Summary
What if you could identify how many of your employees are at risk of suffering from a disease like a stroke, cancer, diabetes, and other health conditions through a software that provides intelligent health data?
Sounds great right?
In today’s episode, I talked with Rod Reasen, the founder of The Healthiest Employer Award program where Xenium has participated and won every year since its start back in 2008.
He and his team started a software company called Springbuk to address the growing concerns of employers over the rising cost of health and wellness programs. The health intelligence software utilizes employee health data to lessen the cost, prevent diseases, and figure out where to allocate funds to create a healthier workforce.
Rod is going to simplify everything on how their software works and why you need to incorporate this technology in your workplace.
In this episode, you will learn about:
- Rod’s learnings from his career as a broker
- Helping employers with health insurance and its rising cost
- How the “Healthiest Employers Program” started
- Why wellness programs aren’t making as big of an impact on health as we hoped
- Trends within the health data
- Biometric screening and holistic wellness programs
- What is the Springbuk app and what does it do for employers
Listen above or read the full transcript below.
Brandon Laws: Hey Rod. It is a pleasure to have you on the podcast. Welcome.
Rod Reasen: Thank you very much.
Brandon Laws: You’ve had quite an interesting career. You started as a broker a long time ago.
Rod Reasen: Easy. You make me sound old there.
Brandon Laws: Not too long ago. But you did say right out of college you started as a broker and you’ve had a great career in being a broker. Talk about those years and what you learned and I want to talk about some of the other things that you’re up to.
Rod Reasen: I started out in the financial services space, as a wealth management financial adviser. I was working with a lot of business owners and in the times of in the late ‘90s, early 2000s, these large employers were saying, “Hey, you helped us with our 401(k) and some of our personal finances and investments. But this health insurance stuff is killing us. Can you take a look at it?”
My first response was absolutely not. The last thing I want to be is an insurance broker and I said, “No, no way. I don’t want to jump into that industry.” But started to take a look at it and said, “Wow, there’s a real opportunity to bring solid advice, bring data and to help these employers out with the rising healthcare costs.”
So that was in the early 2000s. I jumped into the industry as a broker, fully fee-based consultant and the rest so much is kind of history as we speak.
Brandon Laws: When you were in the financial services industry, you hadn’t been in the group health space at all. But you had clients that trusted you to sort of look into it, and you just saw an opportunity to dive in with both feet. Is that right?
Rod Reasen: Yeah, we saw – the financial services space went through a big more fee-based orientation, getting away from commissions before the brokerage, commercial insurance brokerage space did and so we rode that wave kind of taking that different economic model into the large employers saying, “Pay us for our advice, not just commission.”
So we took that model in and it was new at the time. Now it’s very commonplace. So we were one of the small, little disruptors in our marketplace bringing that approach.
Brandon Laws: When we fast forward to – I think it’s the 2008 timeframe, you were CEO of an organization called the Healthiest Employers Award Program. Talk about that. How did you get into that? Why did you start it? What did that stem from?
Rod Reasen: What we saw happening in the early 2000s into the mid-2000s was healthcare costs continued to escalate. You had a lot of discussions to add some political context. You had some discussions happening around what a government-oriented healthcare system might look like and then the first election of Barack Obama and ultimately the PPACA being created.
During that time, employers’ healthcare costs continued to escalate. They were trying to figure out things like, “Should I invest in pop health?” Pop health was very popular. It was called wellness at the time.
You had a lot of just things going on that these employers were like trying to figure out. What we saw in the pop health space kind of happening was employers were – Malcolm Gladwell talks about the tipping point and employers have gotten to the point where they had gotten to a frustration point and said, “I’ve got to do something about my cost. These wellness programs are promising, a fantastic ROI. So I’m going to try them,” and there was a lot of try.
So we said, “What could we do to bring all these folks together to collaborate?” and at the time, it was all the insurance companies, all the wellness providers, all of the insurance brokers, all of the employers to a single place where collaboration can take place and mostly in the middle market, these employers are often neglected because they’re not the big enterprise employers.
So we dreamed up this idea of creating an award because nobody draws attention more than winning an award or putting people on a pedestal. So that was the idea. We dreamed it up. We sold it to the Indianapolis Business Journal in 2008 as an idea, launched the first award in 2009.
We had almost 600 people show up at the first-year event and the IBJ said if you get 250 people to show up, you’ve been doing great. We had almost 600.
So we knew we were on to something. We knew this was a hot button. It was more than just a thesis and then the award grew to 40 plus cities across the US, 10,000 employers surveyed and we learned so much about what the pain points were, how people were going about solving those problems and ultimately became the genesis for launching Springbuk.
Brandon Laws: You’ve really built a heck of a brand with the Healthiest Employers Award Program and we participated – I represent a company called Xenium and we’ve participated in the Portland market since the first year. It was 2009 through the Portland Business Journal. You really built something and I think there’s a lot of people that rally around that because they want to be seen as a “healthiest employer” and I think they’re trying to do good for their employees.
So I just want to commend you on what you built. I think it’s incredible.
Rod Reasen: Well, it takes a team. As we often say here, one of our core value is win together. So if it would just have been my idea, that’s probably all it would have ever been, just an idea. But we got great people that have helped execute on an interesting vision and I appreciate you saying that. But it definitely takes a team.
Brandon Laws: You built out an extensive application process for the Healthiest Employers Program. What did you find out in the data when you take it across the entire nation? I think it’s in the United States across several markets. But when you aggregate all of the data, what trends did you see on a regular basis? I’m sure it was different from the very first year you launched it to the last year in which you were part of that group. But what did you see in terms of trends?
Rod Reasen: Yeah. So obviously pre-Springbuk, pre-launching that – you know, the software company that obviously I lead now. What was fascinating for us to watch was the macro moves that were taking place among the employers.
So each year, we would have 3000-ish employers that would apply. So a very large number. This isn’t 20 or 30 employers. It’s 100 or so employers in 40 markets across the United States and so we had broad distribution of types of employers by size, by demographic, by geographic location. So it was really fascinating for us to look at parsing the data and saying, “What are the pain points that employers are trying to solve for?”
A couple of the things that we saw early on was this movement towards onsite clinics, which doesn’t sound like a big “ah-ha” anymore. But in the early days of the Healthiest Employer Award, we saw that it was a big uptick in employers that were either interested, who said that they were interested or had already adopted an onsite clinic.
That was one of the very first things that we saw and there’s still a trend in the industry to adopt an onsite clinic. Not just at the enterprise but all the way into the mid-market.
The other thing we saw broadly was by metric screening. Well, again, not a big “ah-ha”. What was interesting to us was watching how in the early days, a small portion of employers are doing biometric screening as kind of that leading data indicator.
Brandon Laws: Yeah.
Rod Reasen: And the percentage grew over towards not just doing screenings at the employee level, but into the member’s households, so spouses or other dependents, which was fascinating because that’s a big cost for an employer to take on.
Now we saw near the end of the – you know, kind of the cycle now, we’re seeing employers back off. They’re actually doing less at the biometric screening and they’re moving to a two-year rotation. So instead of doing it every year, rotating every other year and there are other trends obviously. But those are some of the big ones that obviously have massive effects in the amount of data that’s available and kind of the big macro things we saw.
Brandon Laws: Did you see anything that was more of a holistic wellness program from some of the trends, like mental health, those sort of things that aren’t just related to physical health?
Rod Reasen: We saw a lot of folks asking questions about it. Yeah, that’s a fun one to talk through. Mental health is a big win. A lot of VC-backed mental health apps right now. It seems to be a big hot button. MSK is a big one right now that we’re seeing that employers are trying to dive into and all the associated data that goes along there with PTO, absenteeism, even worker’s comp and even mental health. So those are more I would say modern, kind of today items.
Behavior health has been one that has been talked about for a long time. But it has really become a hot button lately.
Brandon Laws: In your time in doing the award program, I’m sure you saw a lot of employers determining lagging indicators on people’s health. You know, biometric screening, that would be a one way to figure out like a snapshot in time over like somebody’s health. But do they use that data in a way that’s shaping their wellness programs of the future? Maybe that’s what you’re trying to solve at Springbuk. But I’m curious if you saw a lot of movement around getting ahead of all this stuff.
Rod Reasen: So now I will jump on a soapbox here.
Brandon Laws: Please do.
Rod Reasen: Well, frankly, that’s one of the reasons we decided to launch into this industry. There are six major categories that we have with the Healthiest Employer Award and the genesis of that award was again to put on a pedestal companies that are doing exceptional things. Section six was reporting and analytics. So the first five sections were more program orientation, incentives, design itself and then sixth was how you’re measuring it.
Historically and even today, through last year, through 2018, our average score on a Rubric scale of zero to 100 – and I have four kids. So the average score is 26 percent out of 100. Now for anyone again listening to the podcast that sees their kids come home with a 26, I mean the teachers don’t even send home a 26, right?
So we watched this over and over for now 10 years that we’ve been running that award and it became very alarming. So we started to dive into the data and say, “Why in the world can’t you show an ROI or why are you not even measuring it?”
One of the questions we put out in the early days, we’ve gone through several revisions of the questionnaire itself and we said, “Are you tracking ROI?” and then there’s some obvious more depth there. But then we asked, “Do you have a formula for calculating that return?” and that answer was even less. It was like 10 percent of employers that applied even had a formula to figure out how they track the investment.
So I think I’m getting around to answering your question. But that ultimately led us to saying, “Holy cow! If employers can’t track this, at some point they’re going to have to because the CFO is not going to allow an investment to continue to be made without some form of proof,” whether it be the efficacy of each individual program or if it would have been a broader brushstroke of pop health working.
The whole industry deserves to be able to tell the story and so while our app Springbuk was not created to be able to tell the wellness story, it’s far broader. That was one of the initial pain points that we saw as an opportunity to dive into the space.
Brandon Laws: I’m really glad you said that because in all the years that I would attend those award banquets – and we’ve won as an organization every single year–and I know because I would fill out those applications and I know what our wellness program is like–I would always hear like some of the winning organizations just talk about what they’re doing and, I’m not knocking anything about what they’re doing because I think it’s better than nothing, but nobody could prove the ROI. Nobody really had the metrics to say like everything that we’re doing is making our people healthier.
Their stress level is down. Blood pressure is down. Like those sort of things that you would probably want in a wellness program. Ultimately we want to make our workplaces more productive and happier, healthier, all those things. It just didn’t seem like people could prove that. Is that really what you saw in all those years of doing the award program?
Rod Reasen: I mean even more frustration than that. I mean – I’m a very data-driven guy as it is and when we would go to these awards – one year, I was in 26 airports and on the stages presenting many of these awards across the country and I would hear similar things.
Frankly, it got to a point where we’re like, “I hate this award. This award is not at all what we wanted to create.” We’ve got people that are winning that in some fashion be winning because they can fill out an application really well. It started to change the application because of that.
But it got us to a point where we’re like listen, the award did its job. It put on a pedestal organizations that were doing really good things. But the industry has to continue to progress and the way we do that, our biggest pain point that we saw was that employers are making huge investments and it’s hard to know exactly how big the industry is. By some estimates, around $100 billion are being invested by employers across the US towards some form of pop health or wellness solutions and that doesn’t include the overall benefits that they’re offering that should drive better health.
So that’s what drove us ultimately into the data business, launching the software was, “How can we help employers make sure that they’re making the best possible investment?” That when they think – you know, they see these sales pitches and you know. You’re in the space and you get the sales pitches from all of these new providers that come out and it’s ROI this, ROI that. Trust us, you will get it in three years, four years, five years. We hope and cross our fingers and we’re like, “Wait a second here. The data is achievable. We can get to the data, where 10 years ago we couldn’t.”
We can get to the data. Data is not the issue anymore. Really it’s about extracting intelligence and information that you can act appropriately upon what the data is telling you.
Brandon Laws: I think it’s interesting you made the point that the timing was right with the Healthiest Employers Award Program just because I think you needed to bring awareness to this big issue around wellness and cost and all those. I think it was a conversation starter.
So now you fast forward to starting Springbuk. I think you’re really trying to accomplish the measurement piece because people are now talking about all of this, that they’re ready for it. So when you built Springbuk, did you feel like employers were ready for some kind of tool that could measure the impact that they’re making on some of their programs?
Rod Reasen: Absolutely. We kind of sensed it from the award and again, one of the things that the award definitely gives us is a lens into the habits and behaviors of employers across the US. So we get a very good sense of where the market is moving really before anyone else does. So we went out and demoed before we had started this company. We said, “Gosh, employers can’t solve this reporting an analytics piece of this.” So we just said, “Why not? Who can we refer them to so that we can get them to be able to answer these questions?”
So we interviewed data warehouse players. We interviewed wellness vendors. We interviewed broker consultants that had broad actuarial teams all the way through deep actuarial expertise and we just didn’t find anything. What we found was either parse or it was – you know, broadly as we even say in our sales presentations that it was data warehouse-driven and our finding was really that data warehousing, while beneficial, you can’t get rid of the data warehouse. You need to collect the data. Employers, while they may be asking that, that’s really not what they’re asking. If you think about it, why do you even want data? You want it so that you can extract intelligence from it.
So from the very beginning, we said, “Why don’t we just create an intelligence platform that does a lot of the heavy lifting and can start to solve for better decision-making upfront?” That’s where we started in 2015 was let’s make better decisions first and then – I’m sure we will talk a little bit deeper about kind of where we’re going now.
Brandon Laws: Yeah. So I would love for you to describe what Springbuk is, what it does and what you really hope it will do for employers.
Rod Reasen: So the quick nugget is we are a health intelligence company. So we blend data science with easy consumption layer of software into a user-friendly experience so lawyers can, what we believe for the first time, see actually what’s happening in their data and to be able to actually act upon it.
There’s a lot of folks that talk about actionable intelligence and it’s old school stuff that I was doing 20 years ago when I first jumped in the industry around generic versus formulary spend in pharmacy. Well, whoop-dee-doo! You know, that’s something we did 20 years ago and you can look at a simple carrier report to do that.
What we’re doing is deep data science with unsupervised machine learning that’s literally digging through the data and finding opportunities that haven’t yet presented themselves. So we’re finding new opportunities of inefficient spend along with obviously our vision, which was to prevent disease with data. So taking a whole different thesis around how you look at data, around preventing disease versus just cost-shifting.
Brandon Laws: So in other words, just to simplify it for our listeners, so you basically would have this plug-in to group health programs, vision plans, prescription, all those health and wellness programs that employers would have. It would analyze cost, claims and things like that and then you would basically be able to visualize how spending is, or maybe opportunities. What can an employer expect out of this and what does it look like?
Rod Reasen: Yeah. Well, part of the tease is you got to demo the product here. So …
Brandon Laws: Exactly, yeah.
Rod Reasen: It’s funny and we literally say this. Seeing is believing. It’s hard to explain – if you know the story about Uber. Travis Kalanick and his buddy were over in London and they were being rained on, trying to wait for a taxi and they dreamed up at that moment the idea of creating Uber. It took Uber some time to really compose the way to explain to people what Uber did because the habits of people were still around hailing a taxi.
Now you don’t think about it. I travel all over the place and I don’t know the last time – sorry taxi drivers that are listening. I don’t remember the last time I used a taxi. I use a ride-sharing app. So in a similar vein, it’s really tough to explain in one sentence exactly what we do because it is so sophisticated but yet simple. When we do show people what we do, they’re like, “Oh, now I get it.” It’s an intelligence platform. We do all the heavy lifting for you so that you can act on the data versus having to go dig into the data like most of the platforms that exist today.
Brandon Laws: You know, I think that would be the biggest challenge for most employers is that their data is so fragmented and all over the place. A lot of times the carrier is probably holding on to the data or the broker maybe and employers probably aren’t taking an active approach to look at that information. So is that sort of how you look at it is it sort of democratizes the data for an employer to make actionable decisions on?
Rod Reasen: That’s low-hanging fruit. That’s a piece of it. That’s kind of the story of the industry of old that just keeps being told today is oh, well we can add more data elements. Our opinion is you don’t need more data. You need more insight or intelligence. There is plenty of data that you already have. Every employer that hopefully listens, there’s plenty of data. What you need is a tool that can go accentuate or create value in the data that already exists and that’s what the Springbuk platform does. It’s what our insights engine was built to do was to bring a snap-of-the-finger, real-time access to put you on to solving the problem versus searching for one in a data warehouse
“Our opinion is you don’t need more data. You need more insight or intelligence.”
– Rod Reasen
Brandon Laws: So make it practical for an employer that’s listening. If they’re using a platform, they’re connected with all of their information from their health programs, what would they expect to see using it?
Rod Reasen: So without going into the deep sections, our average employer on day one, our average employer, we find $1,000 worth of potential savings per employee per year.
Brandon Laws: So how do you expect to get savings just by using the platform?
Rod Reasen: In some instances, it could be a plan design change. In others, it could be about educating the member around a disease state or engaging them on a specialty pharmacy medication. Every employer is different. There is – I will say what is fascinating to us is there’s a general thinking by most of us as human beings that if I take a technology company and pair it against another technology company, that they’re probably going to have a similar workforce and likely a similar disease state or chronic conditions within the population.
What we found is that that’s not necessarily the case and it’s not even necessarily the case by geographic region. Every population is different. Our engine is dynamic and it’s going to find the opportunities that are unique to that employer, much like it should versus a plugin where oh, diabetes is the only thing we’re solving for. Does that help?
Brandon Laws: Oh, absolutely, yeah. It’s actually interesting because I see two sides to this. One is what you mentioned, which is plan design change. So as soon as you have the data, you can see like where the uses are or just even educating your people. So you could say it costs that way but I also see an opportunity where if your workforce is at risk in certain areas, you could either create new offerings around those issues or even on the like really proactive side, just wellness programs in general or activity-based things depending on what it is. Is that sort of how you see it as well is just low-hanging plan design change and the other side is actionable things to get ahead of all this?
Rod Reasen: So I will actually correct you a little bit and I hate to do that to the host.
Brandon Laws: No, it’s totally fine. You’re educating me on this.
Rod Reasen: Plan design changes, while we think can be an interesting way to change behavior, I would say it is probably like number 30 on a list of 20 items that we would look at.
I think again this is a bit of opinion from my seat. Twenty years in the industry I’ve watched that happen for 20 years and employers that just focus on plan design changes end up being – cost-shifting measures and the employee ends up being uneducated about how to make a healthcare decision as it is and then being forced to try to figure things out on their own.
The high deductible health plans, we offer them at our company. While they can be beneficial, I think there’s still a lot of discussion in the market around was this a good thing for the industry or did it just potentially shift the cost to an employee who then later delayed care because they didn’t want to have that co-pay. On a soapbox there just to say that plan design change is not our focus. Prevention of disease is our focus. So I will mention three things that we launched here recently with this what we call early detection or event detection algorithm that’s our proprietary, black box engine that we’ve built and we can detect diabetes, hypertension and endocrine disorder with our own models before they’re being exhibited as a CBT code.
So in essence what we’re trying to do is take an industry that is focused on solving for a gap in care. Again decade-old industry standard we’re trying to move to the next level and say, “OK. We know who has a gap in care. How do we find the numbers that aren’t yet exhibiting a gap in care because they’ve not been diagnosed with diabetes, but they likely have diabetes or endocrine disorder or hypertension?” Those are three of many of the algorithms that we’ve built out in our insights engine.
Brandon Laws: For the employers that you have on your engine, your platform, have you seen changes so far?
Rod Reasen: Excellent. I love this question and for our listeners, I did not tee up this question.
Brandon Laws: I’m just interested.
Rod Reasen: So we hired an outside PhD health economist to come in and do a retrospective study on employers that have been on our platform for more than two years and what we found was that employers that have been on our system had average savings of almost $600 per employee per year for being on the system.
Now I’m going to caveat that. I’m not an attorney. But I’m – just for anyone listening, we are not saying that if you buy the Springbuk system, that your healthcare costs are going to go down. What I am saying is that just like the NSA, FBI, CIA, who would all say intelligence is valuable, we do too. We believe that good information allows you to act credibly and that was one of the things we were trying to solve for early on was being able to make good decisions at the forefront and then track them throughout.
So logically, our platform does have a good return because we’re informing people with credible information so they can act with intelligence.
Brandon Laws: That’s such a great point because a lot of times if you don’t have data, you don’t have information, you’re making decisions off feeling. So what you’re basically saying is through the data, through the information, through the platform, employers are able to make better decisions. That’s simply what your platform does, right?
Rod Reasen: There you go.
Brandon Laws: Yeah, I love it. Well, so where could people learn more about Springbuk? How do they get a demo? Anything else you want to talk about the platform before we part ways?
Rod Reasen: We love opportunities to show off what we do. You can go to our website at Springbuk, which is Springbuk.com and as we talked about, that’s a small African gazelle, agile in its way and fun. So that’s why we named the company Springbuk. So that’s the best place to learn. You can jump on LinkedIn, ping me. My contact information is on LinkedIn. So that’s dangerous mentioning it on a podcast, but it’s there.
So ping us. We’re on a journey to prevent disease with data and this problem around healthcare is more than just one that obviously Springbuk is trying to solve. There are good peers in the market who are doing really good things. We approach it from a different lens. We think we’re better at many things than others. But we realize that it does take more than just us and we invite people to join us on the journey. It’s a big community out there.
Brandon Laws: Yeah. And Rod, just for you and for listeners, I brought you on because I usually don’t do product spotlights like this. But I think what you’re doing is so vastly different and this is a huge area where employers struggle. I’m all about making workplaces better, making people healthier, saving money in the process and it seemed like what you guys are doing is something that could really change the way employers are really treating their employees from a health insurance and wellness program perspective. So I appreciate you and what you’re doing right now. I think people need to know about it.
Rod Reasen: Very much appreciated and for guys like you that are doing this podcast, to be able to help bring innovation and thought to the market, we need this. The healthcare costs haven’t gone down in quite some time and employers are frustrated. They’re tired of continuing to have to pay these costs or pass it on to their employees. So we’re doing something about it.
Brandon Laws: Thanks for coming on the podcast, Rod.
Rod Reasen: Hey, thank you so much.