953 Chelsea Ryckis:

Wings of Inspired Business Podcast EP953—Host Melinda Wittstock Interviews Chelsea Ryckis

Melinda Wittstock:

Coming up on Wings of Inspired Business:

Chelsea Ryckis:

So instead of letting one giant conglomerate control and operate these four pieces, right, and they can move money, shuffle money where they want, they don’t have to show us to the penny accounting of what’s being paid for claims, they can get away with a lot. We open the box and we say, okay, maybe we want, depending on the area of the country, a United Healthcare network. Maybe we want a Blue Cross network, Aetna, Cigna Network, we’ll rent that network. But we’re going to build these other parts. We’re going to find our own TPA that’s incentivized to lower cost. We’re going to go find our own pharmacy benefit manager like Mark Cuban, somebody like that, that is incentivized to lower cost.

Melinda Wittstock:

Healthcare costs are out of control in the United States, with premiums rising faster than the vast majority of Americans can keep up with, and many lacking access to healthcare at all. It seems like the system is broken, so today we talk to Chelsea Ryckis, founder of Ethos Benefits and a pioneering advocate for transforming the American health insurance system. Chelsea shares how she’s fixing the broken system, plus how her own traumatic brain injury and exorbitant U.S. medical debt inspired her to change the way healthcare is delivered and financed.

Melinda Wittstock:

Hi, I’m Melinda Wittstock and welcome to Wings of Inspired Business, where we share the inspiring entrepreneurial journeys, epiphanies, and practical advice from successful female founders … so you have everything you need at your fingertips to build the business and life of your dreams. I’m all about paying it forward as a five-time serial entrepreneur, so I started this podcast to catalyze an ecosystem where women entrepreneurs mentor, promote, buy from, and invest in each other. Because together we’re stronger, and we all soar higher when we fly together and lift as we climb.

Melinda Wittstock:

Today we meet an inspiring entrepreneur who demystifies the complex world of employer-sponsored health plans, unpacks the misaligned incentives driving up healthcare costs, and reveals how her fee-based, fiduciary model is helping businesses—and their employees—take back control. Canadian-born Chelsea Ryckis is the founder and president of Ethos Benefits, an American company advancing fiduciary-driven health insurance strategies for employers nationwide. She’s pioneering a revolutionary approach that effectively eliminates fraud, waste and abuse from employer healthcare plans while increasing savings for both employers and their employees. Today she shares how direct contracting and transparency can drastically reduce costs, and why entrepreneurs and executives need to rethink the true incentives at play in healthcare decisions.

Melinda Wittstock:

Chelsea will be here in a moment, and first:

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Melinda Wittstock:

More often than not, entrepreneurial innovation is borne of adversity—and our personal efforts to overcome it. Chelsea Ryckis’ journey started on the softball fields of NCAA Division 1 when her plans for med school got derailed in an instant—she suffered a traumatic brain injury, followed by a bewildering, debt-ridden detour through the American health system. Even after returning to Canada for rehab, her U.S. medical bills still haunted her: “As a 22-year-old, unable to work…what do I do with this $11,000 bill?”

Melinda Wittstock:

And then came more questions about healthcare—from financing (who pays, how, why?) to delivery (who decides when and where you get care?). Chelsea decided her mission was to fix the broken system—starting with employer-sponsored health insurance, which covers more than half of all Americans. Chelsea is all about exposing what she calls the “Big Lie” about employer health insurance. She says most employers believe there’s nothing they can do to control their health care costs. But it doesn’t have to be this way. With her company Ethos Benefits, Chelsea has built a brokerage model, free from commissions and misaligned incentives, all to ensure transparency, fiduciary responsibility and lower costs. Ethos helps employers unbundle the four core components of a health plan (administrator, PBM, network, and stop-loss insurance) to reveal real costs and deliver real savings. Imagine saving $30,000/month on just one specialty drug—or paying $200 for an MRI instead of $10,000!

Ethos has helped companies eliminate waste, uncover malpractice, and cut costs by 20–40%, all while teaching employers how to use their data as a weapon for good. It’s why Chelsea was recently named Most Innovative Healthcare Consultant in the United States, and has an eye-opening documentary out in the world called, “It’s Not Personal, It’s Just Healthcare.”

Melinda Wittstock:

So, let’s put on our wings with the inspiring Chelsea Ryckis.

[INTERVIEW]

Melinda Wittstock:

Chelsea, welcome to Wings.

Chelsea Ryckis:

Thanks, Melinda. I’m so excited to be here. Thanks for having me.

Melinda Wittstock:

Yeah, well, I want to get into all things Ethos Benefits, and let’s just start at the origin story. I What made you interested in advancing this aspect of health insurance?

Chelsea Ryckis:

Yeah, that’s a great question. I’m actually from Canada originally, and my first interaction with the American healthcare system was in college. So, I played softball on an NCAA Division 1 scholarship my senior year. I had been accepted to medical school, was the team captain, leading in home runs. RBI is kind of this dream situation. But all of that was very abruptly cut short. I was hit in the head with a ball cleared to play too soon, and it ended that.

Chelsea Ryckis:

Not only ending my athletic career, but it also ended my academic career. Ended up going back home to Canada, doing a brain injury rehab program up there, and then unfortunately experienced what about 1 in 12Americans do, which is medical debt from the time I spent in American hospitals. So even though I went to Canada, the bills followed me. As a 22-year-old, unable to work, didn’t know what a deductible was, thought I had insurance. You know, I’m like, what do I do with this $11,000 bill? I have absolutely no idea, no one to help me. And also, you know, not. Not having a properly functioning brain at the time, it was a very awful, hard, challenging experience for me. So, I think when I look back at, you know, the true origin story on my end of why I’ve always. I’ve been passionate about changing healthcare, it’s really that experience.

Melinda Wittstock:

Wow. What a traumatizing thing to go through. I mean, not just the injury and the recovery, but then like so many Americans being left with this debt, it’s like being injured all over again.

Chelsea Ryckis:

Yeah. In a totally different way again. I say there’s two super complex systems that I believe I try to, in the work I’m doing today, like, help people navigate. The first is healthcare financing. So, like, how are we paying for the care that we’re receiving? So, in the case of my brain injury, you know, I ended up in the hospital, had to get an MRI, went to a specialist while I was still in college, right around the end of the year there. And you know, the question in that is, who’s paying for it? Right. Who’s paying this $11,000 and how, when, why the other side.

Chelsea Ryckis:

That’s equally as complex for consumers is the healthcare delivery. Should I have gone to the ER? Should I have gone to this specialist, you know, who’s getting kickbacks from who for telling me to go where? How do patients know where’s the right care at the right time? Right. And then the next question is like bringing those two together, what’s the right price for that care? So, you’re right. I mean, healthcare delivery is complicated on its own, but healthcare financing is a whole other beast. And I just happen to choose, you know, the two most complex systems that I think exist in the country to dedicate my life to.

Melinda Wittstock:

Wow. Well, thank you for taking on that challenge. I think a lot of Americans will thank you because not only is it incredibly complex and there’s all kinds of really warped and simple incentives in the entire healthcare system and sort of the patient is the last to benefit. It is very, very broken. So, it takes a Canadian. I’m Canadian too.

Melinda Wittstock:

So, it takes a Canadian to solve American health care. How about that?

Chelsea Ryckis:

It is pretty funny. People are always especially like clients and, and whatnot. They’re always super intrigued. But you know, I didn’t grow up in the system, which I think is what’s given me the ability to look at the existing health care system and health insurance specifically. You know, just for clarity, I’ve chosen to dedicate my time to what I think is the most impactful type of health care, which is employer sponsored health care. So, employers in the, in America ensure 60 to 65% of the entire population. So, companies, you know, HR directors, CFOs, CEOs, they’re making decisions that are impacting, you know, hundreds, Thousands, quite literally 181 million Americans every single day without realizing the true power and leverage that they have as a purchaser. So that’s super interesting on its own, but that’s specifically kind of the realm that I’ve, I’ve dedicated because I think it’s the area to make the greatest impact the fastest.

Melinda Wittstock:

Right. So, tell me how it works. What’s the big innovation and the change?

Chelsea Ryckis:

Yeah, that’s a great question.

Melinda Wittstock:

Yeah.

Chelsea Ryckis:

I think what most businesses and probably employees would, would say about American healthcare is, and their renewal process, their open enrollment, the insurance they get through their, their employer is, you know, it’s okay, at least I have it. It’s really expensive. If I want to add dependents, it’s crazy expensive. And every single year, once a year, somebody comes and tells us our deductibles are going up, we’re hopping to another carrier, and this industry just is what it is. And health care, inflation, medical trend, we had bad claims, blah, blah, insert excuse. And that’s become the very traditional experience for employers. I call that the big lie. So, the big lie in employer sponsored health care is there’s nothing I can do to control the cost of my health care.

Chelsea Ryckis:

And brokers, hospitals, pharmacies, everybody in what I call the healthcare supply chain, right, that are advising employers to make decisions are making way more money when employers accept 10% increases, 15% increases. So, Melinda, you said it earlier, misaligned incentives. What happens when everybody who’s telling you what to do and is literally making more money when you pay more money, well, your costs don’t go down. Right? And that’s, that’s the traditional broker employer relationship is brokers are being paid commission. So, if the premium is a million dollars a year and then they bring, you know, the broker’s making 5 to 7, sometimes 10% of that, and then next year it’s 1.5 million, guess what, they’re still making the 5, 7 or 10%. So, they’re actually making more when their clients are paying more. There’s truly no incentive to lower cost. And it’s very easy to just kind of name off those excuses.

Chelsea Ryckis:

Like I said, well, you know, Covid was a great one. Everybody’s like, oh yeah, things are more expensive because of COVID, or you had bad claims or this. None of that is actually true. So, my entire business model is around getting to the root cause, what is actually causing these increases year after year. It’s number one, misaligned incentives. And it’s number two, nobody focusing on the real problem, which is the cost of care, right? Like we don’t expect employees to not have cancer, to not have babies, to not get sick.

Chelsea Ryckis:

The difference is if we have a cancer on the plan, are we paying $400,000 for that treatment or are we paying 60 grand for that treatment? That’s how you get to the root cause of controlling cost. Not throwing more deductible on employees or increasing co pays. Those are band aids. So, my entire business model is we remove commission, we work for a fee, and we actually get to the root cause of the problem in the health plan design. Does that make sense?

Melinda Wittstock:

Yeah, it does. So obviously, if the broker’s on a commission, right, their self-interest is to bring the most expensive plan to you as possible and then you have this other thing where there’s so much opacity about the cost. Like no one knows what it really costs, and like what you’re actually really paying for.

Melinda Wittstock:

And it’s always struck me that there needed to be so much more transparency about that and where there’s all this obfuscation and like mystery around it, it’s really, really difficult to, to solve. So, so how do you approach that cost piece? Because obviously, like, it varies in different parts of the country. Like, are you, are your employees in a rural area? Right. Or are they right here? Like, what, what’s going on with all of that? Like, it’s very complex. How do you deal with that?

Chelsea Ryckis:

Yeah, it’s a great question. So, here’s like the crux, and the most simple way to kind of define the problem and the solution. So traditionally employers are going into plans where they’re working directly with United Health Care. So, we call them the Buca’s Blue Cross, United, Cigna, Aetna. Right. Those are the major four carriers in the country. And then to your point, depending on the region, you’ll have different regional players. Every single health plan has the exact same four components to it.

Chelsea Ryckis:

So, whether it’s Blue Cross, United, Cigna, Aetna, there’s the same four pieces that will make up the DNA, is what I call it, of a health plan. So, in a traditional model with a Buca, these four pieces, and I’ll list them off and tell you very quickly what each of them are. First is the third-party administrator. That’s the entity, it’s the number on the back of the card that’s paying and processing claims, working with providers to say, yes, you’re in network, no, you’re not, that kind of thing. That’s the TPA. The next biggest piece is the Pharmacy Benefit Manager, also known as PBM. There’s a lot of legislation and news going on right now about PBMs. Mark Cuban’s really hot on it.

Chelsea Ryckis:

That is determining that entity determines the price and formulary, what’s covered, what’s not covered in terms of drugs and prescriptions. The next piece is the network, right? Do I have a PPO, do I have an HMO, who can I see that type of thing? And what are the reimbursements for care in that network? And then the last piece is the actual insurance. So, it’s stop loss insurance. And basically, it’s just protecting the plan or the insurer from catastrophic claims. So, every single plan has that same four pieces, right? These building blocks to the DNA of a health plan. The difference is if you’re working directly with a Buca, they own all four pieces. So, they own the PBM, they own the TPA, they own the stop loss, and they own the networks when they think of it like a closed box. So, they own the closed box when they have the ownership.

Chelsea Ryckis:

They can call all their network agreements and their reimbursement schedules and absolutely everything proprietary, confidential, and they don’t have to show anybody what they’re paying for the cost of care because everything is owned by them, it’s in a closed box. There’s no way anybody can see in. And that’s the situation where employers find themselves, where year after year they’re being told, oh, well, you had bad claims, you had a cancer on the plan, you had a kidney disease, you had a NICU baby. And then employers might ask, well, like, well, what can we do about it, right? And the carrier in the closed box model is going to say, well, you can’t. Like the claims are the claims, because guess what, they make more money if there’s a high-cost drug because they own the PBM, they make more money if the network is paying again, 100,000 versus 30,000, they’re making more. Because they control and own all four pieces. There’s no incentive for the carrier to lower cost. If you look at who carriers, insurance carriers are responsible to, they are fiduciaries to their shareholders.

Chelsea Ryckis:

They have zero incentive to lower costs for employers. So how do we fix this right now that we know that that’s the problem? The problem is it’s a closed box and you have employers have absolutely no leverage, no insight, no data, no information that actually allows them to control the cost of care. Because the person who, the entity owning all four pieces doesn’t want them to have it. I’m just going to stop there. Does that make sense so far?

Melinda Wittstock:

No, it totally does make sense. I mean, it’s complicated. Yeah, but it.

Chelsea Ryckis:

I know.

Melinda Wittstock:

I was going to ask you about Mark Cuban and Cost-Plus Drugs because it seems like you have sort of a similar, at least philosophical approach.

Chelsea Ryckis:

Yes, very much so. So, everything that Mark is doing and what we’re doing is think about an open box. So instead of letting one giant conglomerate control and operate these four pieces, right, and they can move money, shuffle money where they want, they don’t have to show us to the penny accounting of what’s being paid for claims, they can get away with a lot. We open the box and we say, okay, maybe we Want, depending on the area of the country, a united Healthcare network. Maybe we want a Blue Cross network, Aetna, Cigna Network, we’ll rent that network. But we’re going to build these other parts. We’re going to find our own TPA that’s incentivized to lower cost. We’re going to go find our own pharmacy benefit manager like Mark Cuban, somebody like that, that is incentivized to lower cost.

Chelsea Ryckis:

And then we’re going to buy our own stop loss insurance. So, this is essentially called like designing a custom health care plan. When you do that, you no longer have one entity kind of pulling the wool over your eyes and doing what they want. You have a full open box and to the penny, accounting of every single claim that comes through. So, for example, so these are the types of plans that we design, but they feel and act the same for employees, which is the most important part. The difference is we can see everything. My team can see everything. So, we just saw a drug come through on one of our clients plans every single time the employee went to fill it.

Chelsea Ryckis:

If they were on their previous plan, it would have been a $36,000 drug just hitting the plan every single month. Guess what happens at renewal? Oh, you had a high-cost drug, now you’ve got 10% increase. We were able to get that exact same drug, same manufacturer, same dosage, same everything for 6,000 because we had a fiduciary pharmacy benefit manager in place. So that’s what I mean by like reducing the cost of care, right? We make direct contracts with imaging centers. So instead of paying $10,000 for an MRI, we’re paying $200 for an MRI.

Melinda Wittstock:

I mean that’s just, what a huge difference.

Chelsea Ryckis:

Unbelievable. There’s no, there’s no logic to pricing when it comes, especially hospital pricing, but just health care in general. You know, like you and I, if you had one insurance card, I have a different one and our listener has a third different card. We go into the same hospital for the same procedure, see the same doctor, get the same medicine, all three of us are paying something different.

Melinda Wittstock:

That’s just insane. I know, it’s just, it’s just so insane. I mean, wow. And so, so how does it work then? I mean, it sounds like you work directly with companies, but do you also work with, you know, payroll PEO companies and such? Because a lot of smaller businesses do their healthcare through like a PEO, for instance.

Chelsea Ryckis:

Yeah, that’s a really great question. So traditionally we’re working, you know, direct to employers. So, the same way that they’re hiring a broker right now, they would hire us in place of them. The difference is we’re not going to take commission, we’re not going to take bonuses, we’re not going to take trips from carriers, and we’re going to just work for a fee. So, the commission gets stripped out of the plan. That 5, 7 or 10%, whatever the broker had, we take it out of the plan, and we just charge a fair monthly fee like you pay a CPA, like you pay an attorney, etc.

Chelsea Ryckis:

So, it’s funny that you actually asked that because last week we had a PEO reach out. So PEOs are interesting. So, for anyone listening that doesn’t know what a PEO is, it’s a Professional Employment Organization and essentially their whole value add is that, you know, if you’re a smaller company, you can join their EIN. And now Instead of having 15 or 20 employees, you have the purchasing power of thousands of companies with 15 or 20 employees who’ve all grouped together to get better purchasing power.

Chelsea Ryckis:

So, it works extremely well with workers compensation, payroll pricing, HR services. And then like Melinda said, a lot of times you can bundle your benefits into that. So sometimes when you bundle your benefits into a PEO, you’ll go on what’s called their master plans. And these are plans that they have directly with carriers that their clients can go to. It’s not open to the rest of the market. Those plans tend to, over time get what’s called adverse selection. Because a lot of the times the people who are going to PEOs have a tough time getting workers comp. They have higher risk, higher turnover.

Chelsea Ryckis:

The business models that are looking for that generally don’t support really good risk long term. So, I had a PEO reach out last week because they’re getting really bad renewals on their master plans. And what they asked is, can we carve out the benefits to you guys? You guys do your thing. And you know, we just put it on our platform. Companies always have the ability to do that. Your PEO might not tell you right out the gate because they obviously want to keep that business, but you have the ability to carve out your benefits package and maintain your workers comp, your payroll, your HR advising with a PEO. So, you just have to ask for it and say, hey, I, you know, I want to, I want to get quotes from other consultants. I want to see what else is out there. It’s not, it’s not a big deal. You can do that.

Melinda Wittstock:

What would stop a PEO just from hiring you?

Chelsea Ryckis:

Well, the part of the conversation I didn’t mention was the PEO said, so if we can get this. It was a pretty bad renewal that they had for one of their clients. They said, if I can get this down to 20% or even 15%, I’m pretty sure I can make the client swallow it. Pretty sure I can make them. I can increase the deductibles. I can. And like I started the conversation insert, you know, bad idea, one year band aid idea. And philosophically there’s just such a huge difference.

Chelsea Ryckis:

Like they’re more interested in keeping a client in their master program so that they can make their big commission and big bonus from the carrier and getting them to swallow increases as opposed to actually solving the root cause of the problem.

Melinda Wittstock:

I see. That’s another misaligned incentive structure.

Chelsea Ryckis:

Exactly.

Melinda Wittstock:

That’s really interesting. So, it’s good to know that you can do a carve out. Right?

Chelsea Ryckis:

Yeah.

Melinda Wittstock:

So, if you’re a smaller business and you don’t have a PEO, you just have a regular payroll thing. Right. But you do want to offer some sort of health insurance. Say, for instance, if you’re working in the AI industry right now, it’s a very competitive job market. So, like if you, if you need to get a certain type of employee and you’re competing against bigger companies that have deeper pockets and can add more benefits like you really do, just to be competitive in terms of talent.

Chelsea Ryckis:

Yeah.

Melinda Wittstock:

Need to be able to offer that. But like, sometimes the costs are so prohibitive for a smaller company.

Chelsea Ryckis:

Absolutely.

Melinda Wittstock:

How do you work with smaller companies? I mean, how does that work?

Chelsea Ryckis:

Yeah, that’s a good question. Again, so many good ones today. Yes. And, and no. So really what I’m looking for, like in order to be able to make really, really big impact, we’re, we’re looking for about 55, 0 employees or up to 100. But there are solutions that exist underneath that. And we have a couple clients and sometimes, you know, depending on where they are in the country, we can do it. And if not, we have partners that can, you can still get like for example, recently, one of my friends, she has a business, she has 22 employees.

Chelsea Ryckis:

She has been actually on a PEO for a long time, and she got a nasty increase. And she came to me and she was like, hey, I know I’m a little small, but can you, can you look at this? And I was like, of course we looked at it and basically we got, you know, we unbundled those four pieces, put it into a really easy turnkey program for her and her team, saved them about 110,000, which is a decent amount considering its 20 employees. And everyone’s super happy. It’s Cigna Network. Everyone’s, everyone’s good, everyone’s happy. So those types of options do exist. And the great part about it is we actually get a little bit of data. We’re not flying blind.

Chelsea Ryckis:

We’re not in that closed box. We’re in somewhat of an open box plan. So yes, if you, but you really need to be 10 + to be able to kind of get more of the open box design.

Melinda Wittstock:

Got it. That makes a lot of sense. So, I can’t not ask this. We just had this big, beautiful, I don’t know, buxom bill.

Chelsea Ryckis:

Oh yeah, right.

Melinda Wittstock:

And with a lot of, really, a lot of complexity about how it’s changing, cutting, I don’t know, Medicare, a lot of people don’t really understand the impact of that. Is that impacting your business in any way?

Chelsea Ryckis:

So, number one is direct primary care being able to be used with HSA plans. That is, that is one part of it. There are implications around LCHRA. So LCHRA is a type of individual type arrangement like an HRA where employers can go to the individual market and offer a subsidy to their employees. So those that’s actually going to be available now on the individual market, which is interesting.

Chelsea Ryckis:

So direct primary care is really, really taken off. I don’t know if everyone knows what that is, so I’ll kind of explain it. It’s you go directly to a doctor on a membership basis for primary care as opposed to going through your insurance. And the whole point of direct primary care is that you can have, for a flat fee, monthly, you can have same day access to a doctor who can then help you kind of navigate that healthcare delivery system. So now before, employees weren’t really able to use that with HSAs. And now they can, which is cool.

Chelsea Ryckis:

So those direct primary care fees can now be reimbursed with HSA funds, which is really cool. There’s some student loan repayment. We don’t do a lot of that. But it is important for groups to know. So, employers can offer up to $5,250 a year tax free towards employee student loans. And then the limit will be indexed annually now for inflation. And then dependent care. FSA limits increased for the first time in decades.

Chelsea Ryckis:

So, it used to be $5,000 a year was the maximum reimbursement, but now it’s 7,500 a year, which is great.

Melinda Wittstock:

Okay, so there are some improvements. I mean, the way the media tends to always look for sort of the negative. So, like there’s some impacts on, like can rural hospitals in the current thing, can they survive? You know, like there’s just, you know, all, all of that kind of stuff. But there are some things that, that you can do. It’s interesting on the HSA part of it, I’ve always, I, I think with the HSA plans, they tend to have really high deductibles.

Chelsea Ryckis:

Yeah.

Melinda Wittstock:

Qualify. So how does that work?

Chelsea Ryckis:

Yeah, I’m not a huge fan personally of. Because here’s what employers will do or brokers will advise employers to do. So, they, maybe they have a plan with co pays. Right. Which is not an HSA plan. So just so everybody knows that you can pair a health savings account with a high-deductible health plan, also known as an HDHP plan. This took off probably a decade or two ago where basically companies said, let’s make our employees better consumers of health care. And by having a really high deductible, like Melinda said, like 3, 4, 5, $6,000 even.

Chelsea Ryckis:

And essentially the way the plan works is there’s no coverage until you hit your deductible. So, you are paying out of pocket until you hit your deductible. If you pair it with an HAS, which is a health savings account, then either your employer’s putting money into that account or you’re putting money into that account. There’s a huge tax advantage to that three different ways. But you’re paying for your care out of the HSA account until you hit your deductible. So, everybody thought, well, if we make it more expensive and harder for employees to use healthcare, then they’ll educate themselves. Right. They’ll be better consumers.

Chelsea Ryckis:

That’s not at all what happened. What happened was we basically made Americans functionally uninsured by giving Them outrageous deductibles. And when they go to, to use their plan, you know, they’re told, oh well, you haven’t hit your $4,000 deductible yet. And it’s like, well, what’s the point of having insurance? It makes sense for higher earners, for people who are really savvy with, you know, apps and managing their bank banking accounts and that type of thing. So, I’ve seen it work really well in certain professions like law firms, AI companies sometimes because to your point, they, they spend a lot on benefits and they’ll, they’ll contribute to the HSA. But using, what really has happened is people have, brokers have advised companies with low earners like $15 an hour to have the base health care plan and HSA plan. Those people aren’t. And then not even have a contribution from the employer.

Chelsea Ryckis:

It’s functionally uninsuring Americans all over the crazy.

Melinda Wittstock:

Because those people aren’t really paying relatively. They don’t have like as big a tax burden, say earner. Right. Like it doesn’t make sense.

Chelsea Ryckis:

Exactly. I’m literally working on a prospective client right now. And this is kind of crazy. They have thousands of employees, and they have two plan options. They’re both high-deductible health plans with HSAs. And not a single copay.

[PROMO CREDIT]

If you’re enjoying this podcast and what you learn from all the inspiring women I interview every week, please go ahead, hit subscribe wherever you get your podcasts, and share it with your friends. We really appreciate ratings and reviews on Apple and Spotify – it helps more entrepreneurs like you find the wisdom, tips, and epiphanies they need to grow their business. It makes a difference. Thank you.

Melinda Wittstock:

And we’re back with Chelsea Ryckis, founder and president of Ethos Benefits.

[INTERVIEW CONTINUES]

Chelsea Ryckis:

Like not even a buy up option where you could get copays, just two HSAs. And they’re like, our employees love it. And I was like, really? Okay, like, did you survey them? Like, how do you know that they love it? Oh, well, we just hear from, you know, our internal sales teams and our leadership just how much they love it. And it’s like, well, what about everybody else? What about the people in the factories? What about the people that are driving the trucks? And you know, what about the people who are making less than $80,000 a year? Do they love it? Right. Which brings up the whole question about, you know, designing benefits for your specific population and getting feedback and surveys and that kind of thing. But yeah, HSAs are a really interesting conversation because some people just absolutely love them. And then I think they can, they can be good again for certain groups or offer it as an option. Right.

Chelsea Ryckis:

One of three. But for it to be the base only affordable plan that a company offers, like just solve the root cause of the problem. Right. Which is the cost of care and lower the premium and offer a copay plan instead of just these, these band aids. Right?

Melinda Wittstock:

Yeah. Because one of the, the Things that was attractive about HSA say for someone like me, right, Where I do a lot of proactive preventative care. Like, you know, like, yes, chiropractor, or having a massage or all these things that like insurance doesn’t cover.

Chelsea Ryckis:

Mm, that’s true. But you, but you’re gonna be, you’re gonna be a more savvy consumer, I would say, than, than most.

Melinda Wittstock:

I’d like to think so. Well, and if, you know, brain teasing to me, you know, it’s right. I will work in AI and whatnot. But like, all the same, this is really confusing, you know, for most people and especially busy entrepreneurs, right, where you just have so many things coming at you from so many directions. So, like, to also be an expert in healthcare is like, oh, I know, really, you know, demanding.

Chelsea Ryckis:

Well, you know, the way I always think about it too is so CEOs, busy entrepreneurs, you know, higher earning executives, they don’t have the time or capacity to figure out healthcare delivery and finance. Now let’s think about, you know, the single mom working paycheck to paycheck at, you know, making 10, $12 an hour, depending on where she is in the country. She doesn’t have the capacity to understand healthcare delivery or healthcare financing, which is, you know, where I feel like our current healthcare model, it’s just, it’s at such a breaking point and it’s really up to employers to be like, I can do better, I can do better for my lowest earning employee, I can do better for my highest earning employee. I can do better and start asking better questions, right? Like if I could give employers one piece of advice. And actually, I think this applies to, to life and everybody in general, but and women especially understand the incentives of the people that you hire, right? Like if we just boil this down to the most simple, simple concept, follow the money. How are the people advising you paid? Are they paid to actually act in your best interest or are they paid to work for a company that’s pushing a product? Right. Those are really the biggest questions. So anytime I look to hire a vendor in my business, not healthcare related at all, but just anything, the very first question I ask is, how are you paid? When are you paid and why are you paid and by whom? And then after that I get into what conflicts of interest exist, like who, who is making what off of, you know, you being introduced to me through so and so.

Chelsea Ryckis:

Like, I want to understand everybody’s financial incentive before I enter agreements with them. And I think that that is such a powerful tool to kind of take step one to get out of the mess.

Melinda Wittstock:

Right. So, when you look at the whole healthcare situation in the US and you’re changing it just like Mark Cuban is through entrepreneurship, is that ultimately what’s going to be what, what fixes this? Or like what do you want to see from the government that would assist that change? Where, where do you think it’s ultimately going? Because it’s like everybody, one thing everybody can agree on, it’s broken, right?

Chelsea Ryckis:

For sure. Yeah. So, you’ll hear a lot of fear mongering, like oh, we’re going to get a single payer system. Right. Like think Medicare for all or like the Canadian health care system. I don’t know where you stand, Melinda, on Canadian healthcare, but it’s not healthcare.

Melinda Wittstock:

Always worked for me like whenever Canada, we’ve never had any problem. Like, you know what I mean? I don’t know what’s so controversial about it. It seems to work.

Chelsea Ryckis:

I think it works until you’re really sick or until you need care like right away.

Melinda Wittstock:

You could be in a situation where you’re waiting. I used to live in London, and the National Health Service was really good. But you could be in a situation where you were waiting but you always have the ability to get top up insurance. But then that worked for people who could afford it, right, so exactly. There are problems with it.

Chelsea Ryckis:

Yeah, yeah. But I, you know, really it’s like it’s a philosophical thing like do we want everyone to have access, which is the Canadian system. Right. Like a person who is homeless and a millionaire will go to the same hospitals, get the same type of care, right? Unless, to your point, there’s that buy up option in certain provinces and things like that. In the US it’s like we’re all going to get different care; we’re all going to pay a different price. We think that if we pay more, we’re getting better quality.

Chelsea Ryckis:

Actually, if you look at the data, it couldn’t be less true. There is no correlation between cost and quality of care in this country. But your question, the system’s broken, right? People say Medicare For All, a universal health care system. I don’t believe that that’s the answer. I think that it’s so different from what’s been that it’ll, it’ll just never work. Too much controversy. What I believe is the answer is one employer at a time starting to ask better questions, starting to understand the incentives of the people that they’ve trusted for years. You know, starting to ask, hey, am I working with this broker because they take my HR team out for steak dinners and they buy me Arnold Palmer golf tickets every year? Or am I working with this broker because they’re actually delivering results and helping me lower cost and offer my benefits, my employees, better benefits.

Chelsea Ryckis:

Right. Like, why am I making these decisions? That is one employer at a time. The way that healthcare changes legislatively, there’s so much happening. The one ‘Big Beautiful Bill’ is barely scratching the surface. But there’s other stuff like hospital transparency, pricing transparency laws that have been passed that require hospitals to show their prices online. That’s incredible for consumers if they knew how to use it. There’s PBM, Pharmacy Benefit Manager reform. So literally in some states they’re saying that insurance companies cannot own pharmacy benefit managers.

Chelsea Ryckis:

And if you kind of remember, it was a little complex. But the four pieces of a health plan, when one conglomerate owns all four pieces, that’s where you get the mess, that’s where you get the misaligned incentives. So, a law like that has massive implications. So, things are happening. The Consolidated Appropriations act of 2021 that requires that every broker disclose their compensation to their client before they make a decision at renewal. That’s almost five years old and I would say maybe 30% of the industry is doing it. So, legislation will be helpful. But the adoption of this legislation is the problem.

Chelsea Ryckis:

You know, people brokers have been paid so much to be mediocre and stay complacent for so long that they’re not sharing this information with their groups. So, unless employers are super proactive and are like, I’m sick and tired of my healthcare problem, I want to fix this. It’s taking a while for that information to get to them.

Melinda Wittstock:

Yeah, exactly. Wow. So, you’ve just taken on like a really big thing for your company. How long have you been, like, how long has Ethos been running?

Chelsea Ryckis:

We are going into 10 years being fiduciary benefits advisors. We were one of the first, if not the first that I know of, fee based advising firm in the nation. The one that said we’re not going to be part of the problem. We’re not taking commissions; we’re not taking bonuses. So, we’ve been doing it a hot minute. And I really thought, so 10 years ago, I really, really thought that in five years the entire industry is going to be forced to do business the way we do business because of these laws I was just telling you about. Right. But it’s going to take a Little bit longer because.

Chelsea Ryckis:

But health plan lawsuits just started last year where employees are suing employers for bad decisions. Right. With their PBMs and things like that. So, change is coming. It’s just slow.

Melinda Wittstock:

Right, Exactly. So, what have been some of the biggest challenges for you? Because we all have them as entrepreneurs, right? Getting this going, especially when you’re taking on an entire industry, a whole ecosystem.

Chelsea Ryckis:

Yeah.

Melinda Wittstock:

That’s not easy, right? And the biggest challenges along the way that you’ve had to overcome.

Chelsea Ryckis:

I think at the beginning, when we just started out and our messaging, it still is so different than typical brokerages, but we got into a couple situations where, you know, we had smaller clients who had to work directly with Blue Cross or had to work directly with United, and. And these carriers, and we couldn’t get creative because they were too small. We had situations where these carriers basically came to us and said, if you continue to talk about the truth about what’s going on in this industry, you can’t be appointed with us anymore. Like, you can’t write business. And it was very cartel like. It was. It was like, you know, oh, maybe we shouldn’t do business together anymore. And then one day we made a LinkedIn post, you know, about.

Chelsea Ryckis:

This is the stuff we’re talking about today, like, follow the money. And the next day, we lost our appointment with a large national carrier where we had about 50 small employers with them, which, you know, was hundreds and hundreds of thousands of dollars of revenue, paying multiple salaries in the office, and it was just gone overnight. And it was really a. We didn’t do anything wrong. We hadn’t done. There were no complaints. It was just they didn’t like what we were saying online.

Chelsea Ryckis:

And it was that moment where we were like, we knew this was bad, but we didn’t realize how bad. And that’s why people don’t speak out. And that’s actually when we sold. We ended up selling off most of our business that was under 100 employees, just so we never had to deal with that again. And then now we, you know, we work directly for clients. We write contracts directly with clients. We don’t work with insurance companies. The whole model is.

Chelsea Ryckis:

Is different because of that experience. But that was very challenging to be like, okay, like, we have to go all in on this model because, you know, you can lose significant revenue overnight just for making one company upset by telling the truth. Nonetheless.

Melinda Wittstock:

Yeah, a hundred percent. I mean, well, hats off to you, Chelsea. This is just an extraordinary accomplishment. What you’ve built and what you continue to build. I want to make sure that everybody knows how to follow you and connect with you. I know you have the Ethos Effect podcast and you also have a documentary as well, so tell me about that.

Chelsea Ryckis:

Yeah, we produced a documentary. It’s called It’s Not Personal, It’s Just Healthcare. And it’s essentially an expose on how employer health insurance actually works. Peels back the curtain. Kind of shows a lot of the things that we talked about today in a super easy to understand way through the eyes of HR providers, insurance company whistleblowers. It’s not about us. We’re barely in it at all.

Chelsea Ryckis:

We actually just helped finance the project. So that is amazing. If anybody wants to see that, you can go to ethosbenefits.com and then under, I think, Think Resources, there’s a documentary tab, and you can download it right there and watch it. It’s about 60 minutes, and it will absolutely blow your mind. I can’t tell you how many employers have watched the documentary and then come to us and been like, wow, like, we had no idea. So please take a look at that. We have another documentary coming out this year, specifically on the Mark Cuban space. So, the drug pricing, why can, you know, why does it cost us $50,000 for a drug that we can ship from Canada for 10? Like, it’s the exact same drug, same manufacturer.

Chelsea Ryckis:

What is the pricing disparity about? So, we have that coming out this year, and then LinkedIn, Chelsea Ryckis is definitely the best place to follow me. I’m always posting controversial stuff, which, by the way, it’s not actually controversial. It’s just the truth. But do with it what you will, I hope. At the very least, I just inspire you to think differently. Even if, you know, you’re not ready to take action, or start asking different questions. One day you’ll think about it and maybe you’ll remember this conversation.

Melinda Wittstock:

Amazing. Well, thank you so much for putting on your wings and flying with us today.

Chelsea Ryckis:

Thanks, Melinda.

[INTERVIEW ENDS]

Melinda Wittstock:

Chelsea Ryckis is the award-winning founder and president of Ethos Benefits, a firm dedicated to advancing fiduciary-driven health insurance strategies for employers nationwide.

Melinda Wittstock:

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Melinda Wittstock:

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