Joe Solves Health Care

Joe is from deep South Texas. He started a small company a few years back with only a handful of employees. Through his leadership he grew the business into what it is today. But it’s not the company brand that drives recognition, it’s what Joe has done to control health care costs for his valued employees that catches the spotlight.

How a Texas beer distributor cuts health costs with captive insurance and digital health

A few years ago, L&F Distributors, a McAllen, Texas-based beer wholesaler owned by Joe LaMantia and his family, decided to do something for its employees and their dependents about perpetually rising health costs.

By Joe LaMantia, III, and Heather Crosby, RN | May 05, 2021 at 12:01 PM

A few years ago, L&F Distributors, a McAllen, Texas-based beer wholesaler owned by Joe LaMantia and his family, decided to do something for its employees and their dependents about perpetually rising health costs.

L&F had previously created a captive insurance program for property & casualty and workers’ compensation, and had expanded it to cover 38 beer distributors across the country. That success prompted the creation of a second captive insurance company covering health benefits for beer wholesalers, which was expanded three years ago to also cover industries not associated with the beer business. Today, all three programs are operated by BevCap Management, an insurance agency that L&F co-founded, and cover more than 20,000 lives in over 20 states.

Related: 5 myths about benefits stop-loss captives

The benefit structure of the plans is advantageous to employees: For example, imaging tests, urgent care visits, and ambulatory surgeries are free, if conducted in contracted facilities. The average deductible is only about $750, much lower than the high deductibles in many employer-sponsored plans. And the employers benefit, as well. For instance, L&F has contracted with Texas Medical Management, an ambulatory surgery center in Austin whose rates are so affordable the company can fly employees in from other locations, put them up in a five-star hotel, pay for their meals, waive their copays and deductibles, provide a $1,000 cash incentive, and still save between 20% and 30% on the cost of doing the same procedure in a local hospital.

While the plans quickly proved popular with both employers and their workers, Joe was convinced that there was yet more fat to be cut.  He knew that one of the biggest factors in the growth of health costs is chronic diseases, which are especially prevalent among the truck drivers who make up the bulk of L&F’s 1,200 employees. Nationally, truck drivers have a rate of chronic conditions that exceeds that of the general population. For example, 69 percent of long-haul truckers are obese, compared to 31 percent of all working adults in the U.S.

So about four years ago, L&F began looking for a disease management company to help its employees manage their chronic conditions. The problem it encountered was that most of the firms just wanted to communicate with L&F’s employees by phone. But having strangers contact employees to talk about a health care issue did not sit well with the company.  So they decided to build their own disease management company, called Retro Health. The company began to bring doctors to nine L&F locations to address the employees’ chronic diseases.

It was a good start, but L&F found that the employee response to the disease management clinics, as well as a number of other health programs, was less than it had hoped it would be. One reason is that the company was unable to get the appropriate data on its workers to allocate the limited resources that were available. In 2018, Joe contracted with a software firm named b.well Connected Health to increase employee engagement and to provide an all-around benefits communication solution through its mobile app.

Among other things, the mobile platform informed employees—based on b.well’s aggregation and analysis of healthcare data—when they were due for recommended care and urged them to make free clinic appointments. The results were immediate: In the year after the app was introduced, employee enrollment in the Retro Health clinics grew by 57 percent.

From 2019 to 2020, there were also significant improvements in the percentage of patients meeting clinical goals for the control of their chronic conditions. For patients with diabetes, this metric increased 13 percent; for those with dyslipidemia (high cholesterol), it rose 17 percent; and for hypertension, it grew a staggering 78 percent.

Sixty-eight percent of Retro Health patients are registered on the app, and enrollees who use the mobile app are 5 percent more compliant with care plans than those who don’t use the app.

Better control of chronic conditions has helped reduce the company’s health costs. Prior to the collaboration, the firm’s average health cost per employee per month was  $229. As a growing number of workers enrolled in the health clinics and used the mobile app, the cost fell to $198—a reduction of 14 percent.

Swiss army knife of benefits

Employees can use the app to access medical records from any health care provider who has cared for them; to manage their medications and pharmacies; to connect with third-party apps and wearable sensors; to receive alerts and reminders about their care needs; and to share their health information with family members and friends. In addition, they can view documents about their employee benefits and see all of their claims information and EOB forms, which are provided by the company’s third-party administrator.

L&F utilizes the mobile platform to drive its benefits communications with employees, including notifications about open enrollment in its health plan and other benefits available to employees, such as a telemedicine service that they can use instead of going to an ER. Additionally, L&F and Retro Health use the app to inform employees when they’re due for annual physicals, provide lab results, and educate them on their chronic conditions.

Related: 3 ways telemedicine can ensure a healthy and safe workforce

For example, the help identifies employees who are diagnosed with sleep apnea, as well as those who may have the condition but are not currently being treated for it. This information is drawn from the health risk assessment built into the app. When an employee is at high risk for sleep apnea or already has it, he or she receives recommendations for follow-up care.

The magic of data aggregation

All of this information is gathered on each employee by aggregating data from a variety of sources. Its application sits on top of existing infrastructures, such as electronic medical records (EMRs), TPA systems, and HR programs. Claims data, which cast a wide net over the care a patient has received, and clinical data from disparate EMRs are combined by normalizing data types so that patients can download them into a single personal health record that shows all of their key health care data.

As part of the company’s pandemic response,a COVID-19 symptom checker from the CDC has been added, as well as a “safe return to work” guide to quarantining, and a “test and vaccinate” guide for employees. Other third-party apps can also be plugged into the platform through specialized application programming interfaces (APIs).

L&F has also been provided with a broad range of deidentified data on its employees’ and dependents’ use of health care. Utilizing computerized  dashboards, Retro Health’s disease management experts can see  how many employees have gone out of network to receive care or have sought care in ERs or urgent care centers for non-emergency conditions. They can see who has enrolled in Retro Health’s programs and who is participating in L&F’s wellness programs. And they can summon views of how all employees with particular conditions are faring.

Expanding into new areas

L&F has expanded its efforts to control costs beyond the worksite clinics. First, it’s making efforts to reach workers’ families and to engage them in helping employees adhere to their care plans.

Through the mobile app, L&F also reminds employees about the contracted urgent care centers they can use without copays. The company also has agreements with ambulatory surgery centers that provide excellent care at lower prices than local hospitals charge. L&F flies families to the cities where these surgery centers are located and pays for their lodging and meals—all in order to save money in one of the biggest cost centers of health care. In addition, the company contracts with a maternity services vendor through its employee assistance program.

Reducing long-term health costs

All of these efforts have paid off in terms of better employee health and lower costs. But most of all, L&F has benefited from decreasing the burden of chronic disease on its workforce. The worksite clinics staffed by Retro Health were an important step in that direction—but not sufficient on their own. By adopting the mobile app, the company has provided a comprehensive user experience and personalized health education that shows employees how to navigate their health journey and the services available to them through their employer.

Consumers are increasingly adopting digital health apps, according to a Rock Health survey. However, they don’t want to have to access dozens of apps in different places and without being able to connect them in ways that enhance their health. If you give employees all of their health and benefits information in one easy-to-use mobile app, it can make a big difference in activating them to manage their own health care effectively.

Employers that try to reduce the fragmentation of care to address their workers’ health needs will find that employees respond positively and have better long-term outcomes. When employees improve their health, they’re more productive on the job, and their companies’ health costs decrease.

Joe LaMantia, III, is general partner of L&F Distributors, a beer distribution company he purchased in 1978 with one location in McAllen, Texas that today consists of eight distribution warehouses, services 35 counties throughout Texas and southeastern New Mexico and employs more than 1,200 people. 

Heather Crosby, RN, is director of clinical programs for b.well Connected Health