FTC 222 | Affordable And Accessible Healthcare

227: Affordable And Accessible Healthcare For Everyone With Shane Foss

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Shane Foss started his professional life in the healthcare industry and worked for various healthcare companies in several executive positions throughout the years after university. As he advanced through the ranks at medical device companies, and even in the business of developing healthcare facilities, he was bothered by the lack of affordable, viable health insurance policies available to the average person. He took the entrepreneurial leap and he started an insurance company. He started Hooray Health in 2017 and he hasn’t looked back. Shane joins Mitch Russo on the podcast today to share with us what building this type of company is like and how they’re making healthcare more affordable and accessible for everyone.

Affordable And Accessible Healthcare For Everyone With Shane Foss

Welcome to this moment in time when you get to chill out, tune in, and extract wisdom that you could use to grow your business with Your First Thousand Clients. We are here to support you by making sure you know what is working now in business and in life. If have a business that is in need of some love, revenue and profits, I want you to go and grab my latest new product. It’s called Profit Stacking Secrets. It started out years ago as a new client assessment, but it became more detailed as the years rolled forward. Now, hundreds of clients later, I have refined it to be what you need now to grow quickly with little investment using strategy instead of cash. Go to ProfitStackingSecrets.com and get your copy. Onto my guest and his incredible story.

My guest started out his professional life in the healthcare industry and worked for various healthcare companies in several executive positions throughout the years after university. As he advanced through the ranks at medical device companies, and even in the business of developing healthcare facilities, he was bothered by the lack of affordable, viable health insurance policies available to the average person. He took the entrepreneurial leap and he started an insurance company. He started Hooray Health in 2017 and he hasn’t looked back. In fact, he’s here to share with us what building this type of company is like. Welcome, Shane Foss, to the show.

Thank you for having me, Mitch. I am excited to be here.

It is my pleasure, Shane. I’m excited about having you because this is a unique type of company. I don’t know that I’ve ever had someone running this type of company before on the show. Before we get into the details, tell me how this all got started for you.

A few years ago, one of my best friends called me up and he got his first CEO job. We’re getting ready to exit out of private equity investment. He said, “I need your help. We’re in the health benefits space and I have never worked in that area before.” I went over to the COO forum for a company that created access for surgical bundles for large self-funded employers. I fell in love with the benefits space. I’ve always been on the clinical side of healthcare. This brought me more to the business side and the execution of that care. We turned that business around, sold it eleven months later, stayed on six months, and then the rest is history. I decided to start Hooray Health at that point.

Entrepreneurs are doers by nature; the hardest thing is not doing everything. Click To Tweet

You decided to start Hooray Health because you saw an opportunity in the marketplace.

When I left the company that we had sold, I was consulting and I was working for a couple of different TPA or Third Party Administrators doing some things. My back went out and I’d never had my back go out. I had this horrible nerve pain. It was excruciating. I went to urgent care and I had UnitedHealthcare at the time. I went in and I had a $75 copay with a $5,000 deductible. I asked him, “I haven’t hit my deductible yet. Can I pay the full amount?” They’re like, “It is $150 for the global fee.” I said okay and I paid it.

I went back and they took an X-ray of my neck and they found what they thought was a bone spur irritating the nerve root between C4 and C5. That was causing that inflammation in my nerve and the spasms in my back. They gave me two injections, a muscle relaxer and an anti-inflammatory. Three weeks later, I get an $800 balance bill. I thought, “What on earth is this?” I called up. They are in network. I said, “I have United. You guys are in-network. I paid $150. It should be a global fee.” They said, “We got carve-outs.” What I found out that day is and what every other American that ever goes to see a doctor finds out is that the healthcare system failed us in the sense that we have these high deductible health plans, the first $3,000 to $5,000, nobody cares about. They have all these carve-outs and it doesn’t matter.

I got stuck in that, but what they didn’t know was all I do is negotiate for a living. I negotiated down to less than $100 because it was a carve-out which meant I wasn’t contractually obligated to pay it. I started doing the research and I knew I wasn’t the only one going through this, but the challenge was there’s no correlation in healthcare between cost and quality. There’s no pricing transparency and no consistency. The biggest thing is 1 in 5 Americans are sent to collections every year for an unpaid medical bill less than $600. It’s not cancer that’s sending you to collections. It’s an urgent care visit or a basic physician visit or ER visit.

As part of my background, we had started a real estate development company that focused on health care properties and real estate. We built a couple of urgent cares and freestanding ER. I went to those physicians and talk to them. I said, “This is my idea. What do you think?” I got a lot of good feedback. What we did was we developed a contract that was $25 copay and no balance bill guaranteed when I went to see the doctor. On the backside, our insurance company worked with other insurance carriers that underwrite our policy and they pay that fixed fee. We were the first ones to ever do that. We were completely thinking out of the box. Everybody said, “I couldn’t do it,” but my question was always, “Why can’t I do it? There are no legalities around it.” That’s what started the journey,

I smiled when you started telling the story about the pain in your back being the impetus to move you in the direction of seeing the problem, because all of us entrepreneurs seem to operate with the same idea. Here’s my viewpoint. You and I may probably have the same why. If you’ve ever done an exploration of what is my why, it is to find a better way. I think many entrepreneurs have that same why. What happens, the entrepreneurial journey starts when you hit a roadblock and there is no solution. You say, “I got to create the solution. If I had this problem, I can’t be the only one.” That’s where younger entrepreneurs go wrong. It’s when they forget to do that little bit of market research first.

FTC 222 | Affordable And Accessible Healthcare
Affordable And Accessible Healthcare: You got to make sure it’s a big enough problem where there’s enough money or a large enough market to justify your time and your product.

 

You’re exactly right. You’ve got to love the why. What’s your problem? You got to love the problem. Why are you doing this? You got to make sure it’s a big enough problem where there’s enough money or a large enough market to justify your time and your product. Once you fall in love with that problem and you identify that, then you need to work on the solution, but do not love your solution because you are going to create 50 iterations of it. I was at a conference one time and I sat with the Cofounder of Waze. He said, “Love the problem, not the solution.” I was like, “That is brilliant,” because if you sum it all up for entrepreneurism, that’s it.

I have a friend, his name is Mark SA Smith. He was on my show many years ago. We were talking about this topic and he said, “Find the blood spurting problem and you know the solution is either near or you need to create it.” That was his expression and in your case, it’s even more applicable. The point is this is critical here because many of us are ready, fire, aim when it comes to building products and companies. Ultimately, you got to do it because it’s your nature and I’m the same way, but you’ll learn. You get old enough to have to get enough arrows in your back being the pioneer that you are until you realize, “I got to shorten this journey. I can’t go through all these iterations after I raised money. I got to do it first. I got to figure this out before I start selling this the best that I can.” The lessons begin as you start offering it to the market. That’s when a lot of the real learning takes place.

We did that. The first 6 to 8 months, I built it all myself, working in my office, building our provider network. From there, I went to friends and family. I said, “We’ve got some legs. We’ve got to where we need it,” and then went from there, we’re down the road.

That’s a similar path that I went through myself. When I started my software company, I had been a real estate investor. I made the decision that I didn’t want to be distracted by the real estate so I sold all my investment properties. I took my profits and I use them to build my company along with my partner and live on that money for what I knew would be several years without a salary. That turned out for me to be a great formula because we plowed every penny back during the first two years. We had the attitude that we’re not going to raise money. We’re going to move at the pace that the market takes us.

In retrospect that wasn’t a smart thing to do. I would have wished I had the financial savvy to understand how to work with investors and I didn’t. You learn and that’s part of the process. Shane, one of the things I love about what you’re doing is you’re a savant when it comes to developing a team. You have a process for finding incredible people. You think you might have about the best team you’ve ever had in your life working for you. Tell us a little bit about that.

Finding the right people that align with your goals and your mission is key to the success of being an entrepreneur. Click To Tweet

As an entrepreneur, by nature, you’re a doer. The hardest thing is not doing everything. That even comes down to marketing. You always have an opinion on something. Building the team around you is important. I was blessed to be able to work with Stryker Orthopaedics, which is a wonderful organization early in my career. I got a lot of good experience there. I worked with some fabulous people. The thing that I learned there was get the right people, support them, give them the tools that they need and let them go. As an entrepreneur now, you don’t have the resources that you had before. You don’t have big salaries. You can give options and do other things, but finding the right people that align with your goals, your mission is key to the success of being an entrepreneur.

On the flip side of that, you have to be able to identify quickly if they’re not the right person and make the change. We had a salesperson that was our initial salesperson. He wasn’t the right person. The rest of us are working 12 to 14 hours a day, hustling doing everything. We can’t get him to do much. Our initial success was lacking. I had multiple conversations with them and finally, I let him go. He was shocked and I said, “I don’t know how you can be shocked. This is where we’re at.” The thing that I got out of that, which was a little surprising was because you were such a small team in a startup, maybe 5 to 20 people, it’s still small. Everybody knows everybody. Everybody knows everybody’s business. The impact of me letting him go and showing my commitment to make sure that everybody is staying at a high level went a long way.

A huge part of what we’re doing as an entrepreneur is being able to identify that. The other thing is putting yourself in the back seat and having a little humility in saying, “I think this person can do better than me.” I’ll give you an example. On our Series B investment, we brought in a group that has a long history of being successful exits with insurance companies. I let go of our old salesperson and I hadn’t replaced him yet. I was managing all the sales until we could work through this. I told them what I’d done. I said, “This is why.” They said, “Our concern is there’s not enough insurance experience in your business. Would you be opposed to hiring a salesperson? We know somebody.” I said, “That would be wonderful.” He almost fell out of his chair that I said, “Yes, I’d love that help.”

In which comes in the next part of the story, which is as an entrepreneur, we love what we’re doing. We love our company. We love the problem. Sometimes we’re a little too idealistic, but taking a step back and make sure that you’re getting the help that you need. Be honest with yourself that you need help because our goals are all aligned. We want to make sure that we build a successful company that does a lot of good and that we have a good exit, so why not listen? That’s from an entrepreneurial standpoint, sometimes it’s a little insecurity, but I’m old now. I’ve been around long enough. I’m good. I know I’ve got enough confidence in myself. This is the best team I’ve ever worked with, head to toe. The salesperson that I have is fantastic with many years of experience. I have a COO that is a young gentleman, but probably one of the smartest men I’ve ever worked with, hardest working. CFO, I’ve got an Executive President that runs all of our customer service and implementation that is top-notch, many years in the insurance industry. What I do now is working with them, getting them to work together, and guiding the process as opposed to driving the process.

Shane, what I’m interested in is this process of moving from $1 million in revenue to the next million, and the next. What did you go through when you had to do that? How would you advise people who are in the process of making that transition? What should they be looking for? What should they be aware of? Is there something they need to know that they don’t yet know?

Be honest with yourself on the data. Look at your customer service, look at what your requirements are to deliver that high level of care. If you’re at $1 million in revenue and let’s say you have maybe 100 or 200 clients, when you get to scale, you have to be honest with yourself. Can a customer service rep handle five clients effectively or is it 100 clients? Make sure that you scale appropriately. Another thing is to always look at efficiency. How do we integrate technology to make us more efficient to improve our net promoter score and our customer satisfaction? For me, as we were transitioning, we reorganized the company to re-align ourselves with the client. We used to be sales and operations. Now, we’re aligning ourselves with the clients where we have all of the necessary support from clients. That’s what’s going to scale us to get 5,000 to 10,000 clients.

FTC 222 | Affordable And Accessible Healthcare
Affordable And Accessible Healthcare: Once you fall in love with a problem and identify that, then you need to work on the solution, but do not love your solution because you are going to create 50 iterations of it.

 

What you’re saying is that in the beginning, as you began to grow, you guys were generalists until you needed to become specialists in individual areas. You talk about your sales guy, I must have had that same experience five times. I hire a sales guy. I even pay him a signing bonus. He comes with a stellar resume and he’s a loser. I can’t imagine how anyone else ever hired the guy. You got to learn this stuff. You said something super important that I did not do when I was starting out. That is to hire slow, fire fast.

That is your lifeblood because you’re wasting revenue. It’s a sunk salary. It’s internal especially from an entrepreneur standpoint. If you have ten employees and you have one person that is not carrying their weight or not working as hard as everybody else, that’s 10% of your possible work out the door. The revenue is going in there. I don’t care if it’s $3,000 or $10,000 a month, it’s expensive. Making that decision quick and being respectful. The one thing that I’ll always stick to is I’m not going to talk bad about anybody even when you let them go. Some people believe in hanging them high. It’s bad enough getting let go. Let’s go as friends, be nice, and focus on winning later.

For many people, we’re dealing with fit here as opposed to function. Your organization has 25 people so far. You have a culture and that culture is alive. What happens is a new person comes along and they feel like they’re swimming in unfamiliar territory for a while until they either adapt or don’t adapt to that culture. That’s where your onboarding makes a big difference by bringing them into this culture. Make sure that they have the tools, the training, and the components that they need to do their job. Most people miss this. Frankly, I missed it. It took a while.

It’s hard when you’re in a small company because your onboarding is usually, “Here’s all the sales material.” One of the solid hires that we made. I told her, “You’ve got a month free pass. All I want you to do is talk to people, learn what they’re doing, figure out our product, how it fits into the market with your experience. I don’t want any judgment until 30 days. Put your SWOT analysis together and let’s sit down.” She did that. What it did was interesting because we didn’t do that before with another person. That’s my mistake. She was able to come in and get a free pass to look at everybody.

She benignly talked to people. She’s not their boss. She’s just, “What do you do? How do you do this? That’s interesting. Can I see the data on that? That’s good. You’re doing this.” In the end, she’s able to put it all together. What it did was she was accepted into our organization right away. She had a lot of credibility. Sometimes when you put people especially in senior leadership roles or in a position where they have to make decisions quickly, you’re not giving them enough time to learn what’s going on in the organization. It’s worth the 30 days.

Be honest with yourself that you need help because our goals are all aligned. Click To Tweet

Let’s go back again to that point in time when you’re transitioning from being a startup into an operating entity. Where did you start in terms of systems and software? You had the basics in place, but what did you do? When did you realize, “We got to scale the systems here. We can’t make it on email as our CRM. We got to start thinking big here.” How do we do that? What did you do?

I was telling you about our COO. He did a great job. He’s always ten steps ahead of me on that stuff. He has a full technology roadmap out for us. He brought in our CRM early. We’re using Windows 365. We’re building up our servers, our shared drives, aligning the whole thing. We worked with a company. Cybersecurity is incredibly important for us because we have PHI. I’m getting tested phishing emails all the time, then I’ll get a snide comment, “Why are you clicking on this?” The biggest transition was making sure from a technology standpoint, from the security standpoint, aligning sales with our CRM. We haven’t integrated that yet with our accounting. It depends on the roadmap. Our accounting software, we’re still using QuickBooks. We don’t have a lot of need for something else now, but I do see probably Oracle in the future.

You’re going to outgrow QuickBooks as soon as you need an audit trail. I took a company to almost $30 million on QuickBooks until we got to the point where we had to move over to a real accounting system. In essence, this is the entrepreneurial path and you’re on it for sure. Let’s talk about the future and not so much just your future, but how you would advise an entrepreneur to think about the future? You’re at a point now where you’re three years in or almost four. You got to over $5 million in revenue. How should an entrepreneur view the future? Do they ask the question in advance, “Who will buy my company at this stage,” or is that too soon?

We look at who’s a potential buyer, but more importantly, you don’t want to focus on who’s buying your company now. What you want to do is you want to get to the point where they want to buy it. For us, we’re going to end up in the first quarter going on an executive leadership retreat where we can hang out, have a little us time, relax after the enrollment period, open enrollment ends, and talk about the future. What do we want to be? When you first starting out it’s like, “Are we going to make it to next year? Is anybody going to buy our product?”

At that point when you start thinking about the exit, it’s more important not to figure out who’s going to buy you, but what do you want to be when you grow up? What does that look like? What are you going to need from an infrastructure standpoint? We use four different major operating systems for our software platforms. Because we are a unique animal, is it cheaper for us to build our own software platform that is for us and then integrate it with an accounting platform? Those are the questions that you got to ask. What are the other things that are going on in the market that we need to look towards integrating? We’re doing a lot of stuff. We’ve got on the roadmap for 2021 that nobody in our space is even thinking about. It’s asking those questions. What are the needs of the client going to be a couple of years down the road as healthcare continues to skyrocket? We’re going to be able to offer a product that is a good solution for people that can’t afford major medical anymore. It’ll look a lot more like a major medical. It’s going back and identifying, what you want to be when you grow up? What it’s going to take to get there? What are the milestones? Plan for those milestones and shoot for it.

We’re six months into this whole pandemic. The world has been turned upside down. We are on the verge of a presidential election and by the time this is published that may have already happened. What I’m interested in and if you could provide some insight here, what changes did you make when COVID struck, other than the obvious social distancing and all that stuff? Did you go virtual immediately? Where did you see the biggest impact on the way you operated your business?

FTC 222 | Affordable And Accessible Healthcare
Affordable And Accessible Healthcare: Aligning ourselves with the clients where we have all of the necessary support from them is what’s going to scale us to get 5,000 to 10,000 clients.

 

We went virtual immediately. Long did a great job. He drove a lot of it. He made sure that everybody had laptops, extra monitors, keyboards, everything set up at home. He monitors everybody at home and makes sure that we’re working right. He sent all of that up initially. We went remote right away and we use Microsoft Teams every day. It was a learning experience in the sense that, especially me, I’m a salesperson. I want to be with people, talk and draw on the board. All of a sudden, you’re home and you’re face to face on a screen.

That was the biggest thing. We’ve got maybe 5 or 6 people in the office. We’re working our way back in mastering during meetings and stuff. For the most part, it’s been business as usual. The biggest change for us though and it’s a great change is that we are not flying to Minnesota or California to go see a client anymore. We’re setting a meeting doing a sales call and it’s much more effective. Long term, you will see that is going to be probably the biggest change that happens in the industry. You’re going to see a lot less business travel. You’re going to see a lot more Skype meetings. It’s more efficient.

Why should it take me 24 hours just for an hour-long meeting? It doesn’t make any sense. I think that’s going to be the biggest thing. You’re going to see people going back to the office though. They’re predicting that the whole commercial real estate market is going to fall. I don’t believe that at all. I’m sure everybody else is like me. They want to start putting their pants back on when they go to a meeting, they want to see and talk to people. They want to see their facial expressions. The Skype or the Zoom meetings, whatever you want to call them, is funny because no matter what, you always have the person that can’t get their mute off. They can’t share the screen. They got their face 1 millimeter from the camera and go like, “Is this thing on? I don’t get it.” In every meeting, I’m going to start showing up five minutes late because everybody’s trying to figure it out. If get in five minutes late, then it’s good.

Shane, you’re going to appreciate what I’m about to tell you. Every week we do a family meeting. My mom is 87 and my cousin is 84. Everything you’re talking about, we do that every week. I get it. This has been a great conversation, but we want to go one step further as we do about in every interview. What I’d like to do is ask you a question that will help readers get a little bit better acquainted with you and get to know you a little bit better too. Who in all of space and time would you like to have one hour to enjoy a walk in the park, a quick lunch, or an intense conversation with?

It would be Winston Churchill. I’m a huge history buff. Winston Churchill or Alexander Hamilton, either one of those. Walking through, they were such good leaders. Winston Churchill, his first year of office was spent underground during the bombings with World War II with Germany, getting out and showing his face and defying Hitler. With the US playing their neutrality card during that time. The stress had to be unbelievable for him. He was a character. He’s drinking champagne every night, smoking cigars in a pink robe, and dictating while he’s in the bathtub. You can’t make those characters up.

You're going to see a lot less business travel and a lot more Skype meetings; it's more efficient. Click To Tweet

He was also one of the most real people in a leadership position. The reason I used the word real is that he was always transparent about the fact that he wasn’t sure what he was doing. There were many times when he would tell people in advance, “I don’t know. Let’s try this.” Here’s the thing that I love most about him. As you can tell, I’m also a fan. He never lost hope. He always believed in his mission and his purpose, and he knew he would overcome, even as the bombs were dropping on his head. That’s the leader.

He had a purpose.

Thanks for naming him. I appreciate that. Here we get to the final question and I call this the change the world question. Shane, what is it that you are doing or would like to do that truly has the potential to change the world? I think I know your answer, but go ahead and tell me.

Make healthcare affordable for everyone and simplify the process. That would make me happy, to get everybody affordable access to care.

That’s a great mission and I know you’re on it. If anybody would like to find out more about the company and what you’re offering, how would they do that?

FTC 222 | Affordable And Accessible Healthcare
Affordable And Accessible Healthcare: Sometimes when you put people in senior leadership roles or in a position where they have to make decisions quickly, you’re not giving them enough time to learn what’s going on in the organization.

 

You can find us on the internet at www.HoorayHealthCare.com. You can also find me on LinkedIn, Shane Foss, and see what we’re up to. I’d love to hear from you.

Thank you for that offer. If somebody works for a large organization and is intrigued by what you’ve talked about and maybe would want to be the brave soul who goes to HR and says, “I want to change our health plan.” Would that be something that they could do by looking at your website and getting enough information to present?

We could get that information to them if they email us at [email protected]. We’ll get them the right information.

Shane, it’s truly been a pleasure chatting with you. Thank you for your time. I can’t wait until we get a chance to talk again.

Thanks, Mitch.

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