Healthcare solutions for an evolving workforce

Record date: 03/12/24
Air date: 06/05/24

In part-two of the podcast miniseries, “Road to Relief, finding a path to accessible, affordable healthcare,” Shane Foss, Founder and Chief Executive Officer of Hooray Health and David Fike, Head of LA&H for Zurich North America, focus on the complexities of the U.S. healthcare system and delve deep into the challenges that are impacting Americans, including gig workers, as they navigate through tackling high deductibles and out-of-pocket costs to simplifying the enrollment process. 

Listen as they shed light on how Hooray Health and Zurich North America are revolutionizing the healthcare industry to empower listeners with the knowledge, peace of mind and financial security that supplemental insurance can provide.

Guests:

Shane Foss
Founder & Chief Executive Officer
Hooray Health

Shane Foss has over 20 years in the medical industry as a surgical technologist, entrepreneur, and thought leader, where he has seen the ins and outs of the American healthcare system. He takes pride in his education, holding an MBA from Rice University's Jones School of Business, a BS from the University of the Incarnate Word, and a Surgical Technologist Certificate from the United States Air Force.

In 2018, Foss launched Hooray Health and, as the CEO, has grown the small healthcare startup into a national network of members and providers. Throughout his professional experience, he has worn many hats. He has negotiated complex, multi-million-dollar contracts, managed device sales, created business strategies, and optimized P&L. He has always had a passion for creating opportunities, especially in healthcare, for the average low and middle-class Americans who just want to provide a healthy lifestyle for their families. This unconventional health insurance company is all about providing affordable basic and urgent health care alternatives to those high-deductible health plans. He quickly gained the reputation of being a disruptor in the health insurance world, shaking things up and championing the under-served and often overlooked individuals.

David Fike
Head of Life, Accident and Health 
Zurich North America
David Fike is the Head of Life, Accident and Health for Zurich North America, where he is responsible for the direction, management and performance of these businesses. He joined Zurich in 2014 as CEO General Insurance Malaysia and later provided critical integration leadership as CEO and President Director of Adira-Indonesia following Zurich’s acquisition of the Adira organization. Fike has more than 30 years of experience in the insurance industry. Before joining Zurich, he held a number of international senior positions at AIG, Chubb, Ace, Cigna and Prudential PLC. He has held C-suite positions in marketing, operations and underwriting.

Host:

Farah Rehman
Head of Marketing and Customer Strategy
Zurich North America

Farah Rehman currently serves as the head of Marketing and Customer Strategy for Zurich North America’s Life, Accident & Health business. With over 20 years of experience, she started her career at AIG in product development, then moved to sales, internal consulting and ultimately marketing. At Zurich, she began in advanced marketing and led the life sales and marketing team, prior to taking on her current role. She has a bachelor’s in management information systems from the University of Houston and an M.B.A. from Rice University. Farah lives in Houston, Texas with her husband and daughter. In her free time, she leads her daughter’s Girl Scouts troop and loves traveling the world with her family.

(PLEASE NOTE: This is an edited podcast transcript, capturing speakers with natural speech patterns that may include incomplete sentences and/or asides, grammatical errors, verbal shorthand and some statements that may be less clear in print.)

Episode transcript:

FARAH REHMAN: Many Americans gain access to health insurance through their employer. But with gig work on the rise, these independent workers have to look for health insurance on their own. How can they access necessary everyday healthcare for them and their families? Could gig platforms market supplemental coverage to help gig workers better manage their healthcare costs?

Welcome to Future of Risk, presented by Zurich North America. We explore the changing risk and resilience landscape and share insights on challenges facing businesses to help you meet tomorrow prepared. 

This is our second episode in our three-part miniseries, "Road to Relief, finding a path to Accessible, affordable healthcare." We're taking a deep dive into healthcare trends to better understand the problems as well as the potential solutions like supplemental coverage that can help provide access to high quality, affordable care for everyone.

I'm Farah Rehman. Today we're speaking with David Fike, Zurich North America's Head of Life, Accident and Health and Shane Foss, CEO of Hooray Health. David and Shane, welcome to the podcast.

SHANE FOSS: Glad to be here.

DAVID FIKE: Thank you, Farah, happy to be here as well. Happy to be with Shane as well. So… Thanks Shane. (laugh).

REHMAN: (laugh) As am I.

Shane, we're going to actually start with you because your background is really interesting. You're a veteran of the U.S. Air Force, where you completed a Surgical Technologist Certificate and found a love of medicine.

You worked for 20 years as an executive in the medical industry where you negotiated complex multimillion [dollar] contracts and then you started your own business, Hooray Health. Can you talk about how your background has shaped your views of healthcare today?

FOSS: Sure. It's funny, I had no idea I wanted to be in healthcare when I was growing up, but the second I got here, I never wanted to leave.

When I joined the Air Force, I became a surgical technologist and that experience was just…it was an incredible opportunity for me. I learned so much working with surgeons, nurses and other technologists, it was a great experience for me.

So, as I progressed and left the Air Force, [I] got into medical device, working with surgeons [and] I really built this passion for the patients and the outcome. It was really a great experience because I got to see all sides of the business. I got to see it in the operating room. I got to see it before the operating room, after the operating room. So, it really made me look at the whole picture, which was a great opportunity.

When we sold our last company, we had created access to surgical bundles for large self-funded employers. We had sold the company and I was looking for what is the next opportunity. I saw this huge opportunity with the hourly worker that they were just getting priced out of healthcare.

So, we looked at different options and we came up with this idea to provide access to healthcare for everyday medical needs. We built the plan, we built the provider network, we did all of this in a very short period of time. [We] started working towards our goal. which was really having an impact not only for employers on really recruiting and retaining employees, but most importantly, those hourly employees that really don't have a way to get into the health system.

We've been able to get them into the health system to learn, really coach them, guide them and grow with them. So, that was really my passion. That's how Hooray Health came up. But I give all the thanks to the Air Force, that was a great experience for me. Probably one of the best things I ever did in my life.

REHMAN: Great. Thank you, Shane.

David, you have more than 30 years of experience in the insurance industry and we know that you share Shane's passion for finding solutions related to healthcare coverage. Can you talk about some of the biggest issues that you see in the healthcare system today?

FIKE: Sure. Well, I certainly share Shane's passions for the solution side of things. You point out 30 years in the industry… 20 of those years were actually spent overseas. When I left 20 years ago, healthcare was very different. I'd spent 20 years overseas and when I came back, that was like a wakeup call.

First of all, the cost that is now positioned and being put on individuals of the cost of healthcare, you have to share that burden. When I left, your employer paid pretty much 100% of it. (laugh) But now that cost is being shared.

The other thing that really blew my mind was the deductible increase. We've done a lot of studies with deductible plans. If you look at the Affordable Care Act, deductibles have risen in that category by 40% over the last six years and are hitting $5,000 a year for individuals. That's a lot.

And so, when I look at the biggest issues, it's the increasing cost of healthcare and that cost burden that is being positioned and put on the average American. That's really why we're here and what we're trying to solve.

REHMAN: Yes and I think there's kind of two key themes that we're hearing from what both of you are saying. So one is, David, what you just touched on, which is affordability, which is a huge challenge. The other one being accessibility.

So, if we can just talk for a moment about how both of you see Americans just try to handle that growing financial burden of healthcare. And Shane, maybe we can start with you.

FOSS: Sure. The biggest problem is people are avoiding healthcare. One of the most recent studies, 64% of the population actually avoided healthcare because of the cost and it's an unknown cost.

When you look at a person and they have less than $500 in their bank account and they have to choose between health [and] paying rent. They're going to pay rent and they're going to avoid care. Even when they go to get care, you've got over 51% of them that will avoid a lab, avoid an X-ray just because of the cost.

I think that's the biggest opportunity in the space, because when you look at a $5,000 deductible, if I have $500 in my bank account, it may as well be a $5 million deductible.

So, creating an opportunity for people to not worry as much about the deductible and have access to a transparent, affordable care, that sits underneath that is a really good opportunity.

FIKE: Yes and can I just add to that. I like how you frame that, Shane. You know, access and affordability actually go together. They're not independent of one another. If you can't afford it, you don't access it and I think that's an important part.

Shane, the other thing I want to pick up on… we've done a lot of research on this and how do you prioritize your bills? You said, “paying rent.” Of course, they're going to pay rent, so they have a roof over their head. That's going be prioritized, as opposed to, “well I need to go see a doctor about some kind of condition.”

What all of that does is it prolongs care. If you want to think about what's driving healthcare costs, we are not getting people accessing healthcare professionals early enough.

Then it gets to a point where it's ballooned to a point where the cost of that gets really significant. So, I think that's an important part of the access and affordability piece.

REHMAN: Yes and I think that really translates to, I think there's a number of Americans who really have the same challenge. Regardless of where their background comes from. Everyone's struggling to afford health healthcare in some way.

Shane, when we think about what Hooray Health was founded upon, it was really to fulfill that need in the industry for affordable, reliable, easy to understand supplemental health coverage. So, your plans right now are designed to meet a variety of different workforces.

I think you work with full-time employer groups, part-time, as well as now independent contractors. We've definitely seen the rise in the gig economy and with that has come a rise in the number of workers that participate in that economy.

Can you talk a little bit about some of the challenges that are unique to gig economy workers that they may experience for healthcare?

FOSS: This is a natural progression for us. The gig economy is growing exponentially. If you look over the… really the last five to seven years, it's double-digit growth year over year. And so, what happens is they have limited access to care.

As a matter of fact, some of our first sales were to Uber drivers and it was because they were amazed that they actually could have access to healthcare for a low cost.

So, when you look at where they traditionally go, they have to go to the exchange where they're going to end up with hopefully a subsidy. But the challenge is they have a $7,500 deductible, which means that that's a lot of out-of-pocket costs before they can actually afford care.

The other one is if they have a spouse that has an employer sponsored plan, which is great, but now as David said, “They're up around $5,000 deductibles” anywhere from 4 to 5,000, which still makes it really inaccessible for their basic healthcare needs.

So, I think that having a product in this space, a supplemental product that they can put underneath that ACA (Affordable Care Act) plan that they get on the exchange or their spouse has an employer sponsored health plan is a really good opportunity for them to really mitigate their risks. Have the ability to go in and see a physician.

The other thing, from a platform standpoint, they're working three to four different gig platforms at a time. They're trying to make it and the opportunity that we see is one of the gig platforms or two of them, they're going to offer benefits in a way that does not change their 1099 status. That's a truly individual product by making that available to them.

In our gig study that we did the marketing study, we found that the majority of the gig platform workers would actually work more hours if they had access to benefits.

So, this is something that is a natural progression for us. We're going to help a lot of people getting access to care.

FIKE: And Shane, let's not forget about what happens when you look at those independent contractors if they're injured or they're sick they don't get paid if they're not working. I mean, it's a very different model than your traditional employees.

When, they take time off, whether they're injured or need to care for family members, they aren't getting paid. So, that is a big thing that they think about in the gig economy.

I think peeling back the onion with what are the real needs of that segment of independent contractors. It really does create a need and Hooray Health and Zurich are really filling that need nicely, I think.

REHMAN: I think what this really does and we heard this Shane and David, in our interviews that we conducted, is that many of them feel like they have too much income in a given year to qualify for subsidized benefits, but not enough to afford the high cost of healthcare. So, this kind of comes in and helps fill that gap so that they have the major medical for the big stuff, but they can meet their everyday medical needs as well.

So, if we think about the gig economy it comes with opportunity for gig economy workers because they have flexible schedules and they kind of get to be their own boss. But then we just talked about some of the challenges that they have as well in terms of accessing affordable healthcare.

If we take Hooray Health’s vision to expand beyond kind of the employer market, Shane, that you all have been in, and David Zurich's desire to help solve this growing financial burden for individuals, it just made sense that our organizations collaborate together.

So, if we think about the gig economy, Shane, can you talk a little bit about Hooray Health's value proposition and how you use Zurich products in your offerings?

FOSS: So, the value proposition for us is very simple. We centralize all of our benefits that are underwritten through Zurich, through their hospital indemnity and AME, and we centralize all of them through a mobile app. We focus on really three key things.

First of all, we have our own provider network that has a $25 fee to see any of our urgent cares that are in the network. Urgent cares are really important because you don't need an appointment to see them. You can walk right in. They have onsite labs, onsite x-rays. They can give you an IV, they can stitch your, your hand up. They can put a cast on a broken bone. And so, the level of acuity that they can take care of is enormous.

The biggest issue people have today when they avoid care is the unforeseen cost. And so, we have been able to drive that down to $25 and you know that that's what you're going to pay. It's a great opportunity for somebody that has themselves, their kids, they can take them right in and have access to care. And that's our key value prop.

Next, we have a $0 virtual primary care where we can take care of your chronic ongoing diseases, just virtually at no cost. If you have an immediate need, you can call them immediately and say that you have pink eye and they can write you the script, order a lab, and all of that can be done over your phone.

And then the last thing is we really focus on prescriptions. We know that the average American has one to two prescriptions. We really want to make sure that they have access to get those prescriptions at the lowest cost. And so, we have an RX program that helps them, even if there is a high-cost drug we can guide them to hopefully get them a subsidized medicine.

So again, everything that we do focuses on the customer, the access to care and that's really important for us. We've done that with Zurich and underwriting all of our products and working with them specifically on the benefit levels. Which has been really unique for us because in the market, typically it's very cut and dry: you do this and this. We've really provided a unique level of benefit that really allows the member to get access to care that is important for everyday needs.

REHMAN:  Thank you, Shane.

David, when you think about this collaboration with Hooray Health — I remember our first meeting with them in Dallas — can you talk a little bit about what brought Zurich and Hooray Health together and then how that translates into our customer strategy?

FIKE: Yes, Farah I remember that first meeting too. I think the first question I might have asked Shane was, “What the heck is with Hooray?” (laugh) Then we had a good chuckle about how Hooray, the name, came into the making, which is a great story for another time.

But, when we started getting into the discussions with Shane and his team, the biggest thing that I sensed was the importance of the customer and the customer experience. How are they going to go through a process that is simple, it's understood and there's full transparency.

Those are the things that I think brought us to this collaboration. We were so aligned with this is a customer-first approach. We then started talking about, okay, well let's start actually looking at some of the segments that we want to go into.

We agreed that we needed to do some insights on the gig economy. We've talked a lot about the gig economy. Hooray has done a lot of insights with employer groups. We kind of moved that into the individual space with the gig economy and really started understanding both through quantitative and qualitative research, what is on the minds of those individuals. And really that's where we even fine-tuned our collaboration even more. It's been a great journey. The other thing I just want to mention is the team on Hooray, they're just people you want to work with.

So, Shane, I just [want to] I thank you many times for that, but just want to go on record again thanking you for the working relationship that we have, it's outstanding.

FOSS: Well, that's right back attitude from us. I mean, we literally feel like we're part of the Zurich team, so we…

FIKE: That's good. (laugh)

FOSS: … with Farah and the crew. We are, I think we're all on each other's Christmas list now for sure.

REHMAN: I agree with that. So, if we kind of think back towards that and David, you highlighted some of the research work that we did with the gig economy workers. Shane, what do you think, considering we talked about those unique challenges, why is Hooray Health such a strong fit for this particular market?

FOSS: They need our help. I think they can benefit the most from our services. They have limited opportunities to access care. So, by being able to go to the exchange and get a $7,500 deductible plan, it really doesn't benefit them as much as if they're able to have something to take care of those everyday needs underneath that plan.

So, by having access to Hooray Health, we're able to take care of those needs. The average employer is taking care of their employees and they have access to hospital indemnity, AME, all these different products. But the gig platform they have nothing to offer. And then, so the gig worker is really struggling with that access. So, I think we are a really good fit there.

The other thing is, in the marketing research that David was alluding to when you spoke with the 400 gig workers, 80% of them looked at the Hooray benefit and said, “that's what we're highly likely to buy. "The reason is because the access to urgent cares. Most Americans are not looking for complex care.

They just want, "Hey, I want to know what I'm going to pay. I want to know that I'm not getting taken advantage of." Right? "I know that I'm not going to get sent to collections."

And so having that $25 fee and access to the urgent care, I think is really important. The majority of personal bankruptcies are due medical related bad debt.

So, by helping them subsidize those costs, they're able to go get the care they need, but also not worry about the financial burden.

Then lastly, I think when you look at the, the gig platforms —we talked about it earlier— they're looking at two, three platforms, four platforms that they're working on a weekly basis.

If a platform has an opportunity to provide a valuable benefit like Hooray Health without changing their 1099 status, this is going to really incentivize that gig worker to work more hours at this one platform opposed to the other. So, I think there's mutual benefits across the board by entering into the gig market. So, we're really excited.

REHMAN: Thank you, Shane.

So, David, we talked a lot about the opportunity with the gig economy, which we know is really strong. How do you see this collaboration with Hooray Health progressing and maybe expanding access to care to other markets?

FIKE: Yes, I mean, we're at the start of our journey. While the start is exciting, we're always looking forward. I think to answer your question, Farah, you have to ask, “where's healthcare going? What's the state of healthcare? And you have to ask yourself the question, do we think medical inflation is going to go up or down? Or do you think costs are going to rise or go down?”

Then start thinking about, well, as costs rise, how do Americans deal with the rising cost of healthcare? And what's happening now is it's being done through kind of like a sharing of the risk a deductible plan.

Those deductibles keep getting higher and higher. We've talked a lot about the gig economy. Shane, you mentioned it earlier, it's the individual employee, where is that going to go for the individual employee where today the employer is satisfying and sharing in the cost of healthcare.

But where's that going to go? As I mentioned at the onset, I spent time overseas and there are markets overseas where individuals in health plans are paying 30% of the overall cost of healthcare. Do we see that going this direction in the United States? I think the answer is, yes, probably we do.

So, what I love about our collaboration is it's a perfect solution for that. We can actually solve those issues and really help them manage that overall cost of out-of-pocket expense.

REHMAN: I completely agree. I'm so excited about what Hooray Health and Zurich come up with next. But we're on a great path already for this year. David and Shane, thank you so much for joining us today on the future of risk.

FIKE: Thank you. Thank you, Farah.

FOSS: Appreciate it was our pleasure.

REHMAN: And thank you also to our listeners. I hope you’ll join us for our third and final episode in our “Relief: Finding a path to accessible, affordable healthcare” series. We'll be speaking with Chris Howard, Head of Market Management for Zurich North America's Life, Accident & Health team and Rick Holmes, President of Lakeshore Benefit Alliance about potential solutions for alleviating the heavy burden of healthcare on both employees and employers.

This has been Future of Risk presented by Zurich North America. If you like the show, leave a comment or review wherever you get your favorite podcast. Or drop us a note at media@zurichna.com.