Why Simplifying Healthcare Payments Matters with Brian Cosgray, co-founder and CEO of Elevate

[00:00:02] Hey everybody, welcome back to the Outcomes Rocket.

[00:00:05] So excited you tuned in.

[00:00:07] Today I have the privilege of hosting Brian Cosgray on the podcast.

[00:00:12] He is the CEO of Elevate and is responsible for defining the overall

[00:00:17] vision and strategy for the company.

[00:00:19] He's well known for leveling up both new startups as well as established firms,

[00:00:24] revenue growth, and product evolution alike, and ultimately revolutionizing

[00:00:29] the consumer direct benefits industry.

[00:00:33] Brian's a sought after thought leader, and he's been featured on top business

[00:00:36] publications like Forbes, the New York Times, the Atlanta Business Chronicle.

[00:00:41] And we're excited to have him here on the Outcomes Rocket.

[00:00:44] Brian, so glad you're here.

[00:00:47] Wow.

[00:00:47] What an intro, Saul.

[00:00:48] Thanks for having me today.

[00:00:50] It's a pleasure, Brian.

[00:00:51] And sometimes you do certain things and you take a pause and you're like,

[00:00:54] wow, I've actually done that stuff.

[00:00:56] Feels like it all happened in an instant.

[00:00:59] Time flies when you're having fun, Brian.

[00:01:01] And, and look, just for our listeners to get a chance to get to know you better,

[00:01:05] tell us a little bit about you and what inspires your work in healthcare.

[00:01:09] So we're a little bit different than a lot of your guests.

[00:01:11] We don't treat patients.

[00:01:13] We're a company that provides benefit accounts, typically a health savings

[00:01:18] account, a flexible spending account, or health reimbursement arrangement.

[00:01:22] These are pre-tax accounts an employee can get through their employer to help

[00:01:25] pay for out-of-pocket healthcare costs.

[00:01:28] So we're a little bit adjacent to a lot of your normal guests, but.

[00:01:33] Everybody has to get paid and paying for healthcare is a, certainly

[00:01:36] an important part of it.

[00:01:37] Yeah.

[00:01:37] Listen, Brian, still very relevant.

[00:01:40] Obviously the operations of healthcare, a big part of it is how it gets paid for.

[00:01:45] And with the rising premiums, there's gotta be vehicles for employees to, to

[00:01:52] pay for these things and employers to provide their employees.

[00:01:54] So very relevant nonetheless.

[00:01:56] Yeah.

[00:01:56] It seems like the cost of everything is going up every time I go to the grocery

[00:02:00] store, certainly for our own company.

[00:02:02] Every time we get our annual premium estimation for healthcare,

[00:02:05] it all continues to rise.

[00:02:07] So finding a way to help people do more with the same amount of money

[00:02:11] is an important thing for people.

[00:02:12] Agreed.

[00:02:13] And you know what we have, our listeners are a lot of employers, so

[00:02:17] this will be great for them to hear.

[00:02:19] It's always great to understand what the options are out there

[00:02:22] to take care of the employees.

[00:02:23] So let's dig in.

[00:02:24] Tell us about Elevate.

[00:02:25] What does the company do and how are you adding value to the ecosystem?

[00:02:29] Just quickly on how these benefit accounts came about, right?

[00:02:33] They're authorized by section 125 of the IRS code, which allows for some pre-tax

[00:02:38] or some healthcare expenses to be paid for in a pre-tax way.

[00:02:41] So you have these accounts where you can set aside money

[00:02:43] through payroll contributions.

[00:02:46] And the old way this started was, you went to the doctor or

[00:02:50] the hospital or the pharmacy.

[00:02:51] You paid for something out of pocket.

[00:02:53] You brought the receipt to your nice HR person.

[00:02:56] And if it met all of the criteria from the IRS to be an eligible expense, they

[00:03:01] would reimburse you on a paycheck or two later, right?

[00:03:04] Then the dot-com era came along.

[00:03:05] We started doing business on the web and there are great companies like my

[00:03:09] co-founder, Brian Strom, started a company called Connect Your Care back in the

[00:03:13] 2000s.

[00:03:14] Wageworks is another one that's well known that enabled people

[00:03:17] to submit these claims online.

[00:03:20] Maybe they attached a debit card to it.

[00:03:22] But the dirty secret of our industry is after the claim submission process, that

[00:03:27] process really didn't change.

[00:03:29] It was very manual.

[00:03:30] People were processing those claims.

[00:03:32] It took a long time and it's a confusing process for people

[00:03:36] that do this all the time.

[00:03:37] Our North Star is how do we use technology to take all the friction out of that

[00:03:41] process and make it easier for employees and their families to access and use

[00:03:46] these benefits?

[00:03:47] I think that we all need healthcare to be simpler and consumer friendly.

[00:03:53] So I think it's great.

[00:03:54] Yeah.

[00:03:54] And it's great that you're focused there.

[00:03:56] On the consumer front, we always need more of this and it's not always easy.

[00:04:01] So talk to us about how what you do is different or better than

[00:04:05] what's available to most today.

[00:04:06] The thing that makes Elevate different from so many other startups is we've

[00:04:10] assembled this all-star cast of experts.

[00:04:12] We all have deep industry experience.

[00:04:15] Like I mentioned, my co-founder and our CTO, Brian Strom built one of these

[00:04:19] original platforms and it's now 20 years later, right?

[00:04:22] A lot has changed in technology.

[00:04:24] We have mobile, we have AI, we have this great system of connectors called APIs

[00:04:30] that allow us to work with other platforms and software platforms that are out there.

[00:04:35] None of those things existed 20 years ago and all of these are designed

[00:04:39] to make the experience easier.

[00:04:41] So the way I like to describe it as we took the old workflow that I originally

[00:04:46] described of going to your HR person and submitting that claim and said, how do

[00:04:51] we simplify all of this, right?

[00:04:53] And it's using technology to replace the people that were behind the scenes doing

[00:04:59] this and what that ends up doing for the employee and their families is it makes

[00:05:04] it easier, it makes it cheaper, and most importantly, it makes it real time.

[00:05:08] So the workflow I like to describe is the old way is I have a family, I have young

[00:05:12] children, one of them's homesick today.

[00:05:14] You go to the doctor, you pay for some money out of pocket, right?

[00:05:18] Because you forgot your card, right?

[00:05:20] Your benefit card.

[00:05:21] And you know, most people need that money back to go buy groceries, right?

[00:05:25] And it's a confusing process.

[00:05:26] You have to fax something in.

[00:05:27] Who has a fax machine anymore?

[00:05:29] And then maybe you forgot to include something, you submitted a receipt, but

[00:05:34] not an explanation of benefits and it doesn't have the right information on

[00:05:37] there, so you get a letter 10 days later, it reads like a demand letter from a law

[00:05:41] firm instead of something that's crisp and clean and helps you take action.

[00:05:46] And so we threw all of that out and we said, I want a solution that when somebody

[00:05:50] goes to the doctor, like I'm describing, and they have to pay out of pocket

[00:05:54] because they forgot their card, they can take a picture right there, submit the

[00:05:58] claim, our AI processes that instantly and that money is back in their bank account.

[00:06:03] So they can go to the grocery store on the way home.

[00:06:05] That fast.

[00:06:06] It's that fast.

[00:06:06] That's awesome.

[00:06:07] Well, music to, I think a lot of people's ears to have that type of speed in healthcare.

[00:06:13] It's certainly not precedented.

[00:06:15] And so when you're working with things like this, it's sometimes difficult

[00:06:19] when you're trying to change workflows and trying to change the way

[00:06:24] that things are typically done.

[00:06:26] Talk to us about one of your biggest setbacks you've seen and a

[00:06:29] key learning that's come out of it.

[00:06:31] Yeah.

[00:06:31] The biggest mistake that we made early on, and we're not the only ones to have

[00:06:35] made that was really trying to sell directly to the employer makes all

[00:06:39] the logical sense in the world, right?

[00:06:42] These are the ones who are providing these benefits.

[00:06:44] And what we learned is to really take all of the friction out for the employee.

[00:06:49] We need to be able to embed these benefit accounts and that whole

[00:06:54] administration experience directly into whatever was the key portal that they

[00:06:58] were using to access their benefits.

[00:07:01] So the employer doesn't want 50 different solutions that an employee has to

[00:07:06] navigate through what they want is one hub.

[00:07:09] That's typically something like benefits administration or payroll, or in the case

[00:07:14] of a PEO, there's one place where they're going to pick their benefits, see their

[00:07:18] paycheck and access these ancillary benefits.

[00:07:22] And so through a technology innovation that I described earlier, APIs, which just

[00:07:27] means application programming interface, it's a way to embed some types of software

[00:07:32] into other types of software, something that didn't exist 20 years ago.

[00:07:36] We're able to embed our solution into those primary points of contact for the

[00:07:42] employee.

[00:07:43] And that really takes so much of the friction out of it.

[00:07:45] We can get the data over easily.

[00:07:47] We can enroll them easier.

[00:07:49] So what it ends up creating is higher usage and utilization, and then they take

[00:07:55] advantage of the benefits more, which is really the most important part of it.

[00:08:01] And so that was just a big change that we had to make.

[00:08:03] It's always tough.

[00:08:03] We had to say goodbye to some of our salespeople and add different salespeople

[00:08:07] in.

[00:08:08] But we added over 5,000 employers last year, well more than double that this year,

[00:08:12] and are now serving hundreds of thousands of employees.

[00:08:15] And so if you start to imagine stadiums full of football stadiums, full of people

[00:08:20] using your product and that you're helping all those people, it's a great way to

[00:08:23] learn.

[00:08:23] Oh, for sure.

[00:08:24] It's a testament to the move that you guys made, the learnings that you're able to

[00:08:29] really integrate into the platform.

[00:08:30] And so today, who are you looking to hear this message?

[00:08:34] Are you speaking to the employers?

[00:08:35] Are you speaking to benefits brokers?

[00:08:38] Who are we targeting here?

[00:08:40] Yeah, all of the above.

[00:08:42] So what we found is the best way for employees to access these benefits, the

[00:08:46] easiest way for the employer to deliver these benefits to their employees is to go

[00:08:51] through that primary portal.

[00:08:53] And that's how we distribute these.

[00:08:54] We don't sell directly to employers anymore.

[00:08:57] And so it's partners like a PEO, like Rippling, a payroll company like Augusto,

[00:09:03] a health plan, right?

[00:09:04] That's a big provider of our benefits or even a financial institution, perhaps

[00:09:08] somebody that offers 401ks.

[00:09:11] And then there's third party administrators that specialize in the servicing of

[00:09:15] these participants as well.

[00:09:17] So those are all great distribution points and what we would consider partners.

[00:09:22] And so it's like the old Aflac, ask about it at work, right?

[00:09:26] Ask your third party administrator.

[00:09:27] If you use one, ask your PEO.

[00:09:29] If you use one, ask your payroll provider, ask your 401k provider.

[00:09:33] Are they offering these benefits and who is the solution behind behind the

[00:09:38] administration of those benefits?

[00:09:40] Cause there's only a handful of us that really do this.

[00:09:43] And are you getting the most modern platform and offering that to your

[00:09:46] employees so they can have a.

[00:09:47] That's great.

[00:09:48] So in essence, what you guys do is behind the scenes, you come in, you have

[00:09:53] that this tech stack that delivers this speedy transaction and really the face

[00:10:00] of it is usually like the platform that the employee is using, right?

[00:10:04] That's exactly right.

[00:10:05] And that's really that partner of ours that we want to celebrate and promote.

[00:10:10] And it's what makes it easy for the employee, right?

[00:10:13] They just want to go to one place.

[00:10:14] Employees have a lot of these benefits when they work for a great employer.

[00:10:18] But it's hard to navigate if you have to go to a million different places.

[00:10:21] So one card, no matter how many accounts you have one place and

[00:10:26] real-time access to your money.

[00:10:28] Those are the most important thing.

[00:10:29] That's really great, Brian.

[00:10:30] Thank you for laying that out for us.

[00:10:33] And for everybody listening that is on that side of the house, you have a platform.

[00:10:38] You're part of a 401k.

[00:10:40] You are a benefits broker and you're looking for a better way.

[00:10:44] Certainly Elevate is that company that you should consider for those workflows,

[00:10:49] seamless integrations, bringing that consumer experience.

[00:10:53] If you're not thinking about that experience for the end user, the employee

[00:10:58] that live that you're ensuring, you're going to get left in the dust because

[00:11:02] the players are coming in and they are making moves if you're not making

[00:11:06] them, you will get left behind.

[00:11:07] So we talked a lot about APIs, Brian, and how you guys basically seamlessly

[00:11:12] operationalize what's a trend or technology beyond APIs that you want to highlight today?

[00:11:19] Yeah, I would drop one letter and just say AI.

[00:11:22] And I just listened to an interview with Ray Kurzweil last week, and he was talking

[00:11:26] about the personalized drug trials, right?

[00:11:29] So you think about we're all different and AI is going to revolutionize healthcare

[00:11:34] from, I mean, we're a very small part of it and just trying to help people pay

[00:11:38] their out-of-pocket costs.

[00:11:39] But if you think about diagnoses, right, treatment plans, we react

[00:11:44] differently to different drugs, right?

[00:11:46] And so maybe once the AI understands more about you, they could almost run a

[00:11:50] virtual drug trial to see how you're going to react to a certain treatment

[00:11:54] before that even happens.

[00:11:55] And so I think it's a fascinating world.

[00:11:58] I think we're all going to hopefully live a lot longer than our ancestors

[00:12:03] and a better quality of life too, right?

[00:12:05] And we play a very small part in that overall ecosystem, but I think AI is going

[00:12:10] to revolutionize things in a way that...

[00:12:12] Love that.

[00:12:12] Totally agree.

[00:12:13] And just a chance to tee you guys up.

[00:12:15] You, at the beginning of our interview, you said you guys leverage AI in helping speed.

[00:12:20] Do you want to chat about that?

[00:12:21] Yeah.

[00:12:21] So I think there's two big buckets of AI today, right?

[00:12:25] There's generative AI and that's where you get some of the crazy responses or

[00:12:29] pictures and things we've seen in the headlines and you don't really know

[00:12:32] what the AI is going to say.

[00:12:34] We don't do that today.

[00:12:36] What instead we do is operate within the confines, of course, HIPAA, but also

[00:12:41] the criteria under section 125 of the IRS code.

[00:12:44] So it's really to automate in real time business processes that were

[00:12:50] previously taking a long time.

[00:12:52] And what that means is administrative costs are lower.

[00:12:55] The processing is more accurate.

[00:12:57] So we compare human processors versus the AI.

[00:13:00] And then most importantly, it's real time.

[00:13:03] If somebody submits a claim, they can get an answer immediately.

[00:13:07] And then most importantly, one of the most frustrating things about the old

[00:13:10] way of doing things is if there's something wrong, we can help them correct

[00:13:14] that in real time so they're not waiting days for some sort of answer to show.

[00:13:19] Love it.

[00:13:20] It's all about responsiveness.

[00:13:21] And then what about engaging with you guys?

[00:13:24] Is it a license plus transaction fee or how does that work?

[00:13:27] Yeah, we do it on a per account per month basis.

[00:13:30] And our ideal customer profile typically is already in this space.

[00:13:34] They've had some frustrations with the current offerings and the

[00:13:37] limitations on older technology.

[00:13:40] And they're looking for a rip and replace solution that's going

[00:13:43] to enhance their gross margin.

[00:13:45] It's going to help them offer a better participant experience.

[00:13:48] And in some cases, they may have a really large install base and they just haven't

[00:13:52] been able to scale an older solution.

[00:13:55] And we can help them do that in a very seamless way through our integration.

[00:13:57] Very cool.

[00:13:58] It sounds like there's still a lot of legacy solutions out there.

[00:14:02] Yeah, there's a handful.

[00:14:03] They continue to consolidate every day.

[00:14:05] There's over a hundred million Americans that use these

[00:14:08] pre-tax health benefit accounts.

[00:14:11] And what we like to say when referring to our incumbent predecessors is they're

[00:14:16] consolidating and we're innovating and you'd have to choose.

[00:14:19] Yeah.

[00:14:20] Buying other health systems as we see out there doesn't

[00:14:24] necessarily improve your situation.

[00:14:26] It might buy you some time with distraction and that might be the

[00:14:30] case in your industry as well, Brian.

[00:14:32] So it sounds like you guys are definitely innovating

[00:14:35] and leading the charge there.

[00:14:36] Sometimes more is not, is not better.

[00:14:39] It leads to employee confusion.

[00:14:41] And we're about keeping things simple and using technology to do that.

[00:14:44] And as we like to say internally at our company, if you confuse, you lose.

[00:14:49] So love that you guys are all about innovation and being clear.

[00:14:54] Brian, we're here at the end.

[00:14:56] This has been a really informative meeting and I really appreciate you sharing

[00:15:01] everything that you have with our audience.

[00:15:03] Can you leave us with the closing thought and then the best place the

[00:15:07] listeners could get in touch with you if something that we discussed

[00:15:10] today resonated with them?

[00:15:11] Yeah.

[00:15:12] So the first thing I would suggest is ask your provider of benefits today.

[00:15:16] We'd love to be part of that bundle.

[00:15:17] We're always accessible on the web at elevate.inc.

[00:15:22] And technology is going to continue to revolutionize how we

[00:15:26] access all of these points of care.

[00:15:28] Today, I pay my babysitters for my children with Venmo.

[00:15:31] It's instant and seamless and paying for your healthcare

[00:15:35] should be the exact same way.

[00:15:37] We like to joke that we're not inventing new technology.

[00:15:40] We're just bringing the latest technology to a stale space.

[00:15:43] And that's exactly the case here at Elevate.

[00:15:46] And we can help you do the same.

[00:15:47] Brian, you have certainly elevated us today and certainly for everybody

[00:15:52] listening, take advantage of our discussion and most importantly,

[00:15:56] take advantage of that email or that the website that Brian shared.

[00:16:00] We'll leave it in the show notes for you to be able to reach out.

[00:16:03] Re-share this podcast with anybody you feel might benefit from our

[00:16:07] discussion today and appreciate everybody tuning in and Brian,

[00:16:10] thanks for being with us.

[00:16:11] Saul, it's been a pleasure.

[00:16:12] Thanks for having me.