Andrew Naugle

Q: What do you do at work on a typical day?

I work in what we call the Technology and Operations Solutions practice. Milliman's corporate headquarters is co-located here in Seattle with a few consulting practices like mine.

Our practice has two major lines of business. One is a product called MedInsight, which is a data warehouse and electronic health information technology platform that we sell to health plans and other organizations that finance healthcare. Clients use MedInsight to track where they’re spending their healthcare dollars so that they can better manage those expenditures. The other side of the house is what we call our management consulting practice. Our consulting group provides traditional consulting services for health plans, insurance companies, third-party administrators, hospitals, and employers—basically any organization that participates in the healthcare industry. We provide a broad range of strategic and management consulting services to these clients, generally focused on helping them answer questions related to how they could improve their business operations or performance.

Q: What's your role?

I have a few jobs. I'm a principal, a profit center manager, and a consultant. As a principal, I’m responsible for identifying prospective clients and generating revenue for the practice. As a profit center manager, I’m responsible for managing people—hiring, conducting performance reviews, coaching, supervising, etc. I also do a lot of consulting to clients. I'm an expert in health plan administration, and I do a lot of writing for clients. This is where my English major background comes in. I help clients write all sorts of documents—speeches, proposals, business plans, documentation, and so forth. I’ve even written some congressional testimony. I have several clients that hire me to help them write proposals to the government. As a result, I’ve learned a lot about government programs like Medicare, Medicaid, and TRICARE. So if you ask, “What do I do?,” I’d say, I provide consulting services on topics of administration and operations for health insurers and I also do a lot of work to help clients write proposals for government business.

Q: How much has the healthcare environment changed over the course of your career?

As a consultant with expertise in administrative operations, I have long advocated for the health insurance industry to focus on reducing its administrative costs. And for the first seven years of my career, it was difficult to convince clients to focus on that. If you’re a health insurer and you bring in a dollar in revenue, about 85% of that dollar goes to pay for benefits, about 12% of it goes for administrative expenses, and you probably make about 3%. Historically, when the industry thought about cost saving, it focused on the 85%, spending billions of dollars trying to create programs to reduce benefit cost. That can be a difficult thing to accomplish. In order to manage benefit cost, you have to change other people’s behavior-- you have to make patients do different things and you have to make doctors do different things. Patients have to live healthier lives. They have to get more exercise, they have to eat right, they can't smoke, and so forth. You have to make doctors change the way they practice medicine. Getting patients and doctors to do what you want them to do can be very challenging.

In the last year, the White House has highlighted administration as an area where industry should be thinking about ways to reduce cost in the healthcare system. That attention to the issue has made the industry a lot more interested in thinking about administration and ways to manage administrative cost. I try to tell my clients that managing administrative cost is a lot easier than trying to manage benefit cost. It should be, because you as a health plan just have to change your own behavior. You control processes, staffing, policies, etc. Over the last year, since the healthcare reform discussion really cranked up, health plan administration has moved to the forefront as an area where the industry is interested in saving money. And that's been very good for our business.

Q: Is it possible to look at any other country for a model of healthcare reform that might be applicable to the United States?  

I’m not sure that there is a single foreign healthcare system that offers a silver bullet solution to America’s healthcare reform needs. There are probably components of foreign systems that, if implemented here, could improve our system. It’s important to remember, however, that many of the foreign healthcare systems cited as being especially effective cover populations that are substantially smaller than the United States. If you take the top 10 countries on the World Health Organization’s ranking of the world’s health systems, the total population is about the same as the U.S. population. I don’t think we have a good handle on the scalability of those programs.

If there is one similarity among all foreign programs, it is the restriction of choice and control. Americans value choice—of doctor, of procedure—and they like to control their own healthcare situation. Whether or not Americans will be willing to trade choice and control in exchange for insurance for everyone remains to be seen.

Q: You graduated from college as an English major and now you are an expert on the field of healthcare and a principal at Milliman. What or who brought you to Milliman?  

My career in the health insurance industry started with a summer job as a typist at a newly formed company that had been set up by a health insurer called Humana, to pursue a new book of government business called TRICARE. I ended up working for Humana for three summers and then after graduation from college, they hired me as an editor and technical writer. That’s where I got my start in healthcare. TRICARE is like a health insurance 101 class—I learned the basics of health insurance by writing about TRICARE.

While I was at Humana, I met a consulting actuary named Tom Nightingale who specialized in TRICARE. Tom worked at a company called Milliman & Robertson, which was known in the industry as M&R. After a few years, I left Humana and went to business school at Notre Dame. When I was again looking for a summer job, my colleagues at Humana told me that if I really wanted to be a consultant in the health insurance industry, I should work at M&R. They put me in touch with Tom Nightingale, who connected me with Kent Sacia, a principal in charge of M&R’s newly formed information technology consulting unit, which would ultimately became Milliman’s Technology and Operations Solutions practice. They offered me a summer position and then a full-time position after I graduated from business school.

Q: Can you talk about your work/life balance?

I work and travel a ton. There are times when I might be in the office just a few days a month. I always take work home at night and my laptop comes with me on vacation. This is not a 9-to-5 job. While it may sound like I have no work/life balance, our consultants trade those demands for a level of autonomy and flexibility that puts them in control of when and how they do their work. In our practice, the management philosophy is “consultants have work to do, and they have 168 hours each week to get that work done.” For the most part, how they do that is up to them.

The work environment in a Milliman practice is driven by the equity principals who own that practice. Our practice offers a relaxed work environment. We’re pretty open to alternative work arrangements. We tend to optimize for the work style of the individual, rather than traditional office structure. If you’re more productive at home, then work from home. If you prefer to be in the office, then work in the office. The only constraint to that approach is the commitment we make to the client. If you have to work after hours, during the weekend, on vacation, or at the client site in order to meet your commitments to a client, then that is the expectation. Otherwise, most of our consultants have flexibility to control how and when they do their work.

Personally, I thrive on that autonomy and flexibility to control my work environment and work style. A belief in entrepreneurship and personal responsibility is part of the fabric of Milliman’s culture. It is a basic foundational principle of the organization and that flows over into local office policies and practices.