Why Private Equity is Pouring Billions Into Healthcare

0:00 There's a lot of great actors. There's just lots of bad actors, too. And so, that's what transform or reform will do. It will make transparency more clear. >> Thanks for tuning in to the selfunded with Spencer podcast. Let's go make healthcare better together. Wellness is a category, and I know we'll touch on it, but it's a category I so desperately want to work, and it's been so hit or miss over the last kind of decade or so that I've been in the business. But if you get down to the core of what a wellness solution is trying to do is make people healthier.

0:30 And by extension, if you can do that for enough people, the health care sector should be healthier financially. But we h I don't think we've seen necessarily the results that we'd all would hope for. And so we we'll get into it. Trey, I'd like to introduce you before I take you down that rabbit hole. And if we go there, if we don't, that's fine. But who are you, Trey? We'll go there. but Trey Marinella, Marinelo, excuse me, who are you? where are you from? and give us your story, man, real quick.

0:55 >> Trey Marinelo. I'm a managing director with Hulan Loki. I'm from Buffalo, New York. >> Buffalo. All right. >> Go Bills. >> Go Bills. >> And you know, I I I help lead our payer services and employer sponsored healthcare practice. You know, Hulahan's a global investment bank. I think we have 3,000 people around the world. But our our healthcare franchise, you know, is peerless. Okay. >> We're one of the the biggest. We're, you know, one of the fastest growing and we're the most active in the world for transactions beneath a billion dollars, although we're doing more and more deals above a billion dollars every year. And so I spend probably nine out of every 10 minutes of my day in employer sponsored healthcare. So I'm a avid listener of the program.

1:40 >> Thank you, sir. >> And big fan of yours. >> And you've been on before. You were on our panel a couple months ago and I really appreciate you. You actually even stepped in last minute. you were there to be attendee and I called you a couple hours before and said, "Hey man, unfortunately we had somebody drop out. What do you think about joining and you handled it with a plum and I appreciate >> you proceeded to ask me all the hard questions."

1:58 >> I know. I saved them all for you. I'm like, "You look like the smartest guy. You can answer them." But I I really am excited about this conversation today, Trey, because I've covered let's say private equity in general before, but not really as it pertains specifically to healthcare. And I know you're in the investment banking world and advisory world versus private equity, but it might even be able to be helpful for the audience define where you sit in in that framework.

2:22 >> So investment banking can mean a number of things, but what I do and what my firm does, we provide advice. We're not lending capital. we're not investing. We are providing advice. And we don't get paid unless it's great advice. >> Okay? And so we're advising companies on events whether they're raising capital or they're going through a merger or they're being acquired. It's some version of a growth event. >> Okay. >> And so we want to make sure we're providing and imparting the best advice and wisdom so they can make a thoughtful choice on who to pick as a partner.

2:56 >> Is that on both the buy and the sell side? >> It is. I'd say, you know, I joined Hulahan Loki 13 years ago, but I've been in investment banking since I graduated from college 20 years ago. And 13 years ago, I I think nine out of every 10, if not 10 out of 10 transactions were sell side, >> okay? >> Now, it's probably 7030, >> okay? >> You know, 6040. We're trying to take the knowledge and skills that we've built on the sell side and say, "Hey, if we can help you, you know, buy this business the right way, let's do that, too."

3:27 >> Yeah. Yeah, we're not conflicted, but you know, let's let's use the the lessons that we've learned and make them to your benefit. >> Well, so you did you study this in college? You said since college you've been working. What did you study? >> Skiing. >> Did you? >> I went to school in Boulder, Colorado. So, investment banking was the furthest thing from my mind. >> Yeah. But, you know, I I think I started out my career at a very small boutique investment bank and the first category I I focused in was insurance brokerage.

3:58 >> Okay. >> And so selling brokerages not risk bearing entities like insurance companies but brokers, MGUs, MGAs, PNC, benefits and TPAs. And you know, one of the first deals I ever did was a TPA. you know, back then they didn't trade for what they trade for today. Yeah. >> But it's it's come full circle. >> Well, and out of not probably didn't have much of a healthcare background then and it feels like healthcare chose you versus the other way around. But what did you find did you take interest in it immediately as a sector or is this this is just what I've been perhaps assigned to investigate?

4:34 >> You know, it's happen stance. >> Okay. when I graduated college, I I went to New York City and I was working there right out of school for you know a couple different investment banks. But right before I moved to Chicago to join Hulahan, I worked in education and I loved education, edtech, K12, post-secary, you know, making a difference for, you know, children and communities. >> Mhm. >> And that's what I wanted to do. And then this opportunity with Hulahan came up and it was happen stance. I I didn't know anything about healthc care services. but two weeks later after I interviewed I lived in Chicago.

5:12 >> Oh wow. It was that quick. >> It was that quick. >> Was that from Buffalo to Chicago? >> That was from New York City to Chicago. >> And you know my wife and I we lived in in the city in New York for eight years. She she had gone to FIT, you know, worked in fashion. I was working in investment banking. We had a 500 foot apartment. It was time to go. >> You know, we were both approaching 30 or at least I was. And we thought Boston or Chicago, what's it going to be? Two more livable cities.

5:39 >> Yeah. >> And Hulan offered me a job and two weeks later we lived there. Now that's home. >> Yeah. I don't blame you. I always joke I have a buddy that moved from Mansfield, Texas, which you don't know where that is, but that's the kind of somewhat semi-ural suburb we grew up in. And he went to New York. And I remember he was chasing kind of a retail fashion career. And now he has a he started a boutique kind of fashion company. But I remember he and a buddy were sharing a bed. So, not even a bedroom, a bed for $550 a month. And some other guy was sleeping on the couch. And I was like, "Oh, this is what it's like to live in New York when you don't have any money." Like, it's >> in your 20s.

6:14 >> And it was cool. Like, he would go out till 3:00 in the morning and then he'd show up at 8:00. And I'm like, "I don't know how you do this, dude." but it was it was one of those things like it was really cool for him to launch and now he's out in the LA area. But it was like it was a stark contrast to the lifestyle like I was accustomed to and I think we grew up in. But he was so committed to succeed that he's like I'm gonna go here because this is a place to be and no matter what like the circumstances on I know I'll bet on my own success and it was kind of cool to see.

6:39 >> Yeah. I there's a special place in my heart for New York but I love to visit. I like to go home. Chicago is >> same way. >> you know I'm a buffalonian but Chicago is home. >> Yeah. So so let's let's talk Koulahan Loki then in terms of like the advisory stuff. I think I I was keenly interested in having you on because I think you have a vantage point that you can share with the audience of like where's what's hot right now? Where where's the money flowing? and kind of why too I'd love you to to layer on the why you think some of these sectors are so hot. So maybe we don't have to quite go into future yet but I mean if you want to talk most recent kind of transactions or categories in the past couple years that probably be useful.

7:18 >> Let's start big picture. You know I'm in the healthcare group. you know, we're 100 strong, 65 in the US, 30 or so domestic or overseas, and we cover all areas of healthcare. really except for, you know, big pharma. you know, we're we're not really writing research, so it's it's difficult to be involved in pharmaceuticals. >> We'll do pharma services and we have a big practice there, but just pharmaceuticals is the one thing in healthcare we don't touch. payer services where I have responsibility along with my partner JJ we we try to touch you know as much as we can it could be commercial government non-traditional payers pay viders you know all of it >> but the bulk of the work we do is an employer sponsored healthcare and that's where I found a lot of success we've closed 12 transactions in the last 12 months you know for north of $5 billion and they range from administrative services providers like TPA to clinical, you know, providers like an employee assistance program, cost containment vendors, you know, you name it, we've been involved >> and you know, most recently we announced a deal for a business called Surpass that was sold to Lucy >> and you know, great transaction in the in the pharmacy cost containment space where it's where we see a you know, a lot of opportunity, you know, going forward in a $700 billion market.

8:42 >> Is that how big the far PDM space is in growing? Well, yeah, we definitely know it's growing, man. to the detriment perhaps of a lot of Americans, but it sort of is, right? And I think there is a there's a right way to do it. And you I'm sure there's a reason why you thought that particular business was doing the things they're doing. And that was related to know me, right? Surpasses. Yeah. Know me. I saw that announcement I think a week or two ago on LinkedIn. and I want the pharmaceutical category to do well, but I want it to do well the right way simultaneously. you know and we we you know we partner with Smith a lot and I think the model the philosophy that they bring to the table is important but why why do you think so there's so much negative press if you will in the PBM space right now >> lack of transparency okay >> I think the new companies that are innovative forward thinking you know look at Lucy who bought Surpass you know I think they're they're trying to blaze this trail they're taking a contrarian view of PBM >> and saying well everyone's running let's aggregate >> because if we're going to make change, we need bulk.

9:44 >> Okay? >> And they're offering, you know, a a choice to their their clients, to their vendors. It's not just a one-trick solution, you know, it's a choice. How how should we contain your cost for you, >> you know? so I think that's that's interesting. You're also seeing the Smiths the world right ways. >> Yeah. It's a good example, >> right? some cost plus you know we were speaking Hulahham was invited to speak at this coalition event for PBMs called transparency RX and Mark Cuban was there and some of the senators who are driving PBM reform were there and you know I was asked to speak on the state of the employer sponsored healthcare space including pharmacy cost containment >> and I think it's >> there's a lot of great actors there's just lots of bad actors too and so that's what transform or reform will It will make transparency more clear.

10:36 >> Yeah. >> And you know, the latest wave of, you know, what could happen is there's this, you know, overhang on the industry. You know, President Trump says, "Well, let's just make other countries pay their fair share. We're not going to we're going to make the MFN doesn't mean bring everybody's costs down. It might mean bring others costs up so that we're all paying the same." So, it's it's a little too early to say where things will shake out.

11:00 >> Yeah. MFN is most most favored nation pricing, right? Right. I had I think we talked about a couple months ago when that was announced and I had I would say a little bit of skepticism that it will have the intended result but I think what it is doing is just highlighting to the average American the exorbitant overpayment for the same drugs that we're bearing the cost of whereas other developed nations are paying exponentially less. That's a good conversation starter if anything. Right.

11:24 >> I agree. >> How we go about it many different ways to skin that that particular cat. chronic health issues, surprise out of network medical bills, inflated medical and prescription drug prices. These issues cost self-insured employers hundreds of millions of dollars every year. Add to this the rising cost of care and potential for waste across the life of a claim. And it's clear that self-insured employers need innovative solutions that lower their health plan spend. At Veilance, we've done just that. Developed innovation that shifts the current paradigm. A complete and integrated ecosystem solution driven by data. One that manages and simplifies the complexity of medical claim costs. It is through analyzing millions of data points that we enable employers to realize and fuel cost-saving solutions.

12:15 Veance experts come prepared from day one, targeting the fraction of claims that will drive the majority of health plan costs. That is how our team lives the Veilance promise. Engaging early and often for smarter, better, faster healthcare. So why so why do you think health care as a sector is so hot? Right? Because I think Nathaniel and I went over a a slide the other day where 38 out of the 50 states, health care as an employer, so however we define healthare is the most, you know, popular or employs the most people in 38 out of the 50 states.

12:49 How do we get there, Trey? >> Yeah, it's it's a far cry from manufacturing, you know, 50 years ago or whatever it was. >> I think healthcare has always been big. It's 20% of the GDP. I think there's a need for probably more physicians. It seems like there's a der of primary care. If you need specialy care, you can be on the wait list for months. >> Mhm. >> So, I don't think it's necessarily a bad idea to have the provision of care you know, increase. I I think there's a number of categories that maybe you could reduce to lower that number 38, you know, maybe down to something more manageable. But healthcare is it's it's an important piece of everything.

13:32 Every sector outside of health care is within healthcare. Yeah. >> You know, whether you're manufacturing or >> it it it's 20% of GDP for Pete's sake. >> Yeah. I mean, it's an insane number. I've heard it said it's the would be the third largest economy in the world if healthcare was in the United States was an economy in and of itself. if it was a country. I mean that just the scale of it. Four and a half billion or trillion dollars, excuse me, is just an insane number that you almost can't wrap your head around.

13:58 >> So now think about benefits. >> Yeah. >> Right. You're taking I think 155 million people in the country get their benefits through employer sponsored plans, >> right? So some of it's fully insured still and that's for good reason. but the bulk of it is moving towards self- insurance in some way, shape or form. And I think that's interesting. And a lot of the companies that you interview, a lot of the companies that we advise are, you know, setting pace. They're blazing trails in this employer sponsored healthcare ecosystem >> for good reason. You know, you're you're preventing chronic conditions. You're managing health care costs. You're taking big company strategies down to 50, you know, person companies, 50 life cases. And that wasn't always round. You didn't always have those type of benefits, those solutions for small companies.

14:47 >> Yeah, I we were actually just in an event today and we were talking about what we do at Paro and it's not the reason for this conversation, but it's relevant. And we were talking about all that's possible through self- insurance and all the components of cost containment and how we finance risk. And then we mentioned, hey, you know, we can go down to 50 enrolled or sometimes even lower. And it was like, wait, I can do this as a 50 life employer.

15:08 >> it was they were astonished. And it's like well there's a big reason why this category is doing so well. But there's also the reason personally why I chose to come here is you can now sit down with a small business owner of a 50 60 life group 70 life group probably founded the company maybe their name is on the company. They know every individual employee in that company by name and care about them and you can tell them that what Exxon and Cisco and Nike and all these other large Fortune50 companies do for their benefits. Guess what? You have the ability to do those things too. It's like democratizing access to self insurance >> and it's so cool. And who's at the epicenter of that? A really forwardinking TPA. some really sharp broker professionals, >> right? That are that are helping, you know, be the river guide towards a benefit plan that aligns with the needs of your company. Yeah.

15:54 >> It's not this one-sizefits-all approach. It's, hey, here's the array of solutions. Let's pick which works best for you and why. we'll give you our perspective. You make the choice. >> Yeah. So >> well and that's where great advisory I mean just like you guys are providing great advisory or consulting from a benefits consultant that understands that wide array of solutions and what's appropriate for that particular business. I think there's such a crucial element to that equation. They're also for any vendor and we were talking about this joking kind of before anybody that tries to circumvent the intermediary market struggles because they play such a pivotal role in that transaction.

16:29 But when you get a really good one, the ability to really positively influence the direction of a business or if you're a solution provider that's working with that really good one, you get access to dozens if not hundreds of employers at once. >> Such a great segue into why does private equity like this space? >> Yeah, generally it's because they have a familiarity with distribution and brokers. And so we've been fortunate to do a lot of business with a lot of really interesting sponsors that have, you know, their own value ad or value maximization campaign strategy. I think no more so or no company is more interesting and has been more effective in this than Stone Point Capital.

17:08 >> Yeah. >> You know, we've sold them businesses, we've helped them buy businesses, >> but in 2005 they were spun out of Marsh McClennon, right? So they were the investing arm of a broker. >> Oh wow. I didn't know that. Yeah. And so since then they've owned, you know, three or four brokers, five brokers, something like that. They've made a dozen investments in employer sponsored healthcare because they understand distribution. >> So it's difficult to outpace someone that comes from that industry that understands how to harness that and get true flywheel.

17:34 >> And I I think that's really beneficial and it's a pillar of their strategy. So now you're seeing people like another one is shore capital comes to mind. They're they're replicating a lot of Stone Point's large cap strategies in the in the middle market. >> Really? So, it's cool, you know, whether it's TPA or RBP or consumerdirected benefits TPA. I think, you know, they're even doing stop-loss underwriting. but you understand distribution. I think they just bought a, you know, tech Ford benefits brokerage in Phoenix or something. So, that's it's really interesting if you can harness distribution, you know, that's the ticket. That's how you drive growth and that's how you generate alpha.

18:10 >> We did an we did an episode this morning with Libby Henry who's on the Paro team. she's like our top salesperson and then Cara Kersh who's with Gallagher out of Omaha. And one of the things that Libby and I were kind of connecting over is that I like more constrained or funnel distribution. I like being able to call on a subset of insurance consultants and try to work with them. >> Whereas think about the position that a consultant sits in, they can call literally any business in the country and try to say I need to be your adviser. Right? So you have this unconstrained blue ocean of potential prospects. I like the ability and I think it it's kind of dovetailing what you're talking about is for a solution provider to know who is the conduit, if you will, to get access to the ultimate buyer. How do you sell to that persona?

18:58 And I find that really fascinating to try to master that. >> Yeah, I think I think you're right. everybody brings a little bit of a different flare if they're investing in this category and it depends what's the subsector, >> right? There are there's interesting subsectors. There's some that are slightly less in favor. You know, some would say they're out of favor. >> Mhm. >> or they're lukewarm at best. And then there's some where the jury is still out. And I think a perfect one there is IKRA.

19:24 >> Okay. >> Right. IRA 5 years ago, we were not thinking we'd be here talking about IKRA. Right. It was a >> it was it's been around for 30 years. it has not grown to more than 100,000 members. Now we're sitting here at a million members. Mhm. >> I'm reading stuff about the, you know, big beautiful bill making IRA go to 5 million members potentially because of Medicaid redetermination, ACA contraction. All of a sudden, where do these people go?

19:51 >> Yeah. >> And benefits brokers as they try to give, you know, truly bespoke advice situationally are saying, well, well, maybe it's not full IRA. Maybe it's partial to deal with some, you know, highcost members or beneficiaries. So, I don't think it's going anywhere. And if it goes to 5 million members, who's to say it won't go to 10? And now we're talking, okay, you are carrying momentum, where does it stop? >> Yeah. And so what do you think? What you said, like as a sort of construct that's been around for perhaps 30 years.

20:22 >> What created the momentum behind it and let's say the last three to four, it popped on my radar and then it was like, oh my god, there's this echo ch echo chamber on LinkedIn that all they do is talk about how amazing is and it just like became this flood of interest. Good or bad, I don't know. But it was like why did it just burst onto the scene seemingly >> you know I think some companies see it as a defensive reaction to highcost problems and it's a kick the can strategy you are you know and well I think we were talking beforehand you can somewhat gerrymander your population to or towards IRA so that you can you know carve out these highcost dependents and beneficiaries can you do that forever? I I don't know, >> but right now you can.

21:04 >> And so RA is it is becoming more than it was 5 years ago because people are being more thoughtful about ways to use it. >> In other cases, it's just a all right, we just cannot deal with this any longer. We're getting too big or we don't want to deal with the problems. Here's a stipened, you know, here's a portal. Have at it. >> Good luck. >> Kick the can. >> Yeah. >> Right. And I think that is not an ideal solution as you're you're looking to affect change and prevent chronic conditions and do right by your health plan. Like we we kicked off this episode with, you know, joking around about wellness. You know, wellness is is interesting. I I started this practice at Hulahan because I worked on a business called Interactive Health in 2013 2014. at the time it was owned by Intandem Capital and CI Capital, but the CEO's name was Kathy Kenworthy.

21:58 And she used to say, "We're at the epicenter or we're at the intersection of capitalism and altruism." And that's always stuck with me. >> You know, that's why I like this category. You're doing right by your clients by helping their members. and I think there's something to that. Like you, it's rewarding work. And if you do it the right way, it it is rewarding. If you know, if you areing everybody, I don't know where >> should we turn that into a verb.

22:25 You'reing everybody. Yeah. Paro Health is the largest benefits captive in the United States with nearly 3,000 captive members, 1.3 billion of stop-loss premium in force, and almost 1 million covered lives. No other benefits captive comes close to Paro Health scale. But it's not just about the numbers. Paro Health is a mission-driven organization, and that mission has two distinct parts. Number one, to make self- insurance simple and more accessible for small to midsize employers. And number two, to arm them with the most powerful cost management tools on the market. So, if you're an employer frustrated with your health care outcomes, or you are a benefits consultant looking for an alternative to the status quo, it's time to consider Paro Health. Paro Health, where employers come to do self insurance right, to do it easily, and to do it at scale.

23:20 >> Yeah. And you said, I like that you put that in the jury still out category because I remember raising kind of questions around the viability of that as a category a couple years ago. We've featured it on the show as a matter of fact and it was one of the more popular episodes we've ever done because I think at that time there's a lot of interest in it. The jury to me is still out to use your verbiage in that I don't know what the long-term experience of the individual members is going to be like and if they aren't getting guidance if they don't have counsel how to navigate a complex system we're not really solving the problem we're simply just diverting it over to be somebody else's problem instead. And I think from an individual member experience perspective, I might feel a little bit cast aside by my employer if I go that route. I could be totally wrong, but this is an outsider looking in trying to evaluate it.

24:04 >> Well, think about where we were 5 years ago, you know, during COVID when all right, you name your price. What what digital solutions do you want? Let's fill up this dashboard. >> Mhm. >> And you know, hence vendor fatigue. >> Oh, yeah. >> We came on the heels of that. Oh yeah. >> You had so many icons, you didn't know what to do, how to use it, and people were just collecting administrative fees from stuff that was hanging on the digital front door, but never opened.

24:25 >> Mhm. >> And so now we're saying you deal with it. >> and there's some there's some version in between that's going to be mutually beneficial for payer and provider and then for the constituencies that are also involved. So you you have your your brokers and your providers. and there's others too, but there are solutions that work for companies of all sizes where everyone benefits. You know, the payer, the provider, the member or the dependent who's the employee and the broker >> and everyone's working in unison to affect change and tighten up the benefit plan design and so on and so forth. You have a, you know, nice population. You have, you're in the black and you have high retention rates for everybody involved. Like that's a great outcome, but those cases are few and far between.

25:14 >> Oh yeah. Yep. Well, and so on the subject we kind of covered jury still out. Where is your focus? Because I know ultimately you want to help advise on investments in categories that are hot, categories that are solving big problems that are on the cutting edge of innovation. So are there certain big categories, macro categories you think are very interesting right now? >> TPA, like I said, it's it's the epicenter, so it's always going to be interesting. That's the Christmas tree you're hanging ornaments off of. Mhm.

25:39 >> so I think companies we've been fortunate to be active in that category advising companies like Allied or PointC Trustmark which was rebranded as Luminere most recently Health Easy. >> Okay. >> And so we love this category. Now I will say there's there's very few actionable targets that are scaled growing tech forward not antiquated you know true investable vehicles for private equity that are TBAs. I think Lucent and some others there just are not many new ones that that crop up every day. You look at somebody like Angle Health, it's more of a health plan, but real fast growing level funded TPA.

26:19 >> >> and why do you think they've been able to grow really fast in a space that's somewhat mature, right? And there's not a lot of novel ideas. I would necessarily say why is Angle succeeded? >> Well, look at the fastest growing companies in this category and where all the equity is going. It's the lower middle market. It's I shouldn't say that. It's the the lower end of the middle market. Okay. Where >> define that when you say lower >> so case sizes when you think about mega jumbo you know mid-market SMBs and then there's like lower middle market or lower end of the market these 50 to 100 life cases. That's where I mean this was not always around. So now that it is, it's the fastest growing portion of what we'll call alternative funding or alternative health plans. And level funding is growing, you know, vertically right now.

27:05 >> Okay. >> It it's it's not a hockey stick. It's vertical growth. >> Wow. >> Month overmonth sequential >> and you're seeing a lot of capital flow into these strategies that are being implemented and affected by lower middle market companies. And I think the TPAs that can look at what Paro is doing, right? you know, fascinating business focusing on and and Benon and Crumbdale, right? Companies that are focused on this lower end of the middle market providing a a levelfunded or some version of a self-insured solution or you know, baby steps into one.

27:39 >> Mhm. >> And you're you're making change like you're affecting change and the benefit stays intact. you know, your your plan stays intact, your population is benefiting from the solution that's now in place and that's where the dollars are flowing. >> Yeah. Well, I've been fascinated to see the growth in whether it's the captive space, the consortium space, these level funded solutions that are alternative to the carrier driven like an angle, an alternative model prop up. And I really like that business because they're very tech forward. They're they're basically a tech company first and foremost and it's I didn't realize they're at the pace that you're describing, but I'm also not surprised having met them a few years.

28:19 >> Smart guys. >> Yeah, smart guys. and the tech I've seen the tech and it's it's it works. and so I don't doubt that it's something that's attractive to a small to mediumsiz business in terms of an alternative to what they're doing today. but level funding as a category, I've got my qualms about it. I think con the construct and I won't bore the audience with the construct of a level funed plan that I think constrains employers but it serves a very underserved segment of the marketplace and if done well most of my critiques go away. but I think the carriers were the ones that brought it to the market 1015 years ago >> to keep them in the carrier driven model sliver of risk.

29:01 >> Yeah. Yeah. >> Right. But so so let's talk about what else is interesting where these dollars are flowing. >> It's alternatives. It's not just self insurance because it's been around forever. It's, you know, we advised a company called the difference card recently on a transaction on a sell transaction. we sold it from North Lane Capital to Stonepoint >> and you know, lot of demand, a lot of interest. And they were taking it. It it was called a MERP. It's a medical expense reimbursement plan, but it's an alternative, right? It's not >> self-insured, but it's it's a lily pad to get there. Okay. And so you're taking effectively self insurance on co-pays and deductibles while you're keeping your benefits intact or growing but reducing costs >> and you're able to guarantee this through effectively reinsurance but what they call a you know contract liability insurance policy. So really innovative concept and it's just swelling in growth.

29:57 >> Okay. >> Right. And so this is an alternative that to level funding. Right. So you you you distance yourself from some of the the pitfalls of level funding, >> but you're also >> on this glide path towards self- insurance. You're just not big enough yet. You know, you might have 30 40 lives in the case. >> You're not 250 people and with stability and diversification. So I there's there's not too many mers out there, difference cards setting pace, >> but there's other alternatives that are becoming more and more >> just listening to you talk. I mean, you have the ability to kind of completely pivot to new businesses and analyze them very very easily, it seems, in conversation. How long does it take you to really dig into the viability of a business when you're helping advise on it?

30:40 >> Can this I mean, what's the research process look like? Like what do you need to know to provide intelligent advice? >> We have to do our due diligence, too. >> Yeah. >> So, I think if you go back 13 years ago when I joined Hulahan, we were 15 people in healthcare. maybe, you know, now we're over 100. Back then, if we saw a hundred million dollar transaction, we would marshall the firm. You know, we we would we'd be calling in favors from, you know, corporate.

31:07 >> And these days, we turn those opportunities down. We're we're fortunate to be choosy. >> But I think there's nothing well, we have nothing but our own time to sacrifice and invest. And so, we have to be thoughtful about selecting the right mandates that are right for us. and we do have to do our diligence and it's rare that a call comes in on Friday for you know a sellside assignment on Monday you know that doesn't happen >> so we're following companies when they're in their nency when they're growing to you know maybe they're raising venture capital or maybe they're >> not really at the inflection point yet but we're calling on them and building rapport meeting the team understanding the relationship with the current sponsor or who else is in the cap table so we follow companies for a long time before we you know throw our hat in the ring to advise Yeah. What are the kind of the intangibles you look for though?

31:55 >> Leadership. >> Okay. >> You know, when you took when you look at a leadership team, well, let's step back. The reason why companies trade for outlier valuation multiples, there's a few of them. One is organic growth. >> You know, two is infrastructure in place and part of that's executive leadership team. If you have a dynamite CEO with strong lieutenants around him or her, you have a great business. and I think that's what we saw with Difference Card. That's what we saw with Allied Benefit, that's what we saw with Healthy Z, you name it. These companies, they're they're Joe Donovan always says, "Success leaves clues."

32:31 >> And sometimes that clue is healthy leadership. that is just able to take them from plateau to plateau or from one side of the pond to the other. you know, you you have a great team and sure you have all the tools and you have a a sponsor that is, you know, putting in place infrastructure and systems to professionalize and institutionalize the business, but a great CEO is the biggest intangible. >> Yeah. Well, I totally I can totally understand that because at the end of the day, these companies are betting on the human beings leading the charge, right, too. And if you have somebody that you're questionable about as an individual, you're going to then question the viability of the business.

33:11 >> claim is a medical claim auditing and member advocacy company. We provide fiduciary services to employer sponsored benefit plans and allowing them to create an environment where we ensure that the benefit plans are being charged in a fair and reasonable basis. My business is basically people and it become a real simple transition. and we thought it was going to be far more complex. I've saved we'll say hundreds of thousands of dollars. I could not say enough about claim doc.

33:41 >> So I you sent me not too long ago. it's almost like a marketplace analysis. I don't know what you call or would call it. What what is that you do it every single year, right? That's a hula hanoki kind of report. >> We we put together a lot of collateral. >> Okay. >> You know bankers love collateral. So we we write market updates semiannually with market maps and I think the latest one that I wrote to you was and and you called out the only typo in the damn piece.

34:07 >> Sorry man. So >> I So funny story I have my previous company I was telling you about plan site the CEO who's now C PO I would always I would always catch his typos and it was like I can't help myself. I swear to God I'm not trying to do it but if it I see it >> I hadn't published it yet. Okay. So, do I get credit for like >> Well, I was flattered you read it.

34:27 >> I did read it. >> Well, and the reason I bring it up and not all jokes aside is that it was fantastic. and it gave me line of sight >> across the spectrum of employer sponsored healthcare of like the way that you see things because I can somewhat get myopic and either what's coming to the table on the podcast or what I see at Paro and I don't always get to see the big picture of things.

34:49 >> Well, we try and we do this periodically. I think we put one out in Q1, we'll put another one out at the end of Q3. >> Okay. >> But it tends to be what are the trends? some of it is okay, we'd like to grandstand a bit and talk about what we've accomplished. I think in employer health, we've announced 12 deals in the last 12 months for over $5 billion. >> So, we've been very active.

35:11 >> But what we profiled in that market piece was, okay, here's the investors and what they're saying, strategic and sponsor. What have they done? You know, who are they? What have they done? >> what are the categories that matter? And I think we listed 10, we profiled five, and we baited the hook for the next five. >> And so in the NAQ3, we'll put out our thoughts in a deeper dive on the five that we didn't highlight. And they'll include things like direct primary care, you know, on-site nearsight, companies like premise and proactive MD, even next level health that are setting pace clinically in this employer sponsored category.

35:43 >> we'll talk about pharmacy cost containment. >> You know, we were fortunate to advise Nomi on the sale of Surpass. you know, they've they they realize that they can partner with Lucy, generate a bunch of cash, you know, put it into their fastest growing businesses and be no worse off. In fact, be equal, if not better off, because you're able to >> devote all this capital and energy into, you know, your fastest growing business. And, you know, that's that's an interesting strategy.

36:13 >> Yeah. And I loved it, man. I mean, I think a couple things that obviously selfishly captive stood out to me. you you guys called those out a couple times. Reference base pricing was something that you called out which you know we have a reference base pricing sponsor claim doc but it was interesting to see that that category was still something that seems to be like of interest right because you have your naysayers your detractors of reference based pricing but in if done right and done for the right employer it is incredibly successful at controlling >> there's a reason why it exists.

36:41 >> Yeah. Yeah. >> So and it also doesn't have to be full replacement. It could be an adjunct to, you know, >> yeah, you're starting to see that more as well, >> right? And that's you have thoughtful benefit advisors, not just Joe Broker. >> Tom Broker. Tom Broker. It's all right. Sorry. >> Tom Broker. >> Yeah. and I think it's a viable strategy. It will remain, you know, viable. what we tried to highlight in the last market piece was what we'll call yellow journalism.

37:07 >> You know, not necessarily stating all the facts, you know, claiming that, the payers are to blame. Well, you know, the providers have their they're to blame, too. >> Mhm. >> And so things will change and as more participants of this category, you know, start to weigh in and, you know, move the market a bit, I think more transparency is needed and eventually it should bring costs down. But it's it's a viable strategy in conjunction with a number of other solutions that a you know, a TPA and a broker can thoughtfully introduce to a company.

37:39 >> Mhm. Well, so like if somebody was listening to this and we have a lot of folks in the consulting world that listen to it, but you know, I regularly feature founders of like really interesting businesses on as well and I know a lot of them listen. If I'm somebody listening and go hulahani, I like this guy Trey. It seems like they're pretty successful at investing in healthcare. Like what who is the right ICP if you were will for a Hulahan Loki client?

38:04 >> yeah, I I think we're the bulk of the transactions that we're performing and the advisory we're giving is for you know private equity backed companies. We tend to be involved with transactions that are ranging from $200 million of enterprise value to $2 billion. >> Mhm. >> And so there are very few companies that are privately held, you know, by a founder that have reached that that $200 plus million enterprise value. So, I'd say it's really important for us to know completely the sponsor universe, right?

38:35 Private equity matters and we, you know, we're I think we're both a part of an organization called SIA >> that >> that's where we met actually. >> That's right. Yeah. And we we host we we just completed this actually, but we hosted an event in in Charleston called the corporate growth forum. And five years ago when it was incepted, it it was, "Okay, why is private equity not the devil?" >> Right? Why are you not trying to steal my business? What we've graduated to, and I think we had the most successful event in Charleston we've ever had. And now it's it's interesting. I think it'll come together and merge with the spring event. Okay.

39:12 >> which is, you know, 800 people versus 200. So it should be pretty cool. >> But now it's morphed into all right, let's take some really thoughtful private companies. Let's introduce them to founder-friendly first capitalin oriented private equity sponsors to talk about thought-provoking strategies that they can implement to change to drive change. How how how do you introduce distribution capabilities? how do you introduce technology? How do you introduce other value ad levers that private equity will will bring to bear that you weren't even aware of? It's not how do you put leverage on the company?

39:49 >> Yeah. you know, how do you how do you use maximum debt to drive return? No, it's a growth. How do you how do you turn the propeller faster? >> Yeah. >> And how do you leverage the relationships that you have with with companies and individuals and brokers and intermediaries that matter for the benefit of this company? >> Well, why don't we talk about kind of misconception? I think we were discussing this previously, but it's you mentioned how is private equity not the devil like tongue and cheek, but there was some reputational you know negative reputational concerns over private equity is just this like amorphous category. Why do you think that is? And maybe what are some of the misconceptions that when people think private equity, oh, they're going to saddle it with debt or what, you know, whatever the case may be.

40:30 >> You know, you could answer that so many different ways, but I think the reality is there's bad actors in every industry, >> right? Private equity is no different. There's also a lot of great success stories. And so oftentimes we're approached by, you know, a founder that says, "I want to sell my business, but not to a sponsor." You know, I've because they'll hear a horror story from one friend. I think the reality is there most of the stories that are told are favorable.

40:55 >> Okay? >> You know, and it's true partnership. some are better than others. Some are truly value ad, roll up your sleeves, others are five people and a dog in Greenwich, right? So, but they're not all designed to be value ad, you know, lock arms run through a brick wall together type partners. I think some are capital. >> Some is true, some are truly sponsors. You know, they're sponsoring a company providing value enhancement strategies to maximize or optimize the outcome together. And so, you think about groups. I mentioned Stonepoint. He looked like a Welsh Carson, you know, that's that's high road institutional capital, white collar. you know, embracing like the spirit of partnership and we've been spending more and more time with them in this employer sponsored cate category and it's interesting to see what they were the pioneer in healthcare private equity.

41:47 You know, they're regarded as one of the the most thoughtful strategic healthcare investors in the world and they do it the right way, right? And they've had great outcomes. It wasn't through using debt, right? Sure, leverage can be helpful. It can be a shield, but it's not how you turn the propeller faster. It's not how you make change in the industry. It's not how you innovate. >> Yeah. >> And so, you think about groups like that or or a Lightyear Capital. you know, there's there's so many great names.

42:16 There's there's a bad actor or two every so often. >> Sure. >> But there are everywhere. >> Yeah. And I I' I've been very careful. Obviously, I don't ever want to kind of demonize it. categorically, right? And I told you the most watched episode I've ever had is my buddy who's in private equity. and I I find it really fascinating, right? But it's fascinating and generating wealth for individuals, growing businesses, building the infrastructure to get them from, you said plateau to plateau. I like that terminology. That's fascinating to me.

42:43 and I think picking the right partners, as you say, is is worth its weight in gold. and you have to maybe advisory services and working with somebody you trust to advise on it is a crucial intermediary step in order to do that. is there ever been Trey whether it's a category or a business that was just a miss which just didn't pan out as maybe maybe as big as we envisioned or for whatever reason might have been shut down legislatively. Have you ever had one of those where you go man I thought that was going to be a lot bigger than it was? you know, you saw that in the 2015s with population health.

43:20 >> Okay, >> that was this term that was going to change everything. it didn't really materialize. You know, you some of the companies that were in that category went away. In fact, the bulk of them went away or they changed their operating philosophy. Now, inherently they were valuable companies. They were great ideas. they it was just difficult to show well to truly illustrate return you know to show that they were improving something >> and so I I think that was that was tricky. We were also talking about wellness at the outset and you know I've I think wellness is is important.

43:57 most companies still have some version of a wellness or health engagement strategy. I think it's been tricky for some of these companies to show return on investment. You know, I remember going back to again the interactive health days. You you couldn't really show ROI because the customer base was so well the the employer base, employee base was so transient. >> People would come and go. Yeah. >> If they stay in their chairs for 10 years, you can track ROI. You have horizontal data, >> longitudinal data.

44:26 >> Because people would come and go. You couldn't track anything. >> So, it wasn't ROI, it was VOI for value over investment. Then it was, well, shoot, that doesn't work. let's just ask for net promoter score, >> you know, and and so that's been a category that has fallen victim to, you know, some headlines that have made it, you know, not as favorable. >> but I think that if done the right way, it's helpful. And so you think about, I mentioned Lightyear, they saw a lot of promise in this business called Curlink, >> which is an EAP, >> but it's taking wellness strategies that didn't work in wellness and attaching them to mental health and all of a sudden it works. And so I thought this was fascinating. They're pricing it kind of in between >> you know one of the solutions that was implemented during COVID where it was what do you need to stay in your chair? We we'll take whatever it takes, right? That we're $10 pmm. And then there's the the okay, we're a nickel pm and we're going to sit in the digital front door. You're not going to find us never let alone utilize us. So they're they're somewhere in between and they're they're they've embraced these engagement strategies that are self well they're they're doing it themselves. So they're engaging the population meaning it's going to cost them more to drive utilization which is the opposite of what the EAP providers of old were doing.

45:47 >> It was let's put it somewhere where nobody can find it and they'll never get any benefit from it but we're going to make a fortune. And what Curlink is saying is well hold on we're going to give you the mental health solution that we think is best. We're going to give you these engagement strategies to make mental health you know easier to digest and we're going to make sure you use it and so we're going to drive utilization through these engagement strategies and we're going to charge you a reasonable price and lo and behold going to the moon. Right. So that is pretty cool. You you you couple engagement or wellness with mental health which all of a sudden you don't need to drive ROI from mental health.

46:25 >> Yeah. >> Right. that is there for a reason and it's >> why I argue wellness and mental health are one and the same right like we do a really good job especially in like the delivery side of like separating pieces of your body know you go to the eye doctor you go to the dentist you go to the ear nose and throat specialist and I get that you want them a specialist but we disentangle often times the mental health of a human being from the physical health and I think those two things are like a feedback loop those two things are interlin if you will so separate mental health from wellness it makes sense when you put them together.

46:56 >> It does. >> Yeah. Okay. >> Yeah. And it's, you know, they're they're growing and displacing existing vendors that have been there for a long time because they've shown no results. And so, it's interesting to see the categories that are embracing mental health because it wasn't reimburseable for a long time. So, people stayed away from it. >> Mhm. >> now, especially like in the workers comp space. Well, if we can't reimburse for it, why do we want it? Well, turns out it prevents chronic conditions. It prevents absenteeism. It improves presentism. you know it it is a care management strategy so let's use it and you know I think we're going to see more >> and on the subject of mental health you know thinking kind of forward looking the role that AI could play in that like does mental health support necessitate a human being necessarily on the other end talking to a person or could it be achievable through an empathetic AI of some sort >> that's a great question I you know I think as people become more tech-savvy and are looking at avatars to you know help with their health. I I absolutely think that tech will play a big part whether it's you know 10 years ago it was asynchronous text that was the new you know with companies like 986 right well you know on its own maybe not the the most useful >> when you put it as part of a broader strategy with transparent now you're talking about something and so I I do think that tech through these avatars through AI bots and see what who knows what Elon Mus is going to put out >> it' be interesting and the reason I asked Because you you hear one of the number one constraints in terms of like mental health support is providers, right? Access to providers, finding one, and even if you do find one, >> wait time.

48:35 >> The wait time. You you gota Yeah. You know exactly what I'm going to say. If we get to a point, and of course I'm skeptical of the AI avatars for like being your best friend, right? And like I think we're getting on the cusp of where that may be the case for some younger people. I could see the mental health support being delivered through an avatar of some sort. I want I don't know what the legality is of getting true clinical mental health advice through an avatar versus a licensed therapist, but general, hey, I need somebody to talk to or ask a question.

49:05 I'm stressed out, got financial concerns, whatever. Having the ability to access that in real time, I could see a use case for that. >> So, you look at companies are that are so forwardinking in the tech space like Meta, >> right? and and they're trying to action some of these, you know, these worlds where it's not physical, it's virtual. Is healthcare going to eventually be a part of that? You bet. >> and so I I do think that that's probably I don't know when. It's only a matter of time, but I think big tech should be involved in more healthcare.

49:39 starting with virtual and then, you know, maybe it is AI, but there's no reason why, let's just think about what EIPs were put in place for. It was crisis. It was suicide prevention, crisis intervention. >> And if you have to wait 5 days for someone to call you back, >> you know, the episode's gone. >> Yeah. >> And so if you're able to speak with someone, whether they're artificial or, you know, it's a live experience immediately, the results are probably going to be better.

50:06 >> And so, how do you do that? So, time will tell, but I think some tech, as tech plays a bigger part, especially AI, it it should influence clinical decision-m and the provision of care. Well, I sat down with the founders of Medifi. Are you familiar with those or that business? it's like a really kind of robust care navigation where they really dig in and learn your plan as a plan sponsor and help your employee. They want to be the access point for any employee healthcare needs to go call them and help direct them. But they were talking about adding in AI with human in the loop with that AI. And they actually, I don't know if it was their study or they were referencing a study, but they said in reality, if a human being doesn't know they're interacting with an AI agent, they actually feedback was that it's more empathetic even than a human being.

50:52 But they said once you became aware that it was an AI agent, then your your sentiment changed altogether. But it was able to be convincingly empathetic enough that they actually preferred the AI over the human being. And we were talking about like why could that be? And you know, if I'm just sitting with you and Trey's had a bad day, something went wrong this morning, you're distracted. You may care what I have to say, but you're distracted.

51:16 You're you're something else is on your mind. >> AI doesn't have those limitations. So that's not thinking about what am I going to have for dinner or how am I going to pay this bill. It's focused on you. And so I could see how technically speaking, it could be more empathetic than a human in some situations. >> That's why it will be a part of, you know, healthcare going forward. >> Yeah. there's so much innovation taking shape right now whether it's employer sponsored or it's outside of you know the 150 million members who get you know their health care through their employer you know healthcare is not sitting and waiting and AI will move things faster and it will improve systems and technology and the provision or delivery of care and hopefully for the better.

51:58 Well, so let's let's that's a good segue, Trey, into like kind of looking forward now, right? Having spent years working alongside healthcare leaders, brokers, and employers, I know how overwhelming health care can feel for our customers. We've all been there. Those renewal conversations that never seem to get easier. Rising pharmacy costs and medical costs and no real transparency into where healthcare dollars are going. That's why I'm excited about Nomi Health. They're not just fixing the old system.

52:26 They've rebuilt self-funded benefits from the ground up. With Nomi's network, you can offer something truly different. No co-pays, no deductibles, zero out-of- pocket costs when members see a provider. It's the kind of benefit that makes everyone ask, "Why hasn't healthcare always worked this way?" Ready to bring your clients something different? Visit nomialth.com and see how Nomi is rebuilding healthcare one employer and one community at a time. >> Where's the market going? Yeah. I we talked earlier about companies of all sizes are now equipped or they're suitable for these strategies that were once only available to General Motors or General Electric.

53:05 >> And so as you go down market further, I think these vendors that are still small, you know, are growing. And so you look at some companies that are in this cost containment category, which if if you look at employer sponsored healthcare and you look at the multiples, right? the the enterprise value divided by the the earnings of the business, right? the fastest well I should say the the multiples that are high this tend to be those that can produce return on investment that can illustrate outcomes, right? And those are generally cost containment because they're hard numbers. It's hard dollar ROI.

53:43 And so when you think about companies in this cost containment category, there's some that are, you know, they're not household names now, but they will be. >> Brao wasn't always a household name. >> True. >> nor Benacon, or difference Carter, you name it. But I think Crumbdale is one we're spending more time with. And this is a company that sits at the intersection of, >> you know, payments basically taking taking risk, financial risk coupled with healthcare, it coupled with the ability to administrate a program.

54:12 like a third-party administrator >> and contain cost. And so when you're able to optimize, you know, these these four call it subsectors of employer sponsored healthcare to bring to bear a benefit as a program manager to these small cases and drive hard dollar ROI, you're on to something. And so those are interesting businesses that are, you know, growing fast. They have a massive addressable market >> and they'll be household names in no time. Well, that's what that's what I feel too. And you know, I joined about two and a half years ago and I was like I I keep hearing about captives all the time, man. And I mean, even me as a stop-loss guy and people perceived me as one, I felt like I had a blind spot in understanding what captives truly were and who they served and how they were constructed. And being on the inside, I realized one, it wasn't as complicated as I thought, and two, it is really about a a better story being told to the market. You can get into the weeds of all these like layers of a captive or whatever it may be and those are important at some point. But what was really important is to me is the value proposition of what are you in today and what are you trying to accomplish and how can this vehicle get you get you there.

55:21 >> I was Trey there was something I was going to ask you. oh you were talking about enterprise value and multiples how you would calculate that. One of the things that we regularly bring up to business owners is you you might have for every sale you make, it might have a 20% margin, right? Or something like that, just as an example. And you go to that business owner and say, "Well, how many sales would it take you to translate into X amount of savings on your health care spend? And if I could if we could save you $100,000, let's say, as a projected healthcare savings, how much in sales would you have to sell in order to equate to $100,000 delivered to your bottom line?"

55:58 And so if you start thinking about get beyond this sunk cost fallacy of healthcare procurement and go I have the ability to effectuate what I spend on healthare and if I save X it goes directly to my bottom line and what does that do in terms of value creation or enterprise value creation and you put it in that context for a CFO or a CEO and they go okay now I understand >> this is what the why it's so important to have a great benefit consultant or adviser. I'm partial to the Alliant team because I think there's nobody better, >> right? They are they illustrate creatively cost containment strategies or value maximization strategies for private equity and for the companies that they they own that others don't.

56:42 And I think often times I hear one, it's thank you for introducing me to them. But two, it's we had never looked at it like this before. What took us so long? Yeah. And so when you think about that in the context of and you said this before so I'm using your words now you know what did you say people follow shiny objects >> and it's true and maybe is maybe maybe it doesn't I think there's some platforms in IKRA I like like remodel health love the team at Oak I think they are thoughtful investors that are business builders and ifra is here to stay they will they will figure out how to you know generate return and do it you know in a way that provides benefit I think when you talk about okay how do you advise companies to take either risks or implement because what are they doing if you're introducing a new point solution you're taking a risk so why is a broker willing to put their neck out it's because they've done it before they know that it works otherwise they're going to lose their B and you know >> getting a new client is harder than replacing or retaining right >> so with that in mind if you're able to discuss for the first time some new cost containment strategy that you've affected favorably before to a new prospect, a new client, and it works. It money goes to the bottom line, your enterprise value goes up because you're generating earnings and earnings attached to a multiple or a coefficient, right? That's your enterprise value. And I I think great brokers find value for companies and that's why they're part of the due diligence process.

58:15 >> Yeah. Yeah, I I I often talk about how the role of an insurance consultant and we're very clear defining consultant and broker as different things. The role of a benefits consultant has evolved dramatically since I've been in the industry 15 or so years. The expansive nature of like what is being asked of them these days versus what it used to be. They're a business consultant. I mean, they're not, you know, they're trying to solve problems for a business and it happens to be through the channel of benefits. But it's crazy how often they're tasked with something that seems like so totally out of their scope.

58:48 >> They've got subject matter experts on subject matter experts. Oh yeah. You know, it's it's incredible. But >> brokerage has been you know, a very profitable and growing industry for a long time. >> And so how do you outpace your competitors? It's by, you know, adding value. and so people, some people have attacked private equity with subject matter experts like Alliant, right, that attach themselves to these sponsors and talk about, all right, here's how you drive value.

59:14 >> You want to generate return for this portfolio company >> on the benefit side, do X, Y, and Z. And so they're no different than a tech expert or yeah, you know, an operational consultant. you know, somebody with ERP, somebody who is trying to bring in a FPNA suite. So they're just another tool in either the private equity kit or generally to make way for change, drive growth, increase the bottom line and prepare. >> But they're so valuable because where does benefits sit on somebody's P&L?

59:47 It's usually second or third item, right? And so in terms of expense and then when you realize how much perhaps fraud, waste, and abuse, overspend, inefficiencies, whatever you want to label it, is baked into that expenditure, good advice there can save them significant amounts of money just by a couple structural changes. And I think it's to me, I I think you you mentioned this earlier too, it's just incumbent upon us to be able to spread the awareness that these types of solutions exist, right? And and so I feel like my obligation is to tell the story to as many people that will listen and hopefully it impacts the way that they think about benefits whether they work with us or not is is okay. I'm okay with that. Well, I think with the way Paro is growing and some of the other fastmoving trends in this category, whether they're captive or otherwise, I think they're drawing a lot of awareness to employer sponsored healthcare and how you're able to not only prevent clinically chronic conditions which absorb the bulk of the spend in the entire space, but you're able to do it proactively and preventively and you know there's solutions to increase health and happiness and now you're trying to think about other social determinants of health >> and it's more of a holistic rounded out strategy which used to be all right listen go from fully insured to self because now you're the insurance company and you stop paying premiums and you can be the bad guy that's not it anymore you know it's so there's there's a a healthy balance and you know on the teeter totter of too many point solutions and none you got to put the fulcrum in the right place >> yep >> and it's not there yet but it's getting there >> yep was there anything Trey I know we we did a lot of kind of due diligence if we want to use one of your terms of planning for this to make were when you came here that there were things that we covered that were important to your business and important to you. Has has there been anything that we haven't discussed yet?

61:35 >> No, I just like sitting down with you. I always like to hear >> We can do it. We don't have to have a microphone in front of us, too. Like we can actually just hang out with a couple of beers, but >> yeah. >> no, I I think what we want, you know, the your audience to know is if you are thinking through, you know, strategic alternatives in this category or in healthcare generally, we've shown to be helpful. And I think the outcomes we produce for our clients and it's one client at a time. Each each client's the most important. we would love to, you know, weigh in on the right situations.

62:06 We'll tell you quick if we can't help, >> but in the situations where we can, we provide, you know, bespoke, thoughtful, situational advice to, you know, optimize growth or value or whatever the case may be. And I don't think everyone approaches M&A advisory situationally like that. Mhm. >> You know, it could be just a one-trick ponies that are hammering on the thing that they know how to do. I think we take a slightly different approach with an array of alternatives and thoughtful approach and partnership to, you know, genuinely trying to make change just like some of the companies that we we are fortunate to advise.

62:44 >> Yeah. Well, I mean, you guys clearly you have a track record of success. Success leaves clues as you just said. which you guys there's some clues there with Hulahan Loki and it's been great to get to know you over what since we met last year at Sia right and shout out to Trish and Kristen Rivers for introducing us question for you kind of last question as we close the the episode what would you like to leave people with whether that's a summary of we covered a lot of ground a call to action just a thought for the day you get a chance the floor is yours to to close the episode >> yeah I'd say healthcare is relatively insulated from some of the or you know, we'll call them macroeconomic themes that are negatively impacting M&A globally.

63:27 >> Mhm. >> we're generally tariff resistant because it's healthcare, especially services. Unless you're in government sponsored healthcare like Medicaid, you're resistant to these Doge initiatives. And so we healthcare has been you know moving the market so to speak. >> Employer sponsored healthcare, there's no hotter category right now than maybe healthcare it. >> Okay. But I think employer sponsored healthcare with these with the innovation that's happening right now and you know sitting across from you know paro which is one of the fastest growing companies in this category you know you know it better than anybody and all the guests that you speak to it's a category that matters and it's part of our healthcare franchise it's one of our pillars >> so you know we like to be active and involved in the space if we can be helpful give us a call.

64:17 >> Awesome. Well, I think that's a great place to end it, man. It's been fantastic to sit down with you again. I hope that we'll do this re relatively regularly as much as your schedule. >> We'll do it in Chicago. I'll come to you. Nathaniel, you want to go to Chicago? We'll we'll let's do that. Yeah. Next time. But I appreciate you, man. Once again, thanks for coming down, Trey. It's been a pleasure.