Healthy Data Podcast_ Nick Stefanizzi (Northwell) & Jordan Cooper (InterSystems)-20250512_140329-Meeting Recording
May 12, 2025, 6:03PM
29m 11s
Jordan Cooper started transcription
Jordan Cooper 0:03
Of Northwell direct for our listeners who may be familiar with Northwell Health, this is a different organization. Northwell Health is a healthcare delivery system based in Melville, NY, which is Long Island has been expanding into Connecticut as the healthcare delivery system. We’re not here to talk about.
North Wales health necessarily. Today we’re here to talk about North Wales.
Direct Nick is the CEO of North Wales Direct and.
Nick, I’d like to ask you for our listeners.
Do you please define the history and the definition?
Of what Northwell Direct is and how it came to be.
Stefanizzi, Nicholas 0:38
Sure thing.
And first thanks Jordan for having me.
It’s a pleasure to be able to chat with you and be able to share a little bit more about Northwell Direct.
So as you mentioned, Northwell Health is New York State’s largest integrated delivery system.
We also happen to be the largest employer in the state of New York, largest private employer and Northwell Direct is a wholly owned subsidiary of the health system that operates semi autonomously and that is focused.
Based on partnering with employers to solve the unique healthcare needs and challenges of their workforce and of their families, and we were launched in 2020, we’ve worked with over 200 employers over the course of the last five years in a variety of different ways. And I.
Sure. We’ll talk as we go through this. More about the different ways that we partner.
With employees.
But really, the the genesis of this was twofold, #1.
You know, we see ourselves.
As parts of the communities that we serve just the same as local employers are parts of the Community that we serve and we saw that they had real need and challenge, particularly as it relates to the cost to provide for health insurance.
For their employees.
And so we saw an opportunity as providers and as partners in the Community to help solve that challenge by.
By partnering directly.
And then you know, sort of secondary to that, we knew we had the experience and perspective as the largest employer of how to effectively manage.
Spend on healthcare benefits without compromising access to the highest quality care for all of our members, and so that really was the genesis of why we made the decision to get involved in the direct to employer space.
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Jordan Cooper 2:45
I love it, Nick.
And the reason what I like to do on this episode today is touch upon a topic which is affecting many health systems across the United States.
And this is the concept of a pave, either the relationship between health insurance companies, which we refer to as payers and healthcare delivery systems we refer to as providers of portmanteau would be a paveder.
That is something that’s affecting.
The entire United States, starting with policies that pass.
In the Affordable Care Act in 2009 and have spread through CMS and and from the public payer into the private payer market, you’ve seen everything from one end of the Spectrum, Kaiser Permanente from fully implement integrated as with payer and provider system. And then you have.
The Ppo’s and the strictly FIFA service based providers and then in the middle you have these changing payment models with value based purchasing shared risk and you’re seeing.
Seeing provider organizations purchasing payers, you’re seeing Optum is a payer, which is the largest employer of providers across the United States. And I think Northwell Direct is a very interesting approach to the paveider model.
It’s a very interesting blend and I think our listeners would say, look, you know, I’m not sure if we’re in the same exact approach that Northwell Direct is taking. But I think all of our listeners from different health systems across the United States.
Have a lot to learn from what is going on with Northwell Direct, and I think it’s very interesting approach.
So Nick, I’d like to invite you to tell us particularly about what you’re hearing, what has been the impact, what kind of patients are you serving?
I think you said you’re serving employers that may be self insured, like ERISA employers.
How are payers reacting?
Let’s just dive right in.
Show me the show us the landscape.
And the impact?
Financially, operationally, clinically, go, go for it.
Stefanizzi, Nicholas 4:47
Sure. The first thing that I want to do and I I was out at Beckers about a week ago and I I asked the group that I was speaking to to raise their hand in response to this question.
So I won’t do that here. ’cause it’d be a little hard, but.
The first thing we’ve got to do is challenge the status quo in our thinking about the word payer and who is the true payer for healthcare.
Jordan Cooper 5:09
Mm hmm.
Stefanizzi, Nicholas 5:13And I think in a lot of ways, we’ve allowed ourselves to slip into this model.Where we refer to the traditional large insurance company as payers and I want to challenge that notion because in our view, the true payers of healthcare are employers and their employees who fund the cost for health insurance in employer sponsored plans.And it’s important to remember that over 50% / 160 million people in this country.Have access to health insurance by virtue of participating.In an employer sponsored health plan, so we view them as the true payers and what we saw stepping into this paper space is an opportunity.Not to disintermediate, not to cut out, but to reorient and restructure and realign how the relationships exist and what role each of the parties has to play in the system.And so our focus is on reorienting the relationship directly between us as the provider organization and the employer, the self funded employer as the true payer connecting those relationships.And then wrapping all of the services around it that are needed to ensure the solution can be implemented without disruption.To the workforce while maintaining access to high quality care.And driving down costs, we have over 135,000 members from 50 local regional, national employers and labor unions that have adopted our model for employer sponsored health plans in the New York metro area.And we’re seeing on average that they save about 20%.In their costs related to health insurance, those are dollars that can be reinvested back into the business.Those are dollars that can be reinvested back into the recruitment.Retention of high erforming staff.Those are dollars that ultimately have trickle down effect into the communities that we’re all a part of. And at the same time, we’re seeing that our solution is improving the health of the Members that we’re serving, how we wrap care management around all of the Members.That participate in this model and what we’re seeing are levels of engagement that are much higher than the traditional insurance.Plans are able to offer, and we’re also seeing great outcomes, whether it’s reduction in A1C levels for our diabetic populations, whether it’s better management of people with chronic kidney disease or keeping people from visiting the Ed multiple times over the period of months.Jordan Cooper 7:57Mm hmm.Stefanizzi, Nicholas 8:03Real improvements in clinical outcomes that translate into incremental hard dollar savings for the employers and the members. And we do that as a win win.Jordan Cooper 8:13Many of our listeners may be saying this sounds almost too good to be true.You’re saying that I can get more for less?First of all, there’s many questions that our listeners are probably asking themselves right now.Let’s just start with the basic enrollment process.Northwell Direct goes to employer a OK and employer A is a self insured employer based in New York City.They have 1000 employees and they currently.Only receive coverage through Blue Cross Blue Shield and let’s say they pay X. What?Is that conversation look like?What product do you offer? And then how does that actually affect employees of company A as they seek to get care for themselves and their families?Yes.Stefanizzi, Nicholas 9:02So a couple things that I think are really important, just context.Number one, I want to be clear. We are not an insurance company.We are not a licensed insurance company.We don’t sell an insurance product. What we offer is a network of providers, a high performing network with pricing that we’ve negotiated that is advantageous to the rest of the market.We offer care management services.And then we bring that to life.We bring the insurance program to life.Through partnerships we’ve established with third party administrators, Pbm’s for the pharmacy benefit, stop loss carriers who can cap the risk exposure for a self funded employer, and we offer that integrated solution.Wrapped with national carrier network so that we can ensure local choice and national extension coverage. And so again what I what?I’m describing to you is the full product stack, so you understand how it’s constructed.And how it represents, again not a not a disintermediating, a reorienting of the pieces and parts of the product stack so that we can be a full replacement to the current plan. The current platform that an employer has in place for their employer sponsored health plan, so that.Number two, one of the things that’s really critical like we go out, we market, we engage directly with employers.But what I have said loud and clear to anybody that will listen is we want to be the most broker friendly.Product and service offering out in the market.The broker channel is critically important.They are partners in this process.Employers deserve the advice and counsel that they get from their brokers. We partner closely with them to evaluate how this would work, whether or not the product is a fit for the employers that they recommend.And we have a series of steps in analytics that we will work through demonstrating the utilization of providers and any disruption usually minimal given the structure of our product. We will look at and actually reprice their claims experience to demonstrate.Here’s what you paid in your model.Here’s what that would have looked like.All things the same if it were incurred within our network product.Jordan Cooper 11:27Mm hmm.Stefanizzi, Nicholas 11:27So that we can demonstrate through real analytics.How much of A savings opportunity they have available to them in adopting this solutions?Because a lot of times when you talk about a new solution for employer sponsored Health plans, there are a couple of key themes of concern that come up that come up.One this is new.New is scary. Two, it’s different.Different can mean disruption. 3 You know, these claims of savings.Maybe are not real and we try to dispel all of those perceptions.About what a change like this represents using real data to demonstrate the use case based on their owns claims history.So we work through a partner, a process in partnership with their broker in partnership with HR and Finance leadership at the employer to show them how this will work and what it will mean.And we’ve seen, you know, in in all the employers that we’re working with, again on average about 20% savings. On the other side.And we are seeing.Low single digit and in many instances flat renewals of stop loss policies year over year.And so I share all that say the product is working, it’s having the intended impact that we demonstrate in the pre sale process to the employers that we work with and it’s seamless from the perspective of their employee open enrollment comes.It’s a replacement.It’s a.New option that we’ve put in place and we partner super closely with the HR team to make sure all the communication, education and change management that needs to happen with the employees is put in place. So there’s a high level of readiness.Jordan Cooper 13:17Got it.So I think one question that everyone’s listening is, is, is asking themselves is where do these savings come from? Are there?Is there lower reimbursement rates to Northwell providers?Are there a lower I guess membership fees?Due I guess premiums to the health insurance companies that are actually covering these lives.You mentioned care management and no doubt that may yield some savings, but they can’t account for 20% savings.To the employer, where do the savings come from?Stefanizzi, Nicholas 13:51Yeah. So there’s a couple of it. It really comes down to three buckets when you think about a self funded employer.So first.There are in a self funded arrangement. There are fixed administrative fees, you know typically per employee per month cost for various services that make up the product stack.It’s not a premium per say, it’s it’s usually APE PM fee for the various components of the service.What I would say is.In in that bucket, the services that we make available in our product stack are comparable, if not slightly favorable compared to market. The second bucket. And this is really the biggest driver.Is the expense related to paying claims right? Because self funded employers pay claims as they are incurred by as Healthcare is consumed?By their team members.And so we have negotiated rates that are favorable that are advantageous that yes, are lower compared to the market. We are able to assess that and validate that leveraging the transparency tools that are available to us since the implementation of that law. And so short term, yes it.A lower cost.For claims incurred for care received, and that really is.Is those first two buckets really represent the short term financial opportunity for employers to save money in this arrangement?Jordan Cooper 15:28Mm hmm.Stefanizzi, Nicholas 15:29The third bucket care management in my view, that’s the long term play. That’s the long term investment in the health of your employees and in the health, the improved health of your employees translating to incremental savings opportunity.So higher engagement, higher enrollment in those programs.Leads to better clinical outcomes, which will translate over the long term to additional savings and bending that cost curve over the long term.And so those are really the three buckets.Of cost saving opportunity that we see them in the short and the long term.Jordan Cooper 16:08So on the second bucket, the expense related to paying claims, it sounds like the lower cost to employer comes at a reduced reimbursement to Northwell Health, is that correct?Stefanizzi, Nicholas 16:10Yeah.Yeah.Northwell as well as it’s important to remember Jordan, the network that we that we’ve built and that we offer to employers actually includes providers other than Northwell who have said we want to be a part of the solution.Jordan Cooper 16:28Mm hmm.Stefanizzi, Nicholas 16:33So whether that’s independent practices, whether it’s other health systems like Rwj, Barnabas or Garnett that have said we want to be a part of partnering directly with employers, we’re willing to sign up with you.Jordan Cooper 16:36It.Stefanizzi, Nicholas 16:46Yes, we’ve negotiated favorable discounted rates.It’s.Jordan Cooper 16:51And the reason why those different healthcare delivery systems are willing to accept lower reimbursement rates is as a means of capturing market share and creating new revenue streams.Is that correct?Stefanizzi, Nicholas 17:01This is an opportunity for health systems to compete for commercially insured lives at the health plan level, and while we do not in the product that we offer, we do not restrict local choice.As I mentioned, we wrap our network with the national Carrier Network Tier 1 Tier 2 so that we maintain access to care locally and we provide national extension coverage for the individual that’s on the road traveling.Jordan Cooper 17:19Mm hmm.Stefanizzi, Nicholas 17:30Or the person that has a dependent in college and another state so that none of that is disrupted.But what we do is partner with the self funded employer who can control their own benefit design to put benefit design that encourages the Members not in a punitive way, that encourages that incentivizes the member to choose care when appropriate.Jordan Cooper 17:43Mm hmm.