Self-Funded w/ Spencer - Episode 24 - Matt Brost

This video provides an in-depth exploration of strategic employee benefits consulting, focusing on the transition from traditional, transactional brokerage models to innovative, data-driven self-funding strategies. The speaker, Matt Brost, a practice leader at BSBD, details his framework for client engagement, which centers on three core pillars: Cost, Service, and People. He argues that in the complex world of group benefits, especially self-funding, consultants must provide a clear, compelling "why" that justifies a change in brokerage, moving beyond mere relationships to deliver measurable business value. This strategic approach is crucial for employers seeking independence and flexibility from the limitations imposed by fully insured plans dominated by the major national carriers (BuCAs).

A central theme of the discussion is the integration of innovative health technology and data analytics to optimize healthcare spending. Brost highlights SimplePay, a plan design and billing model that leverages billions of data points to rate providers and facilities based on quality outcomes. This system actively steers employee behavior by adjusting copayments: employees receive a lower copay for choosing high-quality providers and a higher copay for lower-quality providers. This methodology aims to save employers substantial costs by reducing readmissions and poor outcomes, a strategy Brost notes is far more impactful than marginal savings achieved through network pricing negotiations. The model ensures consumer awareness by detailing the cost difference on the back-end bill, even if initial communication is missed.

Addressing the "People" pillar, Brost passionately advocates for accessible mental health solutions, specifically highlighting the application Ginger. Driven by his own experience with personal loss and burnout, he explains that Ginger integrates into the group benefits chassis to provide employees with a dedicated mental health team (coaches and therapists) accessible via text with an average response time of 42 seconds. If clinical intervention is required, the app facilitates a virtual therapy session within 48 hours, with the session billed directly to the plan. This solution offers immediate, clinically supported care, addressing the growing need for mental health resources in the modern, often isolated, work environment. Looking forward, Brost predicts the continued growth of independent networks and reference-based pricing (RBP) as providers become more accustomed to non-traditional payment models, and he calls for greater innovation to bring strategic self-funding opportunities to the underserved small group market.

Detailed Key Takeaways

• The Three Pillars of Benefits Strategy: Effective benefits consulting must be grounded in a clear strategy focused on Cost stewardship, superior Service delivery, and positive impact on People (employee well-being). This framework helps simplify the complex self-funding narrative for C-suite decision-makers.

• Data-Driven Quality Steering: Innovative solutions like SimplePay use massive datasets to rate providers and facilities based on clinical outcomes and quality. This allows employers to design plans that financially incentivize employees (via lower copays) to choose high-quality care, which ultimately reduces overall claims costs by minimizing readmissions and complications.

• Self-Funding Enables Strategic Flexibility: Moving away from fully insured plans and adopting self-funding strategies is essential for achieving independence and flexibility in plan design. This allows employers to unbundle services and coordinate best-in-class vendors, which is impossible when restricted to the limited offerings of major carriers.

• Mental Health Accessibility is Critical: Solutions like Ginger provide immediate, low-friction access to mental health support through text-based coaching and rapid access (48 hours) to virtual therapy. Integrating these services directly into the benefits plan ensures that employees have a clear, easy-to-use resource for addressing burnout and mental health challenges.

• The Importance of Simplicity in Communication: Consultants must translate the technical complexity of unbundled self-funding, vendor coordination, and advanced plan design into a simple, compelling story for clients. Assuming prospects understand industry jargon (acronyms, technical details) is a common pitfall that undermines strategic adoption.

• Future of Independent Networks: Brost predicts that independent networks and reference-based pricing (RBP) will continue to gain traction. As providers become more familiar with these non-traditional payment models, the necessity of relying solely on the major carrier networks for access will diminish, opening up more options for self-funded employers.

• The Small Group Innovation Gap: The small group market (businesses that "run America") is currently underserved by innovative benefits solutions. There is a strong need for profitable, strategic self-funding opportunities that can be scaled down to benefit smaller employers who currently have limited options.

• Relationship Building in Group vs. Personal Lines: While personal insurance is often transactional but relationship-driven, group benefits require a strong, data-backed business case ("the why") in addition to a solid relationship, as the decision to change brokers involves significant operational change for the HR department.

• Prioritizing Team Dynamics: Brost emphasizes that the success and enjoyment of a career are defined by "who you’re doing it with," not just "what you’re doing." Strong partnerships and a positive team environment are crucial for navigating the demanding and complex benefits industry.

Tools/Resources Mentioned

• SimplePay: A plan design and billing model focused on quality-based provider incentives.
• Ginger: A digital mental health platform offering coaching and virtual therapy.
• Meritain: Mentioned as an integration partner for SimplePay.
• BSBD (Boyd Shackleford Barnett and Dixon): The boutique insurance firm where the speaker is a practice leader.

Key Concepts

• Reference-Based Pricing (RBP): A reimbursement model where payment to providers is determined by a benchmark (e.g., Medicare rates) rather than negotiated rates, a strategy predicted to grow significantly.
• BuCAs: An industry term referring to the largest national health insurance carriers, whose financial incentives are often misaligned with aggressive cost negotiation for employers.
• Captive Business: A risk financing strategy, typically used in P&C insurance, where a company forms its own subsidiary insurance company to insure its risks. This concept served as Brost’s introduction to risk assumption strategies like self-funding.