Benefit Plan: How AI Helps You Make The Best Decisions With Matthew Sydney
People tend to make poor choices because they don’t know how to make educated decisions. What if AI can help you predict your own health risks so you can choose the right benefit plan? Meet Matthew Sydney, the President and CEO of Picwell. Picwell can run thousands of scenarios in real-time to help you figure out what’s best for you. You don’t have to be stuck choosing the cheapest plan just because it seems the right choice. You can choose what fits you best based on actual data. Tune in as Chad Burmeister gets Matthew to tell us more!
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Benefit Plan: How AI Helps You Make The Best Decisions With Matthew Sydney
I'm with Matthew Sydney. He is the CEO of Picwell, located in Philadelphia, Pennsylvania. Matthew, welcome to the show.
Chad, it’s a pleasure to chat with you. Thank you.
I love having these conversations. I like to get our audience to get to know you as a person to know what you're up to. When you were a kid, where'd you grow up and what were you passionate about then? What led you from then to now to be the CEO of a company like Picwell?
I grew up around the country. My father was in the Air Force, so we moved around a lot. We spent a fair amount of time in the North of Boston and in the Ann Arbor area. As a kid, I was highly competitive in sports, games, you name it. A big focus of mine was being highly competitive. The other side of what drove me to this role has been a sense of imagination, leveraging imagination to problem solve. I always found that there's always a better way to do something than the traditional normal way to do it. It's not that I'm lazy, but I know I can get things done a little quicker if I think it through and use my imagination, or at least I thought I could. That's what led me to this role.
I've heard the term, “If you're not cheating, you're not trying.” There are obviously some boundaries to that statement. That's a military statement, in fact, if I remember right. Tell me about your interest or leverage of artificial intelligence. It's been a topic I've had. The understanding of AI is getting to be greater and greater. What have you experienced with AI? Where does it play a role in what you do?
I've been in the benefits space and insurtech space for an excess of twenty years. One of the things that I've found in the industry itself, we spend a lot of time, energy, money, and resources on strategizing planning, procuring, deploying, measuring, tweaking and redeploying wonderful services on behalf of our members and our employees. The challenge that we face as an industry is that people tend to make decisions that are not necessarily in their best interests, not because they don't want to, but because they don't know how to make a decision.
There's always a better way to do something than the traditional way to do it.
Some of these are foreign concepts. The jargon is difficult. Ultimately, where the AI plays in is we ask people to predict their own risks or what they think is going to happen with their health. Health is fluid, difficult to do. It's what AI does, which is solve complex problems in a short amount of time. At least with what we do here at Picwell is we're helping people optimize their decisions around their benefits plans. In doing so, we have to run thousands of scenarios in real-time to help someone figure out what might be the best for them, not what's the cheapest or maybe what has the most coverage, but what fits them best.
It’s funny because, in 2020, I was on the highest plan you could get with the lowest deductible. My kids are 17 and 18 at the time and my wife had some preexisting stuff, “Let's max it out.” You're the CEO of a company and you go into the next year and you say, “Let's maximize for some savings this year,” and then something hits you. My son had a little bit of a burn incident that he's now recovered from but it sure would have been nice to be on that exact plan that I had. I suspect AI could look at, “Let's look at this family. Where did they live? How many kids do they have? How many cars do they have?” All of it and mix it in a blender and come out and say, “This is your best plan.”
As the CEO, I have to go in and look at all the plans that are available for the employees. Not only am I making my own decision that's inaccurate and invaluable, but I also have to make the decision for these other four plans that will be available for our employees. I hear you on that. What are some of the outcomes as a result of deploying your technology? What are the benefits to everybody who's involved in the use of this kind of technology?
It impacts pretty much all of the constituents in this ecosystem. Starting from an employer perspective. When we look at plans that we're going to release to CEOs, to our employees, or as benefits professionals, we're trying to provide enough optionality or choice that we think that people can take advantage of and make those decisions around what's best for them and their families. One of the challenges is that we can design phenomenal products and market them that people still purchase against their own best economic self-interest. In your case, you over-insured the first year, and then you under-insured the second year. The reality is that people do that all the time. The answer isn't just about the price, the answer is about protection and preference.
You got all three of those pieces. You got to weigh them all. That’s what AI can do for you. What that does, if you're properly pricing your plans, designing them as an employer, and selecting them, what you're going to do is you're going to see people migrate to the plans that fit them best. There's going to be less churn in those plans. Quite frankly, the outcomes are going to be better from a cost standpoint, which means, depending on what type of employer you are, your trend won't grow as fast. You'll save dollars. On the employee side, you get to take advantage of things like a health savings account, which we know that many more people across the country should be enrolled in a qualified high deductible health plan with a health savings account.
They're not doing it. They're scared of the concept of high deductible and, “What is this going to mean for me and my family? What happens if something happens earlier in the year?” There are some great companies out there that are doing some imaginative things with debt vehicles, by the way. We help them understand what that risk is. That risk changes annually. If you've been in an HSA for a couple of years, you have a little bit more money to protect you and your family. That's part of our tool. We understand that. We can start to think about not just what's going to happen next year, but what's going to happen in the future and at retirement, which the tool supports as well.
All of that, what ends up happening is you align yourself with an optimal plan medical or otherwise, by the way, accident or hospital indemnity, dental vision, things like that. What you start to do is start to hone in on that center section, which is the happy medium between price protection and the right in the middle of this preference. You put yourself in a position that you start saving money as a consumer because you're not over-insuring and not seeing that money back and then you're not underinsured where you're paying more out of pocket than you should.
Thinking about your business that's been around for several years, do you think the business exists without the advent of artificial intelligence or does it just exist in a different form than it is now?
We sit in a subspace of the benefits world called decision support. There have been decision support companies around for quite some time long before we came around. What makes Picwell a little bit different is our leveraging of artificial intelligence and machine learning. Prior to that, it was a lot of mailers, physical mail, and digital marketing and communications, some cartoons and calculators. All of those things have been around for quite some time and they haven't moved the needle. People’s attention spans are very small. They'd rather spend time doing something else than picking their health insurance as an example. In doing so, you want to make it quick and artificial intelligence does that. You want to make it accurate and artificial intelligence does that.
You want it to be somewhat predictable. When I say predictable, I mean when you walk into to leverage the Picwell tool, we won't ask you any questions you don't know the answer to. Asking you questions like, “How many times do you think you're going to go to the doctor? How many times do you think you're going to go to the emergency room?” They are good questions. People have a tough time with that. Maybe, even more, asking them, “How healthy are you?” If you're on a scale of healthy, moderately healthy or unhealthy. If you're a diabetic, but you're managing your blood sugar with diet and exercise, you're going to say you're healthy. There's a lost opportunity to gather some information. That's what you avoid with AI.
It's fabulous to hear all of the different case studies like what you're talking about. What about on the sales side? Have you found any AI being used to gain new customers at all or are you using traditional outreach?
Health is fluid. It changes over time.
We're doing a little bit of both. We're using some CRM tools that have some AI capability in them. I don't think we're there yet in terms of what I'd like to see with our organization and in terms of leveraging AI in sales. We don't have an issue filling the top of the funnel. What AI, at least for us, will do is help us migrate things through the funnel faster because we're not wasting time on cases that are higher in the funnel that we never had a chance to win anyway. Our close ratios will become quicker and our sales cycles will become shorter. We're still figuring that out, but I'm hopeful that we'll get there relatively soon.
I talked to a prospective customer. He said the same thing, “My recruiting business is off the hook. It's amazing, but if I could get more positive candidates in the funnel, then that'd be helpful because I have so much business right now.” The use of AI can be used to deliver also, and to your point, getting things through the funnel quicker. It's interesting. A lot of people think of AI as this big concept of, “Do I need to go spend $1 million and go buy IBM Watson and program around it?” No, there's a lot of tools these days that are written on top of pretty smart AI packages that are out there. Where do you think it goes over the next few years? You've seen things transition over the last several years. What happens a few years from now?
The connectivity and data sharing capabilities are far greater. I'll speak for the benefits in the insurtech industry. Our ability to share information and still protect it from a privacy and security standpoint is far greater now than it was years ago. That's only going to accelerate and in doing so that provides more access to more information. AI lives in the world of more information, the better. The more data, the better. What we'll start to see is AI being leveraged in many ways to level the playing field, not just in sales and delivery, but also in outcomes management. As we start to look at planning a little differently, there's a trend of hyper-personalization in the services that are being provided now.
You have musculoskeletal services that would have never been a company on its own, at least from a digital perspective. There are now several of them. You have companies that are providing sleep health and doing a phenomenal job in being able to demonstrate impact, but one size does not fit all. Where AI comes in is it's going to help us plug into the right clients and people and learn as we go, because health is fluid and it changes over time. As your population ages, your employees' age, their needs are going to change. We need to be on top of that.
I talked to one of those companies. They're out of San Francisco. They're heavily funded and they provide the security and the anonymization of the medical records so that it becomes usable by companies like yours. That's what you're talking about that in the past, my medical records are my records. There was no way to possibly put those into the universe, but with blockchain and those kinds of technologies, now you can easily anonymize the patient records, but make it valuable for the whole is greater than the sum of its part. If somebody wants to reach you to learn more about your benefits system, Picwell, what would be a good customer? What do they look like?
We spend a lot of our time now servicing employers ranging from 250 lives to 50,000 lives. That's our wheelhouse. It's a wide one, but it's a wheelhouse. Also, we spend a lot of time with brokers and consultants in the marketplace that are trying to do their best to enhance the programs of their employer clients and are looking for ways to say, “We've taken you all the way to that last mile but trying to get those employees to take action or to migrate into the right plans for them and their families, we're having a hard time doing that.” That's where we fit in.
I remember every year when it's time to go through that process. We have the best of intentions, “Here are my two hours from 5:00 to 7:00. We're good. Tracy, we're going to go with Plan B1. We got to print out all the forms. We've got to look through everything.” Giving that level of, “This is the best bet based on who you are as a family,” makes a lot of sense. Don't over-insure and underinsure and what's the right package mix.
People want to know what to expect. They want to be helped in understanding what to do and they want to know what to expect. It’s no different than as a business owner what you want. You want predictability. One way or the other, you want to understand what's going to happen. That's where AI helps.
On the good news, the little accident situation that we had, first of all, my son's doing great. He's virtually fully recovered. Second of all, they're supposed to be sending us a check back for the deductible and I don't understand why, but they said, “We've got a check in the mail. Thanks for paying the ambulance bill, but we're sending it back.” We’ll take it. I must've chosen the right plan. It’s doing right by us. This is a fabulous conversation. Matthew Sydney, several years at Picwell as CEO. I appreciate you're shedding some light on how AI is being used in this field. It's always exciting. Thank you, Matthew.
Chad, thank you so much for having me. It's a pleasure.
Everybody, we'll talk with you next time. Cheers.