On the Record with Eric Haberichter, Access HealthNet CEO
Access HealthNet CEO and co-founder Eric Haberichter sees his company as a “cost-effective, very happy intermediary” between providers that offer bundled payments and employers looking for a better way to manage costs.
Haberichter – who also co-founded Smart Choice MRI, which provides a flat rate of $600 for scans – launched Access HealthNet more than two years ago.
“We’re extremely proud and fortunate to be in the Midwest and in Wisconsin in particular,” he said. “I think the startup and innovation community in Wisconsin is really starting to turn a corner and there’s a lot of innovators and a lot of forward thinkers here.”
Eric recently spoke to Wisconsin Health News about the company and what it offers.
WHN: Why did you help launch Access HealthNet?
EH: Years ago, I started doing direct contracting with my previous venture, Smart Choice MRI. And my relationship with folks like John Torinus at Serigraph, and the teamsters and a few others was relatively successful. We had good traction with it. A number of other local providers who were independent, some of whom are around and some of whom are not anymore, had really identified a desire to kind of share some efforts and form like a group that would work collectively to do this. That just never really came to fruition. But it kind of lived in my brain, that it would be something that providers, at least the independent providers, would be very interested in down the road.
I left my position at Smart Choice and started working as a consultant. I did some consultant work for a number of different companies. One of them a local company called Alithias, which is a transparency and care management vendor, really helped clarify the need for, I’ll call it, “actionable transparency.” So that’s the idea that you can tell people what the best values within their current network are, but the only way to guarantee that somebody’s going to get a great rate is to have a predetermined locked-in price. So I would say it’s a combination of experience and from a provider’s perspective knowing there was interest, seeing there was a real need in the market for actionable transparency. In my work at that time, I started talking to a lot more employers and self-funded groups and really realized that there was enormous demand for the product. But also because of my experience I recognized there were limitations to direct contracting, primarily the administration and how you manage claims, how you manage the shopping experience, how you offer enough choices to the membership that you’re not pigeonholing somebody into a single one-size-fits-all solution. So really the concept for a pre-market solution that would allow as many providers as possible to come forward and offer at their own making – they determine the price – fixed rate services on a national basis just kind of grew organically from all of those experiences.
WHN: How does it work?
EH: We are first and foremost a technology platform. And that technology platform allows a self-funded plan to promote a select benefit or a top tier option that we call the Super Option. The way it works is that it’s a complement to the existing plan. Most of our employers currently have a PPO. The familiar language there is that you know what an in-network provider is and what an out-of-network provider is. And typically within your PPO, you have a good benefit in network, a less good benefit out of network. Based on the value that our providers are able to offer into how they get paid, typically the costs of the bundles – the episodes of care – are anywhere from 5 to 75 percent less than what they see in their PPO. In this case, they pay the claims. They know exactly what they’ve always paid. They’re able to look at what their historical claims cost, and then they can look at what our bundles are. If there’s enough savings to make it worthwhile, they then waive the out-of-pocket costs as legally allowable for the member. And in many cases the member is able to access our services at no cost to them. Really what our platform does is make all of those connections possible. It allows the member to shop. It allows the employer to set their plan design within our system so that only things that meet their plan design are displayed. It allows the providers to build their bundles, to market those bundles through us to the employees of our client customers. It allows for the company to pay the administrator via our platform so that the claims can be processed as well.
WHN: What growth have you seen in the last two years?
EH: Our platform and our core product has really been live for about a little more than a year. We started with our first clients January 2016. The year and a half to two years before that was really developing the platform, looking at establishing all those bundles. So in the last year and a half, we’ve signed literally thousands of additional provider locations, including some of the best providers in the market, and expanding our client base significantly through distributers. So we work with brokers and third-party administrators. We don’t actually sell directly to employers. So we’ve grown primarily in our distribution channels, our technology platform and our offering. I would say the engagement and launch of our product is happening right now. And we’re looking to the future for that. So much of what we’ve done at this point is again establishing standards, getting the right providers involved, getting the right distribution partners in place and really again setting that technological standard so that we can be that robust platform that everyone is looking for.
WHN: What’s the geographic distribution of participating providers and employers?
EH: Our first round of clients were companies that are based in Wisconsin but might have a national footprint. The providers started with Wisconsin and then followed our membership. One of our first clients was from the Fox Valley. They had patients, for example, in Pennsylvania. So as need arose in Pennsylvania, we started reaching out to Pennsylvania providers and meeting the need for a client. And that helped us to kind of organically grow our provider map.
Right now, we’ve completely changed the way we do that. We are actually aggressively marketing to providers outside Wisconsin. So in Wisconsin, our provider panel is quite robust, and the majority of providers currently work with us. Outside of Wisconsin, the provider offering is not quite as mature as here. We actually have a seven-state hospital RFP that went out two weeks ago. We’re targeting the top quality hospital providers in currently seven states that aren’t Wisconsin, the surrounding states throughout the Rust Belt and Midwest here. It’s going extremely well.
WHN: How do Wisconsin providers compare to providers elsewhere?
EH: In terms of bundled payments and price effectiveness and all of that, we have such an incredible range of providers in Wisconsin. There are providers in Wisconsin that have been offering bundled case rates for quite a long time with very, very limited distribution. The bundled case rates that providers have been offering have been always very favorable. In the same way that Smart Choice revolutionized imaging by offering MRIs at $600 as a flat rate, there are other providers in the state that did similar things in the world of orthopedics and physical therapy and other services. So that limited group of innovators was very competitive within the Midwest. But outside of those innovators, Wisconsin has above average healthcare costs. We also have above average healthcare quality. So a lot of providers would say well, we’re very, very good so we charge more. But that’s been changing. We have a number of local providers that have really stepped up and are starting to really offer some exceptional values within the bundles that are very, very competitive. There are other parts of the country where competitiveness in healthcare is much greater. Just south of the border in Illinois, prices are significantly lower on average. There are other states that are very, very competitive and others that are not.
I would say that the provider group is rapidly evolving. I believe that the market is changing substantially for the better. But the difference is that the adversarial relationship that fee-for-service puts between payers, employers in this case, and providers – that’s eliminated when you have bundles and the ability to shop transparently in a free market solution. Really that’s going to be the catalyst that allows the providers in our area to be more competitive while at the same time be equally or more profitable.
WHN: What are your plans?
EH: We’re hiring people on a regular basis. We’ve got our RFP out to providers in seven states. We have grown our distribution network from three distributors to 14 in the last six months. I think it’s keep doing the things that we’re doing – build our technological infrastructure, grow our team and continue to scale up slightly ahead of demand so that as demand blossoms we’re able to meet it.