It's no secret that our health care system is broken. It's overcomplicated and too expensive. For years, free market forces that have revolutionized other industries haven't been able to break through the health care wall. SALTA Direct Primary Care is changing that - Dr. John Blanchard is Paula's guest today.
SALTA charges $90 per month for unlimited primary care and telehealth visits, providing services that cover 80% of most Americans' health care needs. This is an alternative to paying a high dollar amount out of pocket until you meet your insurance deductible. And what about the services that SALTA does not provide? Thanks to the Affordable Care Act, they have access to the cash prices for the same services at many different providers. Did you know that some hospital systems in Michigan charge three times the price for the same exact quality of care?
Does a system like this mean you no longer need health insurance? No. But John believes we start looking at health insurance the way we look at car insurance. We don't insure against oil changes, brake pads, and tires? We only insure against catastrophic events like car accidents. That's how we should look at our health insurance. We should have coverage so that a major sickness or hospital stay won't bankrupt us, but we don't need to be covering physicals, common colds, and more.
The way our current health care system is set up, it relies on healthy young people to pay into the system, to cover the health care costs of older individuals who need more care. John hopes that as more younger folks opt out of the traditional system, it will force changes that will benefit all of us.
To learn more, visit: https://saltadirect.com/
To learn more about Paula Christine, visit: https://paulachristine.com/
Or drop her an email at Paula@PaulaChristine.com
Paula: Welcome to Beyond on the Paycheck. I'm Paula Christine. Stop living paycheck to paycheck and start living the life you dream about by taking control of your money. I can provide you with the knowledge and the tools if you make the commitment to put them into practice. So today I'm gonna welcome Dr. John Blanchard, who's the founder and CEO of Salta, which is a direct primary care service for health care
I know recently I had to go and research my own healthcare and buy it on the marketplace, and it's very confusing and very expensive. I pay a lot of premium per month and I have an extremely high deductible. So I started looking for alternatives and came across Dr. Blanchard, and so I'm gonna let him take over right now and explain why he set up direct primary care services, and what that all means. So welcome. Can I call your doctor John?
John: Just call me John.
Paula: Okay. Welcome John.
John: Thanks Paul and Jon, it's great to be here with you as well. Over 20 years ago, we recognized that we had a healthcare system that everyone needed but nobody could afford. It was a complex system that cost too much and delivered too little.
We had to bring transparency and clarity and ease of use to that system in order to make it work better for everyone. And the problem that we have is that all of us, every single one of us today was born into, grew up, used and worked in a healthcare system that is fleecing all of us. And that's what I want to come through in this podcast is a very clear message to all of your listeners.
That it's those in their twenties and thirties that are transforming health care. And I'm excited to talk to you about how they're doing that.
Paula: Okay. So how are they transforming healthcare and it, is it just people in their twenties and thirties, or is it just everybody?
John: It's everybody, but it's really the 20 and 30 year olds that are using technology and transforming all the other industries that we've seen the transformations happening in.
If you think about how we get moved around today with Uber, or how we book a hotel room or take a vacation. All of that was transformed by consumers who had the power by virtue of technology and how they spend their money to transform those industries. If you think about all the industries in our country, what industry hasn't been fundamentally changed by the consumer?
Paula: Healthcare.
John: It's healthcare. That's right.
Paula: It is very confusing. I know. Looking into my own healthcare, I didn't know what to choose. And all I could see was just dollar signs.
John: Right. So the Affordable Care Act made it available for us to go onto these exchanges and purchase healthcare, but the problem is that you're purchasing a service and you're purchasing access to care, that there's no relationship between the quality and the service of care that's provided in healthcare and its cost.
Let me give you an example of. that. An MRI today is in many cases more expensive than it was 10 years ago, but the technology is not fundamentally different. Think about all of your iPhones out there today. How much do you think that your iPhone today would've cost 10 years ago? Probably 10 times what it costs today because it has 10 times or more of the computing power and capability. Yet the iPhones today are less expensive. And that's what usually happens in a service or a technology, is that over time it becomes better and less expensive because it's subjected to free market forces. And in healthcare, those free market forces have not existed until the last few years.
Paula: So what's changed in the last few years?
John: No matter what people think about the Affordable Care Act, there are some good things that came out of it. One of the good things that came out of it is that it made it a requirement of providers and health systems to make their prices transparent by law. Healthcare systems have to publish their price that they get paid, not just their price, but what they actually get paid by insurance companies and what their cash price is.
The other thing the Affordable Care Act did is that it increased deductibles, so it allowed employers to shift more of the cost of healthcare to their employees, and that's why we've seen the emergence of these high deductible insurance plants. The problem is that as a consumer, if I have a high deductible insurance plan, I have to pay out of pocket for the first, it could be up to $10,000 of cost.
What good is it if I can't shop for value in the marketplace? Because essentially I'm paying cash. What good is it if I can't shop in the marketplace for the very best value at the very lowest cost? It's like having insurance for food, but going into the grocery store, there's no prices or quality metrics on the goods you're trying to buy, or going into the electronic store and trying to buy a TV or a computer with no price and no information about what one product's better than the other.
Paula: I am like, it just all of a sudden clicked. Yeah, that is so true. You can't shop it. You have to go to the doctor that you're supposed to go to and you pay the price that ...
John: Yeah. You have no control over the quality or the price of what you're buying, and neither does the employer.
So the employer and individuals in today's marketplace are both in the same boat. They're buying a healthcare system that is overly inflated in its cost and there's no relationship between the quality and the price of the service. So what we are doing in Salta is we have a very simple and transparent cost.
For $90 a month, an individual can join one of our Salta offices and get 80% of all their healthcare needs. So that they could come in for any urgent care visit, any chronic care, wellness visit. Up to 50% of our visits are virtual. They're unlimited visits. There's no copays, there's no deductibles. And not only that, but then we help you navigate the healthcare system to help you find value when you need to go outside of it.
So for example, we dispense medications in our office and those medications, many times, are literally cents compared to what you'd pay if you go to the pharmacy because we buy 'em wholesale and distribute 'em in our office, and we knock out all the middlemen. We have patients who save enough money under just their prescriptions alone to afford our $90 membership fee.
Paula: You guys, I'm just like so in, in shock right now. I don't even know the questions to ask. I feel. We've been duped all this time.
John: You have. Now, what's gonna happen over the next five years is there's going to be tremendous disruption in the marketplace because we are bringing it to the public. There's a company that wrote code that takes all of the published compensation data.
All these hospitals, by law, had to make it public. They did that, but they put so much data out there that your average consumer can't digest it. And so we have access to this proprietary database where we can literally say, okay, Paula, you need an MRI of your shoulder. You have this high deductible insurance plan where you pay out of pocket for the first X dollar cost.
You could go to hospital A. And that MRI is, I'm just using numbers here, $300, or you can go to hospital B and the MRI is $600, or you can go to hospital C and the MRI is $900. The MRI is the same technology and the same quality of reading. Where do you wanna go?
Paula: The cheapest one, of course.
John: We actually have the actual data and access to the data now to help steer our patients to the highest value resources in the community.
See, people don't understand. They think that if I go get an emergency room visit or a surgery or a diagnostic test or visit a specialist, they think that if they go to one hospital that they're gonna pay the same as if they go to. And that's not true. Every hospital system has different negotiated prices for different services, and there are some hospital systems in Michigan. I could name them because I have access to the data, but I won't, that are up to 300% more than other hospital systems.
Paula: Wow.
John: If the average consumer and especially self-insured employers knew how badly they were getting fleeced by the existing system, there'd be a revolution. The insurance companies and the brokers and the healthcare consultants from the big firms, they don't want anyone to know this. You know why? Because they make money.
The more money that goes through the system, insurance companies have what's called a stop loss or a loss ratio, which means they're only able to profit 10% or 15% more than what they pay in claims. So just to use easy numbers, if they pay $90 in claims, they can get paid a hundred dollars. So they keep $10.
That's their profit. But when you understand that, then you understand that if I'm an insurance company, I wanna pay a thousand dollars in claims. Because the more claims I pay, the more profitability I have. The insurance companies and the hospital systems and the insurance brokers, they are working in an old paradigm where they get paid more, the more money that's going through the system, instead of reducing the total cost of money going through the system so they don't wanna change the system. SALTA is changing all that.
Paula: So let's break this down for an individual and we'll just use myself as an example since I have to be on the one on the marketplace.
So if I'm contracting with your service, I'm paying $90 a month, which includes like unlimited times, I can call or come in to see you. I'm gonna get a discount potentially on my prescription drugs. and if I needed service, like an MRI or something you sent me to get an MRI, then of course you're gonna find the least expensive place to go to just based on what we've talked about already.
But what happens if I get into a car accident or something and I end up in the hospital, I still have to have some sort of house insurance coverage. Correct?
John: Yeah. And we recommend that you have that. But I would encourage your listeners to think about insurance in a different way. You use the example of a car accident.
Think about this analogy with your car. If I were to try to sell you an insurance policy that covered brakes and windshield wipers and oil changes and tuneups, you would say I was crazy. Because why would you insure for that? Insurance is for things that are financially catastrophic, that happen infrequently.
What you wanna do is shop for value in the marketplace for things that happen frequently that are inexpensive. You might go to one shop that does a great job for this amount of money versus another at a lower cost. You don't insure for that. It's the same with insurance or for healthcare.
You wanna have a policy that is catastrophic, right? So in case you do end up in the hospital, you don't end up with a $50,000 bill., And then pay cash for the 80% of care that you can get through SALTA for all of your primary care, whenever you need to go. Outside of what we can provide at Salta for a high cost diagnostic test or a specialty visit, you wanna be able to find where the most value is for that in the marketplace. And the most value is the highest quality and experience of care at the lowest cost.
Paula: I guess that's the part I'm struggling with to understand because just using my situation as an example, so I pay $600 a month for health insurance, but my deductible, I believe it's like $7,500. So before my insurance kicks in, I have to spend $7,500, which on a normal basis I won't because I just go in for a checkup every year.
Mammograms, those kinds of things. And then I have my prescription drugs,, so I'll never even get close to that $7,500. But if I end up in the hospital, of course you know I'm gonna meet that probably pretty quickly. I understand your services, I get that $90, but how do I ensure the hospital part of that if I need that? I'm still getting regular insurance.
John: The policy that you've purchased is a policy that covers a catastrophic event like a hospitalization. And everything else, because of the deductible, you're essentially paying cash for. . So you wanna be able to find the least costly services when you need them.
The whole idea is my wife and I, we used to have a high deductible plan and now in my company I cover direct primary care for all of my employees. And the thought before, my wife and I were always like we've gotta use our deductible so that we can get as much healthcare as we can.
That's the wrong way to think about it. You wanna think about not having to use your deductible, get as much of your care as you possibly can at SALTA, at a lower price point, $90 per month, and then your insurance just covers for the catastrophic things that happen. And then again, if you do need to have something that's outside of Salta, that 's the least expensive, highest quality option that you're going to have.
Paula: So can I ask a personal question? Is that okay?
John: Sure.
Paula: Your wife and you, do you have now for the major medical part of it, do you have a high deductible plan with the lowest premium? Is that what you're looking for? I guess that's where I'm confused. I know, if I'm paying $600, then I add on you on top of that, and I never really use the insurance.
Is there something I can get like $300 a month and maybe a $10,000 deductible?
John: The lower your deductible, the higher you're gonna pay in premium. So with my company, we combined the SALTA benefit with a Blue Care Network policy, but my company is paying most of the costs for that Blue Care Network policy, and it's a lower deductible.
For a lot of your listeners who don't have employer sponsored healthcare, they're gonna find that the lower your deductible that you choose on the exchange, the higher the premium cost is. And so the idea is to get the highest deductible that you can so that you cover for a major catastrophic event, and then pay the $90 a month for access to the 80% of care that you're gonna need throughout the year.
A lot of our patients who do this, all of their care is provided by SALTA, so they don't end up having to go outside of that. If you've got a high deductible plan and you just go to your primary care provider, you know that visit, you don't know what kind of bill you're gonna end up with.
Because they do an EKG or they do blood work, or they do different procedures during the office visit. You don't know what kind of bill you're gonna get because it's an inflated surprise bill that ends up coming.
Paula: Yes, I've had some of those..
John: What does that end up doing? It ends up keeping people from going to primary care because they don't want to incur the costs associated with that.
By using SALTA, you know what your costs are gonna be. It's $90 a month, there's no surprise bills, and you can go as many times as you need to and get most of the care that your average person needs. The diabetic care, hypertension, high cholesterol prevention, wellness, all of the services that most people use every day.
Paula: So I know you guys are in Michigan. Are there other companies like yours in different states?
John: This is a national movement that's been going on for the past 20 years. We were one of the founding enterprises to do this. We're a Michigan business focusing on taking care of people in Michigan and enterprise clients in Michigan.
Large companies hire us to take care of their employees. We can give their employees access to a healthcare benefit that they love, a relationship with a doctor, and access to the care they need at lower costs, while at the same time lower the overall cost of care for the company by 20 to 30%. That's huge because we keep people out of the more expensive parts of the healthcare system.
So instead of people ending up at the emergency room or hospital or subspecialty visits that they don't need to go to. Or tests that they don't need, their care is redirected to a lower cost primary care setting.
Paula: John, this has been really eye-opening and just fascinating information for me, and I know my producer Jon is also listening in. Jon, do you have any questions?
Jon: Yeah, this is really interesting stuff, John. And I think the question that I keep coming back to in my mind is, How is it that you're able to keep the cost so low at that $90 a month? Is it because you're working directly with the providers and cutting out the red tape and middle man of the insurance?
I'm impressed at how low that is when you're thinking about all the different things that someone might undergo every month. Especially all the stuff you've described today.
John: Yeah, that's part of the bloated healthcare system that we cut out. Every claim that is sent through the insurance company has to be adjudicated and then paid to the provider.
And that adds as much as 20% of the whole cost of healthcare because in the traditional healthcare setting, you have to employ an army of people to try to get paid from the insurance company, and then you have an army of people at the insurance company trying not to pay claims. So we cut all of that out and just focus on providing great care to our patients.
We're able to reduce the number of patients that each of our doctors takes care of down to 800. Again, most of your listeners might not know this, but when they go on to see a primary care provider, that doctor has 2,500 patients or more, and then they're supervising nurse practitioners or PAs who all have 2,500 patients or more. That's not a medical home. It's a madhouse.
Paula: Plus you always gotta wait an hour in the waiting room too.
John: Yeah. And the error rates are a lot higher, the quality is lower or the access is lower. Think about how much money that we can save a person who's, say a waitress and she doesn't have health insurance coverage from her employer cuz she works for a restaurant.
She's got a shift that starts in an hour, but she's sick. She'd have to miss her shift and miss all of that pay or take paid time off if the employer provides it, to go see a doctor With Salta, she could pick up the phone and imagine this, call her doctor and get cared for over the phone and then make her shift.
Get that antibiotic for a UTI or bronchitis. Now you don't need to actually come into the office for that.
Paula: I am just so amazed. It's just really cool stuff, is it something that somebody could change their insurance today? Say they listened to this and they liked it and they could go out and change what they currently have and the major medical part of it, and then come to you? Or is insurance only changed once a year? How does that work?
John: I think with the exchange, you're allowed to go in and change what insurance plan that you have with some frequency. I can't recall what it is, but the key is SALTA can be used no matter what health plan you have. SALTA works for people that have insurance or don't have insurance. It works for people who are rich and for people who are poor. It works for Republicans and Democrats. Imagine that. It actually works in a bipartisan way. . Everyone has to decide based on their financial situation, what they can afford. But we've got lots of people who can't afford these high deductible plans.
Like you were saying, like $600 a month with a $7,000 deductible or $300 a month with a $7,000 deduct. Most people don't realize this, but in 2006, 6% of all take home pay went to pay for healthcare for households. Today it is 20%. So all new income growth since 2006 is not going to pay for housing or education or school, or clothing or food. It's being paid to healthcare and over 50% of all bankruptcies are related to a healthcare related issue.
And 50% of those bankruptcies, personal bankruptcies, the person had insurance. Can you imagine they had a high deductible insurance plan? But the issue is that most households have less than a thousand dollars in the bank.
Paula: Correct.
John: And most of those that have less than a thousand have zero. They're living paycheck to paycheck.
So people cannot afford these high deductible insurance plans. It's bankrupting them. We've got a lot of our patients who say, you know what? I'm going to at least pay the $90 a month so I can get the 80% of care that I need, and then negotiate prices and pay cash for the things that I need outside of SALTA, and at least SALTA can help navigate me to the best prices that I can get.
Think about that. If you're paying $600 a month and you were to put that in a bank account and then use that money wisely to negotiate prices, you might come out ahead.
Paula: It's not only the $600 a month, it's also the $7,000 that I have to have, or$ 7,500 I have to have. put away in case something does happen.
John: Right? If you end up in the hospital. Yeah.
Paula: So you're looking at what, $14,000, $15,000 potentially?
Yeah, and that's the thing about the Affordable Care Act. Again, there were things that were good and things that were bad, but the Affordable Care Act relied on people in their twenties and thirties who are generally younger and healthier to buy these expensive plans.
John: That's what insurance is. It's a big bucket of money. And you can't have that bucket full of people that are old and sick. You've gotta have people who are putting money into the bucket and the money's not coming out. So the vast majority of claims, that really expensive claims that are, $20,000 or $7,000 or $10,000, it's only 5% to 10% of any given population.
The vast majority of people are spending under $2,500 in healthcare. That's the challenge. How do you insure yourself for a catastrophic event, like a $30,000 hospital bill and then, pay cash for, and have access to a transparent marketplace where you're negotiating the best price for the best value.
Paula: You've given me so much to think about. I just keep going over the dollars in my head that I'm. And it's actually making me a little sick to my stomach.
John: You'll never get that money back. And it's actually motivating to stay healthy. If I know that I can start socking this money away for your retirement.
And then just, have a real high deductible, catastrophic plan. They used to call it like major medical, if you ended up at the hospital., But the problem is that they haven't properly priced these high deductible plans either.
People are still paying way too much for these high deductible plans. I think that they're actuarially charging too much for those plans, especially if you're generally young and healthy. What's the likelihood that you're gonna end up with a major health crisis?
Paula: Not even if you're young and healthy. I look at myself. I'm 57 and I'm in great shape. Very healthy. Unless something major happens to me, I really never go to the doctor
John: And yet you're stuck paying that premium every month for something you're probably never gonna use.
Paula: Correct.
John: We don't like to talk people out of insurance.
Paula: Oh, no. Definitely don't do that.
John: That's what it's for, right? But they should have properly designed plans that are priced correctly for the low likelihood that you're gonna use it. They need people who aren't using healthcare to pay for the people who are. The only way we reduce total cost of care and improve quality and service in healthcare is if we subject it to free market forces.
The consumer has to drive change with their dollar and spend their money where they can find the best value, and that'll make the players in healthcare compete with each other on price and quality.
Paula: I agree with you 100%, but up until I met your associate, Kim, I had no idea this even existed. It's great information and I really appreciate you sharing it with us. How can someone get ahold of you or SALTA to get more information?
John: Yeah. It's folks like you that are making people aware of this and I could see this being something that you may wanna, there's so much more to talk about.
Paula: Oh, I'm sure.
John: But if people wanna learn more, they can go to our website. It's SALTAdirect.com. Pick your location, pick your doctor. We have office locations in Clarkson, Auburn Hills, Troy, Rochester, and Shelby township.
Paula: So what if I'm not in those areas like, I'm thinking of my children. They live downriver.
John: We have a growing number of affiliate practices in Michigan, and our business plan is to open one of these offices every five miles in Southeast Michigan.
Paula: Oh wow, that's a big undertaking.
John: Every year we'll have more offices available. We've got people who drive long distances to see us because they know that they can get 30% to 50% of their care virtually. They drive to see us for their yearly physical, and then if they have to come in, they do, but we can take care of them virtually.
Paula: That was just some great information. I know my eyes are wide open and I have learned so much today, and I understand that I have to learn a lot more about this. But if you'd like to get a hold of me, you can reach me at paula@paulachristine.com or check out my website at paulachristine.com.
Thanks again, John, for being with us today.
John: Thank you.