About David Contorno
David Contorno is an Employee Benefit Consultant and Business Manager with strong community service ties spanning more than 21 years of professional experience. Contorno is a highly-experienced industry trend setter in the Health Insurance Industry with practical understanding of Career-Provided Relationships, Actuarial Impacts, Plan Fundamentals and Cutting-Edge Design Techniques.
About Lake Norman Benefits
Lake Norman Benefits, Inc. partners with business owners to provide customized employee benefit implementation. We help our clients provide the employee benefit programs they require, while assisting in the design of customized programs enabling the employer to minimize cost while offering a comprehensive package, whether to 1 employee or 1000.
Following the publication of Lake Norman Benefits, Inc.’s selection for Charlotte Business Journal’s Largest Area Independent Life, Health & Group Insurance Agencies list, American Registry seconded the honor and added Lake Norman Benefits, Inc. to the “Registry of Business Excellence™”. An exclusive recognition plaque, shown here, has been designed to commemorate this honor.
For more information on Lake Norman Benefits, Inc., located in Mooresville, NC please call 704-663-4236, or visit lakenormanbenefits.com.
U.S. Domestic Medical Travel (USDMT): We are interested in getting your perspectives on the opportunities for employers to adopt a domestic medical travel benefit versus an international medical travel benefit.
David Contorno (DC): It’s interesting because my definition of a travel benefit has morphed.
Now, I’m thinking we should stop calling it medical tourism, and instead say it’s helping the people we care about pay for healthcare by sending them to the most qualified, lowest cost facility that they can find based on their needs.
We should put the quality aspect first and cost second. When it comes to those two things, geography is almost irrelevant.
USDMT: That’s why this publication is called Medical Travel Today rather than Medical Tourism Today.
DC: The example I use is this; Would you drive out of state to save 50 percent on a new car? Most people say yes, but when you ask the same question of healthcare procedures, they scratch their heads.
Fortunately, I think many people are starting to realize that maybe primary care needs to be local while elective and acute type care can be done in the highest quality place regardless of where you find it.
USDMT: That segues us to Tibi Zohar’s technology platform Surgerate. How do you see the role of technology in helping people select where they want to go for care?
DC: Our biggest challenge is not technology. The problem is a complete lack of data to put into the system both in terms of quality and pricing.
Pricing is one of the highest variables in the healthcare space.
With local hospitals, they want to know what type of insurance you have. That would be like if I ordered a burger and then they asked, “Which credit card are you using to pay for this burger?” That just doesn’t happen.
The price shouldn’t matter based on the insurance. It’s complicated because that’s the way they want it to be and not because it must be that way.
Frequently, when we are doing these medical travel type scenarios, we are giving employees the option or typically incentivizing them to choose a particular option. The best methodology is to look at the average price of a procedure at a facility, determine the average price of that procedure in your geographic area, and find the delta between the two.
By ranking providers in terms of quality and cost, we start to create winners and losers. We identify those who are overcharging and under-delivering — start to feel the pain. I think Surgerate is the best platform available today for figuring that out.
USDMT: Let’s talk about prescription drug costs and getting specialty drugs outside of the U.S.
DC: Yes, we provide that service on specialty and non-specialty meds, including brand names and non-narcotic maintenance medications.
USDMT: How do you handle that? Where do they go?
DC: We ship directly, although not for specialty meds or infusions.
We have one version for the employer market where we limit the drugs because if the employer is paying for it, the only drugs that we allow to be imported are the exact same drug from the exact manufacturer from the exact same assembly plant.
In the individual market, we will broaden that list significantly and at the discretion of the individual, we allow people to get drugs that may not be available for sale in the U.S.
We use outside vendors for this and just build it all into a single plan. We ask employers how they build all of these into a single plan and the answer is us — Lake Norman Benefits.
USDMT: Tell us a little bit about the kind of employers you serve and the size of the groups.
DC: We are a growing organization, so we have a lot of different verticals within.
Typically, we serve from 100 to a few thousand employees. But it’s challenging.
To get this service, you’ve got to be self-insured with an independent TPA, not because being fully insured doesn’t work and not because being self-insured with a carrier wouldn’t work. It’s because full insurance won’t allow it.
If an employer is fully insured now and they get a zero percent or a two percent rate increase, for most employers that is much better than they expected. Therefore, their inclination is to say that this is awesome because they budgeted for a bigger increase.
In their minds, it’s savings and they love their broker, so they just sign up and put it to bed for another year. Whereas, if they got a 40 percent rate increase, they would feel much more up against the wall and be desperately looking outside of their current carrier and broker solutions.
The problem is that the solutions that work the best and are the most sustainable are ones in which there is a zero percent increase. That is actually the best year to make the change while the 40 percent increase is the worst year to make the change.
Why? The year in which they are least likely to do anything is the year in which I can do the most for them. And that’s the challenge that I have.
USDMT: I think that when they get the two percent increase, the rates were probably so inflated to begin with that the two percent was just a gratuitous increase. And the brokers are happy to keep re-upping without looking outside the box. In comparison, your approach is unusual.
DC: Yes. We bring a very holistic approach, and include solutions around domestic pharmacy, international pharmacy, and out-patient medical travel — even local primary care – across the board.