In an era of high-deductible health plans, HealthEngine aims to provide consumers with a powerful tool to save money without having to sacrifice quality. The Chicago-based tech startup provides price transparency and appointment booking services through an online platform designed to make high quality healthcare more affordable. Oliver Wyman Associate Terrance Wallace connects with Dr. Jonathan Weiss, HealthEngine’s Founder & CEO, to learn more about how his company aligns the patient and doctor, as well as the individual’s employer or health plan, in order to achieve the very best in both clinical quality and price:

Terrance Wallace: What is your mission?

Jonathan Weiss: The HealthEngine model has been in operation for more than a decade, having first been implemented across private healthcare markets internationally. We’re a physician-led company with the belief that when consumers wield the power of choice, they are truly in the driver’s seat to demand and receive the very best quality and price possible as competition heats up in the marketplace for services. Our model allows physicians to win more directly based on their skill sets, rather than on price or listing on open-access, non-validated online review sites. Our first mission is to, at a minimum, ensure that people are empowered with the information they need to make informed choices when they need healthcare services. We also help them to understand that there is a difference between having health plan coverage and when you actually need to access services. When people are looking for physicians or facilities, and they do have a health plan, there are a lot of things that are still up in the air: Am I in network? How good are the providers? Is this the best physician to treat my condition? What is this going to cost? HealthEngine helps consumers to answer these questions. We also provide consumers with a powerful tool to save up to 70% without having to sacrifice quality.

TW: How do you achieve savings without sacrificing quality?

JW: HealthEngine is a competitive marketplace platform for services, regardless of what health plan you have. We help consumers to understand their options based on the service, quality, and outcomes side, and we also help them to understand what their care is going to cost, while motivating providers to continually improve on all areas. HealthEngine goes beyond any solution currently offered throughout the country in taking as a basis the fact that insurers have agreed rates over many disparate and dislocated networks that are negotiated in a non-cohesive sense, non-quality adjusted way. HealthEngine allows physicians to enjoin the facilities and system to compete, resulting in real-time pricing that is much lower than what the insurer has agreed upon in fixed and multi-year non-competitive negotiations. When you get people and employers trying to optimize healthcare and healthcare spend then facilities and systems, which currently drive most of the cost, start to dance for you. That is the power of every other true competitive marketplace in existence. Those selling us products or services will compete on everything from whether they provide parking, whether they will bump your appointment six times, whether the staff is rude, whether they follow the appropriate discharge procedures, through to how attractive they can get on price and quality. So it’s a real opportunity for patients, physicians, and the payer/employer when there is transparent alignment on cost-effective, value-based healthcare.

TW: What were some of the driving insights that influenced how you designed HealthEngine?

JW: For the last five to six years, we’ve had this perfect storm of the Affordable Care Act. You’ve had people getting used to the idea that they are paying for their healthcare out of their pockets, alongside employers taking more of the healthcare cost directly onto their operating profit and loss. It’s also become apparent that what the health plans have agreed upon regarding what consumers and employers will have to pay for services across local providers can vary quite widely for no reason at all. There’s this whole notion around transparency, and we believe that at a minimum that should be provided – so we do this for free. It’s embedded in our technology platform and it shows virtually every clinician and provider facility across the country, whether they know it or not.

TW: What are some other key differentiators of your platform and how it works?

JW: The HealthEngine Marketplace Platform is available at no cost and provides individuals with a variety of information so they can engage in cost-effective consumerism. The platform shows what facilities and doctors are known for (e.g. centers of excellence, high volumes of certain cases, and fellowship trained). Depending on the insurance an individual has, we can tell them the price for services – actual or estimated – for most of the major insurers across the country. They can see how this translates to their bottom line, because HealthEngine auto-populates where they currently stand on deductibles and out-of-pocket limits. We help consumers understand where they will end up from a cost perspective if they choose one provider over the other. Finally, HealthEngine provides an incentive to make cost-effective decisions regardless of where an individual is with their out-of-pocket costs. If someone finds a provider on HealthEngine that will compete for their choice and the price comes down, whether it is that individual paying fully under their deductible, or their plan or employer that will cover the costs, HealthEngine makes sure the individual gets paid to save under its Get Paid To Save model.

TW: Have you found any correlation between price and quality?

JW: Paying 7x more doesn’t mean you get a better outcome. It’s an arbitrary variance. But, the interesting thing, and something that totally shocks most people, is that it tends to be the case in healthcare that the highest quality providers tend to be the most cost-effective. This goes against most peoples’ rule of thumb that “you get what you pay for.” That is typically true when you see what you’re getting and know what you’re paying! It is not necessarily true when you are blind to this at the point of choosing, and so good marketing can help high cost providers win, since they know when choosing care, you will not see how they stack up with other competitors on the value curve. In medicine, it also makes sense that cost and quality are often inversely correlated: typically the more procedures a physician or center performs, the better it gets clinically.

TW: How can we encourage competition?

JW: The fee-for-service paradigm we’re used to working with says if you do more to me, then I pay more. A number of services are rather routine and have widely agreed-upon best practices. We can begin to describe them like-for-like across providers, and that’s the beginning of what we do. We believe that the doctor, in virtually every case where they are involved, is the primary stakeholder that’s overseeing your care and delivering your outcomes. It’s not the health plan, the health system, or the brick-and-mortar building. We also know that the physicians actually cost relatively little when considering the entire bill, i.e. around 10% or less of the surgery or diagnostic or procedure. That’s interesting because then we say you can’t commoditize healthcare, but if you piece out the doctor (whose training, skill, and experience is unique), then what you’re left with are the four walls, which is around 90-93% of the cost. If you identify the doctor as the variable most related to outcomes, who also happens to be the low-cost stakeholder in the equation (and, by the way, who also happens to typically hold the patient’s trust), then you can truly start to encourage competition across the parts of the system that are more apt to be standardized, and where you have the same sort of service bundle based on the gold standard clinical pathway.

TW: How will the rise of high deductible plans (HDHPs) in the healthcare market change the consumer experience?

JW: Not only do you have more employers self-funding and, under the ACA, greater access to health insurance for millions of people, but you also have people now understanding that they actually pay for healthcare. We’ve always paid for healthcare, but if you were a high-utilizer, you were shielded from the cost aspect of your care to a large extent because you didn’t have the out-of-pocket cost. Everyone suffered proportionately. Society paid for it through employer-sponsored healthcare tax incentives, and everyone’s wages became the obverse of inflation, i.e. stagnation. However, if you are indiscriminate about your care today, it will hit you dollar-for-dollar at least up until you reach your deductible – and deductibles are increasing every year. Past this, you only need worry about a fraction of cost (coinsurance) until you reach your out-of-pocket limit, and then it’s purely “on the house.” Where HealthEngine really transcends anything out there is by saying too much of health plan design has been sticks(deductible, narrow networks, restricting choice, reference pricing) but what we need are more carrots. How can the employer help the consumer to win economically as an individual? If you’re looking at an $8,000 out-of-pocket limit, HealthEngine will empower you to get maximum value for those dollars. If you find a provider on HealthEngine who meets your requirements, will compete for your choice and the price comes down, whether it is you paying fully under your deductible, or your plan or employer which will cover the costs, HealthEngine will share 60% of the savings with you.

TW: What should leaders be thinking about that is NOT on their radar?

JW: If I’m the insurance carrier, and no longer the ultimate payer, then I’ve got to accept the reality that at some point I’m going to exist in a reduced form, almost vestigial. I’ve got to revamp my model so that I win when I provide value and ensure that costs go down and quality goes up. For the facilities and systems, I think that they’ve got to understand that patients are consumers and they can’t be condescended to as enfeeble and scared individuals who can be dragged along as the system sees fit. They have got to start looking at patients as the end beneficiary that they are serving, as well as the physicians who are on the front line caring for them. I haven’t seen that thought codified in a system. Usually the doctors and the patients are the last groups considered around the strategic and operational drawing board. Providers are usually considering the payers and P&L in the short run, because the leadership is looking at the present and how they can maximize the return while they are still in the C-suite to enjoy the fruits. Now, more than ever, providers need to understand their cost structure, provide terrific outcomes, and, for their sake and posterity’s, think a few steps ahead. Providers need to consider physicians as their colleagues and the front lines, rather than employees and revenue units. The physicians for their part, not at the risk of becoming business people by night and doctors by day, need to put forward their voice as a professional and cohesive unit advocating on behalf of patients; they have never lost the power to lead in reforming healthcare, but, in believing that they have, they risk not only their own futures, but more importantly – the prerogative to remain at the vanguard of safeguarding patient care.

TW: What does the future of healthcare look like to you?

JW: It’s binary. Either it becomes like every other sector that serves people and their advocates on quality and cost. Or poof one day it’s just too unsustainable and the government steps in with a single payer-provider system. Like I mentioned, I’ve seen the government-run system, and I’ve built hospitals and practices that are private sector providers in those countries. The best providers that can do well by the patient and compete to do well should compete to serve the market. But once again, the worry is that government simply says, “Everybody out of the pool; there’s a new sheriff in town!” That Leviathan knows few checks and balances.