About Alex N. Arnet
Mr. Arnet is the chief commercial officer of Lucent Health, leading sales and marketing and driving product innovation and growth leadership for the company. Alex has a history of developing and implementing highly effective growth strategies with a keen focus on innovative health risk management solutions to deliver the most affordable plans to employers.
Prior to launching Lucent Health, Alex had a 25-year career in the healthcare industry. His successful track record of growing companies includes his early career as an underwriter at Prudential and in senior sales leadership roles at United Healthcare. He was one of the principals in the spinout of United Healthcare Administrators/Benesight, launching and leading Specialty Markets at Great-West Healthcare, and as chief sales officer at HealthSmart.
In addition to his Sales & Marketing leadership, Mr. Arnet has been a leader in successfully creating an integrated environment for the acquired companies. Alex holds a Bachelor of Science degree in Finance and Real Estate/Insurance from Minnesota State University.
About Lucent Health
We are committed to pushing beyond the broken and antiquated insurance structures to empower you to take control of health benefits for your employees. With customized plans, data engineering, and superior care experiences, Lucent Health provides proactive healthcare solutions for your people. Visit www.LucentHealth.com
Medical Travel & Digital Health News (MTDHN): Tell us what Lucent does.
Alex Arnet (AA): Lucent Health is a data driven, member focused, self-funded health insurance company that provides proactive and customized health plan solutions to employers with the goal of using data transparency, cost control and superior care experiences for the member so that the employer saves money. At the same time, the members get a superior experience over the traditional health plans that have been available in the past.
MTDHN: Do you process the claims?
AA: We do. We’re a large independent national third-party administration company, but we’re more than that. We process claims and have our own care management company, concierge company and data analytics company, all in one.
We’re able to be a very proactive solution driver for our employer customers. For example, we’ve got over 435 employees and three significant service centers in the country processing claims on behalf of 800 employer clients. We manage about 250,000 members and have another eight sales and account management offices around the country to support that.
We also process about $2 billion in claims a year, but only pay out about $800 million to deliver significant savings on behalf of our employer customers.
MTDHN: How would you characterize your employer customers? Large, medium, small businesses?
AA: Our customer base is between 50 to 5,000 employees, although we do have a couple that are over 5,000 employees. We’re more of a mid-to-large market provider, but we do have many clients that are between 50 and 250.
MTDHN: Tell me what the appetite is for medical travel.
AA: Employers are asking for innovative solutions that reduce costs. Some evolutionary type strategies have been using solutions like reference-based pricing, which has been the most sought-after solution by employers over the last several years. With reference-based, you get an average savings over a traditional plan. This allows the employer to use other strategies that they can’t do with a traditional health plan solution.
Domestic or international medical travel is difficult to do under a traditional plan like the Blues, United, Cigna and Aetna. Their contracts do not allow you to do a subset of providers at a reduced rate.
For a customized solution where they start steering elective surgeries to centers of excellence, you have to start utilizing a more customized solution like reference-based pricing so that you can inject that solution into it.
Medical travel type solutions were very popular probably eight years ago. But I think you’re seeing a resurrection of it again because a lot of employers now are moving over to these more customized solutions. Much of it centers around orthopedic and those types of procedures but it could expand to different procedures.
The next phase is that they want to use a narrow network solution, like an elective surgery, to style medical travel to go after certain costly procedures.
MTDHN: That’s good to hear. Are they actually requesting specific procedures?
AA: Yes, and a lot of it is client specific.
But I think clients are actually wanting more direction from companies like Lucent Health to gain insight into what they should be doing. From our perspective, we believe the only way to really make those types of plans work, you have to have the clinical staff in-house.
We have our own chief medical officer, Dr Jim Meadows, and his clinical team. We’re able to use that program and take a concierge approach where we really want the members contacting our clinical teams to basically get pre-certification for inpatient/outpatient services and an expanded list.
In this way, we can take these specialized programs and then refer them, so there’s a higher engagement rate. If you unbundle that and try to give that to an outside vendor, there’s less engagement because there’s a disconnect between the clinical team and these programs.
The more integrated clinical upfront pre-cert inpatient/outpatient precertification process and utilization management process enables you to steer into these other programs.
MTDHN: Can you handle not only the coordination of care but the travel arrangements and the concierge services?
AA: We don’thave a medical travel program, but we could steer to certain facilities based on our known quality and reimbursement schedules.
However, there are other programs out there like e-surgeries and others that have another layer of directly contracted safe harbor programs that we would inject into our health plan.
If the client wanted international medical travel, we could certainly embed that into the health plan.
MTDHN: What countries?
AA: We hear quite a bit about Costa Rica and the Cayman Islands.
MTDHN: Do you see an uptick in international travel pharmacy programs?
AA: We’re starting to see that partly because of the staggering costs of specialty programs and prescriptions.
With our value-based payments, we notify the provider that it’s reference-based pricing and tell them what will be reimbursed. We electronically send them the estimated reimbursement at that time.
That’s a kinder, gentler solution for the provider because they can accept or deny the care. Most of the time, they accept the patient and take the reimbursement.
When you look at those plans you get 30 to 40% savings. When you put in reference-based pricing, the huge reduction in your claim costs can save 40% on pharmacy expenses.
There are other programs where you can fill prescriptions internationally without having to travel to, say, a Cayman or Costa Rica. They allow you to purchase these drugs, but they have to be prescribed by a provider that is outside the country.
MTDHN: What programs are they? Can you share that with me?
AA: There’s a company called ElectRX, and that is exactly what they’re doing.
In fact, we’re working with them to start a pilot program and introduce that to our clients. What we’re finding is that many of the PBMs don’t want to offer this program.
To really attack the specialty pharmacy spend, you have to engage a program like ElectRX or NFPs, their rebate program solution, where we enroll people who would be eligible for free copay type plans. The rebates go back to the employer, not the PBM.
The market continues to evolve, but employers, CPAs and brokers are getting smarter because pharma has reference-based pricing. Once you start reducing medical costs, it opens up your eyes to the fact that your pharmacy costs are out of control because of specialty drugs.
The only way to attack specialty is to unbundle that part from your normal prescription benefit management company.
The whole customization and transparency aspect is important, which is why Lucent Health continues to grow rapidly. We give people their data and show them exactly what’s happening on their health plan. From there, we identify what we need to do to help reduce costs and improve the benefits, outcomes and overall member experience.
Our solutions have driven really sustainable savings.
For example, we reduced the number of inpatient admits by over 40%, which brings 8% reduction of costs and you pull 8% out of your medical trend year over year with that type of solution. Now we’re starting to see larger groups come to us.
MTDHN: What do you see for domestic medical travel? Do you think that the people want to stay closer to home?
AA: Yes, especially with the COVID-19 situation.
Traveling internationally obviously is going to be very difficult. Domestic travel is certainly more palatable and quite frankly you can get the same result domestically as you can internationally.
Also, I think most employers would rather keep their employees in the U.S.
MTDHN: What are the market trends that you see for your companies versus others of your size and scope?
AA: What we’re seeing is employers are engaging reference-based pricing.
Some of them have even done what we call a slice option where you use a traditional PPO plan using Cigna, Aetna or Anthem, for example. It’s a much more extensive option with lesser benefits. They offer our Lucent Health value-base payment with Concierge One as the other option. But that has much more aggressive pricing, lower pricing with better benefits.
We’re starting to see a lot of those employers, who in the past would have never done reference-based pricing, like the slice option or dual option.
The other trend is having narrow networks, which then lends itself into a domestic travel programs where you’re directing people into programs that are already contracted at a very nominal rate above Medicare.
You’re going to the best facility where you get the best outcomes. But you’re also getting a great price and you’re reducing costs by 40-50% or more.
MTDHN: Is telemedicine part of your solution?
AA: One of the initiatives that we have planned for this fall was to aggressively get the rest of our clients on to Teladoc. Teladoc is our main partner.
The COVID-19 pandemic has really opened everybody’s eyes about telemedicine, and we’re going to be doing a big push to get all of our clients onto it.
This narrow network approach, like telemedicine and reference-based pricing, is about steering people into quality programs for elective surgeries and reducing unnecessary visits to emergency rooms and specialists. That’s the wave of the future.