In 2022, Molly Breitenbach and Brandon Alleman noticed major health carriers were making businesses and employees spend more than they might need on insurance.
“They make money when you spend more. Everyone in the system is currently incentivized that way,” Breitenbach said.
Now, they’re hoping to change the health insurance landscape through Candid Health Advisors, a company that is “breaking up” traditional insurance incentive packages by working directly with individual health-care vendors.
Breitenbach and Alleman said Candid Health bundles services from vendors providing the same services in a way that reduces costs for employers and tailors health-care packages according to employees’ needs.
Breitenbach, who previously worked as an accountant, said insurance carriers have structured health-care incentives that force providers to see more people, and brokers to get higher claims for a greater payout.
“The only people that end up losing are the employees," Breitenbach said. "They're seeing their premiums go up with no corresponding increase in care or benefits that are being offered."
She said pharmacy benefit managers — third-party companies that act as an intermediary between providers and pharmaceutical manufacturers — are often owned by major insurance carriers, which reduces the incentive to change costs and restructure packages.
Alleman, owner of Antioch Medicine with a doctorate in translational biomedicine, said those insurance packages are also a major financial drain on employers.
“If you look at companies’ profit and loss statements, they have salaries and wages, and then within the top three is going to be benefit costs for their employees,” he said.
As a result, he said companies have shifted more payments to employees to keep costs from skyrocketing. He said deductibles, co-pays and pharmacy costs have increased, which have affected spending.
How Candid Health Advisors is different
Alleman said their business works with vendors who are smaller than vendors working for major insurance carriers and structuring health insurance plans differently.
For example, Alleman said an employee with a chronic illness and her employer who is now contracted with Candid Health had been paying $1,500 a month for a medicine that cost $125 per month to order and dispense, because of the way her insurance plan was structured.
“We just got the same thing in a different way, which costs 10 times less," Alleman said. "We're just structuring the plan to align the incentives for employees."
To reduce costs, Alleman said the company provides vendors with payments that are structured like a monthly per-member fee instead of higher spread pricing charged by pharmacy benefit managers.
“So the smaller vendor is saying, ‘Hey, I'm willing to be paid differently to get the market share that I'm losing to people who are being paid in a not transparent way,'” he said.
Alleman said his company is working with Indiana and Iowa vendors, as well as some that are Kansas-based.
With four companies working with Candid Health, Breitenbach said they first have to educate employers on the inefficiency of their current plans, which human resources departments do not have the time to create themselves.
She said it often becomes “a hard sell” when asking employers to step away from recognized health insurance carriers.
“Your employees aren't going to have that Blue Cross Blue Shield logo card in their pocket and it's going to be some lift on your end to roll this out. There's going to be some friction,” she said.
Despite being a hard sell, Breitenbach said the “numbers do always work," especially with the first companies working with Candid Health that struggle with unexplained high insurance renewal costs and lack of access to their data.
"They're the ones that are like, 'Yeah, we're fed up. Let's do something,'" she said.
Candid Health added its fifth client company this year. Alleman said the opportunity to change the health-care insurance system pushes their plans and services forward.
“Every company realizes health care is an issue. It comes up every year," he said. "But they really only think about it for about six weeks, and then it's like, ‘Oh, now we're stuck with the same thing.' So we are saying you know this is already an issue. What you don't know is there is something you can do about it and that’s what stands out to people that there is an opportunity to do this differently.”
