Venteur helps employees get flexible health plans

Stacy Edgar of Venteur - Podcast Transcript

Healy:	Hey, this is Healy Jones, VP of Financial Strategy here at Kruze Consulting, andI want to say thanks to our podcast sponsor, ARC. At Kruze, we’ve got a number of clients successfully using ARC to manage their deposits, payments, access financing, all in one place. One of the things that ARC provides that’s really great is over a quarter of a million dollars in FDIC coverage. Their insurance program goes beyond the standard limit and it secures up to five and a quarter million dollars. So, startups that have even more cash than that can go and access treasury solutions to provide yield and safety. If you’re a startup looking for a secure financial solution that can help you scale, please check out our sponsor ARC at ARC.tech.
Scott:	Welcome to Founders and Friends Podcast with Scott Orn of Kruze Consulting, and today my very special guest is Stacy Edgar of Venteur. Welcome, Stacy.
Stacy:	Thanks, Scott. So glad to be here.
Scott:	Oh, my pleasure. And by the way, I have a personal investment in the company, just so everyone knows, but I think this is… Stacy’s built something super-duper cool, and I’ve seen it since literally her and her co-founder we’re scraping by and getting things together, and now the company’s doing really well. So, this is an inspirational conversation. Still a long way to go, but you guys are doing really, really well. It’s exciting. Maybe just retrace your career a little bit and how you had the idea for a Venteur.
Stacy:	Sure. Well, Venteur is really a family story, and I founded the company with my brother. He is our chief technology officer. He’s one of the best engineers you could ever meet, but we grew up in a family of entrepreneurs and health insurance has been this lifelong family burden. Our parents were self-employed, meaning that our only option as a family was an individual plan. And the first year of our parents’ business, they got really sick. I’m glad to tell you my dad’s still here, he was the one who got sick. And what we credit, when we look back over the last three decades, there’s two things that made all the difference. Our ability to choose our plan, which meant we could keep the same providers, build a 30-year relationship with the same doctors. And then also that choice meant we could be proactive about our health care or health insurance costs and think about it as a financial management tool. Otherwise, I would not be sitting in front of you today. I’d be somewhere else probably paying off that debt that we incurred.
Scott:	Well also, like bankruptcy, health bankruptcy or health benefits or health bill bankruptcy is like a plague United States. I’m really glad your family made it through that. That could have been really, really bad there.
Stacy:	Yes, we never faced that directly, but we were always on the edge. And so, what we do as a company is we bring the best parts of that journey, that choice, that individual control to the whole employer mArcet at a way better price point. We do so through under what’s called an individual coverage health reimbursement arrangement. Now, that’s a mouthful. The acronym is ICHRA, but all it means is that a business is providing cash to their employees, and the employee gets to pick whatever they want on mArcet as long as it meets the Affordable Care Act requirements. It’s pre-taxed for the employee and tax-deductible for the company. And we’ve built this comprehensive solution, and the star of our show is our AI technology to help people to pick the best plan for them. I’ll pause there. That’s a story. But, basically, we are on a mission to solve health insurance affordability for this country.
Scott:	It’s really cool. ICHRA is I-C-H-R-A for anyone who’s… So, type in I-C-H-R-A Venteur, V-E-N-T-E-U-R, if you’re listening to this or watching this, you want to learn more. And so, when I was in business school in 2005, 2007, consumer directed healthcare was a really big thing and it was emerging and things like that. And that’s kind of what you’re playing on. You’re letting the consumer make smart decisions and they get reimbursed by the employer. Is that the concept?
Stacy:	Yeah, that’s completely right. And get a load of the statistics. So, one of our employers, 3000 employees, guess how many plans health insurance carriers and how many health plans their employees affect across that [inaudible 00:04:08]?
Scott:	Oh, God. That they have to pick over? They choose from 10?
Stacy:	They choose from a couple hundred.
Scott:	Oh, okay. Wait, because they’re directing their own money, they get to buy their own plan. Okay, good. Okay, I got it. I got it.
Stacy:	Got it. That one company has 300 health plans.
Scott:	Oh my gosh. And you guys administer it all for them so the company doesn’t… it’s not a burden for the company. That’s really cool.
Stacy:	So it’s one check per month for the company, and then literally 300 health plans. And on top of that, you might have a family that has Mom on one plan, Dad on another plan, and it gets even more… Personalization is so huge, and you might be thinking, why would you ever do that? It’s actually a huge asset in terms of maybe the doctors that Mom wants are with this carrier and the doctors that Dad wants are with this carrier. Or maybe someone has really high needs, they should be on a platinum plan, but the rest of the family, they can get by with bronze or silver.
Scott:	And I can see why the AI stuff is important here because then… I didn’t realize the scope of how many plans you’re kind of combing through. If you’re an employee and you’re coming through 300 potential plans, you need a little bit of help. That’s where Venteur comes in.
Stacy:	Yes, that’s exactly right.
Scott:	That, and making it one check for the employer so it’s easy for the employer, I assume?
Stacy:	Yes.
Scott:	That’s really cool. Wow, that’s amazing. And you said that company, that client has 3000 employees. You span the spectrum. There’s some smaller companies, but then a lot of big companies are using you. Is it the big companies get so much value out of this that they can’t say no price-wise, just that and I guess the personalization, right?
Stacy:	Yeah. That 3000 person employer, actually, their story’s amazing. They saved $9 million [inaudible 00:05:56], a self-funded plan for them. This is one year, and this is actually, they increase their benefit level by doing this too. They spend 132% of a gold plan. They cover all of your premiums. And then the other thing people don’t always know about Icarus is you can use the remaining cash for any out-of-pocket expense. And that’s also considered pre-tax as well like deductibles, co-pays. There’s a universe where you can plan this out and pay nothing for healthcare in a year and have it fully covered and paid for, prescriptions, new pair glasses, even massage that’s covered too.
Scott:	I mean, $9 million is a ton of money. So, is it just because these personalized plans are just so much cheaper or how does it work?
Stacy:	That’s a great question. That’s the first question that people ask when I tell that story. Also, $9 million, that’s not even our biggest savings now. Our biggest savings, same profile of employer $23 million.
Scott:	Oh, my God.
Stacy:	I know.
Scott:	Where does it come from? How does it work?
Stacy:	Okay, so when you buy an individual plan, you actually buy a plan that’s underwritten at the state level.
Scott:	That makes sense.
Stacy:	If you think about California, there’s actually two million people in the California state risk pool. It’s basically an ACA plan. When you think about Covered California, but any plan that’s underwritten directly by carrier that’s in that risk pool too.
Scott:	It’s standardized, right? Because I have founders always ask me… they’re trying to save money and it’s like there’s no difference up to 20 employees or 25 employees or something like that. It’s all kind of so standardized that it’s nothing to shop for basically. Is that what you’re saying?
Stacy:	That’s correct for this small group side on the individual side. Basically, insurance is all about law of numbers. The bigger the risk pool, the more stable it is, the more volume discounts you have. And so, it’s really just economies of scale in what’s called basically the Obamacare mArcets, that’s what’s happened. And then on top of that, the states have basically reinsured those risk pools and instead of negotiating for a couple hundred people or a couple thousand people, you’re negotiating for a couple million people. And that’s where you can basically see the same doctor for the same thing at a fraction of the price because of…
Scott:	So the economies of scale, the bargaining leverage that the state has over those plans. This is for individual plans, right?
Stacy:	That’s correct.
Scott:	Okay, I got it. So instead of the employees all going on the company’s small group plan, they’re all buying individual insurance. And because they’re part of that $2 million or just giant risk pool, the carriers are giving a better deal because they’re like, “Oh my gosh, if I can get two million consumers versus a thousand consumers, of course I’m going to give a much better deal because I want that volume essentially.”?
Stacy:	Yeah.
Scott:	Okay. Makes sense.
Stacy:	That’s exactly right. So, the economic case there is staggering, and that’s where we see… That’s what keeps me going. Seeing businesses save hundreds of thousands, millions of dollars, seeing families do the same because of the flexibility.
Scott:	Do these customers take you out to dinner every night or something? I mean, they’ve got to be ecstatic about… I mean, that’s just a humongous amount of money to be saving.
Stacy:	So for that $9 million… The customer that saved $9 million, that was 175 jobs saved.
Scott:	Wow. That’s crazy.
Stacy:	They don’t need to take me to dinner. That’s reward enough.
Scott:	Unless they want to. And then how are you mArceting this? It sounds like you’re working with some pretty big companies. My world is startups and 5, 10, 50, 100 person companies is where I’ve lived for a very long time. But you’re getting clients in the thousands. How are they finding you? How do you talk to them?
Stacy:	Well, I think that… I want to just come back to startups for a second because we also serve startups. Our smallest customer has one employee. And, actually, that’s so easy, we love that. We use our own product as a startup as well. We love serving startups. We actually are a perk for Techstars, 500 startups and happy to offer that same startup discount to anybody in the Kruze world as well.
Scott:	Awesome. That’s really cool.
Stacy:	Larger clients, more mixed.
Scott:	And so those startups who I’ve been telling, “Hey, it’s tough to… Everything’s standardized. You’re not going to get that great of a deal no matter what.” This is an option. For those entrepreneurs and they can sign it with Venteur and then you will handle all the administration one check to them, but you’re letting their employees… And you’re letting people buy across states too, it’s not just in California. That’s actually a big deal nowadays with people working remotely. The intrastate stuff drove a lot of complex, I know it did for us years ago. It drove a lot of complexity.
Stacy:	The biggest thing is that you’re basically… because you have cash, if say you’re an employee in New York, you would buy a plan in New York within New York provider network, even if you’re working for a California company.
Scott:	Oh, okay. That’s how it works. That’s how you get make it easy. Okay, that makes tons of sense.
Stacy:	And that’s actually gives better access to care to the individual too.
Scott:	Makes total sense. Okay. And so, they find you how, what’s going on? Are you guys just like the toast of the town at the trade shows and stuff like that and they just find… I guess in the HR world or benefits world, everyone knows each other I assume too, right? So, they’re refer a friend and things like that.
Stacy:	They really do. We do have a lot of referrals, but actually our main go-to-mArcet to date has been through insurance carriers. They were the ones that helped us spread the word, helped us spread the word with brokers especially, and you may remember this, we were part of the Techstars UnitedHealthcare Accelerator two years ago. So, then we ended up working with… actually we work with United today even still, and they help us spread the word, but also so does some of the regional carriers that basically stand to gain a lot through this model.
Scott:	Is that because they’re picking up volume in the individual mArcet? Because I would think, “Insurers carriers, if they’re… someone saving $9 million, that might be coming out of their pocket,” but there’s certain in carriers who are basically adopting you to take mArcet share. Is that the idea?
Stacy:	Yeah. Think about in California, the equivalent would be maybe a Sharp Health Plan or a Sutter Health plan who’s really well known in that region, but they’re not going to be as competitive for larger groups because they don’t have the national coverage so this becomes an acquisition vehicle.
Scott:	And so they’re like, “Well, we still don’t want to be national, but if we can get way more people in California and Venteur will help the people outside of California find great plans too,” then it’s a great selling point for them. That makes a ton of sense. I’m processing all this. I’ve known the general idea, but it’s really neat how you’re in there and you’re creating all these incentives for individual carriers to operate in a way that’s different. And that makes tons of sense. If someone just wants to be an expert in California, they can do that and then they can plug into your network so you become this giant network over time.
Stacy:	I think that’s also where… Medium and longer term, that’s where our AI becomes even more valuable. What we’re about to see is this hyper personalization in healthcare today we have this really a one size or two size fits all model, and that’s built on employer sponsored healthcare. We have the technology, we have the distribution channels to offer personalized healthcare where each person can really pick, “Okay, what deductible I want? Which line items makes sense for me in terms of… is maybe the behavioral health copay is the most important thing I need to optimize for?”, or specialty care. So, basically, we’re able to hyper personalize at the individual level, and that is going to change the whole industry in terms of insurance carrier incentives, provider incentives, and the economics behind it. We’re already seeing that with our insurance carrier partners that we’re working with and excited to be a partner in writing the future.
Scott:	To take that California specialization example, you’re saying some of them will specialize in specific kinds of care because they know that that’s going to get them picked. Is that what you’re saying? They’re like, “There’s a segment of consumers who are underserved and now that we can plug into a Venteur network, we’re going to get more demand, so let’s specialize in a couple other of these client or these consumer categories and do even better.” Is that what you’re saying?
Stacy:	100%. And on top of that, I do think it’ll work in the reverse where there’s certain line items where they’re like, “No way.” They’re going to price it accordingly.
Scott:	Got it.
Stacy:	But something that people don’t know about the individual mArcet, it’s also true of Medicare on a certain segment of line items, the government actually pays a risk adjustment fee. So you actually, as an carrier, you get the premium and then you get an additional payment.
Scott:	Oh, I didn’t know that. Because they want to incentivize you to take someone with chronic heart disease or something like that, or some terrible something.
Stacy:	Exactly. Actually, the most profitable people member on the individual mArcet, which is totally different from commercial, are people who are chronically ill and sick.
Scott:	Because they can’t find coverage, that’s where the state underwriting comes in. Their states are supplementing that to make sure they get coverage. Oh, wow. That’s fascinating. And so that’s one of the ways they can get such better… That’s why this works, because they can get better coverage and it’s a win-win for everybody. Interesting.
Stacy:	That’s correct.
Scott:	And the state benefits, because these people are getting health coverage and so they’re not going into the hospital emergency system or other… How does that benefit the state to supplement that?
Stacy:	Well, for PCA, all carriers have to pay into a common risk pool pot of money. So, the ones who have more healthy populations, you’re going to pay in and not get money back. The ones who have the people with the highest needs, they get the biggest checks. That’s where actually you totally want, if you’re an insurance carrier, you want folks who’ve got some stuff going on with them.
Scott:	Oh, my gosh, I didn’t know that. Gosh, that’s so cool. You don’t know this about me, but I ran a, or started a patient support community of people with rare diseases called Ben’s Friends 15 years ago, 17 years ago. And we had people with rare diseases. And so, this is before Obamacare, and a lot of them would get dropped or couldn’t get coverage for preconditions because… it was like a set, it was terrible. These people were just sick out of no control of their own, and all of a sudden they’d be looking at bankruptcy or things like that because they just couldn’t pay for their stuff. That’s really cool that the states are subsidizing that.
Stacy:	That’s a huge reform. I’m glad you were part of that.
Scott:	Okay. So, what do people need to know? If you’re a startup… Mostly going to be startups listening to this, but hey, I went to Kellogg and there’s a lot of big company people that probably listen to this too. If you’re working at a startup, give them the sales pitch. And if they’re a five or 10,000 person company, give them the sales pitch.
Stacy:	Sure. Well, if you’re a startup, biggest thing is this takes you out of picking out health insurance for your employees.
Scott:	That’s a great point. There’s nothing worse than that, honestly. People complain so much and you have limited ability to change things. Oh my gosh, that’s a really good selling point.
Stacy:	It’s so stressful and also so personal. They know what’s best for them. And if they need help, Venteur is… we have a team of in-house licensed agents who will help them out. All you need to do is set a budget. We’ll help integrate within your payroll systems. We’ll take care of payments, we’ll take care of your employees, and that’s it. You’re just setting a budget.
Scott:	That’s cool. And you guys presumably help them set a budget too. You’re telling them, “Hey, you don’t need to pay for this,” or, “This is what most companies do,” that kind of stuff?
Stacy:	Yeah. We’ll pick a reference plan out, and then usually we’ll benchmArc like, “Do you want to pay 100, 75%? Do you want to pay for dependents?” And then we’ll show you those numbers and create basically the funding tables for you.
Scott:	Love it. Love it. Okay. And then for the big companies is the same. I’m sure they don’t like picking out plans either, but…
Stacy:	It’s also the same. But I would add this, most large companies… we did an analysis of actually every single large employer in the country and we found 5,000. That doesn’t sound like a lot, but these 5,000 employed 20 million people.
Scott:	Oh my gosh.
Stacy:	Who can save at least $250 per employee per month.
Scott:	Oh, my gosh.
Stacy:	So I can say with certainty-
Scott:	Is that $50 million?
Stacy:	More.
Scott:	500? My math. Wow, that’s incredible.
Stacy:	So my message to large employers is, I’m almost positive you’re overpaying for health insurance and I’ve got a solution to help you out.
Scott:	I love it. That’s really awesome. Okay. How do people get in touch with you if they want or get a demo or just hear about it? Where do they reach out?
Stacy:	So you can visit our website. We are at venteur.com, V-E-N-T-E-U-R. Our name, by the way, is the mix of adventure and entrepreneur, as-
Scott:	I’ve always wondered about that. I was going to ask you. That’s cool.
Stacy:	And you just need to think about, if you’re looking to make a change on health insurance, be an innovator, take yourself out of your employee’s intimate personal health decisions, we’re here to help. Or if you need help with looking for extra cash to help you save money, we’re here to help as well.
Scott:	Also, it sounds like employees would be happier. They get to pick what they want. They pick something that’s suitable for them in their state, wherever they are. I mean, that’s a win. I remember when we started hiring remotely in I think 2018, maybe, I don’t even know, 2017. And all of a sudden our Florida people and our Texas people were paying way more in benefits because we were a covered California weird thing. And we had to change benefit plans to even it out. So, this can really… And also we saved a lot of money doing that too. I know this kind of stuff can work, and the fact that you’ve got it down to a science and can make it easy for everyone is really, really cool. All right, well give my best to your brother and congrats on all the progress. And like I said, I’ve seen you since… I mean, probably two people and an idea, and now you’re a full-fledged, kicking butt startup is really exciting. So, I’m really happy for you.

Venteur helps employees get flexible health plans

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