Wilco Business Review • January 2022

2022 | Issue 1

BUSINESSREVIEW The Gold Standard in Business News

Williamson County, Texas

FIVE TEXANS

ARE CHANGING THE WAY AMERICAN COMPANIES PURCHASE HEALTHCARE FOR THEIR EMPLOYEES

PRACTICAL WAYS TO ACHIEVE BETTER EMPLOYEE OUTCOMES AT LOWER COST Increase Employee Benefits • Eliminate Deductibles & Co-Pays Lower Your Healthcare Spend • Increase Quality in Your Plan

Taylor Rogers Principal - Benefits Advisor Cairn Advisors

Did you know that a certain multi-billion dollar coffee chain spends more money on healthcare than they do on coffee beans?

When purchasing benefits, employers have far more power than they realize.

We design employer-built health plans, which eliminate middlemen and reduce wasteful spending. By kicking bureaucrats out of the exam room, and collaborating with the local healthcare community, our clients can dramatically reduce spending and restore the relationship between the patient and the physician.

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WILCO

BUSINESS REVIEW

CONTENTS TECHNOLOGY

18

BUSINESS BRIEFS

28

You Don’t Have To Stay Frustrated With Your Internet Speed

PEOPLE ON THE MOVE

18

20

28

FEATURED 5

ON THE COVER

Thrive Principals Roy and Michael Jones, CAIRN Co-Founder & Benefits Advisor Taylor Rogers, BevCap CEO Joe LaMantia, Texas Medical Management Founder Sean Kelley photo by Todd White

All rights reserved.

The Wilco Business Review is published monthly and mailed to C-level executives, business owners, policy makers, and community leaders in Williamson County, Texas and surrounding areas.

Mail may be sent to: Wilco Business Review P.O. Box 213 Jarrell, TX 76537 info@wilcobr.com Wilco Business Review is a Fidelis Publishing Group, LLC publication and a product of AdvocateNewsTX Newspaper.

Copyright © 2022

2 WILCO BUSINESS REVIEW | 2022 • ISSUE 1

COVER STORY • SELF-FUNDED HEALTH CARE CEOs Are The Gatekeepers Intersections In Value • Real World Scenarios Free Market Glossary Giving Voice To The People Who Matter Control Your Own Healthcare Destiny

20

TEXAS BUSINESS

24

PUBLIC SERVICE PROFILE

26

ECONOMIC DEVELOPMENT

Kevin Smartt And The New Paradigm In Convenience Stores

Nelson Jarrin’s Journey To Achieving The American Dream

Breaking Ground On A New $2 Billion Multi-Use Project In Round Rock

24

>Banking & Lending

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FROM THE

PUBLISHERS The Gold Standard in Business News

Published Monthly

Publishers

Michael Payne Catherine Payne Executive Editor Ann Marie Kennon Executive Administrator Camy Reynolds Senior Writer Charlotte Kovalchuk Editorial Writers Cassidie Cox · Megan Beatty Columnists IT • Ben Lake Real Estate • Tyler Wolf Finance • Will Boughton Videography Todd White Photography David Valdez · Rudy Ximenez · Todd White Christianna Bettis Digital Media Director Jenny Campbell Graphics Sandra Evans • Ann Marie Kennon Distribution David Schumacher IT/Webmaster Jesse Payne Consultant W. Ben Daniel Public Relations Janet Hage Information and Marketing

Senior Advertising Executive Mark Elliott 512.240.2267 | 512.746.4545 mark@wilcobr.com

4 WILCO BUSINESS REVIEW | 2022 • ISSUE 1

E

ach year, every CEO of small to medium size companies (60-500 employees) is faced with the prospect of what the increase on their healthcare spend will be; without a doubt, it will go up, and seems to escalate with every annual renewal. What once was a great benefit to the overall health of a company, has now become a ball and chain; literally destroying the very foundation of many businesses. Rates of increase have become increasingly burdensome, and after years of hearing exasperated CEOs bemoan, “These increases are unsustainable,” their prognostications have become today’s reality in much of the traditional health insurance space.

This issue of the Wilco Business Review provides a comprehensive guide to a growing paradigm shift in employer provided healthcare—self-funding. This increasingly popular alternative takes what the health care system does best, wrings out all the unnecessary costs, and provides a simple mechanism for business owners to chart their own destiny in healthcare with built-in fail safes designed to minimize out-of-control spending. Self-funding has been utilized by many major corporations for decades, but technology has made it a viable option for another entire market segment of companies where the CEO still sits behind a desk at work and maintains a close eye on expenses.

Inside are several experiences, viewpoints, and options concerning self-funding. One of the primary questions, Can we afford to do it?, is frequently answered with a resounding ‘yes’ that results in better outcomes, less out of pocket dollars for employees, and a much lower overall healthcare and pharmacy spend. After decades of major healthcare providers ignoring the undeniable changes precipitated by self-funding, many are now inclined to turn an ear toward participation in what they now understand is the inevitable course for successful business owners.

Shifting gears to economic growth, Pearson Ranch, a multi-billion-dollar mixed use project in Round Rock, is more evidence of the success and desirability of Williamson County as a place to locate new business. Additionally, read about Kevin Smartt, the CEO of Texas Born Stores, America’s most innovative concept in convenience stores with the first one located in Georgetown.

Finally, it’s a privilege to introduce Nelson Jarrin, who shares his path toward public service and the inspiring story of his life and how his decisions have impacted his career choices.

Thank you to all who read the Wilco Business Review. It is rapidly growing, as evidenced by the need to increase the page count in the upcoming issues. We appreciate your support and look forward to sharing your great stories of triumph in business in one of the fastest growing places in the world.

Michael Payne

Catherine Payne

SOLUTIONS IN HEALTHCARE

SELF-FUNDED HEALTH CARE

YES, YOU CAN

SELF FUND YOUR Squality healthcare. The contributors and subject matter experts in this special section have put a spotlight on the manner and process to your employees’ outcomes, eliminate their deductibles and coCOMPANY’S improve pays, and drastically reduce your corporate healthcare spend. you have between 60 and 500 employees, odds are—even if you HEALTHCARE putIf this magazine down right now—you will be considering self funding elf funding can be an answer to providing your employees with high

options in the next two to three years. Perhaps you haven’t been able to give your employees the pay raises you feel they deserve; look no further than the skyrocketing increase in health insurance premiums year over year. Every year at renewal you tell yourself that these increases are not sustainable.

It’s not just unsustainable for your company—the deductibles your employees pay inflate every year as well. To avoid these costs, many people do not seek care when they’re sick, or to manage chronic conditions.

Further, they seldom, if ever seek preventive care. Obviously, this has a significant and nocent effect on productivity.

It will most definitely pay you to survey and scrutinize other businesses already engaged in this new paradigm. Pay close attention to the methods they employ to improve healthcare outcomes, eliminate deductibles and co-pays for their employees. Familiarize yourself with the means available to save substantially while maintaining your role as fiduciary with the savings incurred on your healthcare spend.

Don’t assume you are not a great candidate for a self funded plan.

You don’t have to have $5 million in the bank. These plans are not only viable, but have been thriving in thousands of companies across the United States for years.

When your employees are spending less or nothing at all for their wellness, it will increase their satisfaction and retention. The savings you will incur will allow you the freedom to offer raises from year to year, further strengthening your retention position.

~Mike Payne

2022 • ISSUE 1 | WILCO BUSINESS REVIEW

5

SOLUTIONS IN HEALTHCARE

WHAT CAN WE DO

CEOs: THE

DIFFERENT?

˜Self-funded Employers

GATEKEEPERS

FOR EMPLOYEE SELF-ADVOCACY

by Ann Marie Kennon

“BUSINESS OWNERS ARE LARGE H E A LT H C A R E CO N S U M E R S . T H E E X P E N S E A S S O C I AT E D W I T H T H E I R E M P LOY E E S’ H E A LT H C A R E I S O U T O F CO N T R O L , A N D T H E C U R R E N T PAT H I S N OT S U S TA I N A B L E.” ~ TAY LO R R O G E R S

W

hat can we do different? Ask Roy and Michael Jones, principals in one of the most successful mortgage companies in America, headquartered in Georgetown, Texas. The Joneses began to seek alternative ways of administering healthcare for their employees due to precipitous increases in premiums from year to year combined with higher out-of-pocket costs for employees. Add to that Roy Jones’ personal encounter and a very large medical bill that left him wanting to leave a legacy of having done something about the incessant and spiraling cost of healthcare.

WHAT CAN WE DO ABOUT A HEALTHCARE SYSTEM THAT IS FAILING US? Enter Taylor Rogers, a benefits consultant. Rogers encouraged Thrive CEO Roy Jones to read Dr. Marty Makary’s bestseller “The Price We Pay” to understand how employers could shape healthcare from the bottom up. He was quickly sold on reinventing the way healthcare was administered and delivered to his employees. Jones teamed up with Rogers and they founded a new company—one that would operate on Free Market Principles and provide employers throughout the United States an opportunity to improve their healthcare plan dramatically. This new approach would deliver a higher quality of experience to employees and simultaneously lower costs.

THE TIPPING POINT Roy Jones’ granddaughter was a dependent; he took her to a freestanding E.R. for some inflammation. They observed her overnight, gave her morphine and antibiotics, and released her the next morning.

Her bill was $132,000 and Roy, feeling helpless, vigorously scrutinized the charges.

After reading “The Price We Pay”

by Marty Makary, he eventually settled the bill for substantially less.

That was when Roy decided enough was enough.

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Rogers and Jones agreed on one aspect of the industry, and the environment—that it was completely untenable.

As Rogers said, “You can’t manage what you can’t measure.”

Their innovative new advisory firm was named CAIRN—a stone marker used to show the way. Rogers says, “CAIRN’s goal is to put companies on a path to success using an innovative process.”

Thrive owners explained to their employees that changes would be made, not for the company’s bottom line, but to enhance the employee healthcare program. Even so, when they embarked on the new way of doing business, dropped their major medical plan, self funded their healthcare, and created partnerships with free market providers, it was it was clear that members needed robust support and education.

HOW DOES IT WORK? CAIRN is an innovative new company that is fully vested in the idea that healthcare costs are not only manageable but can be lowered. Plus, as costs come down, the company has more money to lower premiums and out-ofpocket costs paid by employees.

Michael explains, “We went from fully insured to open network, reference based pricing1, and direct fee-forservice contracts with providers and pharmacies.” When some employees initially expressed anxiety about not having a traditional carrier, CAIRN, HR, and the executive team took the reins and reached out to people personally.

Roy and Michael walked them through 1

S ee p. 10 glossar y

individual needs or experiences, held “town halls,” and monthly all-hands calls to bolster employee confidence in the transition.

For instance, although the employees had a prescription card, the company also negotiated agreements with local pharmacies. The pharmacies provided transparent pricing in exchange for a reasonable administration fee. The company’s prescription spend dropped from $418 per employee per month to $68. This same type of negotiation took place with primary care doctors, labs, and imaging providers with similar results and tremendous savings.

As the old saying goes, “The proof is in the pudding.” At the end of CAIRN’s second year, Thrive had saved nearly $2 million on healthcare.

PRINCIPLES AND VALUES Applying free market values in the self-funded market is a fast-growing concept. Fiduciaries of health benefits are obligated, under law, to steward payroll deducted contributions responsibly. Unfortunately, in today’s traditional environment, that is increasingly difficult.

In its simplest form, CAIRN brings together willing buyers and willing sellers. It puts healthcare in the same lane as every other consumer purchase; no one brings a third person with them to purchase a car, then pays that person to tell them which car to buy and the options to install. Interlopers like that are common in traditional plans—middlemen who take a piece of the pie without delivering any benefit to the company paying for the plan, or the employee who uses it.

SOLUTIONS IN HEALTHCARE

SELF-FUNDED HEALTHCARE

Dr. Keith Smith, an innovator in the free market medical movement says, “The free market is an exchange between buyers and sellers that is mutually beneficial, where both parties emerge feeling like it was a good exchange.”

KEY TAKEAWAY Rogers says, in closing, “The result of our efforts is that this concept is a tremendous benefit to employer groups.

They are seeing meaningful savings and a greater level of transparency.”

Rogers says CAIRN stands ready to evaluate employer issues with healthcare and will offer a no obligation review and comparison between what employers now use and what they could expect out of a plan created by CAIRN. When employees see the data and incentives and are given access to make their own decisions, four out of five will choose free market options. “At Thrive,” he says, “engagement has steadily grown organically due to the water cooler effect. Employees come back from services, tell everyone how great it was, and that it didn’t cost them anything out of pocket.”

When employees are empowered, through resources and education, they tend to make better healthcare decisions for themselves and their families.

“We are not here to criticize physicians or providers. This is not about us versus them; this is about working with doctors to provide the best outcomes for members, physically and financially.”

Marty Makary M.D.: “The Price We Pay”

Dr. Makary is a Johns Hopkins surgeon and Professor of Health Policy & Management.

He is a leading voice for physicians writing for the Wall Street Journal and USA Today and is a member of the National Academy of Medicine. He has been named one of America’s 20 most influential people in healthcare by Health Leaders magazine.

He is the founder of Restoring Medicine, an advocacy effort to help people who can’t afford their medical bills. Dr. Makary also serves as executive director of Improving Wisely, a national physician collaboration to reduce unnecessary medical care and lower healthcare costs.

His current research focuses on healthcare transparency and the re-design of healthcare. His book “Unaccountable“ turned into the TV series “The Resident” and his newest bestselling book, “The Price We Pay”, was described by Don Berwick as “a deep dive into the real issues driving up the price of healthcare” and by Steve Forbes as “a must-read for every American”.

~martymd.com

2022 • ISSUE 1 | WILCO BUSINESS REVIEW

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SOLUTIONS IN HEALTHCARE

WHAT CAN WE DO

DIFFERENT?

˜Self-funded Employers

INTERSECTIONS

IN VALUE

Q&A with Taylor Rogers and Rich Hejny

Doctors and insurers use a lot of big words.

Here are some of CAIRN’s common sense and empowerment solutions.

We are working to mitigate high cost pregnancies and deliveries. We connect members with independent maternal-fetal medicine (MFM) experts at no cost. One of our doctors reviewed a high risk patient’s sonograms and asked her if anyone had ever spoken to her about kidney stones. She was not aware of any but mentioned she had frequent UTIs and her urologist regularly prescribed antibiotics. The MFM doctor explained that her existing treatment bordered on malpractice; i.e., her kidney stones were a serious hazard that could lead to other complications. He insisted she treat the kidney stones as soon as her baby was delivered. The member was referred, and it all happened because we were able to give her case a second set of eyes. It’s all about outcome.

We had a member at Cancer Center A. The prescribing physician wrote in the case management documentation that the patient would receive a 12-week course of the generic formula of Taxol chemotherapy. The center then billed our plan $30,000 for the brand name drug. We did our due diligence and were able to procure the generic formula from a reputable commercial provider for $9 per dose, for a total of $108. The problem we then ran into was Center A would not allow the member to use the pharmacy program to provide the medication but pay them a considerable amount of money—still significantly less than $30,000—to administer them. We want Center A to get paid for their services but we don’t want them to mark up the drug 26,000 percent.

Cancer Center B was willing to treat the patient with the generic medicine, but was farther away.

We explained we could hire a limousine to take her to and from Center B for 12 weeks and still save thousands. The lesson is not to allow an insurer or provider to use procedural intimidation, fears about delays in treatment, or obscure terminology to ensure they can bill maximum amounts.

8 WILCO BUSINESS REVIEW | 2022 • ISSUE 1

Often, free-standing E.R.s are treated as risky sites of care by commercial health insurance plans due to their out-ofnetwork status. We work with many of these independent facilities to establish reasonable reimbursement rates to provide additional access points for employees. These facilities provide access to quick and convenient care in the event of an emergency.

A member was about to undergo cranio-facial surgery for a sinus complication. It was a $40,000 operation so we sent the case file to a free market surgery center. Upon review, they determined the member did not need the surgery.

As it happened, the member was panic-stricken about the surgery and what the results might look like. The doctors told her that she still may need the surgery at some point in the future, but she did not need it now. They canceled the surgery, gave her some interventions—much to her relief —and she is doing well as of the latest update. The client saved $40,000, the member did not have to have her face cut open, and we assimilated some alternative interventions to give her the outcome she needed.

We never count out the major medical plans, especially when they put their money where their mouth is. One client was in a self-funded plan with a $1.6 million maximum liability. The client was concerned about a member’s potential need for Gamifant, which is typically priced just under $7,000 per 2ml unit. Stop-loss excluded the medication as a covered benefit to the policy, leaving the employer exposed to more than $1 million in additional liability. With a maximum liability of more than $2.6 million, a major medical carrier bet on themselves to manage the risk, and offered the employer a $635,000 fully-insured medical plan. We explained they should be prepared for significant renewal increases, and limited access to claims data, but the math would work in their favor.

Assuming they received a 100

SOLUTIONS IN HEALTHCARE

SELF-FUNDED HEALTHCARE

Providers occasionally say, “We don’t take that insurance,” when they don’t immediately recognize a logo.

They often don’t understand that the plans we build are essentially cash and we ask, “You don’t take cash?

We can pay for care however you wish us to pay for it.”

Our only criteria is that the price we are being asked to pay is disclosed up front. When a provider says, “No”, they are essentially telling our member they only accept blind payment for services; i.e., most commercial plans automatically process and pay claims. That should be a red flag to consumers.

In his book, Never Pay the First Bill, Marshall Allen quotes a statistic that 80 percent of medical bills are incorrect. Why is that okay?

Consumers are intimidated and assume that the provider always has it right. The most powerful tool for us to help the members is to assert that we know we have it right; we have the right provider and appropriate price, so we just make it free. Scan the code for more by Allen in CAIRN’s podcast.

Consider how hard it is for your company to generate a net profit. A mortgage lender may need to produce $200 million in loan volume to generate $1 million in net profit. The plan we designed for our client saved them $1.8 million dollars over an 18 month period.

If we save them $1.8 million over a 24-month period (as we have done with Thrive), we estimate reproducing the effort of generating $360 million in new loan origination—for the same net gain to the company’s bottom line. In leaner industries; e.g., manufacturing or restaurants, where services do not result in large profit margins, companies are forced to replace an entire shift due to annual premium cost increases that are irrespective of correlating increases in net profits.

We never create strategy in a vacuum. Take, for example, a software company with 400 employees, spending just over $2 million on a fully-insured plan. A self-funding analysis showed an opportunity to save $2 million over the next five years. The effort required to build and manage this plan could be better spent elsewhere on revenue generating activities. In addition, they may be concerned with short and long-term M&A activity.

Thus, it made more sense to stay agile on a fully-insured benefit plan.

“THE HEALTHCARE INDUSTRY WANTS YOU TO THINK YOU’RE HELPLESS.” Marshall Allen Is a journalist who investigates why Americans pay so much for health care and get so little in return. His best-seller “Never Pay the First Bill” puts a spotlight on Americans spending more on health care and getting less for their money—while the industry makes record profits. Layers of complexity make it confusing and discouraging to do anything about it. It may seem impossible but Marshall believes consumers can push back and succeed.

image credit: Twitter/@marshall_allen

percent increase at the first renewal, their net exposure was still half of what it would have been on the self-funded plan.

“Never Pay the First Bill” equips families and employers with the knowledge, strategy and how-to tactics they need to fight back and win. Consumers can take back control of their health care.

Allen is also the founder of Allen Health Academy, which produces a curriculum of short on-demand videos to equip and empower employees to navigate the healthcare system. Marshall has investigated the healthcare industry for 15 years, including a decade at ProPublica. His work has been honored with some of the top business reporting honors, the Harvard Kennedy School’s 2011 Goldsmith Prize for Investigative Reporting and twice as a finalist for the Pulitzer Prize. ~marshallallen.com

2022 • ISSUE 1 | WILCO BUSINESS REVIEW

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SOLUTIONS IN HEALTHCARE

SELF-FUNDED HEALTHCARE

ASO- Administrative Services Only (Carrier Third Party Administrator) A carrier acting as a Third Party Administrator of a self-funded Plan. Many health insurance carriers offer both fully-insured and third party administrative services, which are often called administrative services only (ASO) often performed under an administrative services contract (ASC). Health insurance carriers and their subsidiaries provide most of the administrative services for enrollment covered under TPA agreements for health benefits.

Balance Billing Refers to a provider billing a patient for the difference between the provider’s charge and the payment received from the plan.

Deductible The amount of expenses that must be paid out-of-pocket by the individual before an insurer or plan will pay any expenses. Typically, the deductible only applies to claims that happen outside of the physicians office unless it is a “Qualified High Deductible Health Plan.” For example, a patient with a deductible of $1,500 having an outpatient surgery will be responsible for the first $1,500 of charges for that surgery before the benefit plan makes any payment to the provider.

EPO - Exclusive Provider Organization Unlike a PPO, participants with an EPO network plan receive a lesser benefit (sometimes no benefit) if they visit medical care providers outside of their designated network of doctors and hospitals.

ERISA - Employee Retirement Income Security Act of 1974 ERISA is a federal law that requires employer health plans to provide plan participants with plan information, requires an establishment of an appeals process for participants, and gives participants the right to sue for benefits and breaches of fiduciary duty. ERISA also describes and provides guidelines for fiduciary responsibilities for those who manage and control plan assets.

HIPAA and COBRA are amendments to ERISA. Facilitator Vendor Services (Third Party Administrators, Brokers, Consultants, IT vendors, all Non-Medical Providers of Services) Third Party Administrators, Brokers, Consultants, IT vendors, all Non-Medical Providers of Services.

Fee for Service In fee for service, doctors and other health care providers receive a fee for each service such as an office visit, test, procedure, or other healthcare service.

ANNOTATED GLOSSARY

Formulary (RX) A list of prescription drugs available to participants. Formularies vary drastically among drug plans and differ in the number of drugs covered and costs of co-pays. Most formularies cover at least one drug in each drug class. Generic substitution is always encouraged and many times is mandatory. Many have step therapy protocol requirements.

Fully Insured plan A group health plan purchased and insured by a licensed insurance company. The employer pays a fixed monthly premium to the insurance company, regardless of the plan’s claim costs. It is the insurance company that assumes the financial and legal risk of loss if claims exceed projections. If the employer has a good claims year, it is also the insurance company who ‘wins’ and keeps the excess premiums.

HDHP - High Deductible Health Plan A health plan with lower premiums and higher deductibles than a traditional health plan. Being covered by an “Qualified” HDHP is also a requirement for having a Health Savings Account. If an HDHP is a “Qualified” HDHP, Federal guidelines apply.

HIPAA - Health Insurance Portability and Accountability Act The HIPAA Privacy Rule regulates the use and disclosure of Protected Health Information (PHI) held by ``covered entities’’ (generally, healthcare clearinghouses, employer sponsored health plans, health insurers, and medical service providers that engage in certain transactions.)

Meaningful Use Meaningful Use is a CMS Medicare and Medicaid program that awards incentives for using certified electronic health records (EHRs) to improve patient care. To achieve Meaningful Use and avoid penalties, providers must follow a set of criteria that serve as a roadmap for effectively using an EHR. Network (In-Network) Preferred Provider Organization (PPO) A group of medical doctors, hospitals, and other health care providers who have agreed with an insurer or third party to provide health care at reduced rates or a percentage off billed charges to the insurer’s or administrator’s clients. Preferred Provider Organizations themselves earn money by charging an access fee to the clients for the use of their network. They also commonly make money off of the percentage of savings amount (the amount in between the billed charges and the paid amounts).

Non-Formulary Drug Drugs that are non-formulary are typically covered at a lower benefit or not covered by a health plan.

10 WILCO BUSINESS REVIEW | 2022 • ISSUE 1

Non-Preferred Name Brand Drug Part of a Tiered Formulary, Non-Preferred Name Brand drugs will have a higher co-pay than Preferred Name Brand drugs. All Name Brand drugs have higher co-pays than Generic drugs. Formularies vary drastically among drug plans and differ in the number of drugs covered and copays. Most formularies cover at least one drug in each drug class. Generic substitution is always encouraged and many times is mandatory. High dollar Name Brand drugs often require prior authorization and clinical review to determine medical necessity.

Out-of-Pocket Maximum The most a participant will pay during the year for covered benefits. On a written benefit summary provided by the carrier or benefits administrator, this listed out-of-pocket maximum amount may or may not include the deductible depending on how it is written. There can be a lower plan out-of-pocket maximum, in addition to the new ACA Federal out-of-pocket maximum. If the plan out-of-pocket maximum is lower than the mandated federal amount, the participant will continue to pay co-pays until the Federal amount is reached. A participant can have both an in-network and outof-network out-of-pocket maximum for their plan that accrue separately.

Pharmacy Benefit Manager - PBM A pharmacy benefit manager (PBM) is a third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, and state government employee plans.

Preferred Name Brand Drug Part of a Tiered Formulary, Preferred Name Brand drugs will have a lower co-pay than a Non-Preferred Name Brand drugs, but a higher co-pay than Generic drugs. Formularies vary drastically among drug plans and differ in the number of drugs covered and co-pays. Most formularies cover at least one drug in each drug class. Generic substitution is always encouraged and many times is mandatory.

Reasonable & Customary (R&C) Usual & Customary (U&C) The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service.

The “reasonable” amount sometimes is used to determine the “allowed” amount.

Reference Based Pricing - RBP A type of cost saving strategy that is utilized by some benefit plans which sets a maximum amount payable for specific procedures. Typically, the reimbursement assigned to a procedure is based on a percentage of Medicare allowables (e.g.,120% of Medicare).

Reinsurance / Stop Loss Coverage A product designed to protect employers and self-funded health plans from catastrophic losses. There are two types of coverage: Specific - employer protection against a large expenditure by an individual Aggregate - employer protection against excessive claim expenditures for the entire group.

Self-Funded plan / Self-Insured plan A plan in which the employer assumes the financial risk for providing healthcare benefits to its employees. In practical terms, self-insured employers pay for claims from general assets as they are presented instead of paying a pre-determined premium to an insurance carrier for a fully-insured plan. Unless exempted, such plans create rights and obligations under ERISA. Typically, self-funded employers purchase stop loss insurance to guard against catastrophic claims.

Seller Providers of medical services, including facilities, hospitals, physicians, ancillary providers, imaging providers, etc.

Stop Loss Coverage Reinsurance A product designed to protect employers and self-funded health plans from catastrophic losses. There are two types of coverage: Specific - employer protection against a large expenditure by an individual. Aggregate - employer protection against excessive claim expenditures for the entire group Tiered Formulary Drug Plan A type of drug plan with financial incentives for patients to select lower-cost drugs. Formularies vary drastically among drug plans and differ in the number of drugs covered and co-pays. Most formularies cover at least one drug in each drug class. Generic substitution is always encouraged and many times is mandatory.

TPA - Third Party Administrator A company that processes claims and helps manage an employer’s self-funded plan. Responsibilities include maintaining eligibility, adjudicating and paying claims, client and provider customer service, utilization management, etc. It also provides services such as arranging for stop loss coverage, provider network access, a pharmacy benefit management company, case management and assisting with employee education. There are three types of TPAs, independent, ASO (carrier owned), and a hybrid of two (an independent who utilizes carrier networks). The type of TPA an employer hires drastically impacts their interactions with a provider.

Usual & Customary (U&C) / Reasonable & Customary (R&C) The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service.

The “reasonable” amount sometimes is used to determine the “allowed” amount.

BETTER, FASTER, CHEAPER

Patients and Surgeons are the most important people in the operating room.

Employers just happen to be the ones who pay for it.

Sean Kelley is Founding Partner of Texas Medical Management (TMM), which specializes in facilitating surgeries for self-funded employers’ health plans. Kelley began doing his part to fix the health care system when he recognized the unreasonably high cost of care wasn’t about better quality but, instead, was largely due to unnecessary interlopers who add no value to the process.

about 85 percent of the money and, because outsiders cannot assess their quality, surgeons only get 7 percent.”

Kelley is sounding a wake-up call for CEOs who are not yet self-funded. “As in life, many healthcare insiders believe it’s always someone else making all the money. Having run surgical practices in a major hospital system, I became certain it is the hospitals making most of the money. Consider a car maker who knows, to the last bolt, what he is paying for in his manufacturing process. This is not the case for his costs for health care, and no business owner would ever blindly pay other bills in the manner they are obliged to for health care.”

Today, his model provides a win-win in the operating room. “We decided we could improve the quality and change the cost of healthcare. Because of the unreasonably high hospital overhead hospitals, we knew employers were paying a premium for those surgeries. But outpatient surgeries like hernias or joint replacements don’t need a full-service hospital. So, we peer-select mid-career surgeons, invite them to work in outpatient surgery centers, save up to 70 percent on the cost, and pay the surgeon within ten days, saving them time and money for billing and collection.”

MEANINGFUL CHANGE Kelley says hospital systems, big pharma, and even implant systems have all staked a claim in the industry, but it is those affecting the outcome most who are left outside. He explains; “First, there is a lack of transparency about quality and cost. Second, facilities are taking

As such, a main motivation of free market advocates is to fix the system through transparency and competition.

Kelley, through TMM, is taking on areas where they can determine the quality of the surgeon and cut costs with no impact on patient outcome.

Kelley’s clients are self-funded employers who, like many in the free market lane, are saving so much money, they are offering surgery to their health plan members at no cost and in some cases paying for travel. They are even able, sometimes, to include perks, like cash bonuses—to their health plan members.

“Our model is simple and works across many healthcare domains; reward quality physicians and providers by paying them Surgery is complicated, fairly and fast. but it doesn’t have to be.

We reward their quality by sending them patients, which benefits their business. The patient benefits from our curated quality. The employer benefits because we’ve done the homework to provide the most efficient care.”

photo courtesy Sean Kelley

Giving Voice to the People Who Matter

As employers’ gain transparency into their healthcare spending, they are able to measure costs and determine provider quality. Thus they use their value sense to find the highest quality and experience at the best cost. A transparent marketplace obtains quality relative to cost. Kelley says TMM is also expanding their scope to include maternity advocacy and oncology, which, like every other healthcare vertical, should be open to competition on quality, cost, and experience.

Kelley’s ‘homework’ involved eschewing the 10,000 page legislative documents put together by all the health care lobbyists. “We can never outspend lobbyists; but there are existing laws that are opening up the market to transparency.

Those same laws benefit employers and employees, allowing them to see cost up front. The difference is Texas Medical Management is transparent on quality and cost, information necessary to help employers make certain they know lowcost doesn’t mean low quality. If we’re not willing to hold ourselves accountable, how transparent are we?”

2022 • ISSUE 1 | WILCO BUSINESS REVIEW

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SOLUTIONS IN HEALTHCARE

Ann Marie Kennon

annmarie@wilcobr.com

SOLUTIONS IN HEALTHCARE

Ann Marie Kennon

SELF-FUNDED HEALTHCARE

annmarie@wilcobr.com

JOE LAMANTIA WANTS YOU TO

CONTROL YOUR OWN

HEALTHCARE DESTINY

W

hen Joe LaMantia’s healthcare broker admitted he wasn’t allowed to disclose how much he made off of Joe’s beer distributorship business, Joe knew it was time to ditch major medical and fashion a better plan for his companies. “The goal is to demystify self-funded plans for C-suite employees, and the major problem is ignorance,” he says. “We were controlling our losses, our premiums were going up every year, and we were not allowed to see the data. Sadly, the benefit system that was put in place to take care of us has evolved into a commercial industry that keeps companies from understanding and therefore advocating for themselves, or even having the ability to shop around for the best value.”

THE BIRTH OF A PROBLEM The problem we have today got its genesis courtesy of the U.S. Government nearly 80 years ago. After World War II ended, the government put a freeze on salary increases for businesses across the country. To attract and retain talent, clever business owners found a way around the freeze—they began providing health care insurance; the beginning of benefits packages. As a result, people no longer had to care how much they paid for surgery, prescriptions, or checkups.

The healthcare industry didn’t take long to realize they could raise prices, because no one cared. “No accountability” was born because someone else was paying the bill and the person receiving care and services didn’t care about that cost.

12 WILCO BUSINESS REVIEW | 2022 • ISSUE 1

Self-funded healthcare is a cost-effective solution to avoid continually rising premiums in a fully-insured plan.

With self-funding, employers can easily spread the risk of costly claims over a large number of employees and dependents.

BEVCAP: BIRTH OF A COMPANY

As CEO of L&F Distributors, when this quintessential Texan got tired of seeing rates go through the roof, he joined a heterogeneous property and casualty captive1; which provided him 100 percent access to his own data. A year later, when he realized it was not fully meeting the company’s needs, he started his own homogeneous P&C captive; providing coverage for 40 independent beer distributors with 8,000 employees, and each member is an owner and director. All members have control over it.

The success of his captive led to a second company that covered beer wholesalers and, again, a third expansion that put him back in the heterogeneous market outside the beer industry. Today, all three programs are operated by BevCap Management, which covers nearly 30,000 lives across the nation.

In the P&C universe, our auto liability is priced in terms of Power Units, regardless of how many employees each has.

LaMantia says, “We have had great results, and my rate per power unit has been the same for the past three years. You can’t say that about the typical insurance industry; they have had enormous increases in the past year, but we are able to maintain that because we use a different universe for our premiums.”

BevCap maintains rates because their carrier uses loss data from companies trained to put things in place to mitigate claims and help them perform better than the general population.

1 C A P T I V E S A R E CO M PA N I E S F O R M E D U N D E R A PA R E N T CO M PA N Y. H O M O G E N E O U S M E M B E R CO M PA N I E S A R E F R O M T H E S A M E I N D U S T R Y. H E T E R O G E N E O U S I N C LU D E S M E M B E R S F R O M A N Y I N D U S T R Y.

DIFFERENT?

˜Self-funded Employers

This is how much waste there is in the system...

I CAN SEND AN EMPLOYEE AND SPOUSE FROM EL PASO TO A FREE MARKET SURGERY CENTER IN AUSTIN...

THE BEVCAP UNIVERSE

~Joe LaMantia

PICK THEM UP IN A LIMO, PUT THEM IN 5-STAR HOTEL...

PAY THEIR EXPENSES AND GIVE THEM A $1,000 CASH INCENTIVE...

ILLNESS

In 2017, LaMantia created a partnership to WAIVE THEIR found Retro Health, a disease management DEDUCTIBLE AND CO PAY... program for the chronically ill. “The problem,” LaMantia says, “was employees who were AND THE TOTAL COST IS STILL 20 TO 30% LESS THAN AT A LOCAL HOSPITAL. out of compliance; not taking their meds, not seeing their doctors. In any universe of employees, there are likely 40 percent who employee; roughly the same amount we paid for them in are chronically ill, but those individuals make up 80 percent 2014. Compare that to other mid-sized and small companies of the cost because they are not being accountable for their who have been saddled with an 8 percent or more per year own health.” increase since then. LaMantia Beer Companies, over the past By funding doctor visits at worksites, on company time, LaMantia brought many chronically ill employees into compliance, saved the company more than $1.5 million, and saw a 60 percent drop in hospitalizations. “If patients didn’t show up, we called them at home. We actually saved several lives, and developed greater trust relationships between employees, physicians, and the company.”

Being in greater control of chronic conditions helped reduce the company’s overall health costs. In 2014, BevCap’s total claims cost was $475 per employee. In 2020, as a growing number of employees participated in the health clinics and began to meet their clinical goals, the cost fell to $415—a reduction of 14 percent.

“The bottom line,” LaMantia says, “I don’t mind spending $100,000 on doctor visits to save $1 million on hospitalizations. It’s better for the employee and saves me money.”

SURGERY BevCap, in most cases, has no copays and very low deductibles for procedures, and covers expenses for imaging and urgent care with contracted providers.

The average deductible for companies in the captive is $750, and BevCap is still saving money. LaMantia says, “In 2020 our company paid about $7,400 per

seven years have saved more than $10 million, and have happier, healthier employees.”

PHARMACY In spite of all the research and success, LaMantia says pharmaceuticals is one of biggest unresolved problems, but BevCap is struggling to get a handle on it.

LaMantia explains, “America pays more for drugs than any other country in the world. When you look at the financial statements of larger specialty drug manufacturers, you see a 40 percent margin net profit to sales.

That is not 40 percent on the product, that is margins on sales.”

In the BevCap universe, for those who need the most expensive chemical therapies, the members implement medical tourism. Patient and spouse are flown, at company expense, to the Cayman Islands for treatment, and it still costs BevCap 70 percent less than if they purchased the drug domestically. “That’s a bandaid and it doesn’t include too many types of treatments,” LaMantia says. “Plus, we are still talking about a $100,000 bill but, in-country, it could be $800,000 to $1 million. What that does is create a situation where larger companies have the motivation to form a group captive.”



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SOLUTIONS IN HEALTHCARE

WHAT CAN WE DO

In the past, if companies had at least 20,000 employees they did not need a captive. However, if one or more employees happen to have a sickness that will cost in excess of $1 million to treat, those companies can no longer afford that. A captive is a reasonable alternative, and makes good business sense. A lot of the work is done behind the scenes so the companies do not have higher overall costs.

KEY TAKEAWAYS

The group captive gets things done where those in typical insurance cannot, and allows members to have influence over every part of the process. As owners of the plan, when a problem arises, captive members don’t call a broker; they call the COO of the insurance company, the head of the hospital, or the CEO of the provider group to work it out.

LaMantia says, “C-suite employees need to get involved in their health care. First, they have fiduciary responsibility to the employees because they are putting in their hardearned money. Second, they need to recognize the system is so complex, and intentionally hard to understand. Ideally, what I want, is for the CEO to look at the company bills and say, ‘This is crazy.’ You don’t need to be a healthcare expert to make a difference.” Put simply, remaining in the existing healthcare plan is like this bank allegory:

NO ONE IN THEIR RIGHT MIND WOULD OPEN A BANK ACCOUNT, DEPOSIT $10 MILLION, GIVE THE CHECKBOOK TO A TOTAL STRANGER, GIVE HIM SOLE SIGNING ABILITY ON THOSE CHECKS, THEN TELL HIM, “YOU DON’T HAVE TO LOOK AT 98%

Companies and captive owners understand that there are good brokers out there, but when an insurance company pays a commission, the employer is necessarily paying much more than he needs to. It’s an incentive structure that does not work.

“TYPICALLY, THE BROKER IS NOT YOUR FRIEND. IF HE IS REALLY HELPING YOU, HE IS NOT HELPING HIS EMPLOYER. ANY RELATIONSHIP IN WHICH SOMEONE ELSE IS PAYING YOUR CONSULTANT TO GIVE YOU ADVICE, IS ONE THAT HAS A HUGE DISCREPANCY OF INCENTIVES.”

LaMantia explains, “If you look at investment brokers, the broker that handles your finances is under a fiduciary responsibility by law to you and your money. He must disclose what he gets paid.

A real estate broker has to disclose who he is working for and what he’s getting paid. If you look at the broker who is responsible for providing health care to you, your employees, and their families, there are no restrictions. He doesn’t have to tell you anything. How does that add up as the correct way to handle things?

“This is part of the overall system that helps create confusion and thought processes that people are helpless to do anything about health care cost.

Just get out of the regular system.”

OF THE BILLS THAT COME IN, OR GIVE ME THE DATA. JUST WRITE THE CHECK.” THAT IS WHAT THESE BUSINESS PEOPLE ARE DOING WITH MAJOR MEDICAL PLANS. IF YOU’RE IN THE SYSTEM, THIS IS HOW IT WORKS.

14 WILCO BUSINESS REVIEW | 2022 • ISSUE 1

photo courtesy Joe LaMantia

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2022 • ISSUE 1 | WILCO BUSINESS REVIEW

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17

TECHNOLOGY

IMPROVE YOUR INTERNET SPEED

by Ben Lake

E

ver frustrated with your Internet speed when downloading a large file or streaming a video call? We rely more and more on our connectivity to conduct business, relax, and even purchase groceries. Here are ways to identify bottlenecks in your connection.

Some terms: Network speeds are usually expressed in megabits per second (Mbps). One gigabit is equal to 1,000 megabits. In other words, 1Gbps =1,000Mbps.

Network traffic has two directions— download for receiving and upload for sending. Nearly all Internet plans have download speeds equal to or greater than upload speeds. So, if you only see one speed advertised you can be sure it is a download speed. But that is not just marketing—most of what we do is downloading: receiving email, watching YouTube, and checking websites.

For comparison, while the FCC defines high-speed broadband as 25Mbps download and 3Mbps upload speeds, Netflix recommends at least 5Mbps for watching an HD video, and 25Mbps for an Ultra HD (4k) video. Of course, higher speeds enable more simultaneous users without buffering.

YOUR INTERNET Websearch “speed test” or simply visit SpeedTest.net. The test results will show your download speed, upload speed, and sometimes ping; i.e., time in milliseconds it takes data to travel from your computer to the speed test server. Anything under 100ms is acceptable.

BEN LAKE

The first possible bottleneck is between your computer and your router.

This connection is either wired; i.e., a physical cable connects the devices, or

by Wi-Fi (wireless). In offices or higher-end homes, a computer is often wired with an Ethernet cable (looks like a fat phone line) to a wall jack. The other end is connected to your router.

Most wired network equipment is designed for 1Gbps, but I occasionally see very old (early-2000s) equipment running at 100Mbps. If you have networking equipment labeled 10/100 or Fast Ethernet (100Mbps), replace it. Not only is it a bottleneck but it is likely old enough to have security vulnerabilities.

To determine how fast your computer is on a wired network connection, on a PC, type Win+R, ncpa.cpl, ENTER. In the Network Connections window, right-click “Local Area Connection” or “Ethernet”, select Status. You should see a speed of 1.0 Gbps. On a Mac, go to System Preferences > Network > Ethernet > Advanced > Hardware.

If you are using an ethernet cable and see a link speed of 1Gbps, you are almost certainly at full speed.

If your PC is connected via Wi-Fi, perform the same steps as described above but instead select “Wi-Fi” instead of “Ethernet” when querying the link speed. On a Mac, hold the ALT key and click on the Wi-Fi icon in your top menu bar to display your link data.

With a wireless connection, your link speed may change every few seconds to adapt to changing conditions; i.e., interfering objects when moving around with a device, overlapping frequencies,

etc. If this link speed is not greater than your contracted Internet speed, you have found a bottleneck. To overcome this, you can consider replacing your router with a faster model, adding an external antenna to your device, or fine-tuning frequencies. At this point I recommend you contact a local network professional to evaluate your system.

An expert can help identify which areas of your system would benefit most from some capital investment.

KEY TAKEAWAY As a closing recommendation, you should check your router about once each quarter to be sure it is running the latest firmware (specialized software).

Refer to the manufacturer’s website for instructions. Routers are your literal gateway to the Internet and if a vulnerability that could allow outside attackers access is discovered, patch it quickly.

Some routers even have a setting to allow automatic updates, which I suggest you enable if available.

Ben is the owner of Open Road Network Services, a Georgetown-based business providing honest, reliable, and affordable technology support to individuals and small businesses. He is particularly passionate about educating and empowering his clients to become more comfortable with technology. • 512-942-7623 • OpenRoad.network

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Ann Marie Kennon

TEXAS BUSINESS

annmarie@wilcobr.com

Texas Born

my vision and our goal was to transform to a new model. Having direct contact with other stores across the country allowed me to see the best in class and formulate what we do and design. Some might have a large wine section or shelf-stable groceries; we put it all together and there aren’t too many like us in the market.”

and Unique in the Market INNOVATIVE CONVENIENCE STORE CHAIN LAUNCHED IN GEORGETOWN

W

ith a vision to go beyond the gas-Cokes-smokes model, Texas Born (TXB) is changing the paradigm of how people view convenience stores, having launched its new brand in Georgetown in August 2021. The Spicewood-based chain of customer-service-oriented food markets and convenience stores is shifting its focus to customer service and forward-thinking features, including e-vehicle rapid charging stations, considerable volume and variety of food and beverage products, quality branded merchandise, and locally sourced products.

While Georgetown is a flagship, owner Kevin Smartt plans to build 30 new locations in the greater Austin

market, with four under construction and re-branding planned for the remainder. “We hope people in Georgetown will come and see us many times, and not just because we are on their route. Residents need to see what we’re about, have breakfast or lunch on the deck, and allow us to become a good community partner.”

Smartt’s TXB innovation is a blend of his personal history in the business, his tenure as president of the National Association of Convenience Stores (NACS), and what he calls an amalgam of the best components of other convenience stores. “It is a challenge to accumulate everything a customer might want, but that was my vision.

Being a part of NACS broadened

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O N E O F M Y G R E AT LO V E S I S C U S TO M E R T E S T I M O N I A L S . O N E N I C E L A DY TO L D M E S H E D R O V E

BY FOUR TIMES AND THOUGHT WE WERE A CVS, THEN A SMALL TA R G E T, A N D F I N A L LY S TO P P E D A N D S A I D, ‘O H M Y G O S H , T H I S I S T H E CO O L E S T CO N V E N I E N C E S TO R E I ’ V E E V E R S E E N .’ T H AT M E A N S W E A R E S H I F T I N G T H E PA R A D I G M . ~KEVIN SMART T

THE COMPANY Smartt landed his first job, at age 14, at a convenience store. He later worked for Frito-Lay, gaining expertise in the market and grocery world, and connecting his career dots when he went to work at TXB. He learned the business from top to bottom, taking on everything from odd jobs to a district manager role.

In 1999, TXB’s owner asked him and his business partner if they would like to buy the store.

At the time, Smartt was 33 and didn’t have the money, so his first conversation was with his wife. She asked him if he realized how crazy he was to take on the debt, but after 18 months of saving and securing financing, he took over the company’s 20 stores and wholesale arm.

When it came to expansion, Smartt looked for attributes that fit the brand, and Georgetown was his first choice. “We have always found Georgetown to be charming in a modern Texas kind of way. It is genuine, nice, and diverse. Those are our roots and authentic brand, and we want people to experience Texas at our store. Texas is friendly, and hot in the summer, but there’s always barbecue, football, and music.”

we are reshaping who we are with delivery meals, craft beers, and a good cup of coffee. We are continually adding products and our own branding. As well, some might call it extreme but, long term, we even have space at our Georgetown site in which we hope to grow vegetables and spices we will harvest for the fresh food we cook inside.”

GROWING THE BUSINESS VERTICAL INTEGRATION Smartt says changes in the convenience store industry go far beyond the old model and parallel changes across the board in retail. “Everything we see today is about highly developed offerings, which has blurred the lines of where things are provided to consumers. Look at CVS; they added food items and caused everyone else to step up their game. It’s similar, but on a smaller scale, to how big box stores decided to sell everything in one place, so customers would have no need to shop elsewhere. Looking at that, in the aggregate, we had to get really good at what we do to stand out, and now we are challenging others’ markets too.”

“Technology, energy, and ready-to-eat food—we are not the convenience store most people grew up with.”

Today, TXB has nearly 50 stores, sources products from Texas whenever possible, and sells products to 150 more businesses. Smartt says, “We sell products and propane throughout Texas and have developed a trucking business to deliver our own fuel. It’s more than just a gas station and

Smartt says having good relationships with NACS, providers, and other owners is part of his personal brand, and his goal is simply to give people reasons to stop there. “Giving people what they want; they want fresh food, we have that. They want a place to chill out, we have outside seating and host a weekly local sports podcast. We decorate with works from local artists and invite them to compete for visibility once a year. We have groceries, and benches to sit on while your electric car charges.”

Smartt adds, “We are the standard in convenience but with high quality, high brands, and high volume. Think ‘Buc-ee’s’ but in your own neighborhood.”

Scan the code to learn more about Spicewood-based TXB.

T H E R E A R E 1 6 0,0 0 0 CO N V E N I E N C E S TO R E S I N T H E U. S ., P R O V I D I N G 2 .3 4 M I L L I O N J O B S .

E V E R Y D AY, 5 0 P E R C E N T O F A M E R I C A N S S H O P I N O N E A N D, I N 2 0 2 0 , I N S I D E S A L E S H I T A R E CO R D $ 2 5 5 .6 B I L L I O N A S C U S TO M E R S F R E Q U E N T E D LO C A L CO N V E N I E N C E S TO R E S TO F U L F I L L D A I LY S H O P P I N G N E E D S .1

Known for its fresh-made tacos and tenders, TXB offers restaurant-quality food items prepared on-site for lunch, breakfast and dinner.

Locally sourced private label products from Texas, including beef jerky and ready-to-cook meats like marinated beef skirt steak and chicken breast fajitas; 1 NACS via Convenience.org

Private label TXB bottled water, tea and nitro; cold brew, and hot bean-to-cup coffee; Artisan products like fine chocolates, gourmet cheeses, salamis and wine; Healthy packaged and prepared foods like take-home salad kits, veggies and fresh fruit.

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PUBLIC SERVICE PROFILE

Ann Marie Kennon annmarie@wilcobr.com photos courtesy Nelson Jarrin

Living the N

AD RME AEM R IC AN

elson Jarrin’s journey to Williamson County began two generations ago in Quito, Ecuador. His grandfather, a surgeon, immigrated to the United States when Nelson’s father (Nelson, Jr.) was a young boy.

Dr. Nelson Jarrin (Sr.) was accepted for a fellowship at the Mayo Clinic, and the family immediately set about learning English and the American way of life.

Nelson, Jr. graduated from St. Ambrose University and made his way to Texas for a career at General Electric. In the 1980s, he and his partners founded a plastics company in Houston. Sadly, he had a fatal heart attack at age 43, leaving six-year-old Nelson (III) and his mother on their own. Nelson recalls, “I had older siblings from my mother’s and father’s first marriages, but they were older and out of the house, so it was just my mom and me. Things were tough in Houston during the oil downturn in the late 1980s, and she worked in a department store to keep us afloat. At six years old, I was forced to grow up quickly and become the man of the house.”

24 WILCO BUSINESS REVIEW | 2022 • ISSUE 1

A NEW CHAPTER

His mother later re-married, and Nelson says his stepfather, Joe, raised him as one of his own. As regional manager for a large trucking company, Joe moved the family a few times but took a leap of faith in 1996 and opened his own trucking company in Houston.

By the time he was a high school senior, Nelson was working for the company. “I learned from the ground floor; loading trucks, dispatching, and finding loads for our drivers. I took a year and a half off from college and spent every summer learning the business; hands-on experience was teaching me what the books could not,” he says. “The company grew to 19 employees plus nearly 30 drivers. We had 29 trucks and 36 trailers at a 10-acre yard in North Houston.

We were generating about $15 million annually, and I supervised operations for our offices.” The pride in his voice is conspicuous when he talks about the company’s specialty—overdimensional and overweight—big, complex shipments with escorts. “We were the trucks that took up two lanes of the highway, shipping for energy companies and the military, through the U.S., Mexico, and Canada; we were wide, tall, and heavy.”

As he and the company grew, Nelson learned everything about the business. As he continued to assimilate customer service, revenue and payroll, workers’ comp, and all the things that go with assuming risk and building a small business in America, he realized he did not want to take over. He chose instead to attend law school at Notre Dame and return to Texas with a wife and a desire to serve.

PUBLIC SERVICE PROFILE

HOME IN WILLIAMSON COUNTY In 2009, having experienced “slavish” hours at large law firms, Nelson felt there had to be more to life. He reached out to State Representative Patricia Harless, whom he had previously campaigned for, and quickly found his stride in public service. She recommended he consider the Texas Legislative Council, the state agency that drafts bills and provides legal advice for members of the Texas Legislature.

In 2010, Nelson and is wife returned to Texas, later working for Senator Charles Schwertner as his Legislative Director and General Counsel.

Tragically, he and his wife suffered six miscarriages. In 2013, when they reached the second trimester of their seventh pregnancy, they were euphoric and decided to relocate. He says, “We moved to Round Rock to be in a solid red county with good community values, quality schools, and a long line of conservative tax stewardship.

We simply didn’t want to raise our family or buy a home in Travis County.”

“We wanted a safe place to live, work, and raise our family.”

ENTERING PUBLIC SERVICE To Nelson, his family’s legacy of hard work meant being in the family business came easy to him. Still, he wanted more. “I have one life to live, and I wanted to do more; give back, and make this a better place. I enjoyed my time with Senator Schwertner and working on behalf of others in Williamson County. I recently decided to run

for office myself because I felt our representative was getting off track from the ideals that brought us here.

Ultimately, it’s about looking for ways to give back to a country that has given my family so much. Volunteering and public service give life meaning.”

ADVICE FOR CEOs Recognizing that business plays as big a part in community growth and stability, Nelson is an advocate for CEOs and business owners to be involved politically. He encourages business owners who are experts in their field to share their knowledge and experience with those in leadership. He explains, “The people at the Texas Capitol who are making decisions about business may not know anything about the industries affected by legislation. It is incumbent upon subject matter experts to make themselves available as resources to those who would otherwise have to make decisions in a vacuum.”

He added, for individuals unable to visit the Capitol in person, supporting legislation is as simple as membership in one of the many industry associations in Texas that represent those interests. “We should never assume that legislators have the most relevant information or access to subject matter experts for each bill.”

WILLIAMSON COUNTY’S FUTURE Given the growth rate of Williamson County, his priorities include pro-business advocacy and solid infrastructure. “People who start or own businesses are taking risks every day, but they need the right environment to continue to expand. You need less government regulation and solid workforce education and training to continue that upward trend.”

Having worked in the trucking industry, he values the depth of the workforce it takes to keep Central Texas on a path to prosperity. “The key thing I learned in trucking was how to relate to people from all backgrounds; the drivers with a junior high education to the people at the negotiating table in multi-million-dollar deals. I have a great appreciation for the needs of people from all walks of life. But I will always appreciate the idea that my family spent plenty of time getting dirty in a 10-acre dustbowl to put food on our table and build a business. I am happy to bring that knowledge to bear in my home here in Williamson County.”

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World-Class Property Com ing to Roun d Ro ck Pearson Ranch in the 21st Century

Charlotte Kovalchuk charlotte@wilcobr.com rendering courtesy Inspire Development

A

ustin-based Inspire Development broke ground January 28 on Pearson Ranch, a 156-acre mixed-use development.

With an anticipated value of more than $2 billion at full buildout, the new premier destination will be at the northeast corner of State Highway 45 and West Parmer Lane in Round Rock.

Sitting on ranch land sold by the Pearsons, a sixth-generation Williamson County family, Pearson Ranch will feature: 2.6 million square feet of office space

“Williamson County is the technology superhighway of the world and I believe this is going to be another piece that will be added to that portfolio. Located in the new premier hub for major technology companies, Pearson Ranch will provide necessary access to office space for employers, generating new jobs and providing on-site access to retail, housing, and park space for Central Texas.”

For this development to land in Williamson County is no surprise for Judge Gravell.

two hotels thousands of upscale residences 48 acres of land for a corporate campus 30 acres of parkland 200,000 square feet of retail, restaurant, and community and cultural spaces.

The first phase includes development of 41 acres, with approximately 600,000 square feet of office space, three upscale apartment communities, and lifestyle retail. Total build-out for the 156 acres is anticipated to take up to 15 years. “This property has such an inherent natural beauty and rich heritage, yet is juxtaposed with incredible proximity to major tech employers and workers that define the future in so many ways,” says Inspire Managing Principal Brett Ames. “We worked very closely with our team to create a plan that tightly knits the past, present, and future into the most compelling land plan possible. Frankly, we feel a true sense of obligation to get it fully right.”

Williamson County Judge Gravell emphasized the project’s location in Williamson County’s burgeoning technology corridor just two miles from Apple’s new corporate campus.

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W E CO N T I N U E , I B E L I E V E , TO B E T H E MOST SOUGHT-AFTER CO U N T Y I N A M E R I C A F O R T E C H N O LO G Y AND GROW TH. IT ’S VERY HUMBLING TO B E I N T H I S P L A C E . ~JUDGE B I L L G R AV E L L Pearson Ranch’s development team consists of architectural and planning firm Urban Design Associates, civil engineer BGE, land planner Land Strategies Inc., multi-family architect Davies Collaborative, office architect Powers Brown, and Chasco Constructors, general contractor for the site infrastructure.

Judge Gravell is especially glad Round Rock-based Chasco Constructors is part of the project team. “I asked the guys, ‘When you make those decisions for who builds this project, if you can, let’s use Williamson County companies.’ Chasco, with Inspire, will build a world-class property on a historic ranch,” he says.

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by Charlotte Kovalchuk For consideration, please email information to info@wilcobr.com

BUSINESS BRIEFS CEDAR PARK

Northwest New Hope Development CPM Development plans to build a hotel and convention center anchored by a retail and entertainment destination near 183A. The project will be anchored by NFM (Nebraska Furniture Mart). Located at 750 E New Hope Dr, it will include a 250-room hotel with a 30,000 sq/ft city-owned convention center, 250,000 sq/ ft of high-quality commercial development, a 500,000-sq/ft retail store, and a 700,000-sq/ ft warehouse servicing NFM. The 117-acre development is expected to generate $435M in net new city tax revenue within 25 years of opening, as well as create at least 725 jobs in the first year.

PEOPLE ON THE Kristin Britt

Shop LC Television network and leading online retailer of jewelry and lifestyle products, chose Cedar Park for its national headquarters. The project will create 1,000 local jobs, making it the city’s largest employer as well as having a capital investment of $50 million. Currently headquartered in Austin, they will construct a 200,000-sq/ft facility near the intersection of E New Hope Drive and US 183. Construction expected to complete by fall 2024.

GEORGETOWN

Amberlin Georgetown Developer Sparrow Living will open this a resort-style, 55 and older active adult community, at 5101 North Mays Street.

The apartment community will feature 188 apartment homes

MOVE

Sporting a wealth of instructional and administrative leadership experience, Grandview Hills Elementary assistant principal Kristin Britt will lead the campus as its next principal.

Kristin has been with Leander ISD since 2015.

Sara Bustilloz Sara Bustilloz was named the City of Round Rock’s communications director after being promoted from assistant director of Communications and Marketing. She began her career in newspaper reporting and served in municipal government communications. Sara serves on the Board of Directors for Texas Association of Municipal Information Officers as VP of communications.

LaShanda Lewis Dr. LaShanda Lewis took the helm as Round Rock ISD’s new director of Counseling Services, overseeing the district’s social and emotional learning, teen parent program, child development centers, and all counselors. She is also the director of advocacy for the Lone Star State School Counselor Association.

28 WILCO BUSINESS REVIEW | 2022 • ISSUE 1

with amenities; fitness center, pickleball court, dog park, and community garden. Residents will begin residency in August.

The Garden at the Summit Opened in December at The Summit at Rivery Park; 1500 Rivery Blvd # 2175, The Garden strives to bring an authentic Italian seafood experience to the Austin area with traditional Boston Italian seafood dishes and a variety of beer, wine, and craft cocktails. The menu features mussels, salami boards and crab cakes, artisan sandwiches like lobster and sea scallop rolls, and thin and crispy Roman-style pizzas.

Dutch Bros Coffee Coming to Georgetown later this year. The drive-through is looking to settle at 1309 West University Ave and will feature upbeat music, energetic

baristas, quality products, and speedy service. Serves specialty coffee, smoothies, freezes, teas, an exclusive Dutch Bros Blue Rebel energy drink, and nitrogen-infused cold brew coffee.

Ubiquity Communications network company plans to construct an open-access fiber-optic network throughout Georgetown.

The company’s open-access model makes the fiber system open to any local and national cable and Internet service providers, as well as other technology platforms, e.g., 5G wireless cell sites. Initial plans to invest $75 million to establish fiber connectivity across Georgetown and start construction in early 2022.

Will provide connectivity for 80 percent of residents and

Rohan Lilauwala

Rohan Lilauwala stepped into the role of Environmental Program Coordinator for Austin, focusing on climate resilience and advancing the city’s Climate Equity Plan. She worked in the nonprofit world for the last few years advocating for and breaking down barriers to the widespread use of green roofs and infrastructure.

Ebony Parks Ebony Parks is Wiley Middle School’s new principal, having previously served as assistant principal of Leander Middle School.

Before coming to Leander Middle School, she spent a year as an instructional coach and English teacher in Austin ISD. She has also taught English in Puerto Rico, Nebraska, and Illinois.

Brandt Rydell After serving on the CAPCOG General Assembly and Executive Committee, Taylor Mayor Brandt Rydell has been named the new chair of the Executive Committee for the Capital Area Council of Governments (CAPCOG), which operates in a 10-county area with more than 90 member governments and organizations; cities, counties, school

95 percent of businesses with the first customers coming online in summer 2022.

ROUND ROCK BGE, Inc. Expanding its presence with a lease for an additional 9,781 sq/ft and 50 new jobs at an average wage of $80,000. A nationwide consulting firm that provides civil engineering and other services in planning and landscape architecture, environmental, surveying, transportation, land and site development, public works, and construction management for public and private clients. The project is an addition to 25,000 square feet currently leased in Frontera Crossing and on top of 80 employees the company plans to hire by year-end 2025.

and appraisal districts, utilities, and chambers of commerce. The 29-member Executive Committee provides direction to CAPCOG staff on program implementation, budgets, and contracts as well as general policies and procedures for managing the agency.

Adrienne Sturrup Adrienne Sturrup is the new director of Austin Public Health (APH).

She manages the public health emergency response, collaborating with other city departments, local government entities, and community-based organizations on COVID-19 response efforts. Adrienne has spent almost 30 years working to promote health and wellness in community settings and has a long history of working in leadership roles with many nonprofit agencies.

Yvette Venegas Yvette Venegas will lead Knowles Elementary School as its new principal, previously serving as a campus administrator at Akin Elementary where she led and designed programs and processes that focus on collaborative improvement and research-based instructional practices. Prior to that, she taught dual language at Whitestone Elementary.

*SOME RESTRICTIONS APPLY, OFFER ENDS 2/22/22

P.O. Box 213, Jarrell. TX, 76537