Kevin Holst: Challenges facing Medicare Advantage agency are largely legislative
I was pleased to re-connect with Kevin Holst at the 2011 Healthcare Summit at Jackson Hole. Kevin goes way back in healthcare IT. I first met him when he worked with Charles Halfpenny in the early 90s, then again when he was at Intellicare (now Sirona Health). He's now the president at Health Resource Advisors in Baltimore.
Dodge: How would you describe your career in the healthcare field?
Holst: For all intents and purposes, I’m a healthcare journeyman. I’ve been involved in a lot of healthcare businesses starting with early stage electronic medical records back in the late 80s when clinicians were asking questions like "why would I want to keep clinical information on a computer?" We used to carry around the IBM PC- AT with the full green CRT DOS-based application to physicians’ offices to try to explain the benefits of being able to look at care and episodes of care on a longitudinal basis which they can’t do with a paper chart. Currently I am working in the Medicare space. Health Resource Advisors is an independent general agency. We represent a number of Medicare Advantage, Medicare Supplement prescription drug plans, some small amount of final expense life insurance. We distribute that through independent agents in a couple different markets. As a small business owner I think about the experience I’ve had with healthcare as a consumer. I buy individual coverage through a local Blue Cross Blue Shield plan. Over the last three years since we’ve run this company, my premiums have increased by about 150%. Our family coverage has a $2,000 deductible which we never meet. So essentially we are out of pocket for our health coverage, while our premium dollars buy catastrophic coverage and subsidize the elderly and uninsured. About two years ago, over lunch my wife cut her thumb on a knife. The cut was pretty deep, clearly she needed stitches. So my wife, my six-month old daughter and I went to the emergency room at noon on a Saturday. In front of us at the ER is a waiting room packed with uninsured people using that ER as a primary care facility. We waited for six and a half hours next to people who were throwing up and had infections, and I eventually took my daughter home and left my wife there because I didn’t want my daughter getting sick. The tech looked at the wound and insisted on doing an x-ray to see if there were any shards left in from the metal knife. "Can’t you just clean it out with a saline solution?" I asked. When I asked her how much the x-ray was, there was no dialogue. You can’t have that conversation at the point of care. Their only response was to have me sign the waiver releasing my rights to legal claim if in fact there was any infection after the fact. I just found that a very interesting perspective of health coverage. A system that over spends on resources too. Was the x-ray clinically necessary? More likely it was more to minimize litigation risk and generate incremental revenue.
Dodge: Common sense has been pushed out of it.
Holst: Absolutely. By litigation risk as well as the provider’s ability to generate their own wealth. And what happens if you add 15 million uninsured Americans? They’re already in the system and in fact, they’re hitting the system at the most expensive point of care. Last week I was in Orlando to attend HIMSS for the first time in a number of years. It was very interesting to walk the exhibit floor after being away for so long. I have been involved with healthcare IT since the 80s. I stepped away back in 2001. As the bubble burst I was with MedicaLogic, running sales for the east coast for their EMR product. It was interesting, after being away from that space for so long I expected more progress. And while the acronyms are different the solutions are essentially the same. A lot of vendors are using buzz words for a slick looking piece of technology, that they call an EHR to get a doctor excited, but it doesn’t solve the problems of healthcare IT – like handwriting on an iPad that converts it into data. Which was just like they did in the late 90s. The CHINs of the late 80s are now the HIEs of the current iteration. They still haven’t figured out the politics around the data, ownership or the financing mechanisms. The Holy Grail has always been a network through which everyone can share clinical and financial information and transact. How do you do that in Hartford, Connecticut, when you have Hartford Hospital and St. Mary’s across town trying to vie for the same patient dollars? Admittedly a very difficult problem, but nobody has a solution for it yet but they’re still talking about it like their solution is the next revolution in the healthcare. I was talking with someone this morning about the Healthplan Alliance which is a consortium of hospital-based physician or non-profit health plans. Within this group there was one health plan CEO whose health plan was owned by a PHO. The practices are owned, the clinics are owned, the hospitals, ER, etc. and the health plan are all under common ownership. This CEO described how, in his own experience, with one of his own children, at one of his own facilities, he and his wife had to fill out the exact same paperwork and sign the exact same waivers and answer the same questions four different times. In his own system.
Dodge: What types of risks and challenges does your business face?
Holst: In the Medicare Advantage space, my biggest risk is legislative. The regulatory changes come fast and furious. Medicare governs what I can and cannot do at the point of sale for a Medicare beneficiary which can often hamper the value me and my agents can offer. If you think about the type of person who’s going to sit at a kitchen table and sell an individual enrollment for a couple hundred bucks – it’s often not the brightest individual, managing independent agents is akin to herding cats. We’ve changed the game a little bit; we’ve added technology in a space where a fax machine is state-of-the-art. In this employable market we’ve got young agents that would not otherwise look at the insurance space or the Medicare space. We’ve got them to look at it and groom them and bring them along as opposed to the old insurance salesmen who often can’t adopt technology. Medicare doesn’t really appreciate the independent agent. They’ve regulated a move towards the captive audience within a health plan so the health plan is directly responsible for the agents. What’s lost in the whole dialogue is the fact that a Medicare beneficiary has a changing need of coverage. The plans change every year; you can’t go in there with one solution and expect to plug a beneficiary in. You have to have a broader access to different coverage options for a senior that has varying needs.