No one can stop what we're doing: A Q&A with Rachel Means

Paul Wilson: How did you get your start in the benefits industry?

I never wanted to be in insurance, because my Mom had been an executive at Blue Cross Blue Shield of Texas since I was a kid. She just retired last May, so we can finally have Thanksgiving together without arguing across the table! My husband used to make a pitcher of margaritas and let us debate the merits (or lack thereof) of PPO discounts on the back porch without him.

I had a really good upbringing, went to college and wanted to go into medicine. I failed Chemistry and decided med school wouldn’t work, so I went the business/marketing route. I had a buddy who owned an energy trading firm so I entered a internship program there and really thought it was the life before I realized the job entailed sitting in front of a computer for 14 hours a day. But the HR person there went on maternity leave and the CEO asked if I’d help with benefits renewal. I didn’t know what he was talking about, but started exploring it and ended up getting a job offer from a tiny one-man shop in Houston.

I was doing account management for him and grew a block of business from the ground up by managing his self-funded clients and groups.

I slowly outgrew that position and he and I had a very friendly separation. I was 23 and thought I was a hotshot, so I went to work at Gallagher. I did very well there but after about five years, kids and marriage came along and I realized I couldn’t do what I wanted to do in the corporate world.

I said, “I don’t want to do this anymore.” That’s where my story really started; I jumped out on my own and had my “Jerry Maguire” moment.

PW: How did those early years shape who you are today?

At that time, I didn’t see anyone doing a lot of creative things, so I started studying and rebuilding my health care mind.

I began to understand I would need to step out on my own. When we moved to Tyler with our boys, I had to start growing my agency and hiring people. I started looking for our own health plans and there were very limited options in that area. Even a crappy high-deductible employee-only plan was $600. How was I going to pay that for people I’m trying to recruit? That was the motivation to figure out how to build the plans we now offer our clients.

The value I bring when I meet people who want to get creative is that I have 200 employees of my own. Anything I suggest to you, I’ve already tried for my people. We’re our clients’ business partners. It’s all about being honest and transparent. Sitting across the table from the CFO and saying, “OK, what is your business model? What’s our goal?” That conversation is different for every client; you can’t just focus on a health plan. It’s a holistic approach to the business.

We work with a large chicken production company. When I took over their account, their base wage was only $7.25 an hour. Because of the work we’ve done together on their health plan over the last few years, they’re up to $14.65. We’ve looked at their wages, their business model, their EBITDA and the money we’ve saved on their plan has been reinvested in other ways.

When I started the business, it was just me. My husband was going to take pictures of me in 20 different outfits for the website: Rachel the janitor; Rachel the COO, etc. I was doing everything. When I came to this market, there were basically four agencies and nobody called on anyone else’s clients.

But people in the community started coming to me and saying, “Hey, we heard what you did for this other employer, can you help us out?” There was a really large agency out here and we ended up acquiring them. They were willing to give up a big part of their benefits division so they didn’t lose more of that business in the end. They’re really good on the P&C side so we can meet clients with a two-pronged approach. It works very well.

The buzz started in the community that there were other options and it has grown exponentially. East Texas is huge and spans from Texarkana down to Tyler. My team handles probably 50% of the market. We have direct agreements and we’ve built our own PBM model with a local grocer that has their own pharmacies. It was a very interesting shift in the business when all that happened in 2017, and we’ve grown probably 150% since then.

PW: What areas of innovation or strategies are you seeing right now?

My husband is a football guy and he always tells people, “You can give someone your playbook but that doesn’t mean they’ll be able to match what you do.” In this industry, people try to hold these strategies close but it’s not about the strategy, it’s about the people who are using them.

I think the biggest misconception in this industry is that a TPA is supposed to do all the work. I thought, you know what? I’m just going to build my own in-house underwriting team and advocacy team, because we know our culture and model. Many smaller advisors rely too heavily on TPAs to do the education and handholding of members and that doesn’t always work.

Underwriters kind of speak their own language sometimes and they don’t always do well when they’re client facing. But I wanted to find an underwriter who didn’t need a gatekeeper or translator to speak to clients. I wanted a CFO to be able to call my underwriter directly and talk through what they need or the questions they have. I found this unicorn, as I call him, who was an underwriter for a TPA and he joined our team and helped build our underwriting. And then we looked for a nurse navigator, because we wanted the people from our team who go onsite for enrollment to be the same people calling members. We started bringing the advocacy team onsite for open enrollment so that these hourly employees could meet our team and look them in the eye.

PW: How would you describe the current health care landscape? Are employers more open to innovation and new ideas?

Health care right now is kind of like drinking from a fire hose, because you have all of this private equity flooding in. I’m a capitalist and my husband and I own businesses, but this is health care; we’re talking about people’s lives. When they’re making these decisions, it’s the most vulnerable time of their lives. When you have all this private equity flooding the market, it makes me conflicted because I know from my husband’s various businesses the intense pressure on an operating partner when private equity is involved. There are goals to hit and you have to grow very quickly to pay that back. I tend to stay away from vendors who have private equity behind them if I don’t know who it is.

Right now, we see big shifts in our block of business. We had a company come to us last year whose cost had gone up 90% over three years. This was an employee-owned company with thousands of employees, so they had to move their own people from a PPO model to an HSA model with a deductible that was a few thousand dollars more than what they were used to. They came to me needing education; they formed a committee of 30 people from every single part of their business. Before we took over their plan and changed it, we spent six months meeting every month on different topics. We worked on education before we even discussed changes. I think we’re going to see more employers who are are no longer questioning the need to do something creative but are hungry for education. We’re seeing this every day in some very big ways.

It’s not going to be hard to effect change. I think the larger carriers and brokers can’t always change their business model fast enough; we have no debt, no capital partner, so if we grow $2M this year and decide we don’t need to grow next year, that’s fine. My strategy is around direct contracting. It’s funny, because CFOs will ask, “You’re just going to call this giant hospital system or provider and ask for an agreement?” And I say, “Well, they take money, right? What will happen if I call and say, ‘Hi, my name is Rachel and I represent XYZ self-funded health plan. We have a customer who needs a transplant; do you take money?’” Well, what do you think they’ll say? Ninety percent of the things we source in health care are not scarce, not expensive, and they’re easily accessible. Most of it comes down to having control of the money in the health plan and access to the members.

The trajectory is really just having a 3-5 year strategy and aligning with the needs of the client. Finding your niche in this land of health care can be hard because the needs are so different. That’s why I think more employer groups are realizing they need to take the time to plan things out.

Texas is really digging into health care costs. I go and testify at the legislature with a committee that includes an anesthesiologist and a guy who owns a physicians’ hospital, so we have case studies and lots of evidence about how things can work. You’re going to see some interesting bills get proposed soon in Texas.

I used to play nice and I was very concerned about my business model getting in the spotlight, but now I’m willing to go to the Dallas Morning News and talk about some of these things. There’s so much momentum right now that no one can stop what we’re doing.

When it comes to the top strategies employers should be looking at, there’s no reason you shouldn’t be doing direct to pharmacy deals. When I see people with 20% increases, I’m like, “What are you talking about? We don’t see that.” I think employer groups are going to start looking at different strategies; it’s not hard.

PW: How do you stay motivated and not get discouraged or intimidated?

I love that question. I don’t get intimidated anymore and don’t feel like I’m beating my head against a wall, but that wasn’t true a few years ago. I think it’s having clients where you walk on site and the members come and hug you or the CEO says, “Let me fly your team around on our plane to do open enrollment.”

I recently got a text that said: “Hey, my name is Elaine Horton and I want to get into health care consulting.” I took her call and she invited me to come over. We sat at her counter for two hours talking about health care. She had been burned in other areas of health care where no one ever did anything and she wanted to find a way to make a difference. About a year ago, she joined us. I had reached a point where I was getting a little burned out during COVID but she came along and we worked out an agreement where I let her own the business that she grows. I had a ton of referrals coming in that I could send her way and she now runs our accounts in Austin where she lives. It has been so fun and energizing!

We still get frustrated at times, because it can be hard for people to get rid of what they’re used to; I call it the “Linus blanket.” They think of it as a fluffy comfortable thing but it’s actually hurting them.

I was recently traveling and got back to my office to find a gift bag from a patient with a little Willow Tree figure that was an angel with a thank you card. This person went out of their way when all we did was help get someone into the mental health therapy he needed. That’s what keeps us going — the members and the clients.

PW: What skills and other qualities do you look for when building a team?

Our team is very maternal. We’re like a group of moms who think of our clients as family members.

We also need people who are very data-driven. The guy who built our systems is the IT director for one of my clients. I’ll get a crazy idea to build a dashboard and he’ll just make it happen. It’s no longer just account management where you get an ID card, look over plan documents and help with a balance bill. My account execs are looking up radiology prices or sourcing things through the Bahamas. I think you either innately care about people or you don’t. I can’t teach compassion, but I can teach the industry and strategies.

I probably pay 30% over market salary because I expect more from my people. They’re worth it, but it’s not an easy job. You have to have someone who cares.

PW: Finish this sentence: The key to success in this industry going forward is…

Transparency and working for your clients and their employees, not the system.