Freedom From Health Insurance with Andy Schoonover

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. Brought to you by the HubSpot. Podcast Network, the audio destination for business professionals with great shows like Science of Scaling. Today, we'll be breaking down freedom from health insurance. To drop these value bombs, I brought Annie Schoonover into EO Fire Studios. Annie is a founder and CEO of CrowdHealth, a company founded to give people the tools to free themselves from the tyranny of health insurance. And today, Fire Nation, we will be talking about the right tools with health insurance, the wrong tools, cash pay, getting to better rates.

0:38And we'll also talk about a viable alternative to health insurance and so much more. And a big thank you for sponsoring today's episode goes to Andy and our sponsors. The Gold Digger Podcast, hosted by my good friend, Jenna Kuchar, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. The Gold Digger Podcast helps you discover your dream career with productivity tips, social strategies, business hacks, inspirational stories, and so much more. A must-listen episode is one of Jenna's recents on everything you need to know about affiliate marketing. Listen to Gold Digger wherever you get your podcasts.

1:14Ever thought of giving a TEDx talk? It's one of the most powerful ways to share your message with the world, and four-time TEDx speaker Taylor Conroy from Thought Leader can help you get there. Visit thought-leader.com slash fire to join Taylor's free training where he teaches you how to land a TEDx talk and spread your message to millions. Andy, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. Hear me out on this one. So I went to Stanford for business school and I'm looking at the top 20, maybe even 30 classmates of mine in my class.

1:56By the way, I was probably in the bottom 20 or 30. and ultimately what I think is that entrepreneurship and intelligence is inversely correlated or negatively correlated. So again, hear me out on this one. The top 20 or 30 members of my class who are wickedly smart, wickedly smart, they are crushing it in the land of status quo. They are bankers. They are consultants. They are making millions of dollars a year crushing it in the status quo, but it's the middle and the lower end of my class that are all the entrepreneurs. And so I was like, why is that? That's the big question that I've been asking myself.

2:36And I think it's two reasons. One is these people are so smart that they see things that we don't, reasons why businesses won't succeed, that if we solve them, we probably wouldn't do what we're doing. You know, there's a million reasons why these things don't work, right? I think the second one is entrepreneurship is just a series of failures that hopefully culminate in a success. And many of these people have been getting A's. They get on every test they've taken, they've gotten the perfect SAT scores. Failure is not an option. So I think there is a level in which, sure, you need to be intelligent, maybe average or above average intelligence to be an entrepreneur.

3:19But beyond that, I think it actually hurts you. I don't think very many people agree with that. So that's my, um, that's my addition to, to your, your wonderful question. Well, thank you. And it's really interesting because I've interviewed now over 4 ,300 entrepreneurs in the past 11 years. And so many of them, and I mean, so many of them have said, you know what, John, if I had any idea, even a clue about what it was going to take to succeed as an entrepreneur, I never, never, never would have started. So to your point, a lot of these really top echelons, smartest of the smart people, they kind of probably know a lot of that already.

3:59They're like, well, I actually know what these other semi-ignorant people did not know. And that's why I'm not even going to start down that path. But I'm taking the more safe, secure routes where I'm not going to fail. I'm not going to have a blemish on my record. But as us entrepreneurs say, ignorance is bliss, baby. And how do you like me now? Ignorance is bliss. Ignorance is bliss. And who knows, maybe they'll do a Harvard Business School case study on that at some point. Maybe this episode will spark that. That'll maybe spark somebody to do something along those lines, because it really is interesting.

4:34And Fire Nation, we're talking to the CEO of CrowdHealth, and we're talking about freedom from health insurance. And now an issue that many people have dealt with is with the perverse incentives that health insurance has, you know, when they fight us when we have this health care issue because of these perverse incentives I just mentioned. So can you kind of talk about how this world works in a very perverse incentive manner? Yeah, it's perverse. You know, I say it pretty simply like this. You know, obviously the sellers of health care, which are big hospital systems primarily, want the price to go up.

5:16That one's pretty obvious. But what most people don't understand is the buyers of health care, which are the insurance plans, actually also want the price to go up. And so why is that? Well, think about it this way. There is legislation within the last decade that forced the health insurance plans to max out their profits at 15 % of premiums. So, kind of walk through the math of that, right? A$1 ,000 premium, they can make$150. Well, most of these are for-profit publicly traded entities. And so, how do you go from$150, increase that by 10 % to get to$165? Well, you have to see your premiums increase.

5:58And so you actually have, they're actually incentivized for prices to go up over time. And so in essence, what you have here is you have the buyers of healthcare, health plans, the sellers of healthcare, hospital systems, both wanting the price to go up. And so what do you get? The price is going up. And that's a very simplistic way of looking at it. But that is in essence what is happening. The system is right with just perverse incentives that create never-ending rises in healthcare costs. That's ultimately what's going on here. Now, one topic that I'm really excited to chat with you about is the fact that you believe that health insurance is unnecessary with the right tools.

6:44Can you share more? Yeah. I'm one of those few people out there that think that being uninsured is better. it's more freeing. You can go to wherever you want. And, you know, in essence, what I think is that if we were able to operate like we operated before 1970, which is when the legislation came into effect that basically, you know, legalized the current way in which we acquire our health care in this country, then we'd be better off. And what was happening before the 1970s? Well, Well, primarily people were paying for their health care out of pocket, and that kept market forces operating. So if you have market forces, if the buyer and the seller of a product agree to a price, then there is a market force that keeps driving those prices down because if a profit gets too high, then somebody enters the market.

7:40This is Economics 101. Well, Economics 101 was pitched out in the 1970s with the HMO Act, which, like I said, it codified our existing system. So I'm actually thinking that you should be uninsured. You have a lot more power that way. And so people think that's crazy. You know, these UnitedHealthcare is a$400 billion company. One out of every 10 health care dollars goes through UnitedHealthcare. Well, UnitedHealthcare comes to Austin, Texas, which is where I live. And there's two hospital systems. UnitedHealthcare has to have both of those hospital systems to operate in Austin because everybody wants access to both.

8:18So if UnitedHealthcare was to come in and say, I'm going to drop your rates by 5%, the hospital systems would say no. And so you're negotiating against a duopoly. Whereas me, I can go in and say, hey, can I have a cash price for your service? And most of the times doctors will say yes. And the vast majority of the time they will actually give me a significant discount because I'm paying them in cash. Now, why is that? Primarily because each doctor has about three people that he or she needs to bill health insurance plans. In addition, he or she spends about 30 % of their time fighting with health insurance plans about what they can or cannot do with their patients.

9:01So by going and paying in cash, I eliminate all that hassle, all those costs, all of the craziness of getting approvals from health insurance plans to actually do what I want to do, which is just take care of the patient. So in essence, what we're doing is we're ripping the health insurance plan out from the middle of that doctor-patient relationship. That's why we're getting our members' prices for their services about 50 % of what health plans pay for the exact same service. Let's get specific and talk about paying with cash. How does cash pay actually lead to better rates for the healthcare services that we need?

9:39I'll give you a couple quick examples. We have a member who either today or yesterday had a brain surgery. The local hospital said it was$77 ,000 to do that brain surgery. We said, hey, you know, can we find you another hospital that would be willing to do that, you know, less expensively? And the woman's like, you know what, I really, really love my doctor. I really love this hospital. But sure, go and take a look. Well, there's a hospital that's actually specialized in this specific procedure that was willing to do it for around$30 ,000, 10 miles away from this woman, and as long as this woman would pay in cash on the day of the procedure.

10:23So if you think about the way these hospitals work is typically what they have to do is they would have to bill health insurance. They would have to fight with health insurance over what rate they're going to get paid. They wouldn't get paid for 30, 60, or 90 days. So what this hospital is saying, look, if you can pay me on the day of the procedure, I will give you significant discounts because I don't have to deal with any of that hassle. And that's the reason why we're getting so much better rates for our members than a United Healthcare or a Cigna or an Aetna can get their members. And so in that scenario, how do you deal typically with that woman or man if it's a different scenario where they're like, but I really like your doctor.

11:04I really trust my doctor. Let me talk about the mechanics of actually her paying in cash, because I think this is important. And then I'll talk about the other, the doctor one. So, you know, that's a, let's just say it's a$30 ,000 surgery. You know, what CrowdHealth will do is we'll go over, go around to about 300 of our members and say, Hey members, would you give this woman in Arizona a hundred dollars so that she can go get this brain surgery. And they can say yes or no. And if they say yes, then$100 goes from their account to this woman's account. We set up a bank account. Basically, it's like a Venmo account when you start.

11:42And so we see all that money transfer. We make sure that she's got$30 ,000 in there. So when she shows up to get her brain surgery, the money is there. They can pay the hospital. So we've done that. we've adjudicated about 10 ,000 bills. Every bill that's been submitted to the community like that has gotten paid. And it's everything from, you know, a brain surgery that we just talked about to a little pediatric visit. So kind of the other part of your question is like, hey, I really, really love my doctor. Well, you can go to your doctor. All we're asking is us to give you another option. And so then the question becomes is like, do you want the 70, I think it was$77 ,000, something like that, somewhere between$70 ,000 and$77 ,000.

12:26I can't remember the exact number. But do you want the$77 ,000 doctor or do you want the$30 ,000 option? And if I can show you that the doctor who's actually doing the$30 ,000 option is better than the one that's going to do it for$77 ,000, wouldn't you choose the$30 ,000? And so we go through a process to show this doctor all the residencies, all the schooling that this doctor has. this doctor has done more of these procedures than almost anybody in the country has done. And so we provide the member with the absolute data as opposed to just the bedside manner of the doctor, which is typically how we will evaluate our doctors.

13:03What if we can prove to you that this doctor is actually better at the surgery and can do it for a lower price, and then give her that data, and then she can decide for herself. And in this case, the member decided to go to the second doctor. So I think it's just about educating our members, Because inevitably what we think, and I'm sure some of your listeners are thinking like, oh, my gosh, like, am I going to be forced to go to the discount doctors? Like, are those doctors not as good as the ones who are$77 ,000? It's no. It's actually the opposite of that. So, you know, in health care, if you think about this, if you have a doctor that does, you know, five knee surgeries a day versus five knee surgeries a month, who's going to be able to do that at a lower cost?

13:47the one that does it for five surgeries a day. They will go in, they'll see the same complication that they've seen, you know, a dozen times before. The one who does it five a month may not have seen that complication. The outcomes aren't as good. You're going to have to come back and get your knee redone because they didn't do it right the first time. And so, in essence, what you want is to find doctors who do this more than any other doctor out there. They're going to be better at it. They're going to actually be lower cost at it. And that's, you know, kind of a key component to the way that we operate.

14:18So it's kind of counterintuitive, but this is what we're finding again, over 10 ,000 bills over the last three years. Wow. Fire Nation, this is really where we're taking this world to a more opportunistic. Opportunities are abound for anybody who wants to say, you know what, I'm gonna step back. I'm not just gonna jump in the train and let it take me wherever it goes, but I know there's opportunities. There's companies like CrowdHealth that are giving me opportunities. let me see what's around. And we have a lot more to talk about around this when we get back from thanking our sponsors. Artificial intelligence is at the top of everyone's newsfeed.

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16:39visit thought-leader.com slash fire. Join Taylor for his free training and get your message out of your head, out of your heart, and out into the world where it belongs. That's thought-leader.com slash fire. So Andy, one thing that I hear from a lot of people, like a lot of my friends, especially from college are saying, John, I really don't like my job, but man, the benefits are great. And I was in the military for eight years. I was an officer. And that was one thing I heard so much from people that are in the military with me is like, John, I want to get out of the military because there's things I love about it, but there's things I don't love about it.

17:15But man, like eight more years, my benefits are for life or 10 more years or the benefits are great. It's sad that one of the primary reasons that so many people never set foot down the entrepreneurial path is the pain and fear they have of these potential healthcare costs. Talk to this. You know, I saw a study pretty recently that from Rand that said somewhere between two and four million Americans would go do something entrepreneurial if it weren't for healthcare costs. Wow. And to me, that's un-American. I mean, we're shackled to our big corporate jobs or to the government or to the military or whatever because of healthcare.

17:57And one of the reasons why I wanted to start this company is I wanted to unleash the power of entrepreneurship from those two to four million people who would go and do it if it weren't for healthcare. Ours is incredibly reasonable. It's$175 a month if you're a single person. There's no massive deductibles. So we're trying to make healthcare accessible to everybody so that everybody who wants to can, with a really good feeling of security go out and start a company. So entrepreneurs, freelancers, gig workers are by far our number one group of people who come and join us. Interestingly, doctors and nurses are our number two group.

18:43But, you know, so we are set up specifically for that group. And so we'd be, you know, super excited to have those types of people join us. You know, the great thing about those types of people too, is you're helping other people in the community who are entrepreneurs like you. They take radical self-ownership, self-responsibility, and they just act in a different way, take care of themselves in a different way than the general population. And so if you think we have this group of, you know, almost 6 ,000 people who are helping each other with healthcare expenses, who would you want to help with their healthcare expenses?

19:21You know, you'd want to help folks like you who are entrepreneurs, who are go-getters, or going after it, you know, funny enough, and I know we can talk about, you know, more about this in a minute, but number one expense in the crowdfunding requests are pregnancies. We have a lot of pregnancies. Number two is active injuries. So it's people who are out doing things, being active. Those are the types of folks that we have in our community. And so we're, you know, we're fired up to have a community of entrepreneurs and freelancers. Fire Nation, I just have to say the flexibility, the opportunity that you have to really take control of your healthcare and to not just be at the beck and call or at the decision of some other individual and company and these large, you know, they don't know you.

20:12They don't care about you. They just are looking at the bottom lines and they're trying to figure things out. And there are viable alternatives to health insurance. And we've been talking about it throughout this entire interview, but really take it home for us, Andy. What are the viable alternatives to health insurance? Yeah, I really, truly believe that helping each other directly through a crowdfriending approach, we call it Back to the Future. It's how we've done it for hundreds, if not thousands of years. If people in our community are in need of help, what have we done? And, you know, in the past, we've gone over and we've plowed their fields or, you know, done whatever they needed to do for us to help them financially, physically, communally, whatever they needed for us to do.

21:00And in the 1970s, the government and health insurance placed themselves in between us and our community members. And so I think we need to get back to where we were before. And so let me give you a specific example here. We had a member in Tennessee over the summer who got her fingers chopped off by a boating accident. And so this was tens of thousands of dollars of expenses. We went out to our community. We said, hey, we have this woman. Her name is Abby. She's 19. She's in Tennessee. She needs help. We had people come back to us and say, hey, can I give more? I know that you asked for$100, but can I give$200 to Abby?

21:40Like, because that's another human being, right? You're giving your money directly to another human being as opposed to a big health insurance company. And there's power in that. So instead of you having to give your monthly check to, you know, big, cold insurance company that's actually your enemy when it comes to, you know, getting your bills paid, you're actually sending your money directly to another person, another human being and helping them. Like, how cool is that? So we think that that community component, we say fund humans, not health insurance, is just a really important differentiator between us and health insurance.

22:17And it's kind of back to our roots the way that we've done things for hundreds or even thousands of years. So Andy, if Fire Nation wanted to learn more about what you have going on and they could maybe learn more about CrowdHealth and how they can get involved, like, which by the way, Fire Nation, Kate's been involved with CrowdHealth for quite some time now. And I always love opening our mailbox and just seeing a letter from CrowdHealth because we know what it is. Cha-ching. So tell us a little more about that, Andy. We appreciate you all being there. And Kate, as you've been very public about, you had a baby on CrowdHealth or with CrowdHealth.

22:53From what I understand, it's been a great experience. I know that you all had some kind of complications afterward. Yeah, we had to spend seven days in the NICU, which of course is very scary because you don't exactly know. with this newborn, but you don't want to be adding on financial terror on top of that as well. So yeah, really great point. Yeah, totally. And so you're probably going to get bills here soon, if you haven't started getting them already, that are going to add up to$150 ,000 or$200 ,000 is my guess. We've had many, many NICU babies in the past. And so what we do is we take all those bills, we'll negotiate with that hospital on your behalf, and we will then go and crowdfund that money so that you and Kate have the money to pay that hospital.

23:36And that takes four to six weeks to get that all figured out, basically. And so, NICU babies, which are some of the most expensive healthcare costs out there, are very doable with crowd health. We've had six cancer cases. We've had a dozen NICU babies. We've had motorcycle accidents, all kinds of big health events that the community has helped out with. So this is good for the little stuff in addition to the big stuff. Fire Nation, you are the average of the five people you spend the most time with. And hello, you've been hanging out with Andy and JLD today. So let's keep up the heat. And for links to everything we talked about, visit eofire.com, type Andy in the search bar, and the show notes page will pop right up.

24:22And Andy, one more time, what is your call to action for our listeners today. Join crowdhealth.com. You can get up signed up there. It literally takes you five minutes. If you have a family, maybe it'll take you seven minutes. If you use the promo code EOF for entrepreneurs on fire, you can get 99 bucks a month for the first three months per person. So there's a little add to your audience. We'd love to give you a little taste of what we can do. We think you'll enjoy it. I'm so fortunate that, John, you've been a member. Your wife's been a member. Your new little one is a member. And so we're so thankful that you all have been a member of CrowdHealth for, what, a couple of years now, two or three years.

25:04Yeah, it's been a great experience. We've been users, you know, well before this interview was ever lined up, Fire Nation. So this is totally an independent action. And, you know, we heard about it. Actually, I honestly believe this. I'll have to double check with Kate is that she heard it a couple of years ago on a podcast and was like, no brainer and has been on it ever since. And so it's cool that I get now to share with my audience on this podcast that, you know, we've been users for multiple years and loving the experience so far. So Andy, I just want to say thank you for sharing your truth, your knowledge, your value with Fire Nation.

25:37And for that, we salute you and we'll catch you on the flip side. Thanks for having me. Hey, Fire Nation, a huge thank you to our sponsors and Andy for sponsoring today's episode. And Fire Nation, successful entrepreneurs are great at three things, productivity, discipline, focus. That is why I created the Mastery Journal so that you can master these three things in 100 days. And we're talking step by step. So visit themasteryjournal.com. I'll catch you there. We're on the flip side. The Gold Digger Podcast, hosted by my good friend, Jenna Kuchar, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals.

26:13The Gold Digger podcast helps you discover your dream career with productivity tips, social strategies, business hacks, inspirational stories, and so much more. A must-listen episode is one of Jenna's recents on everything you need to know about affiliate marketing. Listen to Gold Digger wherever you get your podcasts. Ever thought of giving a TEDx talk? It's one of the most powerful ways to share your message with the world, and four-time TEDx speaker Taylor Conroy from Thought Leader can help you get there. Visit thought-leader.com slash fire to join Taylor's free training where he teaches you how to land a TEDx talk and spread your message to millions.