[S2E12] Vincent Catalano: Five Years Later, He's Still Saying the Same Thing. Who’s Listening?

In July 2021, Vincent Catalano sat down as a guest on the Healthy Dose of Dialogue Podcast with host Don Antonucci, Senior Vice President of Growth at Blue Shield of California. Vincent was then Senior Vice President of Employee Benefits at Lockton Insurance Brokers, one of the largest privately owned consulting firms in the world.

The conversation? Strikingly familiar. Vincent laid out the same truths he's still talking about today: employers praying for good outcomes instead of building strategy, the dangerous gap between HR teams and the C-suite, why most organizations have no real five-year healthcare plan, and what it actually takes to bend the cost curve.

In this special throwback episode, hear Vincent describe how the problem hasn't changed—and why the solutions he's been advocating for years are more urgent than ever. If you're an employer, benefits broker, or HR professional, this one's a reminder that the window to act has been open for a long time.

Originally aired July 16, 2021 on the Healthy Dose of Dialogue Podcast. Republished with permission from Blue Shield of California.

About Vincent Catalano: Vincent Catalano is the founder and CEO of CLEAR Healthcare Solutions and host of The CLEARly Beneficial Podcast. With over 23 years in employee benefits and healthcare consulting, he brings an independent perspective to issues the industry has long avoided addressing directly.

This episode is brought to you by HealthNEXT. HealthNEXT partners with employers to transform their employee health benefits through innovative, results-driven solutions that prioritize both cost savings and improved health outcomes.

Disclaimer: The information provided in this podcast is for educational and informational purposes only and should not be construed as legal, financial, or professional advice. Listeners should consult with qualified professionals regarding their specific situations.

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Transcript

SPEAKER_00 0:04

Welcome to the Clearly Beneficial Podcast, the show where we rip off the band-aid and explore the future of healthcare, benefits, and the people driving innovation in the industry. This episode is brought to you by Health Next, the company leading the way in helping employers build enduring cultures of health and well-being, reducing medical cost trends, and increasing organizational performance. To learn more how they can help you, visit healthconnect.com.

SPEAKER_01 0:35

Welcome to the beneficial podcast. This is your host, Vincent Catalano. We're going to go back a few years, uh specifically to 2021, where I was a guest on Blue Shield Healthy Dose of the Dialogue Podcast. And at the time I was an active insurance broker and was interviewed by one of their senior leaders, Don Antonucci, about enterprise health solutions. And I recently went back and re-listened to that, and then my friends at Blue Shield gave me access to the original audio file so that we could repost it as a fresh episode here. The key to this is that listening to that podcast from 2021 kind of made me feel bad in the sense that not a lot has changed in the employee benefits business. Employee benefits is still complicated. The price has gone up probably 50% since then, and employees aren't trained to the extent that they should be. The other thing is that I don't see that partnership between senior HR leaders and senior finance leaders as one that has taken root and has led to benefits within the organization. I still feel like both those organizations are in silos and still speak past each other. So give a listen to what I said almost five years ago and see if it resonates with you. And please comment and let me know how you feel. Thanks again for listening.

SPEAKER_03 2:23

Hi everyone. Thanks for tuning in to another episode of Healthy Dose of Dialogue Podcast. I'm your host, Don Antonucci, Senior Vice President of Growth at Blue Shield of California. My guest today is Vinny Catalano. Vinny is Senior Vice President of Employee Benefits at LockedIn, a privately owned consulting firm serving more than 50,000 clients around the world in areas of risk management, retirement, and employee benefits. He has more than 20 years of experience in healthcare and in the insurance industry, leading and designing innovative healthcare benefit programs and solutions. In this episode, we'll hear from Vinny about how he and his team at Locton are reimagining healthcare purchasing, how to choose sustainable, affordable health programs, and what employers and patients can expect in this evolving market. Thank you for joining me, Vinny.

SPEAKER_02 3:16

Thanks, Don. Well, you get two Italians for the price of one.

SPEAKER_03 3:20

That's right. That's right, Don. Love it. So, hey, to start out, Vinny, uh, I'd love first just to uh have our listeners learn a little bit more about your background. I mean, you have two decades of experience in employee benefits and consulting. So, what is it about the healthcare industry that excites and motivates you? And also, how did you get into this industry?

SPEAKER_02 3:45

Okay, well, I'll start with that. Uh is kind of a I don't think anyone in the industry starts out saying, I want to get into the insurance industry. Okay, we're all accidents in some way, shape, or form, I believe. And um, in grad school, um, one of my colleagues, uh Bob Emery, um just you know, and it ran conversations, says, you know, he's he was a he was a benefits broker. And he says, you know, Vinny, I think you'd be good at this. And I was like, okay, what is it? So we took, it took about five years for me to like get my brain wrapped around it. And I ended up joining a small uh independent brokerage in in Sacramento and um and started, you know, not knowing what I didn't know. I just, you know, dove into the business, learned as much as I could, focused mostly at that time on small groups, and um really you know, made an impact pretty pretty quickly. A couple of years in, we were acquired uh by a large national, international brokerage, and that allowed me to spread my wings and grow into larger uh organizations in the public sector and private sector uh throughout California. And um, you know, uh the ACA Affordable Care Act, you know, kicked in along the way, and that made uh for a lot of change for a lot of people. And um, I think that is the theme, you know, Don, when you ask me, you know, what motivates me, uh it's it's change. It's this constant evolution. Um, and I'm sure as we'll cover in this conversation later, um the role of what I do has evolved dramatically in the last you know 24 to 36 months. Uh and so uh it's the change, it's the opportunity to help employers um take better control over the cost of this very expensive thing.

SPEAKER_03 5:35

Yeah. And so what has been you've got a front row seat to a variety of different clients and employers in terms of how they've uh experienced the pandemic. And I know it's different for different employers, but as as it relates to health care and benefits, what are some of the things that have shifted or accelerated from your perspective because of what we've been going through with the pandemic?

SPEAKER_02 6:02

Now that that's a that's a great question. You know, the pandemic is obviously something that just sort of happened to everyone. But at the same time, we were not only dealing with the pandemic, but you're also dealing with um social equity issues. Uh the pandemic caused this work from home phenomenon. Um and I, you know, to be in HR today, human resources, um, it it is a I in my opinion, it's a very, very, very tough job. I I mean HR teams are stretched, um, high turnover in that role, as I see throughout the industry. Um and, you know, it's it's been one of those things where the pandemic has caused a lot of people to think differently about a lot of things. Uh, engagement, um, you know, how do we compensate our employees, the value of benefits? But it's it's interesting that those conversations, when I look at Lofton's talent and culture survey, benefits and comp actually fall lower, way lower on the scale than things like diversity, equity, and inclusion, uh, culture and engagement, um, change and transformation, uh leadership skills and upsell uh up training. So the world of HR has has really been thrown into a tizzy. At the same time, um financial leaders in organizations, the C-suite, are all of a sudden looking at benefits and like they're all of a sudden they're waking up and they're going, wait, wait, this costs what? And you know, let's let's go back 20 years when I started in the industry. You know, a single premium for an average plan was what about 200 bucks a single, you know, something like that, maybe 150, you know. And so when they got that 10% increase every year, that 10% on 200 was 20 bucks, no big deal. But today, that average premium is 500 bucks. Okay, and that 10% increase represents 50 bucks. So it's just simple compound math. In five years, that 10% every year equals$863. And companies aren't prepared for that. You know, they're just not. So the finance part of the organization is taking a bigger view. HR is working on any number of other initiatives that affect the organization. And, you know, one of my, you know, um, you know, stump speeches, if you will, is to really try to get those teams talking to each other more effectively. They talk past each other. And if you can get the financial teams working with the HR teams and finding common language, that is where you start to evolve the sustainability of your plans.

SPEAKER_03 8:55

Love that. Vinny, it strikes me too. While there's quite a few of we in our audience will have employers listening to this, influencers, legislators, et cetera. But you know, what strikes me too in healthcare sometimes, we use a lot of acronyms and a lot of inside talk. But as you describe the role of a broker or a consultant to family members or people outside of the industry, could you just describe for folks, you know, what is it that you do? How do you describe that?

SPEAKER_02 9:22

Oh my gosh, what do I do? Um, you know, in in its, you know, in its core, I'm there to find efficiencies across the benefit offer, right? So a lot of organizations just do benefits. I give them a health plan, I give them dental, I give them vision, I give them whatever. And they pay no mind to it. It's just this cost of doing business that they that they that they give. And so when I tell people, I I look for hidden opportunities to find efficiencies for you know long-term cost effective sustainability. That's a lot of words, but you know, no one ever asks what I do because I'm in the insurance business. Nobody wants to talk to me about that. They'd rather talk to me about what I do on the wine side, you know.

SPEAKER_03 10:13

We're gonna get to that. Then we're gonna get to that. That's excellent. Well, hey, here so a question that I have for you is from an employer perspective, then what is what are some of the biggest healthcare misconceptions that an employer has when searching for healthcare offerings?

SPEAKER_02 10:30

Well, I like to say that uh, you know, um praying for a good outcome every year is not a strategy. Okay, and I would say that most organizations do that. They um do not have uh a strategic plan around benefits, it's not a proper defined business process in most organizations. You know, most companies look at their annual healthcare spend year by year by year. And the renewal comes whenever the broker chooses to deliver it. Um, and all of a sudden that sets the brain in motion about well, now what do we do? Okay, well, if if they like I said earlier, I mean, I think everybody's been lulled into this thing where they get a 10% increase every year. And if it's if it's higher, we have to do something about it. If it's lower, the broker walks in with a rate pass or a 5% increase. Hey, we're popping bottles. Yeah, I beat up the insurance company. You know, that's just not reality and not sustainable. So when we go back to the math I did a few minutes ago, most organizations are absolutely would absolutely, if they actually thought about it, we'd be absolutely appalled to realize that in five years at the current rate of increase, um, they're not going to be willing to spend what they spend. And so what happens? You know, they water down the benefits, you know, they they increase deductibles, out-of-pocket maximums, all those things. And then the employees, you know, get mad at the organization for raising their costs for either premium or out-of-pocket expenses. So I think the big misconception is that it's okay to pray about your annual benefit strategy, and you know, that you are okay with the spreadsheet wrangling broker that comes in and you know, throws out a bunch of numbers, and you know, you sit there and you try to make a decision based upon that versus taking a step back and saying, okay, here we are today. Why are we offering benefits? What value do our employees play in the equation? And then what is this? How can we chart out a course for for five years ahead? And um, that's the that you know, go back going back to what what motivates me, what excites me about this business, it's that it's having the opportunity to have that conversation with an employer um to help them see the future. And and that is the big misconception, I think, is most employers think it's just this thing that they at 35% or more of payroll spend benefits are pricing.

SPEAKER_03 13:16

Yeah, it uh it's really important. I mean, I've been doing this for you know just as long as you have, um, more than a couple decades in healthcare. And a lot of that's been on the health plan side. And I would say, boy, there's a handful of employers that I can think of that actually uh have been focused on their healthcare programs like you're describing, and they get results uh for sure in a different way. And it it has always been surprising to me, you know, why that hasn't um shifted more. So from your perspective, is it just that, hey, this isn't a core focus of their business, even though, you know, really it should be. I mean, we've all seen different stats out there about, you know, different, you know, uh companies or services that when you take a step back and look like what you're paying for healthcare versus maybe the products you're delivering, you know, whether it's cars or you know, whatever it might be, that boy, spending some real time there and some strategic time with a broker or consultant, but also with your own team and staff pays significant dividends back to the company, but also importantly to the health and well-being of your employees. What so based on all that, and I know you agree with that, what where have you seen employers? Are you seeing it? Are they starting to shift more into actually looking at it from that strategic way? Or is there just still a long way to go because it's really just that annual process and and up now? We got to look at it.

SPEAKER_02 14:53

Well, if you if you look at some of the research that's been published, uh some of the papers I've read in the last six, eight months, um, you know, the financial suite, CFO, CEO are definitely taking a harder look at at benefits. I mean, listen, the CFO and CEO are actively involved in all of the other risk management insurance decisions, whether it's um, you know, uh EO, DNO, general liability, property, casualty, you know, cyber, you know, all those lines of coverage, you know. And they and when they look if they actually took an objective look at what they spend on those coverages versus healthcare, healthcare is going to be higher. But they stay away from it, you know, for whatever reason. Because in their minds, they give that control to the HR staff. And the HR staff, you know, is is not financially trained, you know, and so they take the advice of the third party, which is the broker or consultant. And, you know, and so it's it's this weird thing that goes on. And to me, it's always I I joke and say it's kind of like a game of telephone. You know, the broker whispers in the HR person's ear, or the HR person then repackages it and then delivers it up to the C-suite, and and something is a lot that gets lost in translation. And then there's been times where I'll get the call from the CFO, what the what does this really mean? Or, you know, and they all they're all angry at that point. And so it doesn't have to be that way. I mean, for me, those organizations that have figured out to get all of us in the same room at the same time to talk about the same thing and and develop the strategy. And and listen, I mean, to be fair, Don, you know, larger enterprises do this. Okay. I mean, you know, that 5,000 plus space. I mean, you've got people who make benefits a strategic part of their business process. But I say in the solid mid-market, in that 100 to 5,000 space, you know, I would say that that there's a lot of room to grow from organizations. And the other thing is, you know, um, and you know the data as well as I do, you know, throughout, say California, when you analyze all the groups that are insured, you know, what, 75, 80% are fully insured and 20% are self-funded. Where if you go anywhere east of California, the ratio is reversed. More organizations are self-funded back east. And, you know, um, I think part of that is the appetite for risk of the insurance companies, but also that other, you know, equally large umbrella in the gorilla in the room that starts with a K, you know, with a large, you know, um market share, um, it creates underwriting challenges for everyone to have choice. You know, the ones that are winning are the ones that go all in with one carrier, I think, in a lot of sense. You know, they can find strategic opportunities, find ways to save money, and um partner well with the self-funded, you know, or you know, type way of doing it, doing it level funded, whatever it might be. But those who want to get control over their healthcare spend would start to be better advised to lean into self-funding captives, you know, you know, level-funded solutions or other things where they can actually see the data and do something about.

SPEAKER_03 18:17

Yeah, it's a great point. I mean, I spent the first part of my career um on the East Coast in New York, in New Jersey, briefly, Maine. And it's very different in terms of the appetite for different products, whether it's health savings accounts, high deductibles, and what's acceptable versus what I've seen in California, Oregon, Washington State, where I've spent the you know, the last uh decade. Um, so I agree with you. And you know, your point on the larger companies are doing this. I agree. I also think, um, and it maybe it ties in a little bit about uh you know some of the uh more paternalistic, I think, customer profiles on the West Coast, but even for some of the large jumbo companies, I would agree they've got strategy and thought around it, but I also think that there's still quite a bit of ways to go for many of them in terms of really understanding the opportunity and also the waste and sort of the malfunction that's in healthcare. I mean, you know, you know, I work for an employer, Blue Shield of California Health Plan, that says, hey, you know what, we got a we got a broken system, and we're looking to create a system that's healthcare, you know, that's worthy of our family and friends and sustainably affordable. And we're the first to say we're not there yet by any means. And so I think employers um have an opportunity to continue leaning in and not find some of that acceptable. And there are some solutions out there that start to drive them in that manner. So, I mean, would you agree with that? I mean, that there's still a ton of opportunity for some of those.

SPEAKER_02 19:52

Well, there's this huge opportunity, Don. And, you know, the the challenge, of course, and and is a fully insured, no fuss, no muss solution is, you know, you know, I like to show a picture of a of a car that's already put together, you know, with everything, and a chassis of a car that has nothing bolted onto it, and you have to bolt all the things onto it to make it run uh as a self-funded plan. Because, you know, but the self-funded side gives you so much more flexibility. You get to find, you get a deep understanding of your of your workforce, you get to target conditions that might be endemic to the workforce. You you can you can manage your pharmacy spend so much better. Um, you know, I'm a big believer in looking at employees, not as a group of people that you're giving this thing to, meaning benefits, but as a group of people who are equally invested in the success of the health plan, right? Most organizations don't train people how to use their plan, right? They give them a sheeted open enrollment. This is what the plan does, co-pay, coinsurance, blah, blah, blah. But they don't tell them how to use it. They don't tell them how to talk to their doctors about drugs. They don't they don't talk to them about, well, before you go to the ER, you might want to tap into the telemedicine app or the or the 800 number on the nurse line just to triage what's going on before you spend 5,000 bucks over at the ER. So I think organizations, if they begin to look at their employees as value-added members of the health plan and stewards of the health plan and get them to think like consumers of the health plan. And I don't care whether you're high deductible or rich plan, whatever. The point is, is if you can get your employees to think like they're part of the thing, um, you will have better outcomes long run at lowering, you know, at bending the curve somewhat.

SPEAKER_03 21:52

I love that. I think you're right. And I and I also feel ownership or the industry, I think, feels ownership of doing a better Our job too of serving those things up so that you don't have to have employees hunting and pecking and understanding. I mean, how many times, Vinny, have you talked to somebody, either yourself in your own family or in the industry? I've got many examples of in sort of myself where I'm like, if I wasn't in healthcare, like, yeah, I figured out how to do this because I live and breed this every day and it still wasn't perfect. Or I'll watch, you know, some of my family members go through the system. And when you look at it from the industry, from that perspective, from the actual end consumer and member and patient, you know, we got a ways to go because I'm like, yeah, of course, I can find that after a lot of work, but doesn't that tell you something? So any comments on that? I mean, how often do you see that happening?

SPEAKER_02 22:45

I mean, Don, I mean, I try I tried to refill a prescription on Lockton's insurance company's, you know, website not long ago, and I I almost lost my mind. And and I'm like, if I can't do this easily with two clicks, how is someone else gonna do this who's uninformed? You know, I I start at the very basic level, right? You know, I believe that Americans only need to know five things about healthcare, right? Very simple. If you can know the definition of the premium, the deductible, the co-pay, co-insurance, and out of pocket maximum. If you know those five terms, you are way ahead of the game because I hear people confuse HR executives, CFOs, CEOs, they confuse all those terms all the time. And the point in my mind, the point oh oh oh one percent of the population knows that a maximum out of pocket. You know, and and so and I think that's like the most important term of all of them, you know, when it comes to the function of a healthcare. So, you know, it's I I think, you know, my my thinking over the years has shifted. Like I kind of believe that 80% of the population is pretty healthy. They don't need a good, they go to the doctor whenever they feel like it's not a it's not a big deal. They're healthy people. You know, 18% are a little more frequent, 19% are more frequent flyers, and and and they access the system more. And then you got that 1% who are just you know in it and and they can have no choice over it, whether it's a chronic condition or cancer or you know, whatever it is, you know, they're they're the heavy utilizers. And um in my mind, you know, you can't control that. You know, we look at those renewals every year and we look at those five large claims, and and those are nothing that a wellness program is going to do anything about. But if we can target those people in that 18% or 19% to use healthcare more efficiently, um that will make a difference.

SPEAKER_03 24:52

Yeah. Um so one of the things I noted that is that Locked In released a top 2021 talent and culture priorities and practices report that was based on feedback, I think, from something like 600 human resources leaders. Uh, can you can you highlight a few of the key takeaways from that and anything that you found either surprising or particularly interesting?

SPEAKER_02 25:18

Well, I mean, I I think uh, you know, when you look at at the and I've got it right up here on the screen, so I was prepared for that question. Um the the top thing that that organizations are looking at are culture engagement and the employee experience. So all those 600 plus lock-in clients, two-thirds said that is like their number one priority. So people are mindful of the fact that now that they're allowing their employees to work from home or some percentage working from home, we need to engage them better. And we need to put them as a priority and make sure that they're feeling part of the organization. So, how do we shift our culture? How what tools do we need to use to engage them better? Obviously, diversity, equity, and inclusion is number two. For literally half of the groups said that was their you know top, you know, one of their top priorities. Um, and then how do we change and transformation? So, change in transformation is number three. So you can see that change is afoot. People are thinking about it. The challenge is you know, it's a little of the blind leading the blind, and hence the world for consultants in all these areas, okay, or they come to people like me and I help them tee up because you know, this survey was run by Lochden's Talent and Culture Institute out of Kansas City, and they have a great team of people and great resources that are third-party resources that we can refer into organizations. But the surprise to me at this really was that when you go on down, you know, only eight percent, you know, look at things like educating employees on um employee benefits. Educating employees about resources and benefits, eight percent of the of the organizations are worried about that. Um, compensation and reward programs, 12%. So so those issues are literally a factor of six lower than the top priority, which is culture engagement and employee experience. Now, my mind, uh benefits education should be wrapped into the employee experience. You know, how do we get people feeling good about the organization? How do we give them the resources they need, whether it's mental health resources or whatever it might be, and education, and then at the same time teaching them how to use their benefits more effectively, I think weed can weave very nicely into the employee uh engagement and experience, you know, part of the uh the dialogue.

SPEAKER_03 27:50

Very interesting. Um so I wanted to kind of turn to some fun rapid-fire questions with you. Uh so in one word or a sentence, Vinny, uh, you know, what's one thing that you do to stay healthy? Peloton. Love it, love it. Very simple. How long have you been using it and how active are you?

SPEAKER_02 28:15

Uh I'd say I like I I said, see, I finished almost I'm coming up on my 700th ride. I've had it for about two and a half years, and um, it's the thing, man. I'm on it five, four or five days a week, you know, anywhere from 20 minutes to an hour. Um, it's it's changed my life. I mean, there's no other way to put it. And and I don't, and that's not a commercial for them. I mean, that's just um it's just is it suited me very, very well. And I'm I'm actually equally proud of my wife who I bought this for me and I didn't think she was gonna be interested in it. She has more rides on it right now than I do. So it's a family thing, and it's it's it's really, really good. What is the most used app on your phone? Uh the most used app on my phone is probably mail. I mean, I am on my, you know, and that's my thing. You're constantly doing that. But you know, the the the second most probably and all in the off hours is Instagram because of my wine thing, um, which is just a hobby and a little wine education thing called Vines with Vinny that um I've been doing since the middle of last summer, where I just you know post wine reviews. I I interview um you're interviewing me, I I interview wine luminaries uh throughout uh California and beyond. Um and to me, it's just a hobby. It's it's just a lot of fun to show people that somebody who really didn't know a lot about wine can learn about wine and uh experience it a little differently.

SPEAKER_03 29:54

Oh, I'm checking that out in real time here. So you got 1,532 followers there, underscore with underscore Vinny, and now you've got an additional follower.

SPEAKER_02 30:04

So thanks, Doug. That's great. Thank you.

SPEAKER_03 30:07

When you're not working, what can we find you doing?

SPEAKER_02 30:10

Um, you know, I'd say, you know, my wife's my best friend, and um she runs her own business. She's an interior uh designer of some note. And um, you know, we constantly talk about the business. I mean, sometimes I think I'm an interior designer, but I'm really, really not, you know. But the point is, is is uh we talk a lot about that business as well. Um she is uh uh chair of the board right now, the American Society of Interior Designers. So perhaps uh I play the role of consigliari once in a while and and give her my two cents and she can take it or not. Um, so I I think that's uh that that's a lot we have. Uh I mean, I have a son from previous marriage, so he's 30 years old, he's gone and out, we don't have pets. So, you know, it's it's good to be living with your best friend and uh be able to have those conversations about pretty much everything, you know, or I have a book in my hand, which uh I love reading.

SPEAKER_03 31:06

So that's excellent. Well, thank you, Vinny. This was tremendous. Thanks for your time here on this podcast. Absolutely, Don. Thank you for having me. I appreciate it. You got it. And for our listeners, thank you for taking the time to listen. You know, I hope you walked away with some key takeaways here. I mean, first of all, just inspiration from Vinny and what he's looking to do to improve the, you know, the health purchasing and outcomes through different strategies that you know employers in particular can be looking at in a different way. And I think, you know, what really resonated in this conversation as well is just the importance of education, communication, and thinking strategically about health plan benefits. It's it's a significant expense. And I know that Vinny and you know um what he's able to do with his colleagues at Locton, there's a lot of different solutions that employers could be and do consider out there. For more information about Lockton, visit lockedin.com and join us next time as we continue to bring you a healthy dose of insights and perspectives based on conversations with leaders who are transforming healthcare. We'd love to hear your feedback, share your comments with us, and let us know your thoughts by writing a review on Apple Podcasts. And you can also join the conversation on LinkedIn or Twitter at Dose of Dialogue or visit our website at doseobdialog.com.

SPEAKER_01 32:30

This podcast reflects the personal views of the host and guests, not their employers or sponsors. See you next time.