#152: Jim Pshock (Bravo Wellness)

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Jim Pshock (Bravo Wellness) [00:00:00]: So these incentive formulas, really, people tend to over complicate them when the reality is most people do this math immediately in their head. What do I have to do? How long do I have to do it? And is it worth my time and effort? And If we could bring that to health insurance, the way that we were all used to it on things like auto insurance, I felt like far more people would actually proactively engage in their help.

Jeffrey Stern [00:00:29]: Let's discover what people are building in the Greater Cleveland community. We are telling the stories of Northeast Ohio's entrepreneurs, builders, and those supporting them. Welcome to the Lay of the Land podcast, where we are exploring what people are building in Cleveland and throughout Northeast Bio. I am your host, Jeffrey Stern. And today, I had the real pleasure of speaking with Jim Pshock, the founder of Bravo Wellness, which He successfully exited to Medical Mutual in 2020. After 20 years working in the insurance industry, Jim had observed a need and a niche for For employee wellness incentives, as health claims data had indicated that the vast majority of health care spending is related to lifestyle influenced And largely preventable claims. Health risks such as obesity, tobacco use, and low participation in health screenings that Of early detection of problems were directly correlated with rising costs in health care and a poor quality of life for millions of people. In 2008, Jim founded Bravo Wellness to improve these lifestyle numbers, saving all parties involved a significant amount of money Land improving and extending the life Of of participating people by offering an outcomes based and progress based incentive program, which rewards those achieving health goals And provides alternatives for those who are medically unable to achieve those goals.

Jeffrey Stern [00:01:57]: From inception to acquisition, Jim grew Bravo Wellness to serve over 2,000,000 members nationally with over 175 employees, a 150 of which were here in Cleveland. The was an awesome conversation Land Jim is an awesome person. We cover everything from the wisdom of lessons learned in kindergarten To the power of incentives in everyday life, post acquisition reflections, to what Jim is focused on now With the bandwidth to invest in other entrepreneurs, advise, consult, and be intentional about his work as he spends more time with his family. So please enjoy my conversation with Jim Pishak after a brief message from our sponsor. Lay of the Land is brought to you by Impact Architects and by 90. As we share the stories of entrepreneurs building incredible organizations in Cleveland and throughout Northeast Ohio, Impact Architects has helped hundreds of those leaders, many of whom we have heard from as guests on this very Northeast, realize their own visions and build these great organizations. I believe in Impact Architects and the people behind it so much that I have actually joined them personally in their mission to help leaders gain focus, align together, and thrive by doing what they love. If you too are trying to build great, Impact Architects is offering to sit down with you for a free consultation or provide a free trial through 90, the software platform that helps teams build great companies.

Jeffrey Stern [00:03:22]: If you're interested in learning more about partnering with Impact Architects or By leveraging 90 to power your own business, please go to I a dot Lay of the land dot f m. The link will also be in our show notes. So I wanted to start with A story that you had shared with me when we first met has been implanted in my mind since. And it was around this idea we arrived at, which I think we basically called kindergarten lessons. And so I was I was wondering if you could share your crayon story for everybody.

Jim Pshock (Bravo Wellness) [00:03:59]: The Kranz story, of course. Yeah. There there's actually a book out there called Everything I I Need to Know I Learned in Kindergarten. And it's one of the books I read early in my career that I was like, I've got something to add. But my kindergarten experience, I grew up on the the near west side of Cleveland Off at Denison Avenue, I attended Elmira grade school on West 98th in Elmira Land went into my kindergarten Cleveland I remember this lovely old lady, Miss Morrow, who was very big on personal responsibility. And whether that was hanging your coat up or putting your mat Lay. The incident that stood out to me was a time when we were coloring and The crayon I was using snapped Land I took it to missus Morrow and said, missus Morrow, my my crayon broke. And she said, no, it didn't.

Jim Pshock (Bravo Wellness) [00:04:47]: And I said, yes, it did. I'm holding 2 pieces of the crayon in my hand and I said my crayon broke. And she said, Crayons don't break, Jimmy, people break crayons. If you admit that you broke the crayon, whether it was an accident or on purpose doesn't matter, but take responsibility for breaking your crayon. I'll gladly give you a new one. And I rephrased it to Mrs. Morrow, I broke my crayon. Actually, I accidentally broke my crayon and I have another The Land she gladly gave me The.

Jim Pshock (Bravo Wellness) [00:05:18]: But that absolutely burned into my brain as, you know, not blaming others or blaming the device or blaming any circumstances, but really just owning the things that happen. And whether they're our fault or not, they're our problem Land, you know, let's take ownership and responsibility for it. Ironically, that that really became the foundation for what Became my business in 2008 of, you know, a foundation of personal accountability.

Jeffrey Stern [00:05:45]: The is this yearning for accountability. Land, yeah, I just, I love that story. You know, honing in on the origins Of your entrepreneurial spirit. I'd love if you could just share a little bit about your your childhood and your upbringing Land where you found yourself first Thinking about entrepreneurship and what that even is.

Jim Pshock (Bravo Wellness) [00:06:07]: Yeah. It really took a lot of reflection to figure that out over the years because I I was not raised in a entrepreneurial family by any stretch. My parents both came from coal mining families in in Stern Pennsylvania. They relocated relocated separately to Cleveland in the fifties and got married in 1958. I'm the youngest of 8 kids raised again off at Denison Avenue Land, you know, very humble beginnings but compared to what they grew up with. It was, we were wealthy compared to all the other families in the neighborhood and at school, I wouldn't classify it The Lay. But, you know, part of that accountability really started with my dad as well saying, Lay, if you want something, you're going to have to go out and work for it. For my older brothers, that meant go out and shovel snow and mow lawns.

Jim Pshock (Bravo Wellness) [00:06:56]: Land, you know, if if you want that better pair of sneakers for basketball or or you want to buy something for yourself or your friend. You've got to go in it. We don't have the surplus to just give you money to do those things. And for me, the first job I had. I was about 7 years old, 8 years old, was picking up dog poop off Missus Dixon's lawn. Here's this lady 2 doors down who had this little white poodle Land, my dad suggested I offer her the service of putting a bread bag on on one hand and having another bag in the other, and I would pick it up for $25 a of, and Miss Dixon paid me a lot of money for that poodle, but I was a 9 year old making their own money. I never thought of that as being the seeds of entrepreneurship, but they really were. It was, you know, this This idea of saying nobody's going to give it to you, go out and find a way to do it yourself.

Jim Pshock (Bravo Wellness) [00:07:53]: And really, the underlying theme had always been find problem that you have the ability to solve. It's a pretty short list as an 8 year old, but you know, as time went on, it it was fine things people don't wanna do or that their time is spent better doing something else, do it for them and they'll gladly pay you to do it. And I think that that's really the essence of a lot of businesses out there.

Jeffrey Stern [00:08:16]: Yeah, absolutely.

Jim Pshock (Bravo Wellness) [00:08:18]: Becoming an entrepreneur in a professional sense, you know, I resisted. I had some great jobs, I had some not so great jobs, but I loved benefits Land my four zero one ks retirement plan and You know The security of getting a paycheck every 2 weeks and really found myself with an idea and a confidence around a concept that I couldn't get my boss to agree to. And I couldn't find another company to hire me to do it, and that's what really led to He's saying, well, maybe I actually can do The. And thank God I had a supportive family and the confidence to try. Yeah. But I resisted being an entrepreneur. I was not the one who said I have to be my own boss. I was quite content being a great employee, but felt like The burning need to act upon The concept The required me doing it myself.

Jeffrey Stern [00:09:13]: So with with that in mind and and overlaying still this this topic of of kindergarten lessons, we did explore A few other ideas I found your perspective on particularly interesting. And I of to go on a little detour here as we make our way to Bravo Wellness Land revisit some of of. And here are actually how they ultimately informed a lot of your decision making Land leadership strategy and overall thinking at Bravo. One of those topics, though, was, you know, learning from mentors and from bosses, both, you know, positive things to emulate, but also Maybe somewhat, you know, pernicious things to avoid and how ultimately, you know, none of it Maybe necessarily right or wrong in absolute terms, but, you know, demonstrate different kinds of of leadership styles that have benefits and and drawbacks. So, you know, I'd love to hear as as we make our way to to Bravo, what was your reflection around this?

Jim Pshock (Bravo Wellness) [00:10:08]: Yeah. I mean, I think if you're not winning, you should be learning was another bumper sticker of my dad's, that I would say wasn't a literal bumper sticker, but mine as well have been. And I was fortunate to start my career out of high school. While my wife was finishing college, I went right out of high school into Capital American Life Insurance downtown Cleveland Land the plan was for her to get a job after college. And then while she was working, I would go to school. But As fate would have it, she kept getting pregnant and I kept getting promoted, so she never went to work after college Land I never went to college after work. Land, Capital American really became in many ways my education. Fantastic culture, great energy, shared vision.

Jim Pshock (Bravo Wellness) [00:10:56]: But one of the things that really stood out to me there was when a new CEO had come in The the mid 90s, there was rumors about the company being sold. And he called the company meeting and his transparency was just very refreshing. And again, I was a kid out of high school, I didn't have anything to compare this to. But he said, we are preparing the organization for potential sale. That could go a number of different ways. We might be here another 100 years, we might be here another few years, but what we can promise you is if you give your very best, you will be far more marketable if and when you ever leave this organization. We're going to invest in you, our employees. And they brought in Case Western Reserve University and Weatherhead Business School courses and had some of the best instructors take us through foundational leadership courses.

Jim Pshock (Bravo Wellness) [00:11:54]: And they did Eventually sell the company in 1997, and I was far more marketable because of it. But that example of transparency And just being honest with people and telling them of what's in it for you if we achieve what we're collectively trying to achieve, I think was really the foundation for what fueled the rest of my career and ultimately my own business. And then of course, there's other mentors, some were mentors that didn't know they were mentors Land others really took me under their wing to give me feedback. I'll tell you The Stern and another one that stuck with me. I was walking down the hall one day just an average Lay, a third party administrator I worked for. My boss said, Jim, is everything Lay? Are you angry? And I said, I don't no, I'm not angry, everything's fine. He goes, tell your face. I said, what do you mean? Because you look like you wanna murder somebody.

Jim Pshock (Bravo Wellness) [00:12:52]: And I realized, you know, that that RBF is a real thing. You know? Like, my my default facial expression is not very happy. And I was fortunate to have somebody willing to tell me that and and be conscious of it. And lots and lots of little examples like that, Jeffrey, Land and certainly bigger ones too about just ethics when you're running a business.

Jeffrey Stern [00:13:17]: So tell us about the the origins of of Bravo. How did it ultimately come about, you know, you're thinking about preventing preventable Lay. Where does this idea stem from?

Jim Pshock (Bravo Wellness) [00:13:28]: Yeah, I mean, really, I listen to to many of of the people in the wellness industry Land, you know, they always have this, They tend to have this Richard Simmons Stern where they were 400 pounds and they changed their life Land now they want to inspire everyone to eat healthy and exercise and live right and I applaud and truly admire those testimonials. When you hear mine, it's nowhere near as I think motivating from a personal lifestyle change standpoint. I got involved in wellness because the data told me to. I spent a good chunk of my early career as an insurance fraud investigator. And so I was mining data before big data was a thing and looking for patterns Land claims that may have indicated some irregularities in billing or some flat out insurance fraud that was happening. And I found populations within subgroups that had dramatically higher claims than other populations. One example was a company that had 1500 people around Baton Rouge, Louisiana, and they had about 1500 people around Colorado Springs, Colorado, and the Louisiana claims are triple. And I thought I found fraud Land what I found was lifestyle.

Jim Pshock (Bravo Wellness) [00:14:48]: I looked in, you know, as I dug into it, I'm like, oh, Colorado is the least obese state in America Land Louisiana is 49th. And you know, between sedentary lifestyle and obesity and tobacco use. I became an advocate for trying to educate and inspire people in that Louisiana population to live more like the people, their counterparts in the Colorado Lay. But it was a means of cost reduction for the employer that of course everybody benefited in. And the quality of life, the longevity, and the better health was a byproduct versus honestly The primary goal initially. And that's really what caused my career to pivot and Lay, if we can align incentives so that the beneficiaries of these improvements, I. The. The employees, really were sharing in the savings, then we really have a shot at this versus inundating them with information Land all the money goes some insurance company somewhere that actually reduces claims.

Jim Pshock (Bravo Wellness) [00:15:59]: I became a student of incentives Land that's really what drove the Bravo model.

Jeffrey Stern [00:16:03]: Yeah. Yeah. Let let's pull on that, incentive thread. You know, because of all the the conversations with entrepreneurs building in and around the health care space, It is just like the perennial core problem that everyone encounters as it just repeatedly encumbers almost everything in healthcare. I feel like Misaligned incentives. They drive all the wrong behavior and prevent, you know, kind of amelioration of status quo just generally. You know, Charlie Munger talks about, you know, show me incentives and I'll show you the outcome. And I Lay of that line.

Jeffrey Stern [00:16:37]: And I think, you know, changing incentives Is one of the most compelling ways to change behavior. So, how did you think about, you know, what the misaligned incentives were and approaching Them in a way to try and align everything in an impactful, positive manner. What was your vision?

Jim Pshock (Bravo Wellness) [00:16:56]: Yeah. Well, first, let me say, I mean, this is a multi $1,000,000,000,000 issue that Some of the best and brightest minds in the history of the world have tried to attack. So, you know, my little slice of this is a very little slice in the whole scheme of things. Without getting too much on a soapbox here, I think How healthcare became an employer's problem is fascinating to me. I mean, your employer doesn't pay for your car insurance and they certainly don't pay a whole lot more if you're a terrible driver. They don't pay for your life insurance or your homeowners insurance, you know, based on the risks that are associated there, but they they got saddled with The, you know, idea of of health insurance really coming out of of the industrial revolution Land Initially, it was a very low cost way to attract employees. The incentives on the provider side dramatically misaligned. You know, the whole fee for service model that says, hey, the more of my services and friends that I can refer you to, the more money we all make.

Jim Pshock (Bravo Wellness) [00:18:04]: If you have great insurance, you're going to have a lot more tests performed, complete misalignment versus what I think is a far better model of moving to quality based reimbursements Land, you know, reduction in infections and readmissions and and better comes lead to higher reimbursements, I think is a move in the right direction. All that to say. In many of the initiatives out there. They forgot the patient. They're like, we gotta get the provider to do this and the insurance company to do that. And Really, the only one who can get on the treadmill. Instead of the couch, you know The only one who can go to the salad bar Land instead of the bakery is the individual Land many times there's this massive disconnect between the choices that they really do troll. And the ultimate.

Jim Pshock (Bravo Wellness) [00:19:00]: Diagnosis is that they're they're battling as we age. Land, the idea of a good driver discount just always made sense to me. In fact, I remember, Land I've already shared how if we wanted anything as children in my house, we had to pay for it ourselves. So I wanted a car at 16. I had to pay for my own car, pay for my own car insurance Land, I became aware of the Stern Farm Good Student Discount. I was not a particularly good student, Jeffrey. I was not happy about being at school Land the only thing I ever wanted to be when I was little was older. But I remember going to every teacher saying, what's the minimum I can do? What's the minimum I have to do to get a B? Because the Stern Farm good student discount was $80 a month, which was massive money to a 16 year old.

Jim Pshock (Bravo Wellness) [00:19:53]: And you needed a 3.0, which was a B. And I was like, what's the minimum I have to do to get a 3.0? And I did it.

Jeffrey Stern [00:20:00]: Yeah, talk about the power of incentives.

Jim Pshock (Bravo Wellness) [00:20:04]: I was not trying to get into a certain college, I didn't have this deep desire to learn about any particular subject, but for $80 a month, I'd get a B Land I damn well got a B, you know? And that concept, you know, really, I realized I wasn't alone in seeing what people were willing to do if you could properly align the reasonability of the ask with the size of the incentive and the timeline that's allowed. So if I told you here's, $1,000,000 to do 5 push ups Land you've got an hour to do it, you don't have to think about that. But if I said here's $1,000,000 to do 5,000 push ups in a minute, even though it's still $1,000,000, you immediately dismiss it going, that's ridiculous. I'm not going to do even 1 because I know there's no way I'll do 5,000. So these incentive formulas, really People tend to over complicate them when the reality is most people do this this math immediately in their head. What do I have to do? How long do I have to do it? And is it worth my time and effort? And if we could bring that to health insurance, the way that We were all used to it on things like auto insurance. I felt like far more people would actually proactively engage in their help. Right.

Jim Pshock (Bravo Wellness) [00:21:26]: The problem was federal regulations Land group health plans said you can't do that. It's gotta be uniform coverage, nondiscriminatory. Discriminatory, everybody gets the same choices for the same price. And that's really where the story of Bravo comes in in creating safe harbors with the government that allowed some of those things to be done for the 1st time since the early 70.

Jeffrey Stern [00:21:48]: So what is Bravo Wellness? How would you describe it at a high level?

Jim Pshock (Bravo Wellness) [00:21:52]: Really, it's a service and technology company that fills this gap between employers and employees relative to a discretionary portion of the benefit subsidy. What that means is if if an employer says, we're gonna provide you with health insurance because you work here, we'll pay 70% of the premium you pay thirty. Well, the safe harbor that was created said, you no longer have to pay 30 or pay 70 for everyone. You can vary that by up to 30 of premium, of the COBRA rate, the total premium, based on reasonable lifestyle related actions and outcomes that these employees engage in. Simple concept, but very complex to administer because you, the same employer who can offer this, isn't allowed to know any of the personal health information because of HIPAA. So It immediately births the need for an independent third party. Then you've got employees who have perhaps genetic issues or medical issues or reasons they can't embark of a weight loss journey or take a certain medication. Bravo was created to communicate the program overall, to assess individuals Land the status of their health with their own physician in most cases, to set incremental goals, 3, 6 months, 12 month goals, to hold them accountable for achieving those and ultimately our software turned your weight loss into a payroll file to ADP or my blood pressure reduction into an HSA deposit that went to the insurance carrier or their bank.

Jim Pshock (Bravo Wellness) [00:23:35]: And so we created this niche of technology and compliance, administration, communication, and ultimately over time, we bolted on what you would assume with traditional wellness, meaning actual programs like Cleveland Clinic Stern Jeffrey Management and Weight Loss Program and Quit for Life or Tobacco cessation. With Some of the best clinical programs in the nation, we were able to package all that into 1 offering to our customer.

Jeffrey Stern [00:24:05]: So from where we are today, you know, temporally, we have the the ability to think back on Land of the the entirety of of that journey from The origin of the idea to really building out the entirety of the company and and ultimately to an acquisition, which we'll get to. But when when you reflect on the evolution of Bravo over time, how do you think about the different Phases or or life cycle stages of the business and kind of the the biggest challenges of of each phase. You know, maybe starting with what you felt was, like, the 1st big break as you approach The. Really, what seems like an ambitious problem of of aligning incentives.

Jim Pshock (Bravo Wellness) [00:24:46]: Yeah. It's a great question Land there's hours and hours of dialogue I can imagine. Or more fun with a glass of bourbon in my hand. But The initial phase was just proof of concept and survival. And truth be told, I started in mid 2008 during the worst economy since the Great Depression Land spent about a third of my time looking for a better job. A third of my time trying to convince my current employer at that time that We were on the wrong path. We needed to to switch Lay. And a third of my time saying, if both of those things fail, what if I did this myself? And I, you know, downloaded business Land pro.com and started working on a business plan at 2 in the The.

Jim Pshock (Bravo Wellness) [00:25:32]: And whichever one of those lanes materialized first was the one I was going to commit to. Right? It's so really realizing that I couldn't find a job at that time and things weren't changing with my employer. The business plan really just started to take on a life of its own with validation of the concept as I talk to people I knew and respected Land friends I had sometimes very limited history Land relationship with stepping up and doing marketing design and offering me their services to build a pro form a because I didn't even know how to spell it. All the pieces fell into place pretty rapidly. And the thing I was lacking was funding, which, you know, I guess that's not an uncommon problem. But in 2008 when venture capital was non existent Land I'm somebody who'd never been an entrepreneur. I really didn't have a personal network of anybody with with cash to invest. There were no angels to be found.

Jim Pshock (Bravo Wellness) [00:26:39]: The idea I had was to start soliciting employers and insurance brokers that I thought would be likely candidates. And literally I use the build the dreams line of, you know, if you build it, they will come. Yeah. And so, hey, if I built this, would you come? You know, would you would you sign on if this thing actually existed? And if they said, probably, I had them sign a letter of intent saying if if you build it, we would probably come. And I gathered about a dozen of these letters Land then I started offering discount saying, well, hey, it's going to cost $100,000 or whatever the number was, I'll give you a 30% discount if you pay the other 70% upfront. And I didn't have an accountant at that time who was explaining all the reasons I shouldn't have done The. But you know, really The deposits on future services or how I funded the business for the 1st 3 years. And You know that being able to take those deposits Land higher contract staffing, which meant like nieces and nephews and other unemployformer coworkers that were looking for work.

Jim Pshock (Bravo Wellness) [00:27:52]: I like literally would say, hey, until you find a real job, why don't you Come and sit here and answer the phone Land see if you can help people. But we, you know, we scraped that together, and that whole phase was energizing and terrifying. But, you know, we're able to do over $1,000,000 in our 1st 12 months. And, you know, in under 3 years, I found myself, you know, entrepreneur of the year from Ernst and Young and having over 40 employees and being at $11,000,000 in revenue by 2011. Still trying to figure out what exactly do we do? Because there, you know, it was a big broad category that when you say something like wellness, there's people who want you to come in and teach yoga Land there's people who have a very different vision of what that should entail. And it was more important not for us to know what we weren't than what we were because it would have been very easy to get distracted by a lot of other Lay, but it was really our niche that caused that kind of

Jeffrey Stern [00:28:52]: Yeah. And ultimately, you know, in parallel to the the growth of the business, you know, I imagine, you know, you're thinking about always, You know, the alignment of incentives Land and the the proof in the pudding is, you know, can you actually change behavior? What is the efficacy of the programs? What are the outcomes look like? You know, coming from your assumption that, you know, you could draw this parallel of the good driver discount and apply it to wellness in in an innovative way. As you actually had, you know, people, human beings, you know, become part of The Bravo Ecosystem. How did you think about, you know, testing the hypothesis and, like, measuring what the actual impact in humans' lives were?

Jim Pshock (Bravo Wellness) [00:29:35]: Yeah, it was a constant discovery and evolution. We weren't great about organizing our data early on. It was everything we could do to just deliver on The services that were sold Land it was difficult at times to really understand What? Inputs caused which outputs. So was it the size of the incentive? Was it the goal that was used? Was it the quality of the communication. Was it the fact that the CEO of a company held an all employee meeting and said motivational things? There are all these different inputs that varied. One of the things that was very evident early on, though, and we were challenged because it seemed too good to be true, is we were averaging 97% participation in a biometric screening that included a blood draw, a venipuncture blood draw, you know, a blood pressure check, cholesterol check, height, weight, waist measurement, body fat analysis. 97% of employees came because the the typical incentive or penalty associated with not coming was $2,000 and on average, people were earning about 60% of that 2,000. So it was a lot of money to not even to Lay, I'm not even going to try.

Jim Pshock (Bravo Wellness) [00:30:57]: And the reality is most people were already passing half the goals with very little work on their part, but they had to at least engage to get that first half. So that high level of engagement was The immediate success story. Then we started getting the testimonials of people saying my doctor Said you probably saved my life because I had no idea that I was diabetic. I had no idea that my blood pressure you know, which I usually had checked at my annual physical on a Saturday afternoon was heart attack level on Monday mornings when you check me at work. And so those testimonials really started to drive even more engagement in positive feedback. But ultimately The once we saw cost trend, we had some of the insurance brokers and consultants coming back saying, This group has averaged an 8 to 15% increase every year Land I'm giving them a 1% increase here for the 3rd year in a row since we put the program in place. It was always impossible to point back to The thing that caused that, but we had an awful lot of data correlation. Yeah.

Jim Pshock (Bravo Wellness) [00:32:11]: And that is really what fueled typically the insurance broker world saying, I've got 5 groups with Bravo. They're all doing great, and now I'm going to bring you my other 50. Majority of our growth came through that broker consultant channel that got it and just latched onto it.

Jeffrey Stern [00:32:27]: I mean, it's evidently a pretty powerful mechanism there.

Jim Pshock (Bravo Wellness) [00:32:31]: Well, it's not without pushback. You would always have a group of employees saying, I mean, anything from they're really taking our DNA so they can do human cloning. The lots of conspiracy theories of what the employer They really wanted to do with their blood besides check their cholesterol. And then there was concerns, understandably in some cases, about privacy And who is this Bravo company that now has my chem profile from the lab? But earning that trust than having independent third party stamps of approval on the way we handle their data, having proper insurance in place for Bravo, and having quality audits and so on done really just Lay us into the Fortune 500 companies after a few years of doing things well.

Jeffrey Stern [00:33:23]: Lay the Land is brought to you by John Carroll University's Boulder College of Business, widely recognized as one of the top business schools in the region. As we've heard time and time again from entrepreneurs here on Lay of the Land, many of whom are Proud alumni of John Carroll University, success in this ever changing world of business requires a dynamic and innovative mindset, deep Deep understanding of emerging technologies and systems, strong ethics, leadership prowess, acute business acumen, all qualities nurtured through the Boulder College of Business. With 4 different MBA programs of study spanning professional, online, hybrid, and 1 year flexible, the Boulder College of Business provides flexible timelines in various class Structures for each MBA track, including online, in person, hybrid, and asynchronous. All to offer the most effective options for you, including the ability to to Pate in an elective international study tour of unparalleled opportunities to expand your global business knowledge by networking with local companies overseas and experiencing a new New culture. The career impact of a bowler MBA is formative and will help prepare you for this future of business and get more out of your career. To learn more about John Carroll University's bowler For MBA programs, please go to business.jcu.edu. The The highest accreditation a college of business can have. I definitely want to hear your perspective on the cost side of things, but one of the things you mentioned there, Given the set of things that you could offer people, you know, you would imagine that there is the optimal best solution.

Jeffrey Stern [00:34:59]: And if money is no issue, You could put in place and really positively impact people's health. And then there's the practical limitations on that, which is We don't have unlimited resources, and so we have to find kind of the best things to offer for a reasonable cost. What did you Land, you know, across that spectrum of solutions that you could offer that were interesting and resonated in interesting ways with people?

Jim Pshock (Bravo Wellness) [00:35:29]: Spectrum is a great word. It was all over the place. So, you know, you had people that would compare us to kind of an EAP that's $0.15, $0.20 per employee per month, and the only reason it was so inexpensive is because they knew it sounded really good, but very few people would use it. And then, you know, then you have those with really unrealistic expectations that if we spend money on on wellness. We're going to reduce our insurance costs this year by 20%. It was really critical to have transparent conversations early on to try to define success. I'll never forget 1 meeting where we had a meeting with a CFO of a very large health system and The said, We saved, okay, his word was saved, we saved $700,000 less this year than last year. What the The going on? And I said, What do you mean? And he said, Well, last year we had far more smokers who didn't get the incentive.

Jim Pshock (Bravo Wellness) [00:36:33]: And now we have fewer smokers, but we paid $700,000 out to them in incentives for quitting smoking. Isn't that the goal of the wellness program? So you know, would you rather save money because you have more smokers paying a penalty? Or would you rather actually judge our success collectively by saying, wow, we went from 35% tobacco use to 18% tobacco coupies Land I'm happily paying out these incentives to people who quit smoking because I know they're going to live longer, they're going to have higher quality lives, we don't have all the smoking breaks to pay for it. Oh, and we don't have lung cancers, you know, as prevalent in the population. And as much of a no brainer as that might sound like, It's hard to show that in the The. You know, because the money you save when somebody quit smoking is usually like 20 years from now.

Jeffrey Stern [00:37:23]: Right, right.

Jim Pshock (Bravo Wellness) [00:37:24]: It's not going to be this year. So when we would actually get people to improve their lifestyle related risks, sometimes costs went up. And so those conversations were really key in determining how are we delectively going to judge success. As we did that, we got better and better at saying if we can show weight loss, we can show greater adherence to medications and we can show that you're closing gaps in care for prevention and women are having mammograms and men are having PSA tests and all these preventative behaviors, we're closing those gaps in care. Even if your costs go up, are we going to agree that this is successful? And until we started doing that, we had some conflict.

Jeffrey Stern [00:38:12]: Yeah, yeah,

Jim Pshock (Bravo Wellness) [00:38:13]: you know somebody sent me an article once of, LeBron James BMI is his obesity level according to the chart because it's a tight and weight. And so we would do body fat exceptions or waist The hip circumference. I mean, the reality is not too many of the employees in the average company look like The James, but you know, you had to have a response to that that was fair and equitable. And you had to have your FAQs that address these concerns when they truly were weighed more because of muscle mass. We laugh sometimes, The early Bravo employees, because we have this person called thigh guy who kept mailing in pictures of his muscular thighs saying, you're telling me this is fat. We talk about Thigh Guy all the time as being an exception that we had to recognize if you actually have Arnold Schwarzenegger, Lay not obese and you shouldn't be penalized. So I mean, just being listening to people, acknowledging the validity of their concern, giving them a fair and scientifically based response, really overcame those objections, but we build an infrastructure to do that on a regular basis.

Jeffrey Stern [00:39:28]: Yeah. I wanted to circle back to the cost side here as we make our way towards the latter stages of Bravo and acquisition. But One of the things I think is just important to talk about is there's a large frustration, you know, both from the employee and employer side about about cost, because I think generally people either feel like they have to pay more or settle for a reduction in benefits. And and ultimately, there's this powerlessness about your agency to do anything about it. And benefits teams are frustrated because they can't control The, you know, the increases in costs every year. And so just kind of this general laden helplessness, every year. How did Bravo fit into this kind of framing?

Jim Pshock (Bravo Wellness) [00:40:17]: You know, really in 2 Lay, and I could tell you this is a very old dilemma Land it's not The easy to fix, and it's going to continue to take a lot of innovation and trial and error and really customization. I listened to excerpts from your recent interview with Brownstone, you know, and The concepts there are spot on of saying if you're a large enough employer to take on some risk and do some self funding, There's a big chunk of the reserves and the overhead that you can bring back to your bottom line. I sat on the on the inner walls of 100 plus year old Medical Mutual of Ohio, fabulous organization that's a mutual whole company. Nobody's getting rich over there on stock options Land they are constantly innovating, you know, looking for ways to reduce costs and improve the health of their members. I could tell you when I started my career in this space, it was the old eightytwenty rule. 80% of your costs come from 20% of the people. Most recently, that statistic is 92.8. 92% of your costs are coming from 8% of your people.

Jim Pshock (Bravo Wellness) [00:41:30]: So you might eliminate 100% of cost for half The population through some wild innovation and building clinics on-site and having virtual care. If you didn't touch that 8%, you didn't really touch the 92% of cost, and those are really, you know, high risk chronic conditions, $1,000,000 pharmacy claims, injectables Land complex cardiovascular issues. To me, that's a separate solution of how you're really managing the high cost chronic conditions from what you're doing for the majority of the population. And you have to look at it longitudinally to say, is there anything I can do so that the healthy people today don't become part of that 8% in the next 5 to 15 years. Land that's where wellness comes in. So we did 2 things. We said You have to think about this as a conveyor belt. You know, you've got people moving from healthy to at risk to in a condition to chronic to complex chronic.

Jim Pshock (Bravo Wellness) [00:42:35]: If we can intervene with them as they start to have risks The aren't yet claims or aren't yet high cost claims, That's when you can really impact the trend, but you've got to look at it as a multi year trend. Yeah. The other part of the equation we immediately addressed was on the cost sharing. So if the cost of insurance was $1,000 a month, instead of the employer saying, I'm going to pay 800, you pay 200, saying, if you have an annual physical, manage your gaps Land cares, you're up to date with all your preventative services and vaccinations and so on, You're managing your weight, your cholesterol, your blood pressure, you don't smoke, we're gonna pay 900 a month instead of 8. However, if you don't do any of those things or you only do half of those things, we're gonna pay somewhere between 6 700 a month and you're gonna have to pay the rest. Some would say, well, that's just cost shift. It's cost shifting to those who are saying I won't or I am not willing to even try and get my own doctor to weigh in on my health. I mean, the reality is most people felt like that was pretty fair.

Jim Pshock (Bravo Wellness) [00:43:41]: Back to the good driver. And so Bravo at the end of the year would say, here's what you saved from the people who chose to absorb a higher cost of the cost share. That's real money today, right to the bottom line of the company. And here's what we eliminated from the projected future cost because of the lifestyle improvements we've been able to document. And those are the 2 approaches to really showing ROI.

Jeffrey Stern [00:44:07]: Yeah. No, it makes a lot of sense. Understanding that I think we'll be Skipping over a fair amount of nuance in the Stern, you know, if we round out Bravo's journey, one of the I'll call it an aphorism I remember from our first conversation Was that you mentioned, you know, this idea of success occurring with preparedness and opportunity in their intersection. And I I always of that that idea of of serendipity. And it feels like a a good apt preamble to talk about acquisitions. So ultimately, in in the later chapters of of Bravo, There are 2 acquisitions that transpire. 1 of Bravo to Medical Mutual Land The of a company called Push Wellness to Bravo. So I'd I'd love if you can, you know, take us through that that leg of the journey and some of the the interesting learnings along the way.

Jim Pshock (Bravo Wellness) [00:44:56]: Yeah, I mean, well, to date we've discussed here thus far Land of the inception and the glory days of if you will of of Bravo in winning awards and innovating Land industry impacting federal regulations and really driving a lot of change Land those should not be under dated. I think if you fast forward into the story, you know, really around 2014, 'fifteen, we went from a handful of potential competitors because most people really didn't even understand what we were doing The a landscape of very large, very well funded competitors, most of whom were Land of throwing in what Bravo did for free if you bought their core service of something like health coaching. And so it became a very different world to sell in. Couple that with provisions of the Affordable Care Act, lawsuits by the EEOC who said, yeah, even though this is all fine with Department of Labor and IRS, we think it violates the American Disabilities Act through a wet blanket on a lot of what we were doing at different times. We had to navigate multiple land mines simultaneously. We were fortunate in bringing in a great private equity minority partner in 2014 that provided the cash for us to navigate that season of uncertainty with the regulations Land we're performing at a high Cleveland, but had aging technology, Had some turnover challenges, had really a change of philosophy within many of the customer groups. So as we went from a market of really saving money was number 1 or 2 on every CEO's priority list, attracting and retaining talent became more important than saving money, you know, as we got into the Lay 20 teens. And so saying, hey, I don't want my obese smokers to go work for someone else, I still need them to drive a truck, I still need them to be here.

Jim Pshock (Bravo Wellness) [00:47:01]: Some of the models around these programs really had to change and become much, much softer so that you weren't potentially alienating great people from taking these roles. Bravo was not navigating all of that at a time when Medical Mutual approached us and said, Lay, we're changing vendors. And if there's an opportunity we'd like to explore acquiring Bravo because we hear all these great things. We have customers that have chosen Bravo over our in house solutions. And we love the fact that you're a national company and can help us diversify Land there was lots of things that were in it for them. But we decided that, hey, this really helps us bravo to double down on what we can do within a more static population in the medical mutual universe while at the same time having the war chest, if you will, to compete on a national level with the Funding Medical Mutual behind us. What nobody anticipated, Jeffrey, was 2 months after that decision, we go into a global pandemic that lasts, you know, for 3 years. And so I, you know, first of all, I have to say Medical Mutual is world class, high integrity, high character people.

Jim Pshock (Bravo Wellness) [00:48:20]: Bravo had half of our business orders cancel, you know, in that 1st 10 months because most of our services involved on-site blood draws and screenings and things like that. And of course, nobody knew it was gonna last as long as it did. So it was never cancel, it was always postpone. 6 weeks, 6 weeks, 6 weeks, flatten the curve in 30 days, you know, before you know it, it's a year and it's like, oh, when are you making money this year? They were absolutely fantastic partners who weathered that storm with us, but you know, here we were Just being acquired after 15 years in business, having a award winning culture, very family oriented, especially with our on-site presence and events with family like atmosphere at Bravo. We're fired by Medical Mutual. Nobody knows what that means. We're in a global pandemic, everybody's working at home, we don't even see each The. And by the way, our technology is breaking because of what the pandemic was requiring us to try to force it to do.

Jim Pshock (Bravo Wellness) [00:49:23]: So for example, where you would come in every year and get on a scale and have your blood pressure checked. Right. Employers would say, hey, just let The copy their 2019 results if they want. Lay, you know, tech was never built for that. Not really sure how we're gonna do that. Seems easy and reasonable enough, but like you start putting enough hard coding and Land aids and things in there to morph it through. We started to really have a strain on a system that wasn't built for a lot of this modification. We saw then the opportunity to acquire a company called Push Wellness in Chicago who had just re platformed.

Jim Pshock (Bravo Wellness) [00:49:59]: Medical Mutual helped us complete that acquisition And it turned into a complete re platforming during the pandemic Land a recent acquisition. So Lots of fiery darts, you know, to deal with all at the same time. Super proud of the team that helped Bravo navigate that. For the most part, the dust has settled, but The were certainly very, very trying times that without the backing of Medical Mutual, I don't know if we would have made it.

Jeffrey Stern [00:50:30]: So with all of that said, how did you think about success? And on the Other side of acquisition, how did your thinking about success and ultimately the impact that you wanted to have with Bravo change, if at all?

Jim Pshock (Bravo Wellness) [00:50:48]: Yeah. I mean, we touched on phases of of the business Land, you know, that first phase of of really survival, getting into the mode of saying, wow, this is a real thing. It was about growth and sustainability. What I realized through this time was I love to launch the rocket. I'm not somebody who is really a maintainer. And so I needed to hire people who were great operators and I was fortunate to do The. But really looking at What was best for Bravo? What was best for the employees? What was best for our customers? I had to recognize that in that season it really wasn't. Let's give them 20 more new ideas to work on.

Jim Pshock (Bravo Wellness) [00:51:36]: It was let's do what we've been doing and do it better and more efficiently and more profitably. And let's do more of it. And so focusing on scale and stability really led me to hire a president and and build a product team and professionalize the organization, but realize that the vision for this season really needed to be more consistent. And for me, success was getting out of the way and letting people do what they were hired to do. On a personal level, honestly, it was difficult for me as somebody who fed off of energy of smiling people, you know, and having a great culture and environment. Being in this remote setting, realizing that that was part of Bravo's profitability Land long term stability was really learning to be this remote company. It's not what I was good at and not what I wanted. So hiring the people and putting them in place who could really commit to that and do

Jeffrey Stern [00:52:43]: it well, I think was absolutely best for everyone involved. And ultimately, you know, you did decide to step away from the organization. Can you take us through, you know, your thought process around that. And with now the space time to reflect, you know, how are you and were you thinking about What you would wanna focus your time and attention going forward.

Jim Pshock (Bravo Wellness) [00:53:07]: Yeah. I mean, it's a journey. I I feel very blessed and and fortunate to be, A young grandpa, I married my wife, Natalie, when I was 20 years old. She was a cougar, she was 22. You know, I had 4 kids at 24 Land and now I'm 52 with 3 granddaughters that are that are all local Land, you know, lots of energy to spend time with them. Both my wife and I lost our dads in the last 6 years, but our moms are here and doing well and and we have time to spend with them and care for them and and do things with them that, you know, frankly, I I put off for a lot of time. And for my own, you know, marriage Land self. I mean, I had been promising my wife a sabbatical for at least 10 years The never happened, so We've taken now a year The past year to travel and see the world and rekindle relationships with each other and with old friends.

Jim Pshock (Bravo Wellness) [00:53:59]: It's been fantastic and it's been exactly what I needed. I am not saying that I could do that for the next 30 years. I do at times feel like, am I really, contributing enough to the world here for, to justify my existence? But I want to be very intentional. And the exit from Bravo and Medical Mutual was not about anything other than really giving back, being intentional about where I'm spending my time, and I've gotten to be involved with organizations like Building Hope in the City that helping thousands of refugees in Northeast Ohio with gainful employment become self sufficiency, become self sufficient. Kind of like that getting back to that personal accountability and responsibility theme I've always had. So finding those very specific and select opportunities where I can invest my time and talent. And if there's something more, something bigger from a professional career side. I really just feel like I'll know it if I see it.

Jim Pshock (Bravo Wellness) [00:55:05]: We'll apply more energy when the time comes. But it's again a position that I don't take for granted and feel like I've been very fortunate to build a great team at Bravo, many of whom are still there leading The organization through this current season. Land, I'm confident that they'll have continued great success with the backing of Medical Mutual behind them.

Jeffrey Stern [00:55:32]: Yeah. I think the whole concept of a sabbatical feels underrated to me as everyone that I've talked to who's Gone down that path just comes out the other side with this, you know, level of of serenity, you know, because it maybe sounds silly to say out loud. It requires time to think. And in the day to day craziness of building something, it's often hard to think about, you know, what what it is longer term perhaps that you want to contribute.

Jim Pshock (Bravo Wellness) [00:55:59]: Yeah, I mean, I know you're a Land of of the EOS operating system Land and many of the People you've interviewed of familiar with that system. I'm a disciple and fan myself, but they always talk about working on the business instead of in the business, and I just kind of personalized that to say, you know, do we take time to work on our life instead of just going through the motions of our life? And you really do have to pull away and look at it, you know, from 10,000 feet sometimes like you do your organization. What do I want my marriage to look like in 10 years? What do I want my relationship with my kids to be when they're grown adults with their own families? Kind of grandparent do I want to be? I didn't think about those things. You just kind of The they were part of the package and you Figure it out as you went along Land, you know, thankfully I've I've had this last year to be far more intentional Land and set goals on the personal side that, I really had neglected in the past.

Jeffrey Stern [00:57:00]: In the spirit of all of that, I wanted to close Before we get to our actual traditional closing question, it was something that I I came across on the Stern, actually, that that you wrote about lessons Learn from your father as Land homage, reflection, you know, celebration in the wake of his passing. And I found what you wrote Particularly compelling. And I wanted to ask about about some of those lessons that you've taken from your dad.

Jim Pshock (Bravo Wellness) [00:57:27]: Yeah, I could do a whole show just on my dad, but part of what I think you're referring to is The article where I talked about how from a traditional sense, I don't think many Business professionals would consider him a success in business or a success overall. They just didn't have the traditional Lay that you'd associate with that being awards and diplomas on the wall and published articles and so on. But my dad was undoubtedly the most successful person I knew because of how content he was and how he cherished every opportunity to interact with people and and learn and to give. And so one of the themes that was part of that as well was just how he raised me and my siblings to win, like to be winners. Not saying that you shouldn't accept losing, but saying you should never engage if you're not there to win Land always play whether it's a sport or engage in your work and give it a 100%, even if your only benchmark is doing better than you did the day before. Play to win. And I I really can't. Thank him enough for that.

Jim Pshock (Bravo Wellness) [00:58:50]: You know that that that is something that I I thought everybody was like that. You know, I grew up thinking, Wait, doesn't everybody want to, like, achieve the goal? And and it was just eye opening to me to learn how many people just feel like a victim of life and circumstances and are waiting for someone to change that for them. And it was just There's never thought we were allowed to have, but that's a great reflection and a big reason why my dad's always been You know, The of my heroes, my biggest hero.

Jeffrey Stern [00:59:23]: Yeah. And in parallel to that, you know, you had mentioned this idea of In the success that you do have, don't grow weary in doing well.

Jim Pshock (Bravo Wellness) [00:59:33]: You know, I couldn't believe the attacks that Bravo and me personally, you know, received strangers on LinkedIn and so on who knew nothing about what we were actually doing or why or how it worked, you know, who would just hurl these accusations of, you know, People just trying to get rich off of fat shaming others. And I'm like, what? Where is this coming from? And if they actually knew how it was done and why it was done, and you know the dignity and compassion that we built into communication like It can get weary, but it doesn't mean you should stop doing the right thing even when you feel misjudged and you feel like you're putting up with a lot of things you don't financially need to, perhaps. You still got to do the right thing. And The absolutely came, you know, from my parents and my upbringing.

Jeffrey Stern [01:00:28]: Yeah. No. It's powerful. So I think we've, we've covered a lot of ground here. I wanted to Cleveland little space at the end to address, You know, anything in reflection on, you know, the the entirety of of Bravo and and your own journey that that you think is is important that maybe we we haven't touched on on yet?

Jim Pshock (Bravo Wellness) [01:00:48]: You know, I I think that it always comes down to people, and I think that one of the things I I truly learned to appreciate on the journey was that people are The for a season. We had the perfect team for our our startup. They were scrappy, they gave a 100%, Everybody would do any job at any time and had each other's backs, you know, but we we outgrew many elements of that season Land, you know, needed disciplined season leadership who could build infrastructure. Land some of those people were there for a building season, but they weren't there for the scaling season. And that's a different, you know, set of of people. And I used to feel like I failed if anybody resigned. You know, like I Lay them down, they bought into me and my vision and The, you know, they left. First of all, in my own prayer time, I felt like God God was telling me, Jim, stop trying to do my job.

Jim Pshock (Bravo Wellness) [01:01:50]: Like you're not God, you're not their source. That's my job and it's okay that people are there for a season. And just like your 1st boss told you, Jim, at Capital American, like when they leave, they're going to be better prepared and more qualified for wherever they go next. And they're going to create room and space for the people you need to come in for this next season in in your organization. I honestly never thought about it being a season for me until these Land couple of years where I'm like, yeah, it was a season for me. It wasn't the reason I exist. It was a great thing I got to be involved with for a long period of time and seeing the legacy, seeing couples, kids that wouldn't exist if they hadn't met at Bravo 10 years ago. It's really cool to me, but you see it as, you know, I see it now as a season Land I'm excited about the next season regardless of what pieces of Bravo are part of where I go next.

Jeffrey Stern [01:02:52]: We'll round it out here with that with our traditional closing question, which Is for a hidden gem The the Greater Cleveland area. You know, something that The folks Maybe should know about that The don't.

Jim Pshock (Bravo Wellness) [01:03:08]: I absolutely love Cleveland. I've had the chance to travel all over the country Land all over the called Land, you know, I would put Cleveland up against any city of of being very easy to navigate and having lots of great things to do, so this is a tough one. I don't know how hidden it is, but I think our Metropark system, you know, deserves all the accolades they receive. It's a fantastic park system The we love to enjoy. Having the Rock and Roll Hall of Fame comes to mind. We're big foodies, so we love the variety of fantastic food around. I think The that I mentioned The if you're not on this part of town you may not know about is Tribbs. So if my wife and I have The go to place, it's Tribs Restaurants Ville Italian food.

Jim Pshock (Bravo Wellness) [01:03:54]: If you haven't been there, I would say it's a gem. Just check it out.

Jeffrey Stern [01:03:57]: Awesome. Well, Jim, I just wanna thank you for taking the time to come on the show and and sharing your story.

Jim Pshock (Bravo Wellness) [01:04:04]: It's been my pleasure. Thank you for creating this venue Land, I love hearing the stories of all the entrepreneurs out there. There's absolutely, if nothing else, people should be inspired because there's there's no reason you can't do what I've done. You know, it's a matter of having a dream and pursuing it Land, I I will tell you one one of the phrases that stuck with me from our commencement speaker in high school was The people who know why to do something can always go higher. The people who know how to do it. And so if you've got a dream and a vision, You can figure out the people who know how to do the how, and I feel like that's been a big part of Bravo's story The hopefully inspires others.

Jeffrey Stern [01:04:43]: Yeah, I love that. If people had anything they wanted to follow-up with you about, what would be the best way for them to do so?

Jim Pshock (Bravo Wellness) [01:04:51]: Well, I have set up an LLC just for some consulting. So it's called Praka, b r a c a. But jim pashakat proketsulting.com is my email. I'm happy to respond to anybody you might wanna reach out.

Jeffrey Stern [01:05:06]: Awesome. Well, thank you again, Jim. This was great.

Jim Pshock (Bravo Wellness) [01:05:09]: Thanks, Jeffrey. Enjoy your day.

Jeffrey Stern [01:05:12]: That's all for this week. Thank you for listening. We'd love to hear your thoughts on today's show. So if you have any feedback, please send over an email to jeffrey@layoftheland.f Land or find us on Twitter at Lay of the land or at Stern, j e f e. If you or someone you know would make a good guest for our show, please reach out as well Land let Snow. And if you enjoy the podcast, please subscribe and leave a review on iTunes or on your preferred podcast player. Your support goes a long way to help us Spread the word Land continue to bring the Cleveland founders and builders we love having on the show.