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Thoughtleader Profile: Tom Kelly, CEO of HealthSmart

Tom Kelly knows what’s wrong with America’s healthcare system and how to fix it.

Tom Kelly, CEO of HealthSmartCEO of America’s largest independent healthcare TPA, he’s a contrarian who has turned HealthSmart into what he calls an “un-carrier,” i.e., a firm that does just about everything differently than Blue Cross, Cigna, Humana, and United. HealthSmart’s mission is to empower companies to dramatically control their healthcare costs. To do so, Tom has advocates not just incremental or Band-Aid changes but a radical transformation of the healthcare industry.

Thanks to his 30 years’ experience in healthcare administration and finance, Tom is also very much a pragmatist who has put his anti-traditional ideas into practice. Consequently, hundreds of his HealthSmart clients have successfully tested these ideas and thus proven they work well … exceedingly well!

A few examples:

Price and quality transparency. Give people “blue book” data and you get better healthcare at lower prices immediately.

Bundled pricing. Don’t let every specialist in the hospital send a separate bill, negotiate a single inclusive price and then hold the hospital responsible for results.

Intelligent intervention. By managing serious diseases, HealthSmart is saving clients up to 85% on dialysis costs, with average savings of $800,000 per patient over three years. Yes, that’s eighty-five percent and nearly one million bucks per individual patient.

Via these and other innovations, Tom has so far accomplished two things few in the industry ever thought possible:

1. Put the power to make healthcare decisions into the hands of ordinary people and take it away from healthcare professionals and administrators.

2. Deliver to employers a detailed view of where their healthcare investment has gone and is going—and the means to control it so it can no longer run out of control.

In short, Tom Kelly provides for his customers and acts as a voice of sanity in the healthcare industry as a whole, offering fresh thinking that is authoritative and accessible and practical analysis that can be acted upon.

A few more examples, from his many published works in Managed Healthcare Executive Magazine, Executive Insight,, The Self-Insurer Magazine and more:

“New York Presbyterian vs. ConEd: the Case for Hospitals as Utilities,” published in Executive Insight

New York’s Consolidated Edison (ConEd) is an electric power utility regulated by its local government to operate as a business that provides essential services to the public. Traditionally, an extremely high level of public interest in providing a service widely, even universally used justifies such government involvement. Economic efficiency is best served by a monopoly here rather than within a competitive marketplace.

So why not hospitals as public utilities? Can’t a case be made that healthcare too constitutes an “extremely high level of public interest”? What’s the difference between ConEd and a hospital like New York Presbyterian as pertains to justification for government involvement?

“Population Health Management: Program or Pet Rock?” accepted for publication in The Self-Insurer

Almost everyone in healthcare today is talking about implementing Population Health Management as a strategy to achieve better value-based quality care. But does Population Health Management offer enough real advantage to make it an enduring program? Or is this just a fad that will be discarded when the next new idea hits the circuit?

“Transforming Claims into Credit Card Charges,” requested by Employee Benefit Plan Review

No other part of the US economy uses anything like healthcare’s arcane and confusing medical claims process to run its finances. The claims process has outlived any usefulness it ever provided and is now an impediment to each of the parties involved in paying or being paid for healthcare. Why shouldn’t claims be handled like credit card purchases?

“HealthCare’s Need for Disruptive Change: Let’s Put Insurers and Providers on their ‘Back Foot,’” requested by Employee Benefit Plan Review

Much has been written about the impact of disruptive change in transforming industries, e.g., Clay Christensen describing how industry outsiders can take on giants by applying new technology and new thinking to challenge the comfortable status quo. Has the time now come for the disruption of healthcare? Why not a new approach that uses technology and new ideas to move the healthcare system away from the hospital and its physician providers to a truly patient-centered paradigm?

Other subjects Tom plans to tackle for business and healthcare publications…

• What happens when “patients” become “customers”?
• Why hospitals try so hard to conceal their costs and success rates.
• Why the recent spate of hospital mergers will actually INCREASE costs!
• Can you name the single biggest factor in healthcare price differences?
• Demolishing the arguments against self-funded healthcare programs.
• Why employees—and CFOs–frequently prefer onsite clinics to big-name alternatives.
• With pharmacy being the most costly service for employers, here’s how some have cut expenses by 20%.

Tom concludes: “Over the past five years, the Centers for Medicare and Medicaid Services has been a major force for change, introducing quality measures, rewards and penalties focusing on ‘never events,’ and expanding the responsibilities of hospitals to include a safe return home (and no readmission). This same kind of leadership is now needed to drive administrative simplification and transparency around both quality and price.”