The Opportunity We Have To Fix Healthcare, with Shawn Sanford

This video provides an in-depth exploration of the broken US healthcare system, focusing specifically on the opportunities for reform through self-funded insurance models and enhanced transparency. Featuring Shawn Sanford, RVP of Sales at ParetoHealth, the discussion traces his career path and highlights the critical shift from traditional ancillary insurance sales to advocating for employer control over healthcare spend. The central thesis is that the current system is fundamentally "stacked against" small to midsize employers, necessitating a mission-driven approach to create awareness and push for structural change, rather than simply selling a product.

A significant portion of the conversation centers on the necessity of preparation, process adherence, and relationship building in the complex benefits market. Sanford draws parallels between his background in professional baseball—controlling preparation while relinquishing control of the outcome—and the sales process in healthcare reform. He emphasizes that success at ParetoHealth was achieved not through charisma alone, but by strictly adhering to a proven sales process centered on educating consultants and employers about self-insurance and the captive model (the "vessel" or "vehicle" for change). This process ensures that the financial quote is the final touch, not the primary focus, shifting the conversation from commoditized pricing to a multi-year strategy focused on control and quality.

The speakers identify prescription drugs (RX) and the lack of transparency as the most egregious examples of systemic failure, labeling the current structure of profit gouging, rebate sharing, and bundling as "absolute highway robbery." This area motivates Sanford the most, as it represents the most immediate opportunity for effective change. Furthermore, they advocate for a parallel system built on transparency, including the widespread adoption of Direct Primary Care (DPC) and direct contracting models (like the Oklahoma Surgery Center example), where prices are known upfront. The ultimate vision is a healthcare system where incentives are properly aligned, and employers are empowered to use their purchasing power to negotiate better prices and ensure quality outcomes, moving away from the current model where health insurer stock prices rise alongside premium costs.

Key Takeaways: • Awareness is the Primary Sales Goal: The biggest challenge in the benefits market is not selling the captive or self-funding product, but creating awareness among brokers and employers about the broken nature of the fully insured and ASO (Administrative Services Only) systems and the hidden costs underneath the hood. • Process Adherence is Critical for Complex Sales: In the self-funded captive space, success hinges on strictly following a proven sales process (Education -> Vet Consultant -> Employer Overview -> Financial Indication -> Quote). Deviating from this process, especially by leading with the quote, results in zero closed deals because it commoditizes the solution. • The Captive is a Strategic Vessel, Not Just a Product: The benefits captive serves as the necessary risk-financing vehicle that allows employers to set and forget the stop-loss component, freeing them to focus 70-80% of their attention and spend on strategic cost management tools and improving the employee experience. • The RX Supply Chain is the Most Broken Component: The current structure of prescription drug pricing, characterized by profit gouging, rebate sharing, and PBM bundling, is identified as the most negligent and egregious part of the system, offering the most immediate opportunity for impactful reform. • Incentive Alignment Requires Structural Change: The industry needs to address the philosophical question of who the consultant works for, suggesting that the traditional commission structure (where carriers pay the consultant) drives behavior that may be misaligned with the customer's best interests. • Transparency Must Be the Standard: It is "insane" that healthcare lacks basic price transparency; the industry should move toward direct contracting and direct pricing models where the cost of services is known upfront, similar to any other consumer transaction. • Building a Parallel System is Necessary: Achieving true reform means building a parallel system of transparent, quality-focused providers (like DPC and surgery centers) rather than attempting to overhaul the existing, entrenched infrastructure. • The Bar for Broker Performance is Low: Simply being dependable, returning calls, and delivering on promises (the basics of effort and attention to detail) can differentiate a representative and build the trust necessary to secure business, highlighting a general lack of service excellence in the traditional market. • Focus on Controllables: Drawing from a sports analogy, professionals should focus intensely on preparation, education, and effort (the controllable factors) while relinquishing the need to control the ultimate outcome (the deal closure), which helps avoid "commission breath" and desperation. • Mission-Driven Culture Drives Internal Success: A strong internal culture where peers are willing to help each other immediately (e.g., filling in for employer calls on short notice) accelerates knowledge acquisition and fosters a unified front against the status quo.

Key Concepts:

• Self-Funded/Self-Insurance: An employer pays for employee healthcare costs directly rather than paying a fixed premium to an insurance carrier.
• Benefits Captive (e.g., ParetoHealth): A group of employers that pool their stop-loss risk together to gain scale, stability, and access to advanced cost management tools, effectively acting as a risk-financing vehicle.
• Stop-Loss Insurance: Insurance purchased by self-funded employers to protect against catastrophic, high-dollar claims.
• PBM (Pharmacy Benefit Manager): Intermediaries that manage prescription drug benefits; criticized in the video for driving up costs through opaque rebate schemes and bundling.
• Direct Primary Care (DPC): A healthcare model where patients pay a flat monthly fee directly to their primary care provider for comprehensive services, bypassing insurance billing.
• Direct Contracting: Agreements made directly between employers/providers and healthcare facilities for services at a negotiated, transparent price.

Examples/Case Studies:

• Oklahoma Surgery Center (Keith Smith): Referenced as a successful example of a transparent, direct-pricing model for outpatient surgery, demonstrating the viability of a parallel healthcare system.
• Unum Interview Process: Described as a rigorous, multi-stage assessment including virtual interviews, a case study, and a final presentation/litigation phase, emphasizing the high standards for entry into the insurance sales world.