Spotlight Interview: Steve Kelly, Co-Founder & CEO, ELAP Services

About Steve Kelly, Co-Founder & CEO, ELAP Services

Steve is a recognized expert and frequently called-upon public speaker in the insurance, employee benefits and risk management industry, bringing more than three decades of experience solving his clients’ complex healthcare challenges. Steve co-founded ELAP Services to address the national issue of employers being overburdened by skyrocketing healthcare costs and lack of representation in the ongoing healthcare debate. Steve has been featured in multiple local and national media outlets including NPR, The New York Times, Newsweek, FOX Business and Money magazine. He is active in several community organizations in the Greater Philadelphia Area.

Most recently, Kelly was recognized as a winner of the 2019 EY Entrepreneur of the Year Award in Greater Philadelphia and was named a national finalist in the Financial Services category.

About ELAP Services

ELAP Services specializes in healthcare solutions that reduce insurance costs for self-funded employers. The company offers a full-service program that ensures employers, their employees and health systems receive a fair price for healthcare. From custom plan design to member advocacy, ELAP offers a portfolio of services that support clients with successfully navigating the changing health care climate and effectively managing their costs. Founded in 2003, ELAP has grown to serve more than 500 organizations, reducing their costs by as much as 30%. For more information, visit

Medical Travel Today (MTT): Tell us a little bit about ELAP Services. 

Steve Kelly (SK): In the mid-1990s, I ran a stop-loss managing general underwriter (MGU) enterprise, responsible for taking in more in premium than I paid out in claims.

When I began to get large claims in from hospitals, I made sure that any claim that came into stop-loss for my self-funded clients was a valid bill and asked for itemized bills.

This started a process that continues to this day, and we’ve taken a sort of activist position on behalf of our self-funded employer clients. I learned a lot about Medicare filings, specifically, scrutinizing hospital financial statements, cost-to-charge ratios and recorded costs per procedure.

Eventually we began working directly with self-funded employers, examining large claims and advising them on how to effectively challenge hospitals, which led to some success. 

Basically, we added value by identifying the actual cost of the service, which we continue to do to this day—while allowing a fair margin above that cost. Today, we have 500+ individual, self-funded plans that use our reference-based pricing process.

It sounds like you’re on a trajectory for further growth. Tell me where you see your growth happening.

Our client base is the middle market self-funded employer. We average about 400 employees in our average group, with about 1,000 members in Main Street businesses, including dealerships, manufacturers and public school districts.

We see plenty of room for growth in that market segment and have a conviction that the PPO process is largely failing in containing costs and advancing quality for the middle market employer—opening up tremendous opportunity for growth.

As healthcare prices continued to rise, we can typically reduce costs year-over-year on an average nationally by about 20%.  Where our model has changed somewhat is that we are now selectively partnering with certain health systems around the country.

We believe the combination of a direct contract with the high-performance health system, wrapped with reference-based pricing, broadens the prospect pool more dramatically. For example, in Philadelphia, we’re partnered with the Penn Health System, supported by reference-based pricing for any non-contracted claims. We’re very encouraged by the results.

How are you positioned against the competition?

We started earlier, which gave us a jump on the competition. Also, we are larger than other competitors. But the key difference is our approach in that we spend substantial time and devote substantial resources to member advocacy.

In fact, we provide a full legal defense if necessary and advise the member in the HR department for as long as it takes. We think it’s critical to stand strong with the employees and their families.

When a balance bill occurs in our business model, we make sure that the employee is treated in the same way our own families would be treated. And that’s a very literal statement. We’re on the same program, and we endeavor to make sure that everybody who has a billing problem with a hospital or physician is treated with a very robust patient-support process.

Do you work with third party administrators (TPAs), brokers and intermediaries?

Yes. Our typical access point to a self-funded group is through their brokers. We approach and solicit the broker community across the country as our access point to the employers. We also work very closely with private TPAs. We probably have about five that we partner with. That accounts for about 90+ percent of our business, and then we have maybe another half dozen where we have a smattering of business.

But our business is largely concentrated with about five independent TPAs, and we integrate with them on a very comprehensive basis, so there’s quite a bit of joint servicing of the account. So, it’s critical that we build a lot of connectivity up and down our respective organizations between ourselves and a TPA. We have employers in all 50 states, and we price claims in every state in the country.

We’re very interested in how we can collaborate with the provider community to help with some community health systems across the country. We’re also very excited about what we’re doing for helping American businesses. We think healthcare has evolved into somewhat of a managed care discussion. We focus on helping clients lower out-of-pocket costs and relieve the burden on working families that our clients employ. It’s about jobs, competitiveness and American industry. We are looking to build direct business relationships between employers and healthcare providers. And we think that’s the way forward, certainly for the employer basis.

And certainly the large employers were the ones who started medical travel to access better quality care, so you’re really bringing it down to the majority of businesses that are struggling.

Yes. Ultimately, international travel has to be a part of the puzzle as well. Economies are globally competitive now, and it’s inevitable that foreign players will begin to come after American business. They’re doing it now, so I think it’s inevitable we’ll see more of that.

Leave a Reply