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.
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 5:13
And 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 7:57
Mm hmm.
Stefanizzi, Nicholas 8:03
Real 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 8:13
Many 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 9:02
So 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 11:27
Mm hmm.
Stefanizzi, Nicholas 11:27
So 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 13:17
Got 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 13:51
Yeah. 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 15:28
Mm hmm.
Stefanizzi, Nicholas 15:29
The 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 16:08
So 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 16:10
Yeah.
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 16:28
Mm hmm.
Stefanizzi, Nicholas 16:33
So 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 16:36
It.
Stefanizzi, Nicholas 16:46
Yes, we’ve negotiated favorable discounted rates.
It’s.
Jordan Cooper 16:51
And 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 17:01
This 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 17:19
Mm hmm.
Stefanizzi, Nicholas 17:30
Or 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 17:43
Mm hmm.
Stefanizzi, Nicholas 17:55
Within the Tier 1 Northwell Direct network, that is lowest cost.
And in our view, highest quality.
And and that is how we attempt to steer volume and compete for those lives at A at a commercially insured plan level.
Jordan Cooper 18:14
Just to be very concrete, can you walk our listeners through the membership card that employees are provided with for Northwell Direct and how that works?
Stefanizzi, Nicholas 18:25
I mean, in a lot of ways, it’ll look and feel similar to what a typical.
A typical card looks like today. You’ll have the employer logo on the card, but what we will do as it relates to the network that you are that you access is we will show your tier one network is Northwell Direct your Tier 2 network is you know one.
Jordan Cooper 18:33
Mm hmm.
Mm hmm.
Stefanizzi, Nicholas 18:48
Of the national carriers, whether that’s Anthem, whether that’s Aetna, that we wrap around our network and that depends on a client by client basis based on.
On you know what set of solutions we’ve put into play. We have some flexibility to mix and match based on employer needs.
So both of those networks will be listed on the card, as will the third party administrator where the claims need to be directed and then most importantly, and in a way that is compliant with all the appropriate regulations, we also provide the information about the plan.
For the Members to very easily understand.
And digest and then make choices.
What am I talking about?
Well, if we put copay differentials or deductible differentials in place between the Tier 1 Northwell Direct network and the National Carrier network to incentivize behaviors, those are very clearly delineated.
So that they can be understood by the member and understand.
Where the most cost effective choice lies.
And so again, all of the typical elements that you see on an ID card, just with some nuance in that we’re talking about two networks that Members will have access to simultaneously.
Jordan Cooper 20:04
And I think our listeners would be very interested in reactions from payers, health systems, employers and employees.
Stefanizzi, Nicholas 20:09
Hmm.
Jordan Cooper 20:11
How over the last five years have those four different stakeholder groups been reacting in general to Northwell Direct’s offerings?
Stefanizzi, Nicholas 20:20
Great question.
I would say.
In each case, it’s been an evolution and in some cases there’s a spectrum of reaction.
And so let me try to explain to you there. I would say for employers, it’s been an evolution, right.
You come out into the market, you announce you’ve got this new product.
You know, employers, HR professionals, finance professionals.
You know, they take benefits, expense benefits programs.
Incredibly seriously, right?
It’s typically in the top three line items of expense for an organization.
Some nuance, depending on the type of business, but you know typically in the top three to five line items in a bug in a company’s budget.
Secondary to that, it’s typically something that is core to the employer value proposition core to their ability to recruit and retain the talent that they need.
And so they’re very leery of disruption.
And risk that can be created to the employee experience or risk that can be created.
From a financial perspective, and So what I would say is when we launched, there was a newness factor to what we were doing.
There was a we don’t know if we necessarily want to be the first one.
We want to see how this works.
Are they actually seeing and proving out what they’re offering out into the market? And as we’ve brought more and more employees, more members?
From employers onto this platform, and by the way, we use it for our own team members.
We thought that it was important.
Number one, we saw the value that we could realize for ourselves, but we we thought it was important to demonstrate to the market our commitment to this product offering that we believed it could work as we brought Northwell on as we brought more and more employers on we.
Moved employers sort of along the spectrum of this is this is really new.
I’m a little bit skeptical.
To saying wow, I’m seeing other employers that I talked to in the community that I know saying that it is working for them and getting more comfortable. And by the way, we’ve brought the brokers along.
They’ve seen the value for the clients that they’re advising and they’re saying to their clients now to their other clients. Now you know what it worked for my other client there.
I think it could be a good potential fit for you. So to us as it relates to employers.
This is a long term investment in a relationship.
You know, we have a number of customers where it took two or three cycles of pitching to them during their renewal before they converted.
That’s OK. We want them to be really comfortable, really ready at the point that they finally make that decision and we’re invested in this over the long term on the payer side, I would say we’ve had some that have had the reaction to say how dare you get.
Into this space.
Why would you want to do this?
You know, this is our lane.
And we’ve had others on the other side of this spectrum that have said, wow, this is actually pretty intriguing.
We could see, you know, the value proposition if we partner together both in adding value to our existing client base and winning new business together.
We’re willing to partner and so we’ve seen the range of those reactions.
We haven’t let that range of reactions in any way detract from our commitment to we think this is the right strategy for our health system.
We think this is the right thing.
For the employers and the communities that we serve and ultimately we think there is a role for all of us to play in this ecosystem. And so again, it’s been a kind of spectrum of reactions.
It’s been an evolution of reactions from the payers and the employers, but one thing that stayed true and that stayed consistent is our commitment to this strategy.
Jordan Cooper 24:16
So Nick, that’s an excellent explanation.
Unfortunately, we are approaching the end of this podcast episode. I normally like to end a lot of episodes asking you to provide advice to somebody listening what they should be considering if they’re in an organization that is, that is moving towards more of a paved or model. But.
Also.
They’re the topics.
This is healthy data, podcasts, and I think many of my listeners would be wondering what kind of data’s driving those analytics. It seems like a lot of the.
Value proposition is in demonstrating to different employers and to payers and to all involved parties that this is a cost savings measure that is going to deliver value in the long term.
So perhaps I might ask if you could, as a final kind of.
If you could offer at the end of this episode, one final sentiment are your thoughts about what’s driving those analytics?
What kind of data is making all of this possible? Since it seems that real time analytics?
Based on real data from claims, history is kind of what’s allowing you to sell this and make it even make it work.
Stefanizzi, Nicholas 25:24
Data is absolutely critical to this in in every step of the lifecycle of the customers that we work with, whether that’s in presale, demonstrating the ways in which our product will minimize disruption to the providers that are utilized to looking at the actual claims data to understand what.
The real.
What the real opportunities for savings are?
Two using claims as they’re encouraged to identify what Members would benefit from a clinical intervention that we could deploy through our care management.
There is such a richness of data that is available within these employer sponsored health plans and we are partnering with the employers to maximize how much we can get out of that data. And then we’re marrying that with the insights we are able to glean.
Through our HIE through the state health information.
Exchanges as a provider so that we can get ahead of claims so that we can trigger alerts when a Member is admitted to an emergency department that is enrolled in in our program so that we can get to them at the bedside and start to support them, right.
Away in a way, the traditional insurance carriers aren’t able to, and so data is absolutely critical. We live and die by it.
We I would highly encourage all employers if you.
You are not getting your your claims data and you are not having rich discussions about what that data says about your plans.
Please ask your current carrier, your current provider for your employer sponsored health plan.
Please demand that they start to share that data with you, that they start to share that data with your broker so that you can start to dig into it in a DE identified HIPAA and employer appropriate way.
There is so, so much opportunity and and and.
Intervention that can be done based on the insights from that data, even in the absence of making a truly transformational change and to the provider organizations to answer your other question about what it what piece of advice would you have?
What I would just say to my my fellow provider organizations out there.
What I’ve described can sound daunting.
It’s a. This is a big challenge that employers are grappling with.
And employers need a lot of different help, and I think a lot of times providers can get stuck trying to figure out, well, how do I meet all of the needs?
This is a lot to take on.
Two things that I would say.
Number one, you don’t have to boil the ocean.
As I said, we’ve not built an insurance company to do this.
We’ve found great partners that bring best in class capabilities to help enable the parts that we bring to the table.
You don’t have to do this all on your own.
There are partners that can support you moving into this space and having impact on the employers in your Community and secondary to that you don’t have to do everything all at once.
Pick one space.
Start with one conversation with an employer to understand what they need.
Start with one program that you think could add value to an employer to get your foot in the door and start the relationship.
Because if you look at these things as an investment over the long term, you will find that there are ways that.
You can build over time to get into this space and have an impact.
Jordan Cooper 29:00
Well, Nick, I’d like to thank you for joining us for our listeners. This has been Nick Stefanizzi, the CEO of Northwell Direct.
Nick, thank you so much for joining us today.
Stefanizzi, Nicholas 29:09
Thanks so much, Jordan.
Jordan Cooper stopped transcription
