersed populations through telehealth and scalable clinic models.

Furthermore, the episode explores the critical role of data analytics in effective benefits management. PAI's "PAA Analytics" platform, built on Deerwalk, is highlighted for its comprehensive reporting capabilities and the transparency it offers to brokers, consultants, and employers. The dialogue also touches upon the impact of new healthcare transparency regulations, including gag clause attestations, and the broader implications of increased access to hospital and claims pricing data. Stiles expresses optimism for the future of healthcare, driven by innovation, data-driven decision-making, and the potential of emerging technologies like AI, while also stressing the importance of nurturing the next generation of industry talent and fostering collaborative relationships between TPAs and their partners.

Key Takeaways:

• TPA as a Strategic Partner: A TPA's primary role is to act as a partner and the "connective tissue" of a health plan, integrating various solutions and providing expertise to create a cohesive benefits package for employers and members.
• Importance of Data Analytics and Transparency: Robust data analytics, like PAI's Deerwalk-based platform, are crucial for self-funded plans, enabling employers and consultants to measure, manage, and impact claims trends, ultimately leading to better decision-making and cost control.
• Level Funding as a Growth Opportunity: Level funding serves as an effective stepping stone for smaller groups (e.g., down to 10 members) to transition into self-funding, offering claims experience and potential savings, provided the administrative approach remains streamlined and scalable.
• Direct Primary Care (DPC) for Quality and Cost: DPC models, exemplified by Proactive MD, offer significant value by focusing on quality of care, tight coordination with specialists, and proactive health management, which can lead to reduced hospital admissions and overall medical spend.
• Scalability of DPC Models: DPC can be scaled for diverse populations through a network of clinics, telehealth services, and a model that doesn't require high volume, making it viable even in rural areas.
• Navigating Healthcare Transparency Regulations: New regulations, such as gag clause attestations and requirements for pricing transparency, are intended to empower employers and members with data, despite initial implementation challenges, and are expected to drive positive changes in the healthcare system.
• Value of Long-Term Stop-Loss Relationships: Constantly switching stop-loss carriers for minor rate reductions can be detrimental, as it erodes relationships that are crucial for navigating complex year-end claims and securing favorable outcomes.
• Corporate Entrepreneurship (Intrapreneurship): Opportunities exist within large organizations for individuals to act as "fixers" or "startup guys," taking on new challenges and developing innovative solutions with the backing and resources of an established company.
• Attracting and Developing Future Talent: The healthcare industry faces the challenge of attracting and preparing the next generation of leaders and innovators, emphasizing the need for foundational business understanding over immediate high-level positions.
• TPA Role in Vendor Vetting and Security: A reputable TPA thoroughly vets its vendor partners, ensuring robust system security, compliance protocols, and due diligence (e.g., SOC reports) to protect client data and prevent breaches.
• Flexibility in Solution Integration: A strong TPA partner offers flexibility to integrate with a client's preferred third-party solutions (e.g., PBMs, enrollment systems) while ensuring all data is consolidated for comprehensive analytics.
• Exploration of Iqra Administration: TPAs are exploring roles in Individual Coverage Health Reimbursement Arrangement (Iqra) administration, providing support for plan design, employee decision-making, and back-end reporting for employer contributions.
• Optimism for Healthcare Innovation: The industry is ripe with opportunities for improvement through captives, DPC, AI technology, and increased transparency, suggesting a potential "renaissance" in healthcare.

Tools/Resources Mentioned:

• PAA Analytics: PAI's proprietary data analytics solution, built on the Deerwalk platform.
• Proactive MD: A Direct Primary Care (DPC) provider based in South Carolina, operating in 17 states, with whom PAI partners.
• Blue Cross data center: PAI leverages this highly secure, high-volume data center for its operations, processing billions of claims annually.
• SIA (Self-Insured Institute of America): Mentioned as an organization with a TPA workgroup discussing industry issues.

Key Concepts:

• Third-Party Administrator (TPA): An organization that processes claims and performs other administrative services for a self-funded health plan.
• Self-Funded Health Plan: An employer-sponsored health plan where the employer directly pays for employees' medical claims rather than purchasing traditional health insurance.
• Administrative Services Only (ASO): A contract under which an insurer or TPA provides administrative services for a self-funded plan without assuming any risk for claims.
• Level Funding: A hybrid self-funded model where an employer pays a fixed monthly amount, covering administrative costs, claims funding, and stop-loss insurance, with potential for refunds if claims are low.
• Direct Primary Care (DPC): A healthcare model where patients pay a recurring fee (e.g., monthly) directly to their primary care provider for a defined set of services, often bypassing insurance.
• Stop-Loss Insurance: Insurance purchased by self-funded employers to protect against catastrophic claims that exceed a certain threshold.
• Iqra (Individual Coverage Health Reimbursement Arrangement): An HRA that allows employers to reimburse employees for health insurance premiums purchased on the individual market, as well as other qualified medical expenses.
• Gag Clause Attestations: A regulatory requirement under the Consolidated Appropriations Act (CAA) for health plans to attest that they are not restricting access to cost and quality information.
• Corporate Entrepreneurship / Intrapreneurship: The act of behaving like an entrepreneur while working within a large organization, often by developing new products, services, or processes.

Examples/Case Studies:

• George Stiles' Career Progression: His journey from a Medicare claims processor at Blue Cross Blue Shield to President and COO of PAI exemplifies internal career growth and the ability to take on diverse roles within a single large organization.
• PAI's DPC Partnership with Proactive MD: PAI successfully partnered with Proactive MD for a university client, implementing a model where employees are mandated to use the DPC for primary care, with referrals required for specialist coverage, leading to improved quality and cost outcomes.
• PAI's Data Center Infrastructure: PAI leverages the highly secure Blue Cross data center, which processes billions of claims annually and features advanced security measures like retinal scans and fingerprints, demonstrating a commitment to data integrity and protection.