What I learned from working with a CEO who read the health insurance reports, questioned the claims and changed how his company used care. I have spent many years helping companies manage their health plans. …
The CEO Who Took On Healthcare – with Rob Dunham
What I learned from working with a CEO who read the health insurance reports, questioned the claims and changed how his company used care.
I have spent many years helping companies manage their health plans. During that time, I have met plenty of capable CEOs. They know their businesses, understand their customers and watch the numbers that determine whether the company succeeds.
Healthcare often sits in a different category.
The CEO knows what the company spends. The renewal comes in, the increase is discussed and someone is asked to shop the market. The detailed work is left to HR, a broker, an insurance carrier or a third-party administrator. Those people may all be doing their jobs well, but one of the company’s largest expenses can still remain several steps removed from the person responsible for the entire business.
That was never the case with Rob Durham.
Rob recently retired after selling HKM Direct Market Communications, the company he led for many years. J.P. Farley began working with HKM around 2014, and I can say without much hesitation that Rob is probably the best example I have seen of a CEO personally managing a company health plan.
He did have an advantage. Rob spent the first five years of his career selling group health insurance, so he understood more about the business than most CEOs, and certainly more than most CEOs in the printing industry. But his knowledge was only part of the reason the plan performed so well.
The real difference was that he paid attention.
He actually read the reports
When we began giving Rob detailed reports on the plan, he would go through them and call me back two or three days later.
Then the questions would begin.
What happened here? Why is this claim so large? Why are we paying this amount every month? Is there another way to handle it?
The first time he did it, I was genuinely surprised. We provided reporting to many companies, and I always took pride in knowing what was inside those reports. But very few CEOs came back and grilled me on the details the way Rob did.
It was a good surprise.
Rob was not trying to become a claims administrator or a clinician. He was doing what a CEO should do: looking at the information, identifying what appeared unusual and asking the people around him to explain it.
One of the first issues we found involved specialty drugs. HKM had a few employees taking extremely expensive maintenance medications, which meant those large costs appeared month after month. Rob asked whether there was another way to fund them. We explored the available specialty pharmacy programs and found alternatives that saved the company approximately $200,000 a year while those individuals remained on the plan.
That opportunity was not buried in a secret file. It was visible in the reporting.
We probably showed similar reports to a dozen other companies during the same quarter. Several of them may have had the same opportunity sitting right in front of them. Unless we specifically brought it to their attention, they walked past it.
Rob didn’t.
His attention saved the company that money.
Then came the $1 million dialysis bill
At one point, an HKM employee needed dialysis. Rob received what I called a “whopper” of a bill.
Rob’s definition was more precise: $1 million.
He cared a great deal about the employee and wanted that person to receive the necessary care. But the size of the bill stunned him, and it was due rather quickly. He called me, and we immediately began working through it.
The eventual cost came in at approximately $100,000.
More importantly, we discovered that other dialysis providers could deliver the same medical care at a substantially lower price. HKM later applied that same thinking to MRIs and other imaging services.
As Rob explained during our conversation:
“The quality of the medical care and the service was exactly the same, but the cost was substantially reduced.”
Rob Dunham
We were not taking healthcare away from the employee. We were questioning whether one provider and one price represented the only responsible option.
In healthcare, they often do not.
The health plan became part of the company culture
Rob also understood that the plan could not focus only on where employees went after they became sick.
HKM brought MetroHealth nurses into the workplace for wellness clinics. At first, some employees were hesitant to have their blood pressure checked or receive a cholesterol test. As people became familiar with the program, participation grew.
The company later hired a part-time nurse who worked from one of its facilities twice a week. Employees could stop by the “wellness office,” ask questions, receive basic guidance and address concerns before they became larger problems.
HKM also adjusted the plan to encourage employees to use urgent care rather than the emergency room for sore throats, flu, minor injuries and other conditions that did not require emergency treatment.
Those decisions affected costs, but they also made the plan more useful. Employees had somewhere to ask a question. They had help navigating the system. They were given a practical reason to think about the setting in which they received care.
What CEO involvement really looks like
Rob did not personally adjudicate claims, negotiate every contract or tell employees which physician to see. He surrounded himself with people who had the expertise to perform those jobs.
But he remained involved enough to ask:
- What is the data telling us?
- Why is this particular claim so expensive?
- Can another provider deliver the same care appropriately?
- Are employees avoiding preventive care?
- Does the plan reward the behavior we want?
- Will employees trust this change?
- What support will they need after the change is announced?
Now you can spot the difference between delegating technical work and outsourcing responsibility.
It does not matter whether a company is fully insured or self-funded. A carrier, broker, TPA or hospital can perform an important part of the work, but none of them can replace the company’s own leadership. Each organization has its own function and economic interests. Someone inside the company still has to connect the plan to the business, the employees and the company’s long-term priorities.
At HKM, Rob did that.
He read the reports. He questioned the claims. He relied on specialists without becoming passive. He helped employees move past misconceptions about lower-cost care. He invested in wellness support and treated behavior change as a multi-year management responsibility.
The savings were substantial. The $1 million dialysis bill that ultimately cost approximately $100,000 makes a dramatic example, as do the specialty-drug savings measured in hundreds of thousands of dollars.
But the result I find most valuable is what happened among the employees.
People became more willing to compare care settings, use appropriate alternatives, participate in wellness programs and ask questions about their own health. The company changed the way healthcare was understood and used.
You can outsource claims administration. You can outsource network contracting. You can outsource many of the technical functions involved in a health plan.
You cannot outsource leadership.
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