David Contorno - CEO and founder of E Powered Benefits

Imagine if your employer gave you the choice between paying 20% out of pocket for your surgery/specialist visit/X-ray at the local name brand hospital, and having the same service done at a different location where care quality was higher for $0 out of pocket. For employees of companies that work with David Contorno and E Powered Benefits, this is a reality.

50% of Americans get health insurance from their employer, and most employers rely on brokers to give them advice on how to cover healthcare. Unfortunately, their incentivizes are not aligned. The average health insurance broker makes commission, so as the cost of the health plan they sell to an employer goes up, they get paid more. As David Contorno is fond of saying, if you look at our health system today, almost everything that goes wrong is the result of someone or more often everyone involved being better off when care quality goes down, or when price goes up. That's why David decided to change his model.  

David's firm. E Powered Benefits,  exclusively provides value based health plan management for companies by sharing up front  fees, never taking commissions, and creating provider relationships that incentivize high quality low cost medical providers.  Their business model has produced average 1 year savings of 40%, as well as substantially reduced cost for employees. These two things are basically unheard of in this space. My conversation with David was eye-opening. 

 The stereotype of insurance companies is that they love to deny claims. As I learned in speaking to David, that’s not exactly the case. The MLR, or medical loss ratio, says that every health insurance company must spend 85% on healthcare costs. 15% is then left for overhead and profit. Therefore, the only way for insurance companies to increase  profits is for costs to be higher. What ultimately ends up happening is that high value care (defined as care that is likely to cure you or treat you with the least intervention possible) ends up being harder to get approved. 

We also discussed the underutilization of Primary Care, and how when health system employ doctors, often the way they pay them incentivizes low quality, high severity/cost care. RVU’s, or relative value units, means doctors are paid on how much value (i.e. revenue) they’re helping to generate within the Health System. If you go to a doctor at that health system with a back problem, writing you an opioid script and sending you to a back surgeon for a consult is far more lucrative than sending you for PT outside of the system. 

We touched on the new hospital transparency law, which theoretically should make it easier to understand Hospital billing. Unfortunately, the law required that hospitals post a machine readable file online, and many have taken advantage of that verbiage to post files that are machine readable but human unreadable. Even worse, some hospitals have put code on their website that prevents it from showing up on Google, which means you have to go to the hospital website and search for a page made intentionally hard to find which is ultimately unreadable by a human.  

Finally, we spoke about David's transition from a commissioned broker to an innovator and disruptor. David used to get paid hundreds of thousands of dollars a year from name brand insurance companies for changing employers to their brand away from their competitors, and for resigning existing employers. When he realized this was causing more harm than good, he closed his business, and started a new company with a model where he is paid a flat fee on an exclusive basis with his employer partners, with bonuses for cost savings and better outcomes.