Politics

Paul Johnson moves from politics to healthcare innovator

Paul Johnson has always been a groundbreaker.

In 1990, he became the youngest mayor of a major American city when he became mayor of Phoenix at age 30. Under his leadership, Phoenix was voted Best Run City in the World.

Since leaving politics, Johnson has turned his attention to healthcare, founding Redirect Health, which helps employers build affordable healthcare plans using a self-insurance model. Az Business sat down with Johnson to talk about his latest passion.

Az Business:

How has your political background helped you in the private sector?

Paul Johnson:

It helped me with contacts, with maturity and with developing an understanding of how things work. Politics also gave me a clear understanding about how the economy works. What drives the economic engine isn’t government, it’s the private sector. It’s innovation, creativity and people producing products. As that happens, government taps into that engine and draws off money to pay for things we see as important — education, police, transportation. But if you overload the engine with too much friction, the engine shuts down. So you have to constantly recognize that there is a benefit to keeping both moving.

AB:

What prompted you to found Redirect Health?

PJ:

As mayor in 1990, I started off having a series of challenges. The budget had crashed. We were trying to find ways to save money. I began the process of doing a self-insurance model for the City of Phoenix. They were able to complete the process later and it did create significant savings for the city. When I left, I went onto a couple boards, including Arrowhead Health Center. They had some unique things they did that focused on the patient. We had different challenges we had to face and the biggest one was the rising cost of healthcare. We went to a self-insurance model. David Berg, who built Arrowhead Health Centers with his wife, Janice Johnston, is a little crazy, but he’s a genius. He did things that every other insurance company would have said you cannot do. He got rid of deductibles, he got rid of co-pays, he began watching and negotiating claims and made certain the claims were brought down in price. It made a dramatic difference. He actually cut his costs 50 percent below the cheapest quote in the fully-insured world. Two years ago, we had friends ask us about the system and we decided to create a commercial product, and that was the beginning of Redirect Health.

AB:

How does Redirect Health work?

PJ:
Redirect Health’s EverydayCare is available for less than $100 per employee per month. Not only does this plan meet all Minimum Essential Coverage (MEC) requirements stipulated in the Affordable Care Act, but it addresses the vast majority of healthcare needs that people will encounter, such as treatment of coughs and colds, diabetes, asthma, pain and injury — including chiropractic and virtual rehabilitation — and other common ailments. Care is included at no additional cost at Redirect Health Accredited Health Centers.

AB:

So, are you an insurance company?

PJ:

Redirect Health is not an insurance company. However, its health care plans do provide companies with an avenue to meet Minimum Essential Coverage (MEC) and Minimal Value Plan (MVP) requirements stipulated by Obamacare. Plans fall under a portion of the law that enables employers to self-insure. While the EverydayCare plan meets the total needs of many employers, Redirect Health also offers Premium Plans that use health insurance companies to supplement risks specific to a company’s workforces, such as coverage for specialists, hospital stays and drug benefits.

AB:

$100 per month is less than my bi-monthly healthcare payment. How are costs kept low?

PJ:

We eliminate waste in the system so members can get care quickly and efficiently. We also have a care logistics team that helps members navigate the system and identify the most efficient and affordable route for treatment – without sacrificing quality. In many cases, we even improve the quality of care. Most healthcare companies are filled with waste, administrative burdens, inefficient processes and unnecessarily high procedure rates due to unreasonable requirements from traditional, status quo insurance agencies. Redirect Health is different. We eliminate waste and unnecessary administration so we don’t have to charge more. We redirect care through the most efficient means possible. For instance, certain procedures that cost thousands of dollars in a hospital can actually be performed in select clinics for a small fraction of the cost and with the exact same quality.

AB:

How do you think Redirect Health will change the healthcare industry?

PJ:

It already is changing the industry. It starts by understanding that everything we are being told about Obamacare is not true. People are utilizing Obamacare as a means to move their product. That’s what is happening. Here’s an example: A stucco company is told it has 100 employees and only five were insured last year and now it has to offer 100 percent of them insurance this year and it can get a policy for $500 per person and if the company doesn’t buy the policy, it won’t be in compliance. Nothing about that statement is true, but it’s being told to employers all the time.

AB:

So what’s the truth?

PJ:

Companies have to meet minimal essential care standards to get out of the $2,000 penalty. They have to file the forms. If companies do those two things, they are 90 percent of the way there. Companies do not have to have the strategy of buying health insurance. That’s not what the law did. It allowed for a self-insurance model.

AB:

How important are innovative companies like Redirect Health to growing the economy?

PJ:

One of the greatest strengths in the United States is weird people. We exalt weird people. We allow them to do miraculous things. Over time, we take their inventions and products and create revenue and tax revenue from it that creates the ability to educate a whole new group of weird people — Steve Jobs, Bill Gates and others. The real challenge is when people begin to believe that you can fix the problems by making everyone equal and getting rid of the gap. When that happens, they quit creating, they quit innovating.

AB:

Do you miss politics?

PJ:

When I left politics after I lost the governor’s race, I had to think about what I wanted in my life and what was important to me. I came to the conclusion that it didn’t have to be politics. I realized what was important to me and it became my mantra: I needed to think the unthinkable. I needed to change the world. And I needed to have a blast. Redirect Health is a group of like-minded people who are thinking way beyond the unthinkable, they are trying to change the world and they are a fun group of people to be around.

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Michael Gossie

About Michael Gossie

Michael Gossie is an award-winning journalist who has earned more than 50 awards for writing, editing and design. He studied economics at Elmira College in Elmira, N.Y., and put his entrepreneurial spirit to work in 2007, using a 200-year-old family recipe to launch an Italian sauce company. He is a competitive marathon runner, Ironman triathlete and is most proud of being the founding president of the Steuben Arc Foundation in Upstate New York, which serves individuals with developmental disabilities, including his sister.

3 thoughts on “Paul Johnson moves from politics to healthcare innovator

  1. Spalding

    Very interesting and informative interview and I thank Paul Johnson for what he is doing. I think he is exactly correct and after representing lawyers, as their marketing specialist, who work with healthcare institutions that are trying to work with insurance companies, I have seen firsthand how convoluted and horrendous the process is. Bravo Paul!

  2. Spalding

    Bravo Paul on working to create an efficient system for everyone when it comes to healthcare and its costs. Having represented lawyers who worked with hospitals and Dr.’s in collecting accounts receivable, I have seen how horrific the whole process is. There was not one individual that dealt with insurance companies on any side of the table who had a nice word to say about insurance companies. The do have systems that primarily benefits them and not their clients or members. Redirect Health seems to be changing that….thank you Paul!

  3. Paul Breslau

    Thanks to Paul and his associates the Redirect Health model has been the perfect solution for several larger clients. They are able to comply with the Affordable Care Act while providing a valuable health care to employees and their dependents. In my opinion the Redirect Health strategy is the best in the industry for larger employer groups.

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