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Easy does it.

SimplePay Health changes the health care insurance conversation.

Ryan Murray, SimplePay Health

For the past six years, Ryan Murry, senior director of benefits for Essilor of America, has focused on a challenge that bedevils most U.S. employers: offering health benefits that make it easy to attract and retain employees while health care costs continue to rise. “We’ve been able to see a lot of great success in controlling our costs and improving the wellness of our population,” he says. “I have learned that is one of my passions.”

Essilor of America is the U.S. arm of the Essilor Group, the world’s largest manufacturer of eyeglass lenses, with at least 40 percent of the worldwide market. Murry manages benefits for the 8,500 employees in the U.S.

His success comes from targeting the three biggest drivers for health care costs: spine/joint issues, cancer, and diabetes/heart/lung problems.

“We have been very specific in trying to address those categories of spend and help our population to be able to be healthier in those areas,” he says. “And, when our workers need care in those areas, to make sure we have strategies in place to minimize our risk, and therefore minimize our cost increases.”

That’s how Essilor of America came to work with SimplePay Health, an alternative health plan designed to steer patients to high-quality providers and simplify the way they pay for care. In a 2019 pilot, SimplePay was an option for employees at one Essilor location. That expanded to six markets in 2020, and throughout the organization this year.

An Attractive Option

SimplePay Health serves employers of all sizes that have self-funded insurance plans. It consolidates health plan services—wellbeing, navigation, and key clinical programs—with the goal of improving workers’ health and health care. “We hardwire them so they come together for a single, integrated, broad health plan management and insurance platform,” says Scott Schoenvogel, president of the Dallas-based company.

Of the 7,000 employees who receive health insurance through Essilor, 55 percent chose SimplePay. Based on his experience to date, Murry is saving at least 10 percent on the total cost of medical claims and administrative fees.

“That’s pretty significant when you’re looking at a spend of around $25 million,” he says. “It delivers the results.”

Before founding SimplePay, Schoenvogel managed financial operations for Baylor Scott & White in Texas, and subsequently started Compass PHS, a health care navigation company that served nearly 2,000 employers’ efforts to lower costs and improve employees’ experiences while working through their existing health plans.

After selling Compass, he founded SimplePay with the goal of simplifying patients’ interactions with their health care providers while steering them to high-quality care.

“Employers want to create a great benefit that people value, but they need to be able to do that in a sustainable fashion,” Schoenvogel says. “Existing health care benefits and insurance suffer from cost and complexity problems. SimplePay was built with the idea of reversing, on as many fronts as possible, both cost and complexity issues.”

Decidedly Different

He identifies two innovations that differentiate SimplePay from traditional health plans.

The first is a plan design that does not include deductibles or co-insurance. Rather, each category of health care service has a three-tier co-pay structure that incentivizes an employee to choose the high-quality provider. For outpatient surgery, for example, the employee can choose an out-of-pocket co-pay of $1,000, $1,500, or $2,000, while SimplePay covers the rest of the network-negotiated rate for the service.

“If you have your $12,000 surgery at the highest quality place, it will cost you $1,000; if you have it at the lowest quality place, it’s $2,000,” Schoenvogel says. “The ability to price by provider is very unique, and we can have our own abilities and technology built around that.”

The second innovation is the payment model. “As a SimplePay member, you actually don’t pay your providers anymore,” he says. “When you go to the doctor or go to the hospital, your insurance card says that the health plan is going to pay the doctor or the provider organization in full.”

SimplePay consolidates all the patient’s out-of-pocket costs—physicians, ancillary services, pharmacy, and hospitals—into a single monthly statement. The patient is then able to review their statement and make payments to SimplePay. The company offers health plans with flexible terms so that employees can pay their out-of-pocket costs over time.

“So there’s a lot of going on behind the scenes,” Schoenvogel says. “By offering that fixed pricing upfront, we are trying to make it easy to identify and get to the highest quality providers so we can change the trajectory of care and get people healthier. And by changing the payment model on the backend, we are eliminating the complexities of the health care system that people have to figure out and overcome.”

At Essilor, SimplePay is one of three health insurance options available to his workforce. Its premium makes SimplePay the middle option between a traditional PPO plan and a high-deductible health plan.

At the end of the first-year pilot, Essilor asked its employees: If you were offered another alternative to SimplePay, would you stay with SimplePay or would you change to the other plan?

“About 85 percent of those employees said that they would stay with SimplePay,” Murry says. “So that’s a demonstration that this is a good plan for employees. They see the value in it.”

Back to School

The biggest challenge for SimplePay is the fact that it works so differently from the standard patient/provider/insurer relationship.

“Health care benefits are very sacred and sensitive for employers,” Schoenvogel says. “It takes a lot of trust to allow someone new to work with your health care benefit program.”

Although SimplePay is indeed simpler to use than traditional health plans, there is a learning curve.

“There’s education of members around their health benefits and how those benefits work,” Schoenvogel says. “The concepts are not super-difficult, but they are new. So, a certain amount of patience and persistence is required as we help people move from an old model to a new model where the employee is empowered to choose.”

Employees expect to pay out-of-pocket for their annual deductible and if they face a hospitalization, for example, they pay for their coinsurance. “But they don’t really know the exact amount that they’re going to be charged,” Murry says. “And they just are relying on the old system and hoping that what they’re told is accurate.”

SimplePay members go online before they choose a doctor or hospital to see the co-pay associated with each option. The hospital copay for labor and delivery, for example, will be $500, $1,000, or $2,000, depending on the hospital’s quality tier.

“But if an employee doesn’t check before they go, they may end up getting surprised with a $2,000 bill because they went to a Tier 3 provider,” Murry says. “The principles of SimplePay work but people have to be invested and willing to educate themselves for them to truly recognize the value.”

SimplePay is easier for providers because the insurer pays them in full, and they don’t divide the bill between the patient and the third-party payer. “If providers really understood it, they would be knocking on the door wanting to participate in the program because it basically takes the provider out of the collections business,” Murry says.

Schoenvogel, the son of a physician, believes SimplePay is a step toward fixing one of the many problems plaguing the health care industry. “No doctor got into the business to be a businessperson—they got into it to heal people,” he says. “But it’s hard to heal people when you have to worry about whether you are going to get paid. And we’re reducing a lot of that risk so that ideally the health care system can realign around its strengths.”

Despite the challenges associated with introducing a new type of health plan, Schoenvogel is pleased with the progress to date. The company’s top-line goal is increased use of best-quality providers and its intended byproduct, a lower overall health spend for an employer.

“That has been our consistent experience to date, seeing significant increases in what we call Tier 1 provider utilization,” he says. “And likewise, we have seen, in many cases, double-digit percentage decreases on both medical and pharmacy costs."

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