Rishi (00:41)
Today our guest is Donovan Pyle. Donovan, welcome.

Donovan Pyle (00:47)
Great to be with you, Rishi. Thanks for having me on.

Rishi (00:49)
Yeah. Donovan is – the author of Fixing Healthcare and he's the CEO of Health Compass Consulting.

So

The topic today is fixing healthcare, a CFO's playbook for reclaiming $1,000 to $4,000 per employee. First section here, Donovan, is the unlikely path. You have a music performance degree from Sunny. And today you run a healthcare consulting firm and you are the validation institute's 2025 Benefits Advisor of the Year. Walk us through that path.

How does a musician end up fixing healthcare?

Donovan Pyle (01:30)
That's that's a fantastic question. and and you I appreciate the homework you did there. yeah, so I spent my first 10 years well I started playing music professionally when I was 15 in 1995. And I played professionally full time for the most part in Manhattan for about 10 years after college. And so

If you were watching TV in the mid-2000s, you probably heard my playing on on commercials for like HBO and Chevy and Nike and companies like that. I was playing drums on commercials, the music for those commercials. And

And so, yeah, did did all kinds of things. I taught, I played in corporate bands, I played in wedding bands. I mean, really, just any anything you can do to make money as a musician, that that's what you do. I I got to work with U2. I was the mix assistant for U2's 2009 release, which was called 360 Live. just pretty amazing amazing experience. I got to tour and open with the band Heart at Pine Knob in Detroit, which was incredible. So

So did a lot of fun things and you know it was good but it kind of felt a little bit empty.

And I was touring with the band for a few years and we ended up getting signed by by EMI, you know, the old oldest record label in the history of the world. And just after we we recorded our debut album for them, they filed for bankruptcy. And so we were completely done. And the the album wasn't even was wasn't even finished yet, wasn't even released. And so, you know, I'm I'm stranded in upstate New York and

And you know, I'm 31 years old and I was j frankly just sick of sick of getting up at or waiting or you know, going to bed at 6 a.m. I wanted to really use other parts of my brain and do something completely different and have a completely different life experience. And so I said, well, what's what's the most opposite thing from the music industry? What what could that possibly be? Well, it it's clearly it's the insurance business. ⁓

Rishi (03:19)
Mm-hmm.

Yeah.

Donovan Pyle (03:25)
Right?

So so somehow I convinced

Some folks at Chubb, you know, the huge property and casualty company, international insurance company, to hire me in a very entry-level sales job in their accident and health division. And and so that was a great way to cut my teeth. you know, we at at Chubb we would develop and administer disability products, things like that, and then we would sell them through brokers to

to

employers and their employees. That was the distribution channel. And and so that was really instructive and learned you know just so much along the way there.

Rishi (04:03)
Very interesting path. I live in Asheville and there's a lot of musicians here, but I cannot imagine any of them doing what you do.

Donovan Pyle (04:11)
Well, yeah, if you'd seen me in the late 2000s, I had hair down to here and a big beard. And yeah, I I I you know I I frankly I wouldn't have for foreseen this transition either. But yeah, it's it's been a really, really interesting path. And you know, it led me down the road of really uncovering a lot of structural

challenges in the insurance industry. And and so one of those so you know I I kind of I worked my way up th through the corporate environment at Chubb. And in my last role I was I was managing our our largest broker relationship. And so this this broker sold a ton of disability. And

But I I was getting a little bit bored, right? You you get good at something and then you get kind of bored with it, right? And I had been in the top five percent of salespeople nationally for a few years and gone to all the club trips and all that fun stuff. And one thing that was you know, kind of really s stuck out stood out to me in that during that time was that I'd go to these open enrollment meetings with the broker.

Rishi (04:58)
Mm-hmm.

Donovan Pyle (05:15)
And you know the executives at the company we were enrolling were were oftentimes kind of upset about rising health care costs. Their employees were upset about rising health care costs. And when I changed careers, I moved down to Orlando from Manhattan.

And in Orlando, we have this company called Rosen Hotels, whose founder by the name of Harris Rosen, he in 1991 started, he got really upset with the legacy model of buying healthcare. And he said, I'm not, we're not doing this anymore. We're not just blindly giving our money to insurance companies, we're not blindly trusting brokers. And so what he ended up started doing in 1991.

Was pioneering new ways to buy healthcare and provide healthcare for his employees. And over the course of the next 30 years, he saved his his company over a half a billion dollars on healthcare. compared to what he would have spent doing the traditional thing that most people do. And he did it by providing a superior health plan to his employees. I mean, so much so that

Rishi (06:22)
Yeah.

Donovan Pyle (06:24)
He he's in a hospitality industry where, you know, turnover is rampant. His his turnover rate is half what his competitors is, and he spends half as much on healthcare as his competitors. And so I'm here I am sitting in these open enrollment meetings and

You know, like I said, the employers upset, the the employees are upset. And I'm thinking to myself, like, why aren't the brokers recommending some of these strategies and solutions? Like you don't even have to reinvent the wheel. Like this guy already did all this groundwork for us. You could just replicate some of those things.

Rishi (06:50)
⁓

Mm.

Donovan Pyle (06:58)
And I very naively thought, geez, if I just move to the brokerage side of the business, I can probably scale those innovative solutions, I can probably help a lot of people, and I can probably make some money doing it. And so I went and worked for a national firm and very quickly realized that's not the business that they're in.

Rishi (07:14)
Mm. Steve Jobs said good businessmen invent and the best businessmen they just copy.

Donovan Pyle (07:23)
Well, there's something to be said for that. So but but you know, I I think, you know, like like I said earlier, the the challenges in this industry are mostly structural. And there's a lack of understanding about the roles and responsibilities of these different types of stakeholders and the history of them and what they're what their role is historically. And so

Rishi (07:34)
Mm-hmm.

Donovan Pyle (07:46)
That's really the challenge. And so just to wrap up the story, yeah, so after building a book of business at a national brokerage firm, I was fired unexpectedly.

And I was told during my termination that I was, quote, being too hard on one specific insurance company, health insurer, who happened to pay them their largest bonus each year. And I was told, listen, you're asking very difficult questions of this health insurer. And we don't like what you're doing, and you're potentially putting our bonus money at risk. And so we don't like that.

Rishi (07:57)
Mm.

Mm.

Donovan Pyle (08:21)
Okay, and so that's when the light bulb really went off for for me. And I said, my goodness, these guys are not their job is the the legacy brokerage industry, their job isn't isn't to do what it employers expect them to do. Employers expect them to help them get the best deal, right? Maximize their investment. We're gonna spend all this money on healthcare. How do we get the most value for our money?

Finance teams don't understand this stuff. HR teams typically don't understand any of this stuff. They rely on outside experts. However, the problem in the brokerage in this industry is unique because when you work with a broker, they're not in the business of helping you maximize your investment. Their job is to serve as retail distribution for insurance companies. They get paid by insurance companies the same exact entities that you expect them to negotiate against on your behalf.

It is a huge conflict of interest. In fact, it's technically illegal under federal law. It's called a prohibited transaction under federal law. But most employers don't know that legacy brokers get paid all these bonuses by a small set of insurance companies.

Rishi (09:26)
Mm-hmm.

Donovan Pyle (09:37)
They don't know that some of these brokerage firms have equity in these insurance companies. They don't know that some of these legacy brokers get loans and lines of credit from these same insurance companies you're expecting them to negotiate against. They don't know any of that stuff. And so the analogy I like to use to illustrate the ludicracy of this industry is that imagine if you know I'm the CEO of my company.

And I don't have time or really the interest in really understanding US tax policy at a deep level. What do I do? I hire a CPA. And that CPA works for me to protect my interests and my blind spots. Brilliant! And now I can focus on my core business. Brilliant. Okay, but check this out.

In the brokerage industry, the CPA is getting paid by the IRS. Okay? That's the disconnect. Imagine if my CPA was getting paid by the IRS, I guarantee you I would pay more in taxes than I should. And so no one, yeah, no, no one would ever willingly enter into that engagement.

Rishi (10:44)
Yeah, so well said.

Donovan Pyle (10:51)
And and so this is this is really why I wrote this book. I spent two years writing this book called Fixing Healthcare, How Executives Can Save Their People, Their Business, and the Economy, so that

Finance teams and HR teams, the people, the fiduciaries of the plan, right? The fiduciaries, they understand how this industry works. Because if you don't understand how this industry works, you are going to be run over by it. And employers currently are. Think about it, Rishi. 2024.

US employer spent $1.3 trillion on healthcare. 25% of that was completely wasted. That's over $300 billion. If you break that down to the employee level, we're talking about $4,000 per employee per year that's being wasted, and that's the most conservative estimates.

Rishi (11:40)
I'm really impressed by the stats. So the next question is tell us a story about the most eye opening thing you've ever found buried in a client's benefits contract. The one that still makes you shake your head.

Donovan Pyle (11:56)
Well, geez, in this industry, so so I started my management consulting firm called Health Compass Consulting in 2018. Our role is to protect employers and patients from the insurance and medical industrial complex. That is what we do. So I went from I went from the supply side selling products to employers to representing the demand side.

Rishi (12:14)
Mm-hmm.

Mm-hmm.

Donovan Pyle (12:18)
Right? We serve as a fiduciary to the employer. We are legally obligated to serve the employer's best interest, and we happily do it. That's why I started the company. So we shake our heads almost daily at things we see in contracts that employers have signed off on because let's face it, half the time they haven't read the contract. They re rely on the broker to read the contract, but the broker is not incentivized to catch this stuff. So anyway.

I'll tell I'll tell you a quick story. I got a call from a executive director of a teachers union a few years ago on a Friday afternoon, just like today. And completely out of the blue. I didn't even know this teachers union existed. And and so you know they they they have 10,000 employees. It's a large school district just north of Orlando, and they're like, listen,

Our healthcare costs are exploding. It's so expensive. And we have a number of our, maybe like seven or eight of our union members, sitting on this insurance committee. And they meet once a month. But you know what? Like, they're smart people, but they don't know this insurance stuff. And they're being asked to make decisions about this $65 million healthcare budget. And and they're like, listen, like, you know, we don't really know if we trust the district.

Rishi (13:29)
No.

Donovan Pyle (13:34)
We don't really know if we trust the district's broker. Can you guys maybe just come in and teach us how this this whole system works? Like what is a PBM? What is a TPA? Who are these vendors and what do they do? Okay, so we did a workshop, right? Great. We we we set aside a couple hours, got got their team together, educated them on all this stuff, and I said, Cool, that's super helpful. Now, what if you could you do an analysis?

of our plans, right? Can you look at the contracts? Yada yada yada and tell us what should what should we be pushing for in these committee meetings? Okay? And we said, okay, yeah, we can certainly customize a an engagement for that. So we did our deep dive on the current vendor stack, on the contracts, on the whole the funding mechanisms, all that stuff. And we s and we sent found wow, like you know

first of all, you the the the district hasn't gone to RFP for a new pharmacy benefit manager in seven years. And that's insane because yeah this this this whole landscape changes a lot and frequently. And then by the way you haven't okay so you haven't gone to RFP for a new pharmacy benefit manager in seven years. And by the way, you're with one of the worst ones. Okay? So I mean look in your contract it says right here on page, you know

175, and by the way, these PBM contracts are like over a hundred pages long in many cases. Okay? That's how they hide stuff in the contract. ⁓ in on page 175 or whatever it was, it says, We PBM do not serve as a fiduciary to you. And if the client tries to serve in a fiduciary capacity, we will turn we we reserve the right to terminate this contract.

Rishi (15:04)
Mm-hmm.

Donovan Pyle (15:21)
What they're telling you guys is that they are not legally obligated to serve you in your best interests. Okay? They're telling you in the contract, they're not legally obligated to do that. And there's a reason for that. Legacy pharmacy benefit managers serve as wholesalers of drugs. Okay? Their job is to sell products. It's not to give you the best deal, it's not to maximize your investment.

It's not to provide you with services to help you get the best deal. That's not what legacy PBMs do. And so we said, well, wow, this is a this is low, this is low-hanging fruit. Why do you why don't you push to get a new pharmacy benefit manager? So to wrap it up, they they they they went to RFP, they got a set 11 responses, they picked a better pharmacy benefit manager, and they saved about $3.6 million on drugs last year.

All right, pulling one lever, replacing one vendor. And yeah, and and if they had chosen a better pharmacy benefit manager seven years ago, they could very well would have had fifteen to twenty million dollars more in their budget. And potentially some of their teachers that are on are literally on food stamps, maybe, you know, maybe that would have helped them.

Rishi (16:16)
Yeah. Great story.

Yeah.

I love this story actually. So the next section here is why our audience who are construction CFOs should care. Translating to the job site. The national average is now about $17,500 per employee per year in healthcare costs. And research says roughly 25% of that is addressable waste. For a 100 person contractor running

two to three percent net margins, what does that waste actually mean in terms of jobs they'd have to win to make up for it?

Donovan Pyle (17:15)
Yeah, it's a great question. I mean, I think there's so much opportunity for the construction industry to improve and drive more value to their bottom line and their people by doing a better job of managing their healthcare supply chain.

So let's just level set. I mean, for many organizations, healthcare is the fastest growing financial risk on corporate P&Ls. It's the fastest growing financial risk. And when I ask most businesses, what's your plan? What's your strategic three-year plan to solve that problem? Most of them don't have one. They haven't considered making one. Well

Okay, do you use a broker? Yes, we use a broker. What's their plan? They don't have one. In fact, they make and that's largely because legacy brokers again make more money when costs go up, not down. Nobody wants to, negotiate against their own financial interests, right? So there's no so many businesses, this is not true of everyone. Some companies are very sophisticated, they do a fantastic job, and we want to commend them. However, the vast majority

Rishi (18:10)
good.

Donovan Pyle (18:23)
Are not proactively measuring this

It's a huge opportunity. Think about it. Let's say you even just were able to reclaim and save $1,000 per employee without and when we talk about savings, we're not talking about watering doing it by watering down the coverage and you know passing more costs on to employees. That's cheating. That's not that no, that's that undermines the whole point of offering benefits in the first place. We're talking about doing a better job of managing the healthcare supply chain. What does that mean? Okay, first of all.

So many businesses think of healthcare as a single line item expense. Right? The carrier sends an invoice and we pay the invoice that one line item. Okay.

That there's a whole supply chain underneath that. Okay. So what you want to do as an organization, we think of this in terms of a maturity model. Okay. So one of the first things you want to do early on is put yourself in a position where you can start seeing the supply chain. You start getting the claims data so that you see your supply chain. What does that actually mean? I'm talking about how much is your company actually paying for

Hospitalizations, surgeries, labs, imaging, and drugs. How much are you actually paying for those things? A lot of businesses don't know. And it's not necessarily their fault. A lot of the carriers don't willingly give them their data so they can see their supply chain. And that creates fiduciary risk as well because we've got these things, you know, in the Consolidated Appropriations Act that says you're not allowed to have gag clauses in your contracts, all that stuff. We don't need to talk about it.

So once you can see put yours you put yourself in a position where you can see your supply chain, then you can actually start managing that thing, right? And think about this. This is this is listen, there is no other market like this, Rishi. Where I live in Orlando, Florida, healthcare prices vary over 1100%. I mean, imagine if these contractors were buying gas for $3 a gallon.

Rishi (20:23)
huh.

Donovan Pyle (20:29)
Or across the street or down the street, they're buying the same gasoline, filling up for $300 a gallon. And you as the employer had no idea when they were doing which one. Well you're paying for all of it. I mean, it's your money. I mean, so so I mean, this is such a huge opportunity for businesses that engage. And unfortunately, for most employers and patients, their employees and their families.

Rishi (20:44)
⁓

Donovan Pyle (20:59)
The the insurance industry has been so masterful in lowering expectations amongst the C-suite. And by the way, the insurance industry does this for their own financial benefit. I mean, I I think I, at the workshop we did at CFMA, you know, we asked the audience right up front, how many here, how many people here have been convinced or told that, hey, healthcare costs just go up every year? There's not a whole lot you can do about it.

Rishi (21:06)
Mm.

Donovan Pyle (21:24)
Well almost everybody raised their hand. Like that is the dogma that is just permeates our culture. And that attitude of of that practice of lowering expectations is designed to extract money out of you because you're not listening I mean as a CEO of my company, if I'm told that I snuff there's nothing I can do about a specific problem.

I'm not gonna be in that meeting anymore. I don't need to if there's nothing I can do, I don't need to be in that meeting. HR, you go deal with it. Or whoever.

And exact that's exactly what the insurance industry is trying to perpetuate in many cases. is that narrative. So that people just say, you know what? You know, we were expecting a 10% renewal, but we got 8%, and we're very happy with that. We sign it and we move on. When in reality, you know, it they could have gotten 8% reduction while i improving benefits for their population in many cases. So

These are the opportunities out there, you know, for your Hundred Life group, you know, with your company with a hundred employees, if they save a thousand dollars per employee, that's a hundred thousand dollars right to their bottom line. Right?

Rishi (22:30)
Yeah, and this is a

very tough business construction. Two to three percent net margin. These guys are running on razor thin margins here,

Donovan Pyle (22:39)
Right. So so so when your second largest expense is going up eight, ten, twelve, fifteen, twenty percent a year, it's just eroding margin. And it's not sustainable. I mean we've had more inbound inquiries from mid-sized businesses this year in the past eight months than we've had in the past eight years combined.

Rishi (22:46)
Mm-hmm.

Donovan Pyle (23:00)
And we just see that a lot of businesses, they're kind of at a breaking point. It's like they don't know what to do. They don't know what to do. And I had one company, CEO of one company say, listen, we're almost working for free right now. Like what are we doing? Like this is this is it's really it's really upsetting people.

Rishi (23:15)
I'm glad that CFMA found you and I found you through them. construction has its own wrinkles. Seasonal labor, union versus open shop, owners who personally guarantee everything. Where does the benefits problem show up differently for contractors than for other mid sized employers?

Donovan Pyle (23:21)
Yeah, likewise.

You know, people like to think that their vertical is different. And in some cases it's absolutely true. you know, the technology needs are different amongst different verticals. but I always like to when when people ask about how healthcare in construction is unique.

I generally push or any industry, I generally push back on that a little bit. And here's why. Diabetes does not care where your employees work. Cancer does not care where where the patient works. And the way that you're gonna go about solving that problem and getting them better.

Rishi (24:08)
Mm.

Donovan Pyle (24:20)
It really it it doesn't matter. Like you want to drive them towards the highest quality care you can give them. And by the way, that's typically yields the lowest price, too. Right? It this is such an inverted market, Rishi, that when you pay BMW prices for a surgery, let's say a a total knee replacement, when you pay BMW prices, what you actually get is a Yugo in most cases. Okay, so so

Rishi (24:31)
Mm.

Mm-hmm.

Donovan Pyle (24:48)
When you you could pay $100,000 for that total knee replacement and at at the local hospital and they might do 25 total knees a year. And so because they don't do that that many, their quality scores in that category are probably not very good, right? They've got readmissions, they got problems on the back end, et cetera, et cetera. Whereas if you went to if that same patient went to an ambulatory surgery center that is a center of excellence where they do 500 a year.

Total knees? Guess what? You could get that same surgery done for about $20,000, $20 to $30,000, and they're much more likely to have a better outcome because that's what they specialize in. I mean, these are the opportunities everywhere. And it's just it's just crazy to think about it. But you know, as far as to answer your question in in a slightly different way, you know, there is a very well documented challenge.

Rishi (25:17)
Mm-hmm.

Donovan Pyle (25:43)
In mental health in the construction industry. And frankly, I'm not really, I don't really understand why that is, why that's part of the culture. so but you know, if people that are suffering with those challenges, you better believe that it's hurting their productivity. You better believe it's probably creating some s safety concerns, and they're probably.

They're probably a you know, a at risk of of of quitting as well. And by the way, I was at a Florida safety conference a couple years ago, and one of the stats that really stood out to me was that the the number one reason for accidents or drivers of on-site accidents is turnover, employee turnover. Right? newer people on the job site that they don't have the muscle memory of how.

The organization does things, right? They're safety protocols. What's something that's kind of unique about the construction industry in healthcare? I would say, yeah, the mental health concern is real. And that's an area of the plan or the program that construction employers should really consider bolstering and paying special attention to because there seems to be an elevated need there.

Rishi (26:52)
I know somebody who was in an accident in a construction site and it was probably due to a mental health issue.

Donovan Pyle (27:00)
Yeah, yeah, I'm sorry to hear that.

Rishi (27:03)
Deductibles have grown 162% while wages grew twenty six percent. Contractors are fighting a labour shortage in the field. How have you seen benefits design become a recruiting and retention weapon? Tell us about an employer that got this right.

Donovan Pyle (27:24)
Yeah, so let's let's talk about the legacy levers that employers have pulled to save money. basically, you know, all right, so let's let's just level set here. the marketplace of strategies and solutions is huge. If you're a mid-sized business, there are literally dozens of carriers who would love to compete for your business. However,

Because most employers work with legacy brokers and service distribution for a few insurance companies who pay them the most, most employers are only being shown three or a few different options every couple years. Right? There's a couple different carriers. You either sell fund or you or you fully ensure your plan, and that that's what they think the marketplace is. That could not be further from the truth. The marketplace is huge, it's vast, it's dynamic.

And most employers that we speak to have never had, even if they've been around 50 years, they've never had a full market evaluation conducted for them. And so they've never been in an environment where they've created a competitive bid environment for their business. Right? If you're bidding for a job.

Rishi (28:30)
Mm-hmm.

Donovan Pyle (28:34)
and there are 15 companies bidding for that job. You better believe that that mar there's gonna be margin compression throughout that exercise, right? People are gonna sharpen their pencils and start competing harder for that business. Well, most businesses, when it comes to their second or third largest expense, which is healthcare, they've never had a full market evaluation to comp to really create that competitive bidding process for their business. And so

Rishi (28:46)
Yeah yeah.

Donovan Pyle (28:59)
that's something employers really w need to do is really gain visibility and exposure to the actual marketplace, which again is huge. So so that that's a big opportunity. I lost track of your question. Repeat it, repeat that for me one more time, please.

Rishi (29:15)
So the deductibles have grown a lot faster than wages. And one thing I was gonna point out, this seems like the market's not optimal or competitive enough in this industry that you operate in the healthcare?

Donovan Pyle (29:18)
Yeah.

I could not disagree more. no, i I mean, yes, most employers are not being shown the marketplace. They don't even know what strategies and solutions are out there to help them. And so and so this going this going back to answering your question, and so because they don't know that there is a huge marketplace and a very competitive marketplace that exists, then they resort to things

that frankly undermine the whole point of offering the benefits. the only way that they've been shown to achieve savings in many cases is by shifting costs to the employees. Right? We're gonna raise deductibles, raise co-pays, narrow networks, and increase the employees' contributions towards the plan. And all of that again undermines the whole point

Rishi (29:59)
Mm-hmm.

⁓

Donovan Pyle (30:14)
of offering these benefits, which is to attract and retain talent and improve productivity. Right? So that that practice of backing people into HSA plans does not work.

Rishi (30:20)
Yeah, yeah.

Donovan Pyle (30:27)
Sure, if you've got a healthy and wealthy population, great, HSAs can be a wonderful vehicle. But you know what? I guarantee half your population doesn't have $1,000 tucked away for an emergency. And if you're sticking them with a $5,000 high deductible plan, you are unintentionally put you know putting them in financial stress. here, I mean, if we if this here, this is proof of failure. Okay, check this out.

Medical debt has been the number one reason for bankruptcy for many years in the United States. Medical debt. But here's the kicker. Most of the people, about 70% of the people who file for bankruptcy because of medical bills, they have health insurance. They have the product, right? That's supposed to be protecting them.

Rishi (30:55)
Mm-hmm. Yeah.

Mm-hmm.

Donovan Pyle (31:09)
But these high

deductible plans, these consumer-driven health plans, for the most part, it's done the complete opposite of what we were pitched. You know, it's it's bankrupted the employees, it's put them in financial stress. Your diabetics who should cost about $8,000 to keep healthy and keep and manage their disease.

Because when when they're on these high deductible health plans, they they they forego maintaining their diabetes, and guess what? They end up in the in in the hospital for seven days and they lose they they lose at least a week of work and and it's a f you know $70,000 claim that could have been avoided. So, you know, I mean one of the lessons from Rosen – Hotels is like one of the many lessons is whenever there's a barrier to care, break it down, get rid of it.

Rishi (31:46)
Yeah, yeah.

Donovan Pyle (31:56)
The more you help your people, the more you're helping them. I mean but you want to buy effectively. Don't, you know, when you've got people getting $100,000 knee replacements that they that they should have bought, you know, gotten for $25,000, you can't do that fun stuff. When you've got people buying MRIs for $6,000 at the local hospital that they can get for $600, down the street.

You can't do any of this nice stuff for your employees because you're you're wasting so much money by buying blindly.

Rishi (32:26)
Next section here is the fiduciary storm, the risk most CFOs don't know they carry. Under the Consolidated Appropriations Act, the CFO personally attests that planned fees are reasonable and quote unquote I didn't know is no longer a defense. Spell out for our audience what that personal exposure really looks like.

Donovan Pyle (32:50)
Yeah, so you know fiduciary so just to level set, you know, anyone who has discretion over the plans at the employer at the employer level, and that could be the CFO, that could be HR, that could be the CEO, operations, etc., anyone who has discretion over the plans, right, decision-making authority.

Is considered a fiduciary under federal law. And they have been since 1974. Okay? This is not a new rule. It just hasn't really been enforced. And so what is happening in the health and welfare side of the benefits house has already happened.

Rishi (33:16)
Mm-hmm. Mm-hmm.

Donovan Pyle (33:25)
It already happened on the retirement in the retirement industry about 20 years ago when fiduciary standards under federal law began being enforced. And one law firm in specifically successfully sued thousands of employers for breach of fiduciary duty on 401k plans. And that unfortunate exercise

Did have a silver lining in that it completely transformed the 401k industry. Basically, what it did was it it really made financial advisors who used to sell products for commissions and bonuses, it made them switch from being supply side to demand side by serving as a fiduciary to the employer and selling

advisory services for a fee. And so when that transition happens, the performance of 401k plans improved quite a bit because there was alignment, right? Now the financial advisor is not just recommending products that pay them the biggest commissions and bonuses. No, they're serving as a fiduciary to the employer and they charge a fee

And their incentives are aligned. And this is kind of boring stuff to talk about, but it's so foundational and so important. And so so yes, when those four or one K lawsuits went through and these plant sponsors were successfully sued.

It it it breaches the corporate veil, meaning that if you're a CFO and you're you have discretion over the plan, you are a fiduciary. Whether you know that or not, you are. Congratulations. It comes with a lot of responsibility and and liability. Okay? And so your personal assets can be taken from you for fiduciary breach. Okay, like it's it's actually potentially very serious, and I don't mean to scare people, but

It you should you should absolutely be aware

Of what you're of what you're getting into and know and have the right processes in place to safeguard yourself. And so, one of the things that we did in our workshop was teach these employers how to set up a fiduciary committee for their health and welfare plans, just like they have for their 401 plans. There's a reason why you have that. And you know, people that serve on committees for 401ks are very oftentimes are very proud about it, right? And they should be. It's a big responsibility that you're taking.

On behalf of your company. Congratulations. Well, do the same thing on for the health and welfare side. I guarantee you you get better results.

Rishi (35:48)
Johnson and Johnson, Wells, Fargo, JP Morgan, all facing fiduciary litigation over their health plans. Pick one of those cases and tell it as a story. What did the fiduciaries miss and what should every plan sponsor take from it?

Donovan Pyle (36:07)
Yeah, gr great question, and I love talking about the Johnson and Johnson story because there's so many layers of irony in the in that one. Because because they're a drug maker. so check this out. So here's the long and short of it. You've got an employee who's taking a specialty medication, which costs about ten thousand dollars a month, right? And and for any any employer you know listening in, roughly four percent of your population are taking these types of drugs. Okay? Like you've got members who I guarantee are taking

Rishi (36:14)
Mm-hmm.

Donovan Pyle (36:34)
Taking specialty medications that may cost around $10,000 a month if you don't know how to buy them. So this employee from Johnson Johnson was filling, you know, getting a prescription filled, and they're probably paying their copay, which is probably maybe $200, $300 a month, whatever. They're going about their business, and one day,

The woman asked the pharmacist, hey, you know, how much I I know this this is a very expensive medication through the plan, the employer's plan, but what if what how much would it cost if I bought this outside of the plan and just paid cash for it? How much do you think that $10,000 a month medication costs if you just pay cash for it?

Rishi (37:12)
Hm. I say twelve thousand? I would think it's more expensive if I directly buy.

Donovan Pyle (37:17)
I mean d yeah,

doesn't doesn't don't don't the big pharmacy benefit managers negotiate really good pricing on these drugs? That's what you would think, right? Well, yeah, you you we we'd all be completely wrong. That same drug, that same drug purchased outside of the plan by paying cash cost seventy-eight dollars.

Rishi (37:20)
Yeah. Yeah, yeah. That's what I would think. Yeah.

Okay.

Mm-hmm.

Seventy eight dollars. ⁓ my god.

Donovan Pyle (37:40)
$78.

So the PBM is making this huge spread between $78 and $10,000. And again, this goes back to understanding the role that these companies play. Sure, the historically the big three PBMs serve as wholesale distribution for drug makers. Okay?

Rishi (37:49)
Yeah.

Mm-hmm.

Donovan Pyle (38:03)
Brokers, legacy brokers serve as retail distribution for drug makers. However, you don't have to work with those types of vendors. There are hundreds of PBMs out there in the market. And some of them serve, they don't serve as retail distribution or wholesale distribution. They're not on the supply side. They're on the demand side. They serve as a fiduciary to the employer. They don't mark up the cost of drugs. They just charge a flat fee for their procurement and clinical management services.

Okay, so it's all about alignments and if if you know, if no one's reading the contracts, you're not gonna know what's in them and you're not gonna know if you're accidentally asking the fox to guard your hen house.

Rishi (38:46)
Yeah, and healthcare contracts, I mean, they probably are really hard to read.

Donovan Pyle (38:51)
Yes, they are.

Rishi (38:52)
You described the benefits supply chain hospital, insurer, benefits firm, employer, employee, and the key insight that most advisors are paid commissions tied to premium volume. Walk us through how those incentives actually play out when a renewal lands on a CFO's desk.

Donovan Pyle (39:15)
Yeah, how the incentives actually play out at time of renewal. Okay, so I'm gonna take it back to 1930 very quickly, because it's it's very important to understand these dynamics. back in the Great Depression, before 1929, there was no such thing as health insurance. Okay?

Because medical costs were generally pretty low, and they were pretty low because people didn't want them. They couldn't cure anybody. Okay, nobody wanted it. actually in the year 1900, people spent more on on on cosmetics than they did on healthcare. But I digress. however, with medical advancements.

Rishi (39:38)
Mm-hmm.

Donovan Pyle (39:49)
training doctors, training nurses, sanitizing hospitals, and actually getting better outcomes through the 1920s, healthcare costs began to rise, right? The cost of care began to rise. And the Great Depression hit hospitals especially hard. And so one of them, Baylor University Hospital in Dallas, Texas, the executives there had an idea. What if we could get

A large employer to prepay for our services, right? On a subscription model. And I mean, this is SaaS before before SaaS, right? We're doing subscription insurance. And so they they struck a deal with the Dallas Teachers Union. And for 50 cents per employee per month, those Dallas teachers could go into Baylor University's hot nice clean hospital and deliver their babies. 50 cents per employee per month. Okay?

And that program became so successful that it caught the attention of hospital executives from around the country. And they said, Well, geez, like, how can we develop our own health plans to stabilize our revenues and increase distribution of our services? And so they literally, a number of them, put up the seed money to found health insurance companies in the 1930s.

And so by nineteen forty, there were fourteen Blue Cross plans operating across the country. Guys, hospitals and legacy insurers, they are partners. Okay. The the hospitals didn't put up the seed money to found health insurers out of the goodness of their hearts. They did it to stabilize revenues and increase distribution. So every year when you see this fight in the media between a hospital and a health insurer over contract rates.

That's usually smoke and mirrors. They almost always settle in the 11th hour. You know, they always point the finger at each other and say the other one's being unreasonable. That's all smoke and mirrors. Guys, they are partners in the commercial market, they all benefit from rising unit costs. Okay? So here is the distribution channel. Hospitals provide the services. Health insurers are the wholesalers of those services.

Rishi (42:02)
Mm.

Donovan Pyle (42:02)
Who are the retailers?

The legacy brokerage industry. Okay? That's the distribution model. You gotta understand that's the supply side. You're the demand side. And if your finance and HR teams don't know healthcare financing and procurement and supply chain management at a deep level, you have no chance of fighting back against the medical industrial complex. I mean, it's just it's not like.

you're such an easy victim for them. And so yes, this is why they continuously lower your expectations about what's possible, even though twenty it's well documented that at least 25% of what the average business is spending is being completely wasted. Okay? So that's the opportunity. And and so you gotta just demand more, demand expect more, get more

resources on sitting on your side of the table, contractually sitting on your side of the table to represent you and help you manage this supply chain so you can drive more value back to your people and your bottom line.

Rishi (43:05)
Actually I thought the government created these insurance companies.

Donovan Pyle (43:09)
No. No, no, no.

Rishi (43:10)
So i

the government is trying to do a lot of laws on them right now, right? Like the healthcare law that yeah.

Donovan Pyle (43:16)
Yeah, so so so b

basically yes, it yeah. The government is and and we do actually have some pretty good people at the DOL right now who really understand this business. And here's the thing: they are now legally saying through these Consolidated Appropriations Act that you, Mr. and Mrs. Employer, you have not only the right to demand accountability and transparency, we are requiring that you get it from your vendors. Okay?

Rishi (43:25)
Mm-hmm.

Donovan Pyle (43:44)
You've always been able to I mean through voluntary basis get transparency and accountability from your vendors. Now the government's saying we demand you to get it. Okay, so this is a green light to be tougher, ask hard questions, demand more from these vendors, whether it's your broker, whether it's your TPA, your PBM, your network provider, your stop loss providers.

Any of the vendors in the stack demand more. You have to. It's it's it now it's the law that you get compensation disclosures from all of these vendors so that you can see where those conflicts have are and avoid fiduciary risk.

Rishi (44:24)
Man, are you worried these insurance companies really hate you and they're gonna come and I don't know, try to assassinate you or something?

Donovan Pyle (44:32)
No. I mean, I I'm only highlighting things that are publicly available. when I talk about, all the conflicts of interest in the legacy brokerage industry in my book, I'm quoting directly from these publicly traded insurance brokerage firms, they're they're they're they're ten K earnings reports. This is all public information.

Rishi (44:47)
Ooh. Okay.

The next section is stories from the field. Tell us the story of the six hundred employee manufacturer that thought it was a fee based arrangement, then a discloser revealed two hundred thousand dollars in undisclosed compensation and a seven million dollar renewal increase with no data behind it. of fiduciary led negotiation eliminate that increase entirely?

Donovan Pyle (45:16)
Yeah, th this is a fantastic case study from fr that was submitted by my my colleague ju Justin Leader up in Connecticut and he he's just an amazing consultant. and so in this case study what he what he's talking about is that when he first met this manufacturer, they were looking at a 50% increase on their health plan. That was the renewal.

From a major carrier, 50% increase, and that equaled seven million dollars. And what they did, what Justin's team did, was they got an attorney to write some letters to the insurance company and to the broker demanding accountability and transparency. And what they found out was that not only so the the employer, the manufacturer thought that they were paying their broker $200,000 a year.

To provide you know a suite of services and selling these products. Okay. But what they found out is that the broker was also getting another two hundred thousand dollars a year annually by the same carrier that they were expecting them to negotiate against. The same carrier that was giving them that that 50% increase as the renewal. Right? And so because they put their feet, you know, put their heels on the ground and said, No, you know, we want to know what's going on.

Rishi (46:19)
Mm.

Mm-hmm.

Donovan Pyle (46:31)
Tell us how everything's working, they were able to get that renewal increase, zeroed out, no increase, and and avoid a seven million dollar hit. So that's just a fantastic story of the power that employers actually have if they stand up to these entities.

Rishi (46:38)
Mm.

Information is power.

Donovan Pyle (46:52)
Absolutely.

So we're doing this podcast.

Rishi (46:53)
Rosen Hot

Exactly. I mean our audience would enjoy this content. Rosen Hotels has saved over 500 million dollars since 1991. Zero deductibles, 90% free prescriptions costs half their peers. What did Harris Rosen understand that almost everyone else still misses? And what can a mid-sized contractor?

Realistically borrow from that playbook.

Donovan Pyle (47:22)
Yeah, what are some of the learnings? the some of the learnings include you working with vendors who are contractually aligned with you to help you meet your interests, right? Meet meet your business objectives, right? So in the contract, right, you you need to under see if there are misaligned incentives. so here here's like just an easy tell. Any vendor who makes money because healthcare costs went up.

Rishi (47:30)
Mm-hmm.

Donovan Pyle (47:48)
Should be eliminated from your vendor stack. I mean, just as a general best practice, anyone who uses inflation-based who has an inflation-based revenue model should probably be eliminated from your vendor stack. There are situations where those types of vendors may be a good fit, but it's not the norm. Okay. So so that's that's number one. So what Harris Rosen did was eliminate those vendors who had revenue models that conflicted with his interests.

Rishi (47:50)
Mm.

Donovan Pyle (48:14)
Basic, you know, normal stuff. what else did he do? He through his plan design, he incentivized his employees to use value-based providers, meaning that providers who are providing a high-quality healthcare service at a reasonable cost. Okay, not getting the $10,000 total knee replacement that has low poor outcomes, getting the

The $25,000 knee replacement that has good outcomes. And and the way that you know you can do that as an employer is to through this thing that we call steerage in the business. And so what that means is that you know, for you you want to outline in your in your plan that for these services, if you go to these better providers, these these value-based providers for these these detailed services, we will

Eliminate your out-of-pocket expenses. You don't pay any copies, you don't pay any deductible, you it's a hundred percent free. All right. So think of it this way: like a lot of companies use concur for travel and expense. Right? And so, you know, more sophisticated companies will incentivize their employees to use better service providers, right? And they'll give them a gift card for 25 bucks to use this hotel.

Rishi (49:20)
Mm-hmm.

Donovan Pyle (49:33)
They'll cut deals with these this hotel chain, with this airline, right? And so so you just wanna you you just wanna align incentives through the value chain, right? That that's that's such a powerful tool.

Rishi (49:45)
Well said. Blue Wave was handed a thirty four percent premium increase and told unquote accept it or switch careers. They avoided the hike altogether. What did the first thirty days of that engagement actually look like?

Donovan Pyle (50:05)
Yeah, so Blue Wave Resource Partners is a fantastic company in Orlando, Florida. they're a staffing company for companies like Tesla and SpaceX and Disney. very successful organization. And when we first took over managing their program, which was about six months before their effective date, and by the way, that's a that's a very good time to you know upgrade your advisor. their

Their broker had maybe it was a little bit maybe about four, five or four months. But anyway, their broker had told them listen, the best option for you is a 34% increase. That's the best option, right? And we're talking about keeping the plans the same, like on a on an apples to apples basis, a 34% increase. And of course, they'd only shown them a few different vendors, even though the marketplace of carriers is huge.

Rishi (50:40)
Yeah.

Donovan Pyle (50:53)
I mean it's massive. And so, as a staffing company st dynamics and staffing are are very very different. But anyway, that that that was not, you know, that was that was not a not a financial hit they could abs absorb. So what we did was we gave we provided them with a full market evaluation and we said, Okay, look, there are twenty something carriers that were want or you know want to compete for your business, but in addition to that, we also built you

Health plan. Okay. We created a a a custom plan for you. We picked out the TPA, we picked out the PBM, the network, yada yada yada. We built it. And and and that ended up being the best solution for them. And one, because it would get them the visibility to their healthcare supply chain, which allows them and us really to start managing that supply chain. And then two, the total max spend, the total cost of risk for that custom plan that we built was actually like

1% below their current spend. So we created a 35% delta between what the legacy brokerage firm had recommended and what we recommended. And mind you, you know, this new plan that we built for them had better access to care, you know, all that kind of stuff. It was better for the employees too. And and so that was the first step that the company took in our maturity model. Now that was several years ago.

Since then, they've they've taken they've taken several more steps through our maturity model. And so the net result of that that multi-year strategy was that in you know rather than healthcare costs doubling, which over the past three years, which it has for quite a few mid-market groups, right? They're paying twice as much as they were only a few years ago. This Blue Wave's costs have actually gone down. They've gone the other way.

For the past three years. Now, mind you, they haven't gone down a ton, right? They might have gone down a press a point or two each of the three years compared to current. but it just goes to show you what is actually possible when you actually when you when you get when you when you obtain unbiased professional advice who sits on your side of the table, and that advisor you know really does a full market evaluation and

and is able to build you bespoke solutions that meet your business objectives.

Rishi (53:09)
Anyway, what is this maturity model you're talking about?

Donovan Pyle (53:12)
Well, I don't have it handy in right in front of me here, but in my book, any actually if you go to fixinghealthcare dot com if under forward slash resources, we do have examples of the maturity model. Okay. And so basically what it is, is it's a roadmap, it's a multi-year roadmap. And so the whole point of it is that you know, as organizations grow and become more sophisticated, the way that they finance and procure and buy healthcare.

Should also become more sophisticated. Okay? And so it's like, it's like, you know, when you're a young company, you buy off-the-shelf software, and maybe it does like 60% of what you want and kind of costs a lot. As you grow and mature as an organization, you start building your own software. Okay? And it does more of what you want and ends up costing less. And so, same thing in healthcare. So, early stages, you want to get yourself in a position where you can you get

Data rights and you can see your supply chain, right? And then once you can see your supply chain, then you start managing that thing. And so there's a number of levers you can pull throughout the maturity model. Most of the companies that we well, the average score, so they're basically f in in broad strokes, there are five different stages of the maturity model. And most of the attendees at our CFMA workshop in Phoenix, they were at stage two, which means that the average

Rishi (54:29)
Mm.

Donovan Pyle (54:29)
there was was overpaying, was being overcharged by about four thousand dollars per employee every year. Okay? Yeah, l stage one is about five thousand five thousand dollars in waste, stage two is four thousand, et cetera, et cetera.

Rishi (54:36)
Mm.

Thank you. The last section here is the playbook and Monday morning. You teach a contract autopsy hunting for gag clauses, steering language, and rebate retention provisions. If a CFO listening pulls their PBM contract this week, what three phrases should they search for? And what do they do if they find them?

Donovan Pyle (55:11)
Well, I mean th this is a huge, very deep topic. yes, I mean and and we could go spend hours talking about contractual language for each vendor in in the vendor stack. but yeah, just a quick couple quick ones that come to mind. So, you know, if if you're working with a a PBM, a pharmacy benefit manager who in their con well, first of all, you might not even hold the contract. Okay. If you're buying a bundled solution, there's a good chance you don't even you don't even have the contract. So you don't even know what you're getting.

So first step, get the contract, right? So you can see what you're you've been buying. but yes, if that contract says that they do not serve as a fiduciary to you, then they're not aligned with you. They're not legally obligated. They could be spread pricing on the cost of drugs for by amounts you'll never know. There's all kinds of stuff. And so I would say the thing that's really actionable, right? I mean, this is the point of your question: is what's actionable, right? The f the the the biggest lever you can pull right now.

Rishi (55:42)
Mm-hmm.

Mm-hmm. Yeah.

Donovan Pyle (56:06)
is to use the consolidated appropriations act, the transparency laws in the in that act from 2021 and the most recent one to demand transparency from your vendors. And so re and so what the government is now requiring is that you get a 408, that's 408 compensation disclosure from each of your vendors. And I think that the most frankly I think the most important one is getting

Is getting it on your advisor because you as a CFO, as a finance professional, an HR professional, you probably lean on them tremendously to protect your blind spots. And so you want the biggest, you know, the the biggest leverage you can have is getting your advisor right. Because if they're not working for you, they're there they may be unintentionally working against you. And

And so, I mean that's the history of the industry. So get a 408 compensation disclosure from them. And that will spell out exactly how they get paid, from who and why, and what their actual scope of service is. Rishi, this might shock you, but so many mid-sized businesses don't have a contract with their broker.

Rishi (57:16)
Mm, wow.

Donovan Pyle (57:17)
There's no contract, and there's a good reason for that. Because the broker doesn't work for them. Okay, that's why that's why there's no contract. But that creates a huge problem. And this is why the CAA is requiring employers to get these compensation disclosures so that they know how the broker gets paid, why, from who, and when, and what the scope of service may or may not be, with and what their fiduciary status is. Do they serve as a fiduciary to you or not? And that's a big deal. So

if again, if you go to fixinghealthcare dot com, I think we have a four hundred eight compensation template that you can download from the website. If you if it's not there, you can also go to my firm's website, which is healthcompass consulting dot com, and we've got all kinds of resources like that there.

Rishi (57:59)
Thank you. You call the advisory transition phase zero, zero disruption, a paperwork change, not a plan change. Convince the skeptic, the CFO, who agrees with everything you've said but is terrified of touching benefits mid-year

Donovan Pyle (58:18)
Yeah, yeah. So from a technical perspective, you can change advisors anytime throughout the plan year. However, you know, trying to renovate or remodel your kitchen the week before Thanksgiving probably isn't a good idea. So ideally you want to change advisors, at least a month before your renewal period starts. and so

People get confused by this because the whole industry has been so product focused that they think they think some CFOs are misunderstand how how this works. Changing your advisors has no effect on your products. It does not change your products Whatsoever. It does not change their pricing. None of that changes. Okay?

so you you want to keep that in mind. And now if you're if you're if you're upgrading from a broker to a fiduciary mid-year, what they're gonna do is for the transition period from let's say you're a one-one effective date and you upgrade from a broker to a fiduciary at 7-1, that fiduciary will most likely accept the same compensation that the broker was getting for.

The the remainder of that plan year, right? The carriers paying them, you know, whatever, they'll accept that for the remainder of the plan year. And I'm not talking for everybody, but generally speaking, that's what they'll do. At time of renewal, what they're gonna do is they're gonna when they're when they're negotiating on on your behalf with the carriers, they're going to tell the carriers to to net out, get rid of all the commissions in those products.

Okay, and they're going to replace that with a a flat, transparent fee. Okay? And this way, you know, God forbid, if you get a ten percent renewal increase, the advisor is not getting a ten percent raise, which is I mean that that's that's how lots of employers work with their brokers now. I mean, right? It's all on a commission basis. I mean, we just we just met a a prospective client a a couple of months ago.

Rishi (1:00:11)
Mm.

Donovan Pyle (1:00:18)
The the the broker was getting, and they didn't the employer didn't know any of this, the broker is getting paid not only commission on the stop loss insurance, but also three percent of the pharmacy spend. Why are they like like for what? So switching to this fee based revenue model i is important because it aligns the incentives and that is critical. That's the only thing that allows, you know.

Rishi (1:00:27)
Mm-hmm. No.

Donovan Pyle (1:00:38)
If if a if a broker or advisor is getting paid by vendors, they can't serve as a fiduciary to you because they're conflicted. They can't. It's a prohibited transaction.

Rishi (1:00:47)
Right.

In economics there's a term called principal agent problem. So when the agents incentives are not aligned with the principal, things don't look very good.

Donovan Pyle (1:00:58)
Yeah, I mean isn't it amazing? And you know, I don't know if it's a coincidence or not, but like when we're talking about some of the biggest purchases that we make in our lives, these legacy distribution models are riddled with conflicts of interest. Think about your house, right? You're negotiating, you're trying to buy a house for the best price, and your agent makes more money when you spend more money. It's like why do we do that? We don't have to do that.

Rishi (1:01:06)
Mm-hmm.

Mm.

Donovan Pyle (1:01:24)
And same thing with we're talking about healthcare. Legacy brokers make more money when costs go up, not down. And so, you know, right in in in tw I don't know what the current numbers are, but in 2013, 30% of the average American's lifetime income was going towards healthcare. And that's in the form of taxes, you know, Social Security, Medicare, all that stuff. And premiums, out-of-pocket expense. 30%, can you imagine? 30% of your average the average American's lifetime earnings are going towards healthcare.

That's insane. It's totally ridiculous. It's not a good deal. It's not a good investment. Especially if you study population health, social determinants of health. The social determinants of health tell us something very instructive. You know what's the one of the most influential things on your health? It's not healthcare, it's financial stability. Financial stability is one of the dominant social determinants of health because

Rishi (1:02:13)
Mm.

Donovan Pyle (1:02:20)
You know, if you can't afford to if you're struggling to pay your bills every month, you are stressed and you are going to be much more likely to become sick and unhappy because you've got that financial stress. So it doesn't make sense to bankrupt ourselves so that we have access to health insurance, which isn't even sh insurance, we don't need to talk about it. But it just doesn't make sense. It's not a good deal. It's not necessary. We have to think differently.

Rishi (1:02:43)
And half of this country, we are living paycheck to paycheck. You know? We give us like a thousand dollar emergency, we can't handle that.

Donovan Pyle (1:02:48)
Exactly. I mean

You you're exactly right. And this is why, you know, people like Warren, you know, Warren Buffett calls healthcare the the tape the t the tapeworm on America's economy. I mean, he's right. He's absolutely right. you know, he also famously called GM a a healthcare company with with an auto division attached because because they're spending more on healthcare than they were on steel.

Rishi (1:03:09)
Ha ha ha.

The last question, Donovan is leave our audience with your Monday morning action plan, the first four moves, and tell people where to find the book and the benefits performance audit and what kinds of conversations you are most open to.

Donovan Pyle (1:03:32)
Sure. So I would highly recommend going to healthcompassconsulting.com or you can go to fixinghealthcare.com. Download the free executive summary of my book. It gives you the six-step roadmap for healthcare transformation at your organization. And you know, here are the broad activities that need to happen, the stages of activities that need to happen to write the ship.

the other thing I would encourage you to do is we just launched a a new tool that we call the Compensation Integrity Index. And what we're doing for employers is we're auditing the their brokers' 408 compensation disclosures. And the reason that we're doing that is that when these rules were first applied on retirement plans 20 years ago, employers were getting these 408 compensation disclosures from their financial advisors.

Rishi (1:04:09)
Mm.

Donovan Pyle (1:04:21)
However, the disclosures were written with such legal ease that many employers didn't really understand what they were reading. Or they weren't reading them at all. Okay? And so Tony Robbins, yes, the Tony Robbins, built a whole business on helping employers understand 408 compensation disclosures that they were getting from retirement advisors. So I actually stole this idea from Tony Robbins. And

Rishi (1:04:45)
Mm-hmm.

Donovan Pyle (1:04:46)
And so we built a tool that very quickly audits these four zero eight compensation disclosures so that employers can understand if they're subject to prohibited transaction risk. If their brokers are getting compensated by the same vendors that you're asking them to negotiate against, that is a prohibited transaction under federal law. And not only is it illegal, but never mind the legality of it, it's not right for you or your people. So

Reconsider that the nature of that relationship.

Rishi (1:05:17)
Yeah, ethics comes before law.

Donovan Pyle (1:05:20)
I love that.

Rishi (1:05:21)
Donovan, thank you so much for giving us this time. I enjoyed this conversation.

Donovan Pyle (1:05:26)
My pleasure, Rishi. Great seeing you.