Level Health CEO Adam Berkowitz Discusses the Impact of Direct Contracts on Employee Healthcare Costs

St. Louis, MO – August 21, 2024 – Adam Berkowitz, CEO of Level Health and founder of Simpara, recently spoke with St. Louis Public Radio about how direct healthcare contracts are transforming the way companies manage employee benefits. As businesses nationwide face escalating healthcare costs, Level Health and Simpara are leading the charge by offering an alternative that prioritizes transparency and affordability.

Challenging Traditional Health Insurance Models

In the interview, Berkowitz underscored the unsustainable nature of the current healthcare spending in the U.S., which reached $4.5 trillion in 2022. “It’s not sustainable,” Berkowitz stated, pointing out how traditional insurance models force employees to shoulder rising costs through higher deductibles, premiums, and out-of-pocket expenses. “The harsh reality is that employees have been kind of the brunt of all this collateral damage. What ends up happening is people delay care until it becomes a big problem, and then they’re facing these big bills.”

A Real-World Example from Woodard Cleaning and Restoration

“We were finding our employees weren’t choosing to go get care because they couldn’t afford it,”

Justin Woodard, CEO of Woodard Cleaning & Restoration , shared his experience with the impact of traditional health plans on his employees. “We were finding our employees weren’t choosing to go get care because they couldn’t afford it,” Woodard said. He described his frustration with the lack of transparency and the steep cost increases of nearly 40% that his company faced during renewals. “We didn’t have good transparency about why the costs were going up so much,” he noted.

However, the situation changed when Woodard’s company switched to a health plan brokered by Simpara about five years ago. “The year we switched, we were looking at two numbers that were about the same. We’re like, ‘You’re saying if we do this plan over here, we can offer a $0 deductible to our people, they could get more care, and that still wouldn’t increase the cost?’” The switch allowed Woodard’s employees to access healthcare with zero out-of-pocket costs at the point of care.

Revolutionizing Healthcare Access with Direct Contracts

Berkowitz explained that this was made possible through direct contracts between employers and healthcare providers, bypassing traditional insurance companies and PPO networks. “In short, cutting out the insurance companies and PPO networks that we’re used to in exchange for transparent and fair prices,” he said. These direct contracts enable companies to offer healthcare options that come at no cost to employees when they use designated providers.

Level Health has already established robust direct contracts with innovative providers like Rezilient Health & Vicare nationally to provide $0 primary care, mental health care, labs, imaging services and more to members wherever they are. They’ve also built regional across Missouri, Kansas, Idaho and Georgia with major regional hospital and provider networks, and more are on the way.

Skepticism is Normal

Woodard’s employees were initially skeptical, but their concerns were quickly dispelled as they began utilizing the new healthcare plan. “There was a lack of belief until there was actually starting to be some utilization and they weren’t being charged anything,” Woodard recounted. Over time, the company has expanded its offerings, adding networks for chiropractic, mental health, and physical therapy, all at zero cost to employees. “Those three benefits are now available to all of the people in the plan for zero cost,” Woodard said. “We’ve had people say, ‘I’ve never had access to those before, where I could afford it.’”

The Future of Employee Healthcare

“When you choose certain providers, then you’re not going to pay anything out of pocket,”

Looking ahead, Berkowitz expressed optimism that direct contracts will continue to grow in popularity. “When you choose certain providers, then you’re not going to pay anything out of pocket,” he said. This approach, focused on transparency and affordability, offers a promising solution for businesses looking to provide better care to their employees while managing costs.

Jake Page, Head of Growth for Level Health, emphasized the company’s long-term vision: “We are committed to bringing this type of health plan model and transparency to every community. Our goal is to ensure that businesses everywhere have access to affordable, high-quality healthcare options that truly benefit their employees.”

For more insights from the interview, read the full story on St. Louis Public Radio here.