S3E30 Andy Schoonover
SUMMARY KEYWORDS
pay, people, hospital, health insurance plans, doctor, uninsured, health, healthcare system, bill, insurance company, member, money, health insurance, insurance, health care, big, folks, bucks, cardiologist, incentive
Announcer 00:10
He was a morbidly obese surgeon destined for an operating table and an early death. Now he's a rebel MD who is Fabulously Fit and fighting to make America healthy again. This is Stay Off My Operating Table with Dr. Philip Ovadia.
Jack Heald 00:36
Welcome back, it's the Stay Off My Operating Table podcast with Dr. Philip Ovadia. And I'm Jack Heald, I represent the audience and I'm not a healthcare provider. And we usually have healthcare professionals. But today, we've got somebody who's on our side of the table. And by our, I mean, folks like me, who depend on the healthcare system to take care...
Andy Schoonover
I want to be a healthcare professional.
Jack Heald 01:08
There we go, want to be. Phil, why don't you introduce our guest today?
Dr. Philip Ovadia 01:10
Yeah, sure thing, real pleasure to have Andy Schoonover here today. We used to talk a lot on this program about the various issues with the healthcare system. And I think what we've been trying to do on this program is talk with the people who are proposing solutions to the problems. It's great to talk about the problems, but we really want to know, how do we fix it? And I hope that's what we've been doing with this podcast, Andy certainly fits into that category. And the specific problem that he's been tackling is around health insurance and the role that insurance plays within the healthcare system. So really excited to have this conversation with him, and to talk about what he is doing. And with that, I'm going to turn it over to Andy to kind of introduce himself to our audience, give a little bit of his background. So, then we can jump in and talk about how we fix the insurance problem.
Andy Schoonover 02:24
Yeah, thank you, thanks for having me, really, really appreciate the opportunity. I'm CEO of a company called CrowdHealth. And in essence, what we're trying to do is give folks tools to allow them to pay for their health care viably outside of the legacy health insurance system. A few years ago, my little one who was one at the time was having recurring ear infections. And so, we went to an ear-nose-and-throat doctor who told us that she needed, she had a perforated eardrum, she needed tubes in her ears, many parents go through the same thing. So, I went to the local hospital. The ear-nose-and-throat doc actually delayed his vacation by a day because he was so concerned about my daughter's long-term potential hearing loss. So, heading to the hospital, a 15-minute procedure, very, very common procedure and I get the bill a few weeks later, and it was $8,000. And I'm like, Wow, $8,000 for a 15-minute procedure. I was like, I’d love that hourly rate. For sure. Right?
Jack Heald 03:31
That's like, more than $300 an hour.
Andy Schoonover 03:34
Yeah, way more. Way more. It's like $30,000 an hour. It's crazy. So, I was like, Okay, well, this is what health insurance is for, like, this is the point of health insurance. if something big comes up. And in reality, I didn't really care that it was $8,000 because I have health insurance. Well, my healthcare.gov health plan, my Obamacare health plan, which I was paying $1,200 a month for, comes back and said it was medically unnecessary and so they refuse to pay for it. And so, after I think it was two or three rounds of protest, they still refused. And so, I had to stroke an $8,000 check to the local hospital. And as you can imagine I was pissed. So, I called a health insurance plan. I said, I quit. If you're not going to pay my bills, I'm not paying your bills. And so, I've been uninsured since. So, it's been a little over three years of being uninsured. And most people think that's kind of scary, but I kind of feel like it's very freeing.
Jack Heald
Totally agree. Totally agree.
Andy Schoonover
And it really kind of built some tools for my family. It started as just for my family, like what do we do now that we’re uninsured? And that culminated into a company saying I think other people would appreciate the tools that we've come up with and that's how CrowdHealth came to be. So happy to fill in any blanks there, but that's in essence like I was saying before we started a lot of these startups start because somebody like me looks at this system and says, this is just wrong. Like, there's got to be a different way of doing this. And I've been very fortunate I can pay $8,000 bill, but the vast majority of Americans can't pay an $8,000 bill. And so, the stat is 200,000 families went bankrupt last year, due to a health event, even though they had health insurance. So, this clearly isn't working.
Jack Heald 05:36
Yeah, okay. There's lots of questions.
Dr. Philip Ovadia 05:40
Yeah, exactly but let's, I guess, let's make sure everyone understands the problem. So, you go, you get that procedure done, you get an $8,000 bill, if your insurance had covered it, most likely, they would have said to the hospital, we're going to pay you a thousand bucks, whatever it is, and they would have paid that thousand bucks and the hospital would have taken it. And that would have been it. And maybe you would have had a copay or your deductible or whatever. But the actual amount paid for that procedure would have been $1,000. But because your insurance company denied it, the hospital then asked you to pay the entire $8,000, even though they knew that that procedure was only worth the $1,000, let's say, and we won't even get into what it was actually worth. But the hospital was expecting to get $1,000 from your insurance company. They know, in order to get $1,000 from the insurance company, they have to send them a bill for $8,000. Because if they send him a bill for a thousand, then they're only getting a couple of 100. But when the insurance company said, Okay, it's not necessary, we're not paying for it, they then come to you and say pay the full amount.
Andy Schoonover 07:03
Right. I came to found out it is about 1500 bucks. So, they made me pay the entire 8000 I didn't know any better at the time. They're sending these nasty notes to you, which is what hospitals do, I'm gonna send you to collections, I'm gonna do all these things. And you're just like, whoa, okay, fine. I'll just pay you the eight grand. So, they use that fear tactic very effectively to get people to pay. And by the way, after the fact, what I found is somewhere between 16 and 18%, depending upon the year of healthcare.gov plans, claims on healthcare.gov plans are rejected. So, you have an almost one out of five chance that your claim will be rejected if you're on a healthcare.gov plan. If you're in Indiana, it's 35%. If you're in Texas, it's 25%. So, one in four, one and three, like these plans are telling you yes, we'll pay your bills, but one out of three, one out of four, one of out of five times, depending on where you live, they don't. They don’t pay your bill. And so, I think that's riskier than being uninsured actually, from my perspective.
Jack Heald 08:12
I can't argue, alright, so gosh, I had an unexpected health event here six or eight months ago. And I discovered firsthand just how royally screwed up the billing is, my suspicion is in your $8,000 bill, had you not paid it, the hospital would have written off $7,000, Or I should backup if they had gotten paid $1,000 by the insurance company, they'd have declared a $7,000 loss on this procedure. My guess is that's how the bookkeeping works. So, they were gonna get $1,000 worth of credit, one way or another. Oh, my God, we could just go on. Okay, so let's get down to the nitty-gritty. What is your company? What's the solution? How does it work?
Andy Schoonover 09:03
Yeah. So, the key here is what I found in my period of being uninsured, I can pay doctors in cash. I can get a significantly better price than what the health insurance plans get. And so, what is the reason for that? One is doctors spend about 30% of their time dealing with health insurance companies. So, it's pre-ops, it's fighting to get paid. It's all of these things. And so, we're giving 30% of your time back to you so you can do what you love. You can do what you wanted to do in medicine in the first place, which is take care of patients. The second thing is a lot of times when they submit the bill, they don't actually get paid for 30, 60, 90, sometimes 120 days, and they get paid a portion of what they actually bill. And so, if I come to you and I say, hey, here's a credit card I want to pay you in cash today on the day of the procedure, will you take significantly... Will you take less than if you build that health insurance plan? The other thing, maybe a third point there is Dr. Ovadia has been gifted in cardiology. And so, you can imagine somebody sitting on his shoulder saying, this is how you should do the practice of cardiology, who's probably not even a cardiologist telling you that. That's your health plan. That can get really annoying quickly, I imagine. I'm a CEO, I think I do a pretty good job of a CEO. If I had somebody in my shoulder chirping at me, telling me how I need to be CEO, that would be really annoying. And so, we're seeing this doctor burnout from health insurance plans chirping at them, telling them what they can do and what they can't do. So that's another reason why they want to take the insurance plan out from the doctor-patient relationship. So, all of those things equate to I get much better pricing if I can pay in cash. So how do I enable people to pay in cash? The little bills, easy, right? If you go to the primary care doc, or even a specialty doc, it's 100 bucks, 200 bucks, 300 bucks, that's easy to actually pay with. And so, we ask members, hey, you pay all those directly.
Jack Heald
Pay the little ones anyway.
Andy Schoonover
Pay the little ones. For the big ones, what we ask is that you let us know so that we can negotiate that price with the doctors or the facilities prior to you paying that bill. So, I'll give you two examples. One is, I'm in Austin, I live in Austin, we had a member four or five months ago, maybe six months ago that tore her ACL. She goes to an orthopedic surgeon; orthopedic surgeon says it's gonna be $25,000 to repair your ACL. And so, we call him, and we say, okay if we can pay you, and then on the day, will you take a lesser fee? He's like, Yeah, I'll reduce my fee by I think it was 35 or 40%. We call the anesthesiologist Yes, I'll reduce my fee. And then he wanted to do it at the hospital. And we said, hey, would you do it at the surgery center? And he's like, sure, I'll do it at the surgery center. So instead of a, I think it was a 10, or $12,000 facility fee, it was like a $2,000 or $3,000 facility fee. So, in essence, what happened was that $25,000 ACL tear was reduced to I think it was $12,000. And so, we reduce the price of that ACL by going in, negotiating. And then so we know that ACL tear is going to be $12,000. We go to our community of people who have all put money into an account every single month. So, it's $175. You put it into an account every month, that accumulates over time, so they've got a stash of money that's in an account that's owned by them. And we say, hey, would you help Jack because he tore his ACL? For $12,000, right? I'll just say, we asked 120 of them for 100 bucks. And if they say yes, then money goes from their account to Jack's account. So that Jack has enough to pay for that ACL tear when he shows up for his surgery that day. So that's in essence how it works. It's basically a crowdfunding platform, that you have a group of people who say, yeah if somebody in this community gets hurt, I'm willing to help. And then...
Jack Heald 13:36
This is Kickstarter for medical problems.
Andy Schoonover 13:39
It's Kickstarter for medical problems, except that you've got a community of people who've said, I'm willing to help. And so, 200 years ago, if somebody in the community got hurt, right, that community would gather around them and help them. And over a period of time, either the government or insurance companies have gotten in between us and our neighbor, so that we're no longer responsible for the person who lives next door to us, right? And so, we are digitally taking the insurance company, the government out from in between and saying, hey, I'm your community, and I will help you if you get hurt. And so, the key driver of this though is if CrowdHealth asked Andy to help Jack, and I say no. And I've said no to the last 10 people, then when Andy submits a bill, everybody in the community knows that I've said no 10 times in a row. So, I've been a bad member of the community. So, the probability of me getting my health event paid for is really low. Right? It's like the person in the community that walks their dog and their dog craps in your lawn every day, like if that person needs help, you can be like, you're not a very good member of the community. Right? And so, there's this reciprocity that drives, that willingness to give to other people in your community. And so, we kind of say it's back to the future a little bit. It's like, let's go back 200 years ago, when we as community members were taking care of each other, we're just doing it digitally.
Jack Heald 15:14
That is fascinating.
Andy Schoonover 15:17
We've crowdfunded, I don't know what it is, it’s about like 3000, almost 3000 bills thus far. Every single bill has gotten crowd funded. 98% of the time we ask people to contribute to another person, they say, yes. So only 2% of the time will community members say no. So, we've played this out over the last two years, and it works. I mean, it has worked really, really well. And this is the crazy stat that I'm about to throw out on Twitter each member was asked for $35 last month. So, if you think about the grand scheme of health care costs, each member was only asked for 35 bucks. That's ridiculously low because we're getting so much better pricing than health plans. So, it's a pretty incredible model.
Dr. Philip Ovadia 16:11
And just to be clear, that's $35 out of the 175 that they had paid in anyway. So it wasn't that they were actually going into their pocket, they were using some of the funds that they had saved, essentially.
Andy Schoonover 16:28
So, the math on that is it's 175 bucks every month, you put the 175 bucks, and we take $40 as a subscription fee, that's the way that we make money. So, there's 135 left. And so, I asked you last month for $35, which means you still have $100 left in that account. And then when you leave CrowdHealth, it's your account, you can take that $100 with you. And so, it's not like you stick it into the black hole of health insurance land and never see it.
Jack Heald
And never see it again.
Andy Schoonover
It's actually your money.
Dr. Philip Ovadia 17:00
And I guess one question that comes to mind is what's the scalability of this, and do you... Well, two questions. What's the scalability and what's the generalability? Not sure if that's a word, but what does your pool have to look like to make this successful? Because if you have a lot of sick people who are spending a lot of money on their care that's probably not going to be viable.
Andy Schoonover 17:33
Yeah. And we have thousands of people in our community so it’s not tiny. And we're growing by hundreds every month. So, we've taken care of, I think four, it might be five cancer cases now. One of which was colon cancer, which as you all know, is not an easy one. We had a thyroid, a colon, a cervix, and there was one other one I can't remember. We've had a NICU baby, who is in NICU for 12 days. We've had a brain hemorrhage who is in the neuro ICU for two weeks, like these are big bills. And so, in essence, what we then go and do is negotiate those bills with the hospital and get those bills down pretty significantly. Given that all of our members are uninsured, we have more negotiating power with the hospitals than United Healthcare does. So, we get those bills down. I think we're averaging somewhere around 60%. Now, if you get $100,000 NICU baby bill, it was much higher than that. But let's just say it was $100,000, we were getting it down to about 40. And so, if you have thousands of people, let's just say you have 5000 people, that's eight bucks per person that month for a massive health care bill. So, we think that we've hit a threshold where we can viably do this. We can't promise that you're going to get your bill paid, because then that would be a guarantee and that would put us in insurance land, so we don't promise it's still your bill.
Jack Heald 19:07
Sounds like the insurance companies don't promise it either.
Andy Schoonover 19:09
Well, no, it's even worse. They do promise it, but they don't actually pay for it. They actually, they are a guarantor of your bill, but they don't actually pay for it because they find some loopholes. And they bureaucratize you, I don't even know if that's a word. I used it in the wrong tense probably, but they put so much crap around it, that it makes it so complex that you're like, fine, like, just tell me what I have to pay or go bankrupt, one of the two. And so, they use the complexity of the system against good folks like us.
Jack Heald 19:44
Well, we all know that it's screwed up beyond, almost beyond comprehension, certainly beyond description. However, it sounds like you ramped this puppy up pretty darn fast. How did that happen?
Andy Schoonover 20:06
Yeah, I mean, so this is my second company. I did a remote patient monitoring company to start, we were basically monitoring blood pressure and blood sugars and heart rate and weight and things like that out of the homes of folks of Medicare folks. So, we were selling into actually health insurance plans. Funny enough, it was my client in my previous business, and now it's my foe. And so that went really, really well. And so, we took some of that money, and then really, we've raised a total of $12 million to ramp this up. And so, a lot of money has gone into advertising. And what we find is, there's a lot of people out there that are either one, uninsured, because they're just like, I'm looking at all the options, and none of the options fit what I want. Or they're underinsured, and they're looking at healthcare.gov plans and saying, holy crap, I gotta do a $15,000 deductible. I gotta pay $30,000 before the health insurance plan pays a dime, that doesn't make sense, like, I need an option. So, there are just lots of people out there that this resonates with. They're like, holy crap, like, this is great. The one barrier being like people are afraid of being uninsured. Like, that's just a bad word and culture. And I, I'm trying to say no, no, it's delightful. Being uninsured is a delightful experience. And you have way more freedom, way more flexibility. You can see whatever doctor you want, you don't have to worry about if they're in-network or out of network, or getting explanations of benefits and all this other crap that you have to deal with health insurance plans, like, it's great. And I feel totally confident for my family, that if we had something really big happen, which the probability of which is very, very low, if it were...
Jack Heald 21:55
Which is why insurance companies got started in the first place.
Andy Schoonover
Totally.
Jack Heald
We're gonna, we want to pool the risk. So that in the extraordinarily unlikely event, something awful happens to one of us then all of us, because we've paid into will help that one person who suffered the problem and somehow it got turned into something, I don't even call it insurance. We've changed the meaning of the word insurance. I realize I'm tilting at windmills; you're here complaining about description. Nevertheless, I think what you're describing is actually how insurance used to work. Am I wrong about that?
Andy Schoonover 22:44
Well, it's, yeah, go ahead.
Dr. Philip Ovadia 22:46
Yeah, just kind of say it at least was the original conception that insurance would be there for catastrophic care. But that people would have a financial stake in their health still. And that's what's most interesting to me about this whole thing because I think one of the biggest problems we have in healthcare is that people are financially disconnected from their health. Most people have no financial connection to their health because they're like, I get sick, my insurance is going to cover it. So, I don't really have a direct financial incentive. They also have no financial relationship to their doctor directly. And I think that's a problem. I think it's a problem on both sides of the equation because your doctor isn't working for you as a patient. We're working for the insurance company. We're working for the hospitals, the health care company. And again, we don't have, doctors don't have incentive to keep you healthy necessarily. It's sort of the opposite. The financial incentive in the healthcare system is to do things for you, do things for you. And it's kind of perverse to say it, but it's the reality that the sicker you are, the more money the healthcare system is going to make. And that's really on a societal level, what we have to tackle, and I think part of that is just if people were paying out of pocket more for their health care, A, they would shop around. At the end of the day, they have the freedom to shop around and B, they would probably think more about their choices that might be influencing their health. And so that's one of the most powerful things that I see about this model.
Jack Heald 24:49
Well, Phil, if I understand what you're describing you say that incentives actually work.
Dr. Philip Ovadia 24:57
The incentives actually work. It just depends on how you design the incentives. I mean, and that's really the problem that we have is that the incentives that have been designed in the healthcare system, they're getting the desired results. It's just that those desired results are not what we would want them to be necessary.
Andy Schoonover 25:21
I had a Twitter spat yesterday with an anesthesiologist who was a specific condition that one of our members would have had to get a hysterectomy. So laparoscopic hysterectomy, the local hospital gave them $50,000 quote to do this. The local surgery center was, the quote was, I think it was $12,000. So, the difference was $38,000. In this anesthesiologist, and by the way, all studies show that laparoscopic hysterectomy without serious complications can be done in the surgery center. And so, his response was, well you really have to have a motivated patient to go to a surgery center, because most patients are going to have to stay the extra nights in the hospital. And I said, well $38,000 makes me pretty damn motivated to get out of that, to go to the surgery center, that's a really expensive night in the hospital $38,000. And so that was like, here lies the problem of health care, like people don't even think about the fact that to go to the hospital is going to cost you $38,000 more. Yeah, you get one night in the hospital. But if it really impacts you, if you're responsible for that bill, ultimately, you're going to think about this differently. And we had this guy with colon cancer, he reached out to us and was like, man, look, I want to get the best care possible, but I don't want to screw the community. And so, will you guys help me find a really good doctor at a really good price? Right? And so, it's like, you would never hear that with health insurance company. Health insurance is like, just give me somebody who's going to accept my insurance card. Like, that's, that's what I'm looking for. Right. And so, we do believe that this model has created some incentives for some people to take a much harder look at what they're paying for their health care. One other quick story because I think the way I say it is CrowdHealth puts the health back into health care. Because if Jack, if you have a condition in which I need to help you, I know that my money, I don't say your personal last name and where you live, but I know my money is going directly to you to help you with your condition. We had a member in Tennessee lose four fingers in a boating accident. And so, it was tens of thousands of dollars in terms of recovery and things like that. So, we said, hey, you're giving to a 19-year-old female in Tennessee who lost four fingers in a boating accident, like your money is going directly to her. And so, we had people reach out, it almost brings tears to my eyes being like, oh my gosh, I can't imagine what this person is going through. Can I give more than what you asked me to give to this to this woman? Right. I was like, that's what healthcare should be like, like, we should be being like my heart wants to help this person as opposed to just being like, by Fiat, by mandate I'm giving to an insurance company who then decides how the money is getting split on the other end. So, it's kind of like a love your neighbor, kind-of healthcare process here, where I'm like, that is way more effective than sending your premiums in every month. We had a miscarriage a few months ago, too. And people who had miscarriages reached out and said, I want to help this woman more like how I help her with her miscarriage because I had a miscarriage. Like that, to me, is what healthcare should be about.
Dr. Philip Ovadia 29:01
How are you handling the non-hospital part of all this? So, one of the biggest expenses we have in the healthcare system is chronic conditions, things like diabetes, heart disease, heart failure, the medications that it takes to manage these, the repeated doctor visits that it takes to manage these how do we address that side of it, because it's not as easy, although it's also not impossible, but it's not as easy to say to negotiate down the price of your medication.
Andy Schoonover 29:46
It's not as easy but it is not difficult. Again, we're uninsured and so almost every pharmaceutical company has a program for folks who are uninsured. I think it is Eli Lilly, maybe that just came out with there, they said, if you were uninsured, you will only pay $35 a month for insulin. And so, these and even the big, massive drugs that are $10,000 a month, if you're uninsured, you can go to these pharma companies and say I'm uninsured, and they will give you 80 or 90%, discounts on these drugs because you are uninsured. And so we had a member, three or four weeks ago who is a type one diabetic, and he's like, I'm choosing CrowdHealth because when you look at the deductibles of the ACA plans, I'm actually going to be able to find my insulin for cheaper, find all my other stuff that I need for my insulin, or for my diabetes cheaper, and I'm still I think he said he was gonna save like five grand a year, on his health care, by using CrowdHealth as opposed to going with the with an ACA plan. So, we think it's good for chronic conditions, in addition to the healthy folks like, like me and you. So, I will say that we get self-selected males in their mid-30s, who are pretty healthy. And so, the foundation for CrowdHealth has been those types of folks. Because they are less risk-averse. And this is something new. And so, just by the nature of what we're doing, we tend to get people who are less risk-averse than the normal, which tend to be healthier and male and in their 30s, which are just an inexpensive population. So, we do have a great population to work with. And it's good that we have that, because that's the foundation for which we need to build something like this.
Dr. Philip Ovadia 31:49
And do you have any criteria that would prevent someone from enrolling, preexisting conditions or anything like that?
Andy Schoonover 32:05
The only two that we do not allow people to join the community is, if you are over 260 pounds, then you have to lose a little weight before you can join us. The funny thing is that's been an incentive for a lot of people, I think we've got a dozen people now in the group. I know it's not a lot, but it's a start that have wanted to join CrowdHealth and have actually lost weight as a result. And now our CrowdHealth members, which is kind of cool. The only other thing is kind of smokers. We don't in. So, it's like, look, if you're not going to take care of yourself, then why should other people have to take care of you have some big health event comes up? So, we want people to be taking care of themselves. But those are the only two limitations to folks who can join the community.
Jack Heald 32:58
Wow. Okay, so what other questions do you get asked the most about CrowdHealth?
Andy Schoonover 33:12
Yeah, I mean, I think people are concerned about the big ones, the cancer cases, and things like that. And what I say to them is we've done this; we can get much better pricing than the health plans. And I think one of the reasons why the pricing is so high is if the pricing wasn't so high, your need for health plans or health insurance would be way lower, right? Like, there is a massive incentive for health insurance to keep prices high so that they are needed. And so, I just think that...
Jack Heald 33:43
If I understand and I've been trying to figure this one out for a while, there is this twisted symbiotic relationship between hospitals, big healthcare organizations, and I use that term reluctantly, and insurance. Because as long as the hospitals charge high prices, it drives the demand for the health insurance. And as long as the health insurance keeps jacking the prices up, it gives air coverage for the hospitals to jack their prices up.
Andy Schoonover 34:25
Yeah, it's even worse than that. In Obamacare, they have this 15% medical loss ratio rule, where for every dollar of premium you only can make 15 cents so we'll just say that my family's premium is, to make math easy, $1,000. The health insurance plan can only make $150 on that. So, everybody from the outside looking in without any kind of free marketplace experience was like Oh, that's great. The Health Insurance Plans can't rip us off. But guess what, these are for-profit entities, how do they make $165? They have to jack up your premiums by 10%. And so, you actually have health insurance who are incentivized, this is your agent, this is a principal-agent problem, right? This is your agent who's supposed to be working on your behalf, that actually has an incentive for prices to go up because they make more money when premiums are higher. Right? So, you have the buyers of healthcare, which are health insurance plans, who want the price to go up. You have the sellers of healthcare, who are the big hospital systems, and it's more and more so. They both want the price to go up. So, this doesn't take a Ph.D. in economics, if the buyer and the seller want the price to go up, guess what the price is going up, right? And so, I mean, people think that this is very, very complex. Oh, healthcare is so complex. I think that's just a red herring for No, it's not that complex. Hospitals want the price to go up. Insurance Plans want the price to go up, the price is going up. And that's just how our system works. Unfortunately.
Jack Heald 36:01
This sounds like a bad marriage; it sounds like the only way to win is not to play.
Andy Schoonover
And that’s what we’re saying.
Dr. Philip Ovadia 36:08
Yeah, just to make it even worse, is that increasingly, the insurance companies and the health care providers are the same entity. They own each other. Insurance companies are buying hospitals, and these large hospital networks are largely self-insured. So increasingly, you don't even have anyone negotiating against... They’re paying themselves basically. And so even more so the incentive is there.
Andy Schoonover 36:39
United Healthcare is the largest owner of doctors in the country. United Healthcare. I mean, so it's like, okay, so who's negotiating with who here like that doesn't make any sense.
Dr. Philip Ovadia 36:51
Yeah. Let's talk... Selfishly, I want to talk about this, from the provider standpoint, the physician standpoint, how this actually improves things for them as well, you kind of started talking about it earlier. The amount of resources that the average physician puts into getting paid by an insurance company is simply astronomical. I mean, when you look at... Most people go to the doctor's office, their family physician, and they see all these people working in the office. And the question is, like, what are these people doing? There should be like one person to kind of check me in and one person to check my vital signs, maybe, and the doctor. And that's really all you need. And they don't realize that almost all of the time that those people, those employees of the doctor are spending is trying to get paid by the insurance companies.
Andy Schoonover 37:53
Yeah, that's totally right. I mean, from what I've seen, it's probably 30 or 40% of our costs go to administrative stuff. I mean, you probably have seen this graph. It floated around Twitter for a while. Dr. Ovadia, you probably, I think you retweeted it too because I saw it. Like, since the 1970s, the number of doctors have gone up. It was something like 5% or something like that, like the number of doctors. It's basically grew with population, where the administrators are something like 30x or it's totally nuts. And so, you're seeing more and more, and the vast majority of those administrators are health insurance related. I mean, it is getting paid by the health insurance companies, there's entire hundreds of billions of dollars of industry around how do I get paid the most by health insurance. It's revenue cycle management is what it's called on the hospital side, right? Like there's a ton of our health care dollars going into how to get paid. So think about that, 30 or 40% of our healthcare dollars are being used for just the billing whereas if I show up with my Apple Pay right on my phone, it's like a percent and half friction. I'm a Bitcoin guy. If you did it over Lightning, it would be Penning’s if I could pay over Lightning. So, there's a way to strip out all of that administrative costs by paying directly and so the only people who love us probably more than the members are the doctors but you go into a doctor's office and say I want to pay you in cash or like really, like how can I get more of you? How do we get more of your members into to see me? So, we've started building a database of these doctors who are like please like send more people our way. Because a lot of these doctors, these independent doctors are disappearing because the hospital systems are sucking them up and so they're losing their entrepreneurial kind of flair for their business because of billing and that's ultimately what it is. It's just they can't get paid enough or to cost so much the bill that just makes it uneconomical.
Jack Heald 40:02
I was in the office of a friend who is a doctor. And as he's working on me one day, I said, how many other people are in your office or how big would your staff be if you weren't dealing with insurance at all? And he said, my staff would reduce by two-thirds, 66% of his staff, and he had, like, 15 people in his office. He could have been delivering health care, what he was actually there to do, it was him, two other doctors, with five people. And there were 10 people who spent all day long dealing with insurance. So, part of the money I was paying him, by the way, I paid cash, part of the money I was paying him was going to pay for these 10 people who are not providing anything related to health care. Now, that may be an extreme case, but I don't think it really is. I think that's what...
Dr. Philip Ovadia 41:06
I think it's the average. And the other component of it from the provider standpoint is the documentation, the excessive documentation that's required from the provider in order to get the insurance company to pay for them, because like you said the insurance company is looking for any reason not to pay. So, if the documentation doesn't have the right codes, doesn't have the right keywords in it, they're going to turn around and say we're not paying for this. And that is a whole another level of pain to the providers because we spend a lot of time with what really is unnecessary documentation just to make the insurance companies happy. And it really, again, has nothing to do with the care of the patient.
Jack Heald 42:02
Yeah. Okay. Well, let's talk about the process. There are folks listening, there are both providers, and just normal folks like me listening to this, and okay, what's the process? How do I go about doing this? I want to get started.
Andy Schoonover 42:19
Yeah, I mean, it's super easy. I don't know if you want me to walk through a bill. Or...
Jack Heald 42:26
Let's start with how do I quit being insured, how do I quit being raped every month by the insurance company and join CrowdHealth? And then we'll go to the process.
Andy Schoonover 42:41
Yeah, I mean, it's, it's super easy. JoinCrowdHealth.com is where we're at. And it literally takes five minutes to sign up. It's month to month. So, we're not putting you in any yearlong commitment. There's no renewals or open enrollments or anything like that, it's month-to-month. And as a result of that, we give you an app on your phone, that you have access to urgent care, virtual urgent care, virtual therapy, you can submit all your bills here, it's super easy. My wife just went to her annual OB-GYN visit last night, and it literally took me 15 seconds to take her bill and put it into the app. And then once that bill is in the app, we crowdfunded and then get you the money for that bill. It's just super easy. It's almost, as I describe it, I'm like, wow, that almost is unbelievable. It's so easy. I mean, it's so easy to do that we're trying to create a frictionless healthcare system. And that's ultimately our goal. So, it's super easy to get signed up. Like I said, five minutes. If you have a family of four, six, or something like that, it might take you 10 minutes, but I'm not asking for your annual income. I'm not asking for any of that detailed information. I'm just asking for the basics. It's a super easy enrollment process.
Jack Heald 44:03
Now, as I understand it, for every health event, there's like, we don't pay for anything under X. Yeah.
Andy Schoonover 44:17
Yeah. So, for all the health events, each member gets one wellness visit per year. So, if you have a family of four, that family gets four wellness visits per year that are 100% you can put that into the crowdfunding, submit that for crowdfunding. We do limit that to 300 bucks. So, you can't go to some naturopathic somebody or another who is a $1500 or $2,000 visit or something. It is limited to 300 bucks, and you can get one of those per year, and then anything other than that, so, let's just say that I'll use my most recent example. I was having chest pains. So, I went to a cardiologist. And the cardiology visit, I think, was something like 200 bucks. They wanted me to go to do a stress echo test which cash pay was 250 bucks. So now I'm up to 450 bucks for that health event, right? I went and got some labs done; I think all the labs were like 775 bucks. So now I'm up to 525 bucks. CrowdHealth, what we asked you, is all one health event. So, we asked you to pay the first 500. And then anything above 500, you can submit to the community for crowdfunding. So, I'll submit $25. I probably won't even submit it. But 25 bucks to the community for crowdfunding. In essence, what does that just like, Look, you got to have some skin in the game here, upfront for each health event. But it also gives you a little bit of just security around like, hey, if I have to go to the ER, God forbid, like I know, it's gonna be 500 bucks, whereas your health insurance plan, I'm like, I don't know if that's gonna be 50 bucks, 500 bucks, 5000 bucks or $50,000. Like, I have no idea what that's going to be. So, it gives some people some security around that health event. So, we want you to have some skin in the game, but not so much that it puts you into bankruptcy. We kind of say, you look at the scoreboard every year, and its healthcare.gov is like 200,000 bankruptcies, and CrowdHealth is zero bankruptcy. It's like, that's our ultimate goal, that people don't go bankrupt as a result of a health event. And that's why we structured the way we do.
Jack Heald 46:42
What about health on the healthcare provider side? How do they get involved with you?
Andy Schoonover 46:47
Yeah, I mean, you can reach out to us hey@joincrowdhealth.com. If you are interested in being involved, then we have, we're developing a database. So, we have members, by the way, we have members in all 50 states, Puerto Rico, US Virgin Islands, and DC. And so, we have people more than likely in your area. So, if you're interested in joining up with us send your contact information to us, and we'll get in touch with you. It's your name, it's your specialty, your location. And then if we have people who are in your location, then we would be more than happy to send them to you. We are looking for independent docs, docs outside of hospital systems preferably. We always say if you go into a hospital system, you're going to stay in a hospital system because it's really hard for that doc to refer you outside of that hospital system. And hospital systems tend to be 2, 3, 4 times more expensive than independent docs, independent labs, independent radiology facilities, things like that. So, we try to keep you out of the hospital system. So, we're looking for independent docs across the country. So, and as Dr. Ovadia and I have talked about, like, I want docs who get it, like who just don't look at what the American Heart Association says, or the American College of Cardiology and be like, okay, yeah, you have high LDL, I need to get you on a statin. Like let's think a little bit more critically than that. Let's look at the studies, let's be thoughtful about how we do this. And I think there's enough of us in this country. And this is nothing against Dr. Ovadia because I have tons of respect for his work, but it's like, “trust me, I'm a doctor” just doesn't fly with a lot of people anymore, especially what we've gone through over the last few years. It's like, trust me, I'm a doctor, and I've read the studies. And I know what statins do to LDL, and I know how LDL impacts actual heart disease. And so those are the type of doctors that we're looking for. It's like which ones are actually doing the work to understand the newest studies so that we are actually getting appropriate care because I think too many doctors still are, “if you have this, then you have, then this is just the way that we do it.” And it has been that way for 50 years, like statins specifically. I'm a 190, I think, on my LDL and immediately my cardiologist says, get on statins and stop eating red meat. He said literally, my cardiologist said this the other day and Dr. Ovadia can opine on this, it’s like, you've got to stop eating red meat because it's inflammatory to your system and it's symbiotic. And so, this will cause heart disease. And so, I'm sitting here being like, okay, like, it's not even worth arguing, right? Like, one, I'm not a doctor. So, he's not gonna listen to me, but two, like, I know, some of those things are just factually inaccurate. And so, I'm just kind of like I'm looking for dogs who are like, who yearn for the right decision, the right path, the right medical path as opposed to the, right clinical path as opposed the ones that just the American Heart Association says, right, I mean, those folks have no incentives to change their mind, one because of pride. From my perspective, it's hard to say I was wrong for the last 50 years. That's just inertia that is almost insurmountable with some of these large bureaucratic healthcare organizations. So, I prefer to listen to Dr. Ovadia and this podcast to learn what actually are the studies saying. So, there's the doctor we're looking for.
Jack Heald 50:24
Is it strictly allopathic physicians? Or do you also... Do you provide other kinds of health care backup?
Andy Schoonover 50:37
Yeah, I mean, I think more and more of us are looking beyond the western medicine perspective and looking into more alternative forms of medicine. So, we have opened up our crowdfunding to pretty much any kind of naturopathic, holistic, integrative alternative type of medicine out there. And so, yeah, we're not looking for a western medicine type of scenario, if that's what you're comfortable with, and go for it. Like, that's your prerogative, like, again, I don't want to be Fiat about this, I want people to have a choice in who they go to, and they can decide for themselves, if they want to go to a cardiologist that puts them on a statin, I don't truly believe that that's the right way of doing it. But it's your choice. It's your body. And I'm not, I think it's between you and your doctor, ultimately. But we also are very kind of keen on showing you some alternatives. I just had this whole thing on Twitter and Instagram about a DEXA scan and how a DEXA scan, even though I'm only 43 years old, is pretty interesting to me. Now, I know what my fat percentages and things like that, right? My visceral fat and how that's important, why that's important, and things like that. So, we're trying to get some of those alternative ways to think about healthcare out there. So, people are actually educated about some of that stuff.
Dr. Philip Ovadia 52:05
This is going to be a big question. I know we're getting towards the end. But do you see this as basically an alternative healthcare system developing? Do you see that our healthcare system is really forking?
Andy Schoonover
Yes.
Dr. Philip Ovadia
And that we're gonna end up with... there's going to be two sides of the equation, you can take your traditional insurance funded health care, and you're going to get the results that that's been getting, and you can break out of the model and connect with the practitioners who were doing that, and the funding model that's doing that, and the people who are interested in having that.
Andy Schoonover 52:53
I think it's absolutely a parallel system, to the system that we are currently working in. Sorry, I'm gonna lose power here. So, I want to make sure I don't lose power on y'all. So yes, I think that there's an alternative system here that we are building that I think is way more effective than the current system that we're in. And so, there's a fork, that's going to happen, I believe. Because people ask me, what can we do to change the healthcare system? And I said, look, the only way to change it is to burn it down. Like, I don't think there's any incremental change that we can do to the current healthcare system that's going to vastly improve the outcomes. And so, I think we need to burn it down and start a new parallel system. And if we can support that, then let us be that small seed that hopefully sprouts into something really, really big that can actually build this parallel system. So absolutely, I think we are, our goal is to really build a parallel system to the one that's currently out there. I think the hospitals have to be the first to fall. I think they're the most inefficient, horrifically-run organizations probably in the country. And there's no reason why all these things have to be in the same building. And it's wickedly inefficient and very, very expensive. And so, I think the hospitals have to fall so I'm one of the ones it's like if a hospital goes bankrupt, I'm kind of like, great, it should like we've got to do some things differently. We have half of our pregnancies being done at home. Like that's the group of people that we have. Yeah, half of them, I think across the country, it's something like 6%, 5 or 6%, we're at half. And so like, those are the types of people who are engaging with us, like we want to do this differently. We just don't buy into the fact that you have to be in a hospital to do some of these things. So that's gonna ruffle a lot of feathers. There's lots of money behind this, right, these hospitals and these insurance plans are the ones that we're taking on. They all have a lot more money than me. And so, this is an uphill battle. But that's why I need folks like you all to be like, Yeah, I'm supportive of this. I'm in. If everybody moans and groans about how bad the healthcare system is, but doesn't do anything about it, then it's like, okay, well we're in there fighting the fight and being in the arena, trying to really change this. And so, I hope that your folks who are listening to this will be like, Man, let me get in the game here and really try to change the system.
Jack Heald 55:27
I think that's a good, good place to end it. Those of you who are listening are complaining about health care system. Get in the game, here's a way to get into the game. Here's a way to get out of the game that you can't win. And get into a game that not only is going to take care of your health in a way that you want it to be taken care of, because it matters more to you individually than to anyone else. And you can also help your neighbors and your family and really all of this to create a better a better way to take care of health. Andy, thanks. This is a great story. This is a really, really good story. I've been watching it for years thinking there's got to be a parallel system that's going to spring up because I'm not the only person who's sick of this. I can’t be.
Andy Schoonover 56:25
Yeah. Well, thank you guys for having me. I really appreciate it. And Dr. Ovadia, I have tons of respect for you and what you do. So, thank you for everything that you're doing to try to change the system. And I know you've been an inspiration to me and others. So, thanks so much for having me on. It's really truly an honor to be on your show.
Dr. Philip Ovadia 56:44
Yeah, thank you, Andy. Full disclosure, I've volunteered some time on an advisory board for CrowdHealth. They haven't paid me yet. If they want to start, I won't object, but we'll talk about that later. But it was just such a fabulous idea that like I said, I'm always out there looking for the solutions. Most of us know, we have big problems in the healthcare system. And I'm always happy to discuss that, but I'm really interested in how we fix it. And that's been my approach and my mission. And I think CrowdHealth is really a big, is going to be a big part of this model. I think, makes a lot of sense from a lot of perspective. So, I look forward to seeing how it continues to grow.
Jack Heald 57:41
I look forward to hearing about your growth as a result of this podcast, so.
Andy Schoonover 57:46
I'll let you know. I'll keep you posted.
Jack Heald
All right.
Andy Schoonover
Thank you so much.
Jack Heald 57:50
Thank you. Well, for Dr. Philip Ovadia, I’m Jack Heald and for Andy Schoonover, he's still Andy Schoonover. Thanks for joining us on The Stay Off My Operating Table podcast. Please visit JoinCrowdHealth.com Check it out. It's a way that I think is going to change how those of us who are ready for a change can really participate. Please visit Dr. Ovadia's website as well, ifixhearts.com. You can check your own metabolic health with a quick and dirty little two-minute test. I did it myself. Apparently, I'm not as good of shape as I thought I was. I will talk to you all next time.
Jack Heald 58:34
America is fat and sick and tired. 88% of Americans are metabolically unhealthy and at risk of a sudden heart attack. Are you one of them? Go to ifixhearts.co and take Dr. Ovadia's metabolic health quiz. Learn specific steps you can take to reclaim your health reduce your risk of heart attack, and stay off Dr. Ovadia's operating table.
Jack Heald 59:02
This has been a production of 38 atoms