EP479: What Could Go Wrong Covering High-Cost Claimants With Stop-Loss Reinsurance? With Andreas Mang and Jon Camire

This show today, for sure, it’s for plan sponsors and anyone on or about plan sponsors; but also listen if you are serving high-cost claimants some other way. Because what you’ll learn here today is some insights relative to how plan sponsors go about making sure that they can pay you—like if you work for, for example, some clinical organization.

For a full transcript of this episode, click here.

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There’s a, I don’t know, 101 starting point of this conversation if you need it on stop-loss, which is episode 478 from a couple of weeks ago. This show is the, let’s say, 201-level conversation that I’m having with Andreas Mang and Jon Camire about, as I said, stop-loss insurance and stop-loss insurance considerations.

And I’d like to start here: If you’re a very large employer, you’ve got 10,000+, say, plan members. The best stop-loss coverage terms are gonna be very, very different than if it’s a smaller employer with 400 or 500 employees. So, this is not a one-size-fits-all; and this is really relevant, especially since stop-loss coverage is a big-ticket and an extremely crucial decision.

Which is why the first piece of advice offered in this show—which is certainly a carry-on from that earlier episode I mentioned (EP478) from a couple of weeks ago—the one piece of advice to rule them all: Get a very, very experienced broker/consultant who works with self-insured plan sponsors of your exact size and has for a while. That is the one rule to rule them all.

Get this number one piece of advice right and you’ll do a whole lot better with the rest of the to-dos that Andreas and Jon share today, which are piece of advice number two: Get a whole bunch of stop-loss coverage bids from different vendors and get them every year.

Number three piece of advice: Pay attention to a few key contract provisions. There are four contract provisions to be really watching out for. One is the runout period, making sure there’s no new lasers, that there’s renewal caps, and then mirroring provisions; and Andreas and Jon really get into these in the show that follows.

And then last piece of advice, number four piece of advice: Watch out with the eligibility.

So, after we run through the advice portion of this podcast, I ask Andreas—by the way, this whole intro is turning into a giant spoiler alert—but after the advice portion of our broadcast, I ask Andreas and Jon what the biggest mistake they see plan sponsors make is. And they both kind of agree, it’s not balancing risk and expense particularly well. Andreas mentions how he was talking to an executive at a stop-loss carrier who, in a moment of weakness, as Andreas tells it, this executive revealed that he was shooting for a 30% to 40% margin on the policies sold.

So, yeah, buying too much stop-loss year after year means that the plan could be spending millions of unnecessary dollars for too much insurance. On the other hand, worrying too much about price and skimping and then finding oneself un- or underinsured when that big high-cost claim comes through is also not good.

I’m summarizing some big wisdom from Andreas and Jon, as I said, so do listen to their thoughts.

After this in the show that follows, we get into the now what, knowing all of this, what is actionable that we didn’t cover already? And in short, we circle the wagons around getting into a collective and using a so-called panel approach, which gets explained.

Then last but definitely not least, because you hear this on one after another Relentless Health Value episode—I mean, you ask anyone for advice and this one comes up—I was saying earlier the “Get a great consultant” was the one rule to rule them all; but this last one might be kind of like hold my beer on that one.

Know how everyone is being paid from your consultant to the collective, to the stop-loss carrier and/or their brokers. Get these disclosures. Watch for things that don’t have to actually be on the disclosures. And sometimes you can sort of figure these out when somebody seems like they’re moving a little wonky. Ask lots of questions.

So, as I have said seven times already, today I am speaking with Andreas Mang, who is senior managing director at Blackstone and CEO Equity Healthcare. I am also speaking with Jon Camire, who’s also over at Blackstone. Jon is managing director and CFO Equity Healthcare. Jon is an actuary, and he runs their stop-loss program over there. So, yeah, I’m very pleased with myself for getting the likes of these two to talk with you today.

Normally right now I say, “My name is Stacey Richter,” and then I say, “This show is sponsored by Aventria Health Group.” What I’m gonna say today instead, though, is that this show is also sponsored by Havarti Risk, which I am so thankful for. The show, Relentless Health Value, actually does cost an unexpectedly large sum of money to create and produce; so I always appreciate when somebody offers to sponsor a show or help sponsor a show.

Havarti Risk empowers healthcare leaders like you to make smarter decisions that increase quality and lower the cost of care. Havarti’s cutting-edge approach combines deep industry knowledge and also actuarial expertise with advanced technology to transform how you manage risk and optimize performance. I mean, look, when you’re putting patients over profits and trying to manage that quadruple play that we talk a lot about on Relentless Health Value, you need partners who understand both the clinical and the financial sides of healthcare risk.

To that end, I go a ways back with Keith Passwater, who’s the CEO of Havarti Risk and moderated a panel a couple of years ago that he was on at the Society of Actuaries. Right? So, I got myself invited to the Society of Actuaries meeting, and that panel was entitled, “Can Health Actuaries Make the U.S. Health Care System Better?”

And I have to say, I really appreciated the thoughtfulness that Keith came into that conversation with. And in short, yeah, there’s actually a lot actuaries can do to make the system better. If anyone can do it, let’s get their big brains in on the mission.

So, yeah … call Keith Passwater, call Havarti Risk. I really appreciate them stepping up with some dollars to support this pod and keep it on the air.

Also mentioned in this episode are Blackstone, Havarti Risk, and Keith Passwater. 

You can learn more at blackstone.com. You can also follow Andreas and Jon on LinkedIn.

Andreas Mang is senior managing director, portfolio operations, and chief executive officer of Equity Healthcare, where he is involved in managing medical benefits spend across the Blackstone portfolio. Andreas brings 20 years of healthcare experience to Equity Healthcare, having held various roles in healthcare finance, operations, and strategy.

Prior to joining Blackstone, Andreas was the vice president responsible for national provider network operations at CareCentrix, a PE-backed, leading home health benefit-management company. At Blue Cross Blue Shield of Massachusetts, he held a variety of roles, including a leadership role identifying and implementing administrative cost savings opportunities throughout the organization and ultimately designing a new corporate business model. In addition, he held roles as the manager of strategic financial planning at Harvard Pilgrim Health Care and was a senior consultant with Deloitte Consulting’s Strategy and Operations group in Boston.

Andreas has a bachelor’s degree in healthcare management and policy from the University of New Hampshire and an MBA from the University of Rochester’s Simon School of Business Administration. He currently serves on the board of DECA Dental.

Jon Camire is managing director for Blackstone and the chief financial officer of Equity Healthcare. He oversees financial evaluation, benchmarking, and modeling of health plan performance optimization for existing and prospective portfolio investments including strategic benefit design alternatives, clinical programming, and innovation partner opportunities.

Prior to joining Blackstone, Jon served as vice president of financial modeling with Unum, spearheading the modernization of the actuarial and financial management capabilities across the enterprise. Prior to Unum, Jon operated his own health actuarial and healthcare reform consulting practice supporting payer, provider, employer, and government clients in navigating the risks and opportunities of the rapidly evolving health system dynamics. Earlier in his career, he held actuarial leadership roles with Blue Cross Blue Shield of Massachusetts.

Jon holds a bachelor’s degree in mathematics from the University of Massachusetts. He is a Fellow of the Society of Actuaries and a member of the American Academy of Actuaries.

07:47 What are the best practices for plan sponsors to use for stop-loss coverage?

10:11 What are the “unknown unknowns” within stop-loss coverage?

15:25 What are some policy provisions that plan sponsors should be aware of?

19:02 Why is it so important to do eligibility audits?

20:41 What are some common mistakes made with stop-loss coverage among the self-insured?

23:21 What’s a panel approach, and why is it important for negotiating stop-loss coverage?

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Justin Leader (Take Two: EP433), Andreas Mang and Jon Camire (EP478), Stacey Richter (EP477), Charles Green (Bonus Episode), Ann Lewandowski, Peter Hayes, Yashaswini Singh, Dr Kenny Cole, Dr Eric Bricker, Dr Christine Hale, Nikki King