Don’t Feed the Beast: How One Leader Beat the Healthcare System

Full Episode Transcript

Dan (00:05)
Welcome to another episode of Uninsured by Choice, the podcast helping you navigate the healthcare system without insurance. I’m your host Dan, and we’re presented by our sponsor, Zion HealthShare, a nonprofit medical cost sharing community that is the better alternative to health insurance. I’m joined today by our guest who is a 25 year HR veteran who decided to stop playing by the insurance industry’s rules after leading executive teams at Toyota and Fortune brands.

Matt Ort took the leap into the free market revolution. At Merrill Steel, he led a five year transformation that saved the company and its employees over $5 million, him the National Employer Purchaser Healthcare Award, is the same previously won by Disney, Boeing, and Walmart. He is the author of the powerhouse book, Save Your Company, Don’t Feed the Beast, the co-founder of Self-Fund Health, Midwest’s fastest growing employer health plan. Today, he serves as the National Executive Director of the Free Market Medical Association where he’s helping employers across the country find a better way. and his wife Denise live in Wisconsin where they are foster parents and founded a nonprofit there to support other foster parents in the state. Matt, welcome to the show today.

Matt Ohrt (01:11)
Dan. It’s great to be here.

Dan (01:13)
the first thing I wanted to ask about, the book is fantastic. So for anyone first, I’m just going to put the plug out there already. Check out the book. Very worthwhile read. use the don’t feed the beast. beast, did that imagery come from? Where was the word choice there?

Matt Ohrt (01:29)
Yeah, I started saying that way back, well before the book was written and published back at Merrill Steel. I was just walking around and it felt like I was looking for a path of sustainability. And I was just searching everywhere and anywhere I could find those win-win kind of outcomes between the buyer, which was us as the employer and employees, and the sellers of health care.

And I really struggled. I first, I looked in the sandbox, right, to have kind of the least amount of disruption or change. I really just, within the traditional insurance realm, I couldn’t find that solution. So I realized not only was I going to have to step outside of the sandbox a little bit, I was also going to have to build some sandcastles outside of that sandbox. And so the phrase, I felt like every time I played within that traditional kind of healthcare industrial complex system, it felt like the buyer would lose, right? and then I started to kind of take that further and I realized that, who we patronize is who we if I’m in a win-lose relationship, the last thing I should do is support, right, I’m losing and they’re winning, why would I keep supporting that? I realized I didn’t have any power. I couldn’t get them to change what they’re doing, so I needed alternatives. And so that’s what we did.

we started shopping for value started shopping for healthcare, not health insurance. And once we kind of understood that and changed our mindset, many good things started to

Dan (02:51)
And that doesn’t even seem all that complex when you think about it. The system itself is extremely complex, very Not a lot of people outside of the industry really understand it or follow it all the way. Even a lot of people in the industry, would don’t always understand or follow it. And so to come in and say, wait a second, we don’t need to operate within this industry or within this ⁓ standard that’s been set for us. That’s really simple, but really powerful and really uncommon, mean, increasingly more common, but especially the time, this was only the last really 10 years, we’ve been seeing a lot of momentum for direct pain, direct care, and you were kind of there at the beginning at the forefront. What was that like? What was it like kind of being a trailblazer there?

Matt Ohrt (03:33)
Well, it wasn’t it wasn’t warm and welcoming. I’ll tell you that, you know, if I had a nickel for everybody that said I was full of it or it wouldn’t work someone even almost humorously or sarcastically say, you’re a mover and a shaker, almost like they were mocking so when you’re starting out and blazing new trails, I think they met well, but in their heart, they’re like, that’s so cute. trying to fix this. once, you know, we got into the first year and the second year and the third year and things really started to happen and we saw that we were right not increasing premiums I’m always just kind of a practical guy I say I’m not here to impress anybody I was always kind of annoyed by a lot of the corporate world things and the fancy boardroom presentations I just want to make a difference.

And I want to help people. a farm boy with roots from shout out to all my Iowa There’s a lot of farms and a lot of just kind of straight talk and waving at strangers in the car and just this old fashioned kind of trust. so I may not be the best business person out And I’m sure there are a lot more savvy business folks, but I know what it means to shop for value. I know that if you tell me I have a 75 % discount ⁓ smart enough to know that I don’t know what I’m paying for something and I’m smart enough to know I’m being deceived. And so a lot of what I do is very intuitive and simple and I just want to know the unit price, I want to know the bundle price, and I want to know the quality, and I want to know if I’m getting value when I shop. I think we all have that skill. That’s kind of one of the ironic things about this is Americans have that skill. We do that in everything else we buy so do employers but somehow that’s been shut off in the healthcare game.

Dan (05:14)
Yeah, the largest industry in the country that accounts for, don’t even remember the latest number, I think it was 18 % of GDP or something, some massive number of healthcare spending is our number one expense. And in a country that prides itself on free market economics, it is far from that, mostly, you solve we dive into the book, I think for those who are HR managers, executives, even maybe brokers who help those types of folks.

They’re looking at annual increases. It’s never a matter of will the premiums go up. It’s by how much can I minimize that Merrill Steel, how many years we looking at with no premium increases and what were those numbers that would probably shock most HR managers and executives?

Matt Ohrt (05:53)
know, I’m kind of outside those walls now, but I still keep in touch with quite a few, some of the family members and the president. He’s a car guy like me. So we talk once in a while So we still keep in touch. But when I, when I started way back in 2016 at Merrill steel, the premiums were actually really good. So they had put a lot of energy and money into this plan and they were really protecting a good plan. 160 a month.

family and 40 a month for single now they plans hadn’t changed yet so they had some high deductible options and so forth and we transformed the health plan and we transformed all the plan partners it’s my understanding that they’re still there today when I was there We didn’t have a premium increase and they’re still holding on to that due to many good folks still working within that process, so the same goes and perhaps one of the most important sayings I think this applies to health shares as well this year’s claims Equals next year’s premium increase right? So if we shop wisely this year, that’s that’s our biggest thing. That’s our biggest secret I don’t think it’s really a secret because I’ll share that right openly, but that’s our biggest way to manage the premium increases for next year if we overspend which is kind of the root cause for healthcare. We’re spending thousands for MRIs when we should be spending hundreds and we’re spending tens of thousands for surgeries that we could be spending much less and still getting a very good That value shopping mindset is really the core of what I’ve done and what many are doing today.

Dan (07:15)
So now, getting back to the book, you outline a sort of six step formula. So people who are in that group side, that’s kind of who we’re talking about here, would be interested in this kind of thing. Can you outline that formula that people should be looking at or steps that they should maybe be thinking about right now that would help them have similar results that you’ve been able to achieve?

Matt Ohrt (07:35)
Yeah, I attempted that. I don’t have a lot of changes or really any changes after writing the book. I spent a lot of hours on it, So I still believe in it. And each situation’s different. That’s where things get complicated in healthcare. But I put together a formula that I think every employer, this applies to physicians and the seller side as well, is they can learn how to work with employers.

but a formula, of a one, two, three, four, six total steps. so the first one is where I became passionate about a topic that I wasn’t passionate about for much of my HR career. The first two thirds of that 25 year career, I was like a lot of HR folks, or like a lot of business leaders, and it’s kind of like, this is not the most exciting topic, let’s get through it, and let’s go back to running the business.

and I had many aha moments. One of those was realizing this was our second biggest business expense, not HR expense, our business expense. I said, wow, if we could do something here, my core passion, why I went into HR in the first place was to help people. Boy, if we could really do something here and fix this, I can help a lot of people.

Now that motivated me and that motivated me to do the step and ⁓ what I’ve called understand your current situation. Some of this is taken from Toyota. I Toyota roots, so Toyota wouldn’t care. They’re borrowing their problem solving process. But perhaps the most important step is to really understand what’s my current situation, what’s happening, what should be happening, and where do I want to go. And if there’s a difference between what is happening and what should be happening, I have the definition of a problem. I have a difference of standard, So what should be happening is we should have affordable, sustainable healthcare. And what we really have is not that at all, right? The opposite. And so we have a problem to solve and then of course it gets very complex and very difficult. But that’s what led to the formula. So the next step would be once you understand it well is to understand the many, dynamics at hand is to develop how am I gonna shop for value? How do I break out of these walls, and get out of these networks or somehow work within the networks but to be able the truly shop for value and know what I’m buying. And that’s different for each area maybe in each company, but the dynamics the same. I’m shopping for value. From there, simple topics or intuitive topics, but not easy to do. ⁓ Choosing trustworthy partners, for instance, is another step, right?

Sometimes I think we we I see for instance I saw I talked with someone on a post the other day about you know here’s the ten things to do in your PBM contract and how you’re gonna solve all these things. And this would apply to any partner. And my response kind of was like, why would you wanna work with someone like that? They’re sneaking things in your contract, the contract’s way too long. Why don’t I just pick a partner that I trust and then when I’m not looking, I’ll say, what did you do good for us today instead of what did you sneak into the new contract today, right? That kind of thinking, like I need people I can trust.

And so that’s one of the concepts is only work with trustworthy partners. I had to change every partner within the Merrill-Steel Health Plan in order to achieve that. And then there’s also a chapter about leading change, which is such a fun topic. I’ve studied this in grad school. I studied this for 25 years in HR. I’ll tell you, Dan, it’s never gotten easier.

Dan (10:39)
I’ll see you time.

Matt Ohrt (10:43)
You know, even when I’ve learned a lot about it and I’ve learned some very good techniques, people sometimes don’t like change. And I think that’s why we’re seeing such an unraveling of the health plans today and employer health plans or even individual, the whole healthcare industry is that people are kind of grasping onto the old when they should be dumping that and striving for new solutions as you guys know well.

Dan (11:04)
Yeah, it’s interesting how innovation sometimes take hold because in the tech world, for example, Google, Facebook, these giant tech companies, they’re rapidly accelerating the pace of And even in healthcare delivery itself, look at the equipment and the processes, the the actual access to care, the insurance, the whole system whereby we pay for care is still this really old legacy, you know, kind of that innovation hasn’t caught up with. And I’d say you’re probably People are hesitant to change and the people who can make the changes happen to be benefiting financially quite a bit from the current system. So there’s not a real incentive for these legacy types of entities to really want to adjust, especially when you look at some of these carriers who own entire verticals, know, UnitedHealthcare owns Optum.

And so when they start playing in this, in this, you know, we pay for the care. we also happen to deliver the care and everything in things can start to get a little, harder to see, I guess you could say, right.

Matt Ohrt (12:05)
I’ve tried to understand that same concept for years, that maybe because it’s healthcare, we kind of make this assumption, which I would say is a false assumption, that everybody means And I’m not here to criticize or throw stones, but I can tell you that much of what we would call the healthcare industrial complex…

We’re kind of waiting for them to fix it, right? The seller side or those that are really doing well, those that are kind of running this monopoly. I think that’s false hopes, friends. think this is going to have to be a grassroots solution, a grassroots effort. And if we’re waiting for the government, we’re waiting for the big healthcare industry to solve this, not only will we be waiting forever, it’s going to get worse. It’s getting worse by the day, by the year.

I would say we’re in a bit of a crisis almost that we have three wheels have fallen off and the fourth one is wobbling.

So a lot of that’s what the FMMA is about is those that are courageous, those that recognize this issue say, want to be a part of a solution here and not just hope somebody else fixes this or just to kind die a slow death here. I think we’ve got to come together and show our American spirit and show what we can do. Americans have a history of solving problems, even if it means grassroots.

Dan (13:13)
Yeah, even if the solutions out there are small now, they have been growing very, very rapidly. So don’t want to sound like we’re all doom and gloom over here or something like, we’ll never fix a lot of progress being made here. maybe, for example, if someone’s kind of new to this space or a small employer who’s just getting you look different health care coverage options and most people understand what fully insured means. then there’s self-funded and level funded I don’t know that a lot of people are going to understand what that means because you maybe give people a little overview those phrases.

Matt Ohrt (13:44)
Yeah, and I think ultimately the theme here right then is that we’re looking for solutions. think health shares fit into that. I think they’re fitting into that more and more each day. So in terms of the insurance side, you really have simplistically three different levels. have fully insured, which there you don’t see anything. There’s no visibility, but you’re just paying this premium. And then they would cover the They would cover the health care costs. They would take on the risk, if you will, in the kind of which is really more slanted toward the self funding side, but is level funded plans.

Now they vary a little bit. I know some really good ones. Feel free to reach out to me and I don’t get anything from that, but glad to refer to the best ones. Where you actually, it feels like fully insured. You’re paying a set premium based on max cost calculations, but if it comes back there’s a difference between max and expected of what they calculate for the reinsurance or the stop loss, then you get money So it’s kind of more like self-funding. And then the traditional self-funding, be where the employer is taking on really paying the claims and then there’s just some insurance typically unless you’re really really big they don’t need it but some insurance at the top to cover the the big the more you gravitate toward managing kind of getting into managing your plan right the more you’re rewarded but then that requires some strategy of it as a health plan. A health plan is there’s two parts of it. the health share is just the same. How it’s funded and then how it’s spent, Often we focus just on how it’s funded. So we say, wow, this is level funded or self-funded. But then we don’t look at at all of whether we’re shopping for value. I’d say the level and the self free you up to do that, to change your plan design, to change your partners.

But if you’re level or self-funded or even a health share, but you’re not doing anything to manage the cost and to shop wisely, you’re really just acting like you’re fully insured. And I would say you’re going to get the same outcomes. I hear comments like, good news, you’re only going to go up 12 % this year. I don’t think we would talk like that in any other industry. And somehow that’s become good news in the health care industry, not good news for me.

Dan (15:41)
only 12%. That’s an odd way to phrase this. What’s usually the second or third largest line item expense for most, larger businesses that are more than just a or anything like that. So of funny the way that can get positioned. But you bring up a really important point that when you are self funded, you assume the cost of these claims and everything coming in, there’s a very very strong financial incentive for you to try to help your workforce stay healthy. So for two reasons, obviously the first for you as an employer is healthy employees are working employees. If they are a lot of time off, that’s affecting output and productivity. So from a business operational perspective, of course that’s there. But if you are now kind of on the hook, so to speak of, I want to make sure that we don’t have huge claims coming in an ounce of prevention is worth a pound of cure. Walk us through what that looks like in the group setting. Because I, as an individual, know I can walk into a DPC today and say, I want to become a member. Does that work for groups? Is that something that you’ve seen ⁓ applied practically?

Matt Ohrt (16:41)
wellness can be kind of a mushy topic, but I think it’s a very tangible topic if done right, right? So there are a lot of things maybe we do within a wellness program the corporate world for fun that maybe are questionable in terms of, they really improve my health? if you’re thinking about your health, you’re probably at least trying and doing better for your health. And that’s what a lot of those are. But the DPC, would say that direct primary care is the foundation for proactive health, right? Having a partner that’s accessible, you can get in in a day or two that you’re not gonna get a surprise bill. And the employer plans that I design, that’s no cost to the employee. Typically it’s paid for by the employer. So you have unlimited primary care for the employee and their family.

And then you have 30 or 60 minute visits that maybe that DPC doc or physician only has 500 or so patients versus 3,000 what they have in the system, why they left in the first place and started their own practice. So I think that’s the foundation and I think an annual physical or kind of a health checkup is a good thing for all of us. The biggest predictor of healthcare costs, by the way, is age. The older we get, the more healthcare we’re likely to need. And then maybe as a foundational thing, a follow-up coaching on that, right? So I had a physical, I went through all these tests, and now to talk with a physician and say, here’s where you are. Maybe it’s ⁓ a year-to-year thing. Am I getting healthier or getting worse?

simple as it may sound, lot of problem solving is being consciously aware. If we’re constantly thinking about something, we’re much more likely to do better at it. I think, what wellness programs can be. And there are many great ones out there today, many custom designed ones, and many, many that are offering those services.

Dan (18:17)
Absolutely. ⁓ A lot of the episodes that we’ve done so far, the guests we’ve had on, we talk a lot about that individual marketplace versus other options or something like that and what I as an individual or my family or household can do. But it’s really interesting learning more on the group side. A lot of the same options are going to be available. Now they might need different structuring and whatnot And we also have legal compliance considerations. If you have 50 or more full-time employees, you do have to have ACA compliant offerings, there’s this whole world that people can be looking into on the group side that I don’t think a lot of HR folks or executives really knew they had those options. think a lot of people just think, well, you know, fully insured group plan, that’s what we have to do. That’s all that’s available to us. The law says so. Hold on, there are other options here. And so it’s really cool to see play out that you’ve done that hands on. We’ve got case studies to show that you’ve written an entire book about it. So I just think that’s just so cool that group plans cover so many people in this country. That’s how most people are getting it. So that’s how you put the biggest dent in this by to group business.

Matt Ohrt (19:19)
I think, I think health shares are becoming a very good option for groups as well. roughly half of Americans are covered by their employer health plan and however that’s designed. And then two thirds of that half are on self-funded plans, which have more flexibility and more opportunity. Now, most of those self-funded plans are still acting like they’re fully insured. They’re doing zero medical strategy. Maybe they’ve added DPC is a good, it’s a great start. It’s probably the best start, but if you stop there, I think you’re very limited you’ve got to build on that 80 percent of the care we see is done by DPC in about 20 percent of the cost but from a spend standpoint about 80 percent of the cost is in that referral that’s specialty or secondary care and that’s about 20 percent of the care really as an employer, you’ve got to be intervening in both. You’ve got to be referring to quality surgery centers, quality imaging, et cetera. We’ve got to be shopping for value in the whole cycle of care, not just the primary care.

Dan (20:12)
And I’m glad you brought that up because when you talked earlier about funding versus paying for the care. So you’re with the free market medical association. So why don’t you walk us through the FMMA’s role in helping people here, maybe your role at the FMMA and how that plays into helping people who are looking for these alternative routes.

Matt Ohrt (20:30)
I’m a little biased now, I suppose, being the executive director. But I thought the FMMA was the hub of the movement. joined the FMMA somewhere around 2018. I became a chapter leader for Wisconsin in around, somewhere around 2020.

I was already leading a movement there. It’s kind of came up. I in central Wisconsin, which is one of the most rural parts of Wisconsin. Many were following my path were inspired by my path of a real employer having success. And so later on, then I founded Self Fund Health, which kind of expanded that scope from just regional and Merrill Steel to the whole state. And I started roaming around and supporting direct care and supporting free market principles, we had developed a healthcare best best practice group that grew rapidly. then I reached out, somewhere around 2020, I reached out to the FMMA and said, you know, I’m kind of leading this movement here and we’re having success and I’m leading this healthcare best practice group, but it feels like I should be a chapter leader for the FMMA, right? The FMMA is national, it has resources and support. And they said, we love that idea as well. Let’s talk with a current doctor. Usually they want two and I happen to know that doctor anyway and call them up. He’s like, I love that.

Let’s go. went from 2020, we had 15 DPCs according to a Madison article. And today we have somewhere around 140. So Wisconsin is just really taken on to this. One of the highest cost states in the nation, according to the RAND study. So more of a need here, maybe than some other states, although it’s really an issue nationwide. And yeah, started leading that.

and then just this past summer, I talked with the co-founders and they asked me if I would be the executive director. And so that’s really a similar role of leading the movement, but now at the national level. And I’d already been over the country the last couple of years, speaking about my book. I’ve been in about 45 cities, got a couple scheduled this spring in Dubuque, Iowa and Grand Rapids, Michigan, fairly local for me.

But really passionate about fixing American health care. That’s a that’s that’s a bit of a big bite but that is When I get up in the morning that is that is what I am determined to do. We’re just about ready to get going here We’re gonna have some chapter leader meetings at the end of this month and in early March We have about 40 in the low 40s as far as national chapters and we’re gonna energize them and we all get aligned and Really start doing some cool things

Dan (22:50)
That’s great. So if someone wanted to be involved as a support that’s looking for the support of the FMMA, what might you be looking for as far as support?

Matt Ohrt (22:59)
Yeah, we’re actually transitioning to a nonprofit status. So if there’s anyone who wants to just support what we’re doing, ⁓ that would be great, even financially. If someone wants to be a member, that kind of indirectly supports what we’re doing and kind of joining what we jokingly call as PLUs, people like us. then if really someone wants to go to the next level, they can be a chapter leader, depending on the state and depending on who’s in the state already and so forth.

But I believe we’re kind of the hub and the melting pot of this movement. I think a little bit of that I’m going to share here with the chapter leaders is kind of rest on our shoulders, not necessarily as a burden, but as an opportunity. And I think it’s up to us and the time is right for Americans to come together and get this right because it’s going in the wrong direction.

Dan (23:43)
Now, the FMMA puts on some conferences, I the year. Are there any coming up this year that people might want to have on their radars?

Matt Ohrt (23:50)
We do. So in the past, the FMMA has a history of having an annual conference. This year is maybe a rare exception. I don’t think we’ll change that pattern. But there won’t be one in calendar 26. There will be one the next in February of 27. But there may be a lot of national regional events that will happen throughout the country regionally put on by the local chapter leaders. So that’s something to watch for.

Dan (24:11)
Very cool. Well, really appreciate you being on today. Anyone who would like to connect with you, reach out, learn more, contact you. What’s the best way for someone to connect with you?

Matt Ohrt (24:21)
I’m on LinkedIn. So that’s a good way to find me or simply an email at [email protected] is also a good way to find me.

Dan (24:28)
And then the book again, where can we find the book? Amazon, everywhere I’m assuming or?

Matt Ohrt (24:33)
Yeah, pretty much everywhere. Amazon’s probably the most common. It’s out there. and about 7,000 copies in a couple of years. it’s been, know, message is still almost daily of people thanking me for taking the time to write it. And, I think it’s hopefully moving this movement forward.

So in the FMMA, if you’re interested in joining, there’s a sign up on the webpage, FMMA.org. if you consider yourself a PLU, and I always kind of joke and say, going to quietly let this happen and it doesn’t really bother you and you want to kind of go with the status quo, then the FMMA is not for you. But if you’re someone that wants to make a difference and that what’s happening to our healthcare in our country bothers you a little bit and you want to be part of the solution, then look us up because I think you might be a good fit for us.

Dan (25:17)
Yeah, love it. And that’s why you’re here. That’s why we’re all here with this podcast. We’re trying to help build that community through that media ecosystem of people who are navigating healthcare without insurance, trying to find alternatives, better solutions. And really appreciate you coming on and explaining that to us today. And want to remind everyone that you can subscribe on Apple, Spotify, YouTube, all the major platforms. Be sure to stay tuned for next one. And thanks again to Matt Ort for being on today.

Matt Ohrt (25:43)
Thanks for having me and thanks for what you guys are doing. Health shares, think, are a big part of the, at least the short and probably long-term future actually of being able to buy healthcare services, Not insurance, but buying healthcare services, both for individuals, families, and employers.

Dan (25:58)
Absolutely. So thanks again. See you next time.

Follow us for more at uninsuredbychoice.com.