Case Study: A Secretary Died Avoiding a $1,500 Deductible. Wisconsin Built Something So It Would Never Happen Again.

[00:00:00] Before we start, I want to invite you to Rosetta Fest 2026 in Nashville. This is where employers, unions, and clinicians who are cutting healthcare costs 20-50% while improving care and outcomes share exactly how they did it. Operators learning from operators with patients at the table. Learn more and register at rosettafest.org. Now let's get into today's conversation.

[00:00:25] Hey there. Welcome to a special series within the Relocalizing Health podcast as we count down to Rosetta Fest in Nashville, July 29-31. Each one of these episodes is a quick look inside the book and the communities that inspired it. Real places, real numbers, real people who decided to stop waiting for somebody else to fix healthcare and just built something better themselves.

[00:00:54] You don't have your ticket to Nashville yet. Go grab it at rosettafest.org. This is where people in these stories will actually be in the room with you, very open to sharing their methods and excited to have you copy it and run with it in your community. So let's get into it.

[00:01:21] You know, most employers think they've got to solve healthcare on their own, inside their own four walls. But this is a story of employers who decided to cooperate instead. And it's really changed everything in Wisconsin.

[00:01:35] But it started with a face that Patrick Blackhall can't forget. He was the CFO and COO at Rice Lake Area School District in Northwest Wisconsin. And back in 2011, facing the mandated budget cut under Act 10, he built a $1,500 deductible into the plan.

[00:01:55] It seemed reasonable and responsible. The care had proposed it. And there was no obvious alternative. But a secretary, you know, came to his office. Her husband was out of work. Bills had stacked up. She said plainly, I can't afford $1,500. I won't use it.

[00:02:13] Unfortunately, two years later, she died of cancer. She avoided care until it was too late. And sadly, this is a story that is all too common around the country. And she left behind a family that had depended on her income. Patrick says it really directly as a person can. He said, that had a massive impact on me and how I thought about healthcare. I did not want this to happen again.

[00:02:38] And that moment grew into what's now the Employers Healthcare Cooperative of Wisconsin, which now covers 23,000 lines across the state. So let's watch how it grew. But just give you a little context. So you feel the wall they were up against. Wisconsin's one of the most expensive states in the country for healthcare. They have some of the most price gouging hospitals in the entire country.

[00:03:08] And the big systems really set the pricing for and everyone else follows. A lot of communities face what's effectively a monopoly. And as school districts got crushed, budgets got cut 5% under Act 10. But health costs climbed 10 to 15% a year. So cut teachers, cut programs, cut benefits. That was just the brutal math of it.

[00:03:34] But Patrick's insight about that deductible really was very enlightening. And the answer was never to make care more expensive for people who can't afford it. The answer was to make the right care available for free. And his exact words were, I had to get people access to basic care at no cost. So I decided we must provide access to primary care free.

[00:04:03] And that's one of the rare parts of this story. And it's a distinct thread of this episode. And it's also one that's really prevalent around our system. And this was something almost no broker in Wisconsin would touch. But Patrick did have one who said yes. Sarah Paints, she didn't flitch.

[00:04:28] Patrick said, amazingly enough, I had one of those rare brokers that said, let's do it. And during the worst of it, she talked to Patrick more than she talked to her own husband. And she later left her firm, wouldn't support the model, went out on her own. And she still serves some of the cooperative roots today. But I want to be candid about this, particularly for those pioneers early on.

[00:04:54] You know, Patrick said plainly in year one, he called it a dumpster fire. Those were his words, not mine. This is about almost a decade ago. They jumped into reference-based pricing with almost no contracts in place and less than two months to launch. This is not what I'd recommend, by the way. And a workforce that mostly disappears for the summer, so it was barely time to educate anybody about this.

[00:05:21] He was working 40 hours a week on top of his actual job, just trying to fix these health care problems. And then in September, the local hospital system sent him a letter. They sent paid bills that weren't charging or were going to start Dallas billing your employees. And then had an email summoning him and the superintendent in the CEO's office.

[00:05:44] And in that room, the hospital's CEO spent 10 minutes berating them, told them their plan was terrible, reminded them that the hospital employed 800 taxpayers, and issued them an ultimatum about what they were going to do. Patrick looked down and said, in effect, go ahead, balance bill every member. We can't afford it. They can't afford it. And we're going to dispute every single bill

[00:06:12] and take it to the local paper to explain how you're treating the school district. This is a place where it's not unusual for a hospital to charge 300%, 500%, 1,000% of Medicare rates. But the VP of contracting at the hospital jumped in immediately and said, well, wait, hold on. We don't need to do that. I'm sure we could work out something. And they did. And they got a direct deal. And that's one of the things we found many, many times.

[00:06:40] Once you have a frank conversation, there's problems that the employers can help solve for the hospital as well. But sometimes you have to have some uncomfortable conversations. But, you know, again, along the way, it wasn't easy. We had three of the nine school board members who were lobbying to fire Patrick. And it was a closed-door session about the plan and about the man who had built it. Patrick wasn't in that room, but the superintendent was in the helpline.

[00:07:09] They had to do this. The board trusted them enough to see it through. And that's really, you know, the fix was in that primary care, was in that direct contracting. And Patrick literally got in his car and drove across northwest Wisconsin negotiating contracts procedure by procedure. Every place an employer couldn't get good access became the next stop. By the way, now you don't have to go through that level of effort.

[00:07:36] There's a lot of folks make it a lot easier, but it shows what's possible. And then the idea that, you know, really changed it from a school project into a movement. And as he was accumulating these contracts, it's like, you know, this shouldn't be just for Rice Lake. We should share the value we've created here. And so there were two other employers. Sarah, their broker was working with Menashe's joint school district and Walker Forge.

[00:08:05] They saw the results and wanted to. And in 2021, Walker Forge's president, Brian Adesso, proposed a cooperative. His logic was beautifully simple. He said schools already cooperate on things they can't afford alone. Why not this? So that's when they formed the employers cooperative of Wisconsin, this health care cooperative.

[00:08:25] And they had a five member board from the member employers lean, you know, members just chipped in $2.50 per employee per month, plus $250 a month. That just helped run some of the operation. Here's the leverage. And what was Patrick's pitch? He said, we always lay out what that we have more than 20,000 belly buttons.

[00:08:52] And when they talk with the health systems and the health care, they say they want to work with them directly. It's opened up a lot of doors. So something that started with a single 300-person district that never could have opened the doors, now it is. And they have 23,000 lives that they're supporting. So every member employer gets a dedicated free primary care clinic.

[00:09:17] You know, and that's a real key, an answer to what had led that secretary to unnecessarily be a victim of the system. You remove the barriers that turn in a manageable problem and avoid it from turning into a catastrophe. And so they work with partners all over the state. They're a novio, neopath, clear path clinic. And they make it very, very affordable.

[00:09:45] And it's something that they also stock generics in the club, in the clinic, rather. And they do labs in-house. And there were two cancer cases that really tell it better than any spreadsheet. It was a 64-year-old man, not somebody who'd normally go to the doctor. He came in for a routine physical because it was free. And he had an elevated PSA, aggressive prostate cancer, taught early.

[00:10:15] And five years later, he's clear. There was a woman who had a cervical cancer, also caught early, at a very treatable stage. And her provider said flat out, you know, without the free clinic, this wouldn't have been caught. And so Patrick blind was, I know they would not have been caught if not for a clinic. And it's really solidified that decision. And one of my favorites was a story with a surgeon.

[00:10:41] A member's surgery moved from a $59,000 procedure to a direct contract alternative. And the surgeon called Patrick up to ask why he lost that case. And we learned how little that $59,000 he was actually seeing. He went out and built his own surgery center. And he now collaborates with the cooperative. And the range of results are significant.

[00:11:08] Some groups had cut their costs 45% in year one. Others had held their costs flat for eight years. While comparable, I'm more than 80%. There's an independent actuary at Windsor Strategy Partners that found cooperative groups are running about 22% better than comparable groups. And this is one of the through lines to the book.

[00:11:34] This is really about taking ownership and cooperative economics. The same instinct that built rural electrification a century ago is what's happening in healthcare. Neighbors and, you know, neighboring businesses are pulling together. They're neighboring, you know, employers like the school districts are pulling together in a way that nobody could totally do this on their own in the same way. And this is one of the pieces that I really love.

[00:12:03] Rice Lake didn't even find the Health Rosetta community until that 2023. They all built this from scratch on their own. And now he's got, he's an active member of the Health Rosetta community. And that's helped them find additional partners. They can do more things in pharmacy and other areas. So they continue to not only contribute their learnings, get learnings back out that they might not have been able to find on their own. And so his elixir, you know, basically he's quote him.

[00:12:32] He said, there's a way to fix healthcare. It's a journey, but employers and communities therein have to join together to do it. And that's really the big takeaway. Sometimes the biggest unlock isn't a better vendor. It's a better employer who really cares about their workforce. They don't need any permission to get started. Rice Lake didn't have a playbook, you know, nearly a decade ago. They just built it.

[00:13:00] Now they're part of the community and they serve 23,000 people across Wisconsin who are having these kinds of dramatic results. And Patrick is coming to Rosetta Fest. He's happy to share. He's actually coming with last count. I heard at least 15 of their members are joining Rosetta Fest and they will be an active part of the employer track.

[00:13:24] And so I really hope to have you all meet them and learn from their experience. Well, that's the story for today. If it resonated, the new Relocalizing Health book is going deeper into that and Nashville goes deeper still. So Relocalizing Health comes out July 29th right at Rosetta Fest. Every attendee will get it. You can pre-order a copy now on Amazon.

[00:13:53] And if you want to be in the room when that happens, get your ticket at RosettaFest.org. See you in Nashville.