Benefit Plan: How AI Helps You Make The Best Decisions With Matthew Sydney

People tend to make poor choices because they don’t know how to make educated decisions. What if AI can help you predict your own health risks so you can choose the right benefit plan? Meet Matthew Sydney, the President and CEO of Picwell. Picwell can run thousands of scenarios in real-time to help you figure out what’s best for you. You don’t have to be stuck choosing the cheapest plan just because it seems the right choice. You can choose what fits you best based on actual data. Tune in as Chad Burmeister gets Matthew to tell us more!

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Benefit Plan: How AI Helps You Make The Best Decisions With Matthew Sydney

I'm with Matthew Sydney. He is the CEO of Picwell, located in Philadelphia, Pennsylvania. Matthew, welcome to the show.

Chad, it’s a pleasure to chat with you. Thank you.

I love having these conversations. I like to get our audience to get to know you as a person to know what you're up to. When you were a kid, where'd you grow up and what were you passionate about then? What led you from then to now to be the CEO of a company like Picwell?

I grew up around the country. My father was in the Air Force, so we moved around a lot. We spent a fair amount of time in the North of Boston and in the Ann Arbor area. As a kid, I was highly competitive in sports, games, you name it. A big focus of mine was being highly competitive. The other side of what drove me to this role has been a sense of imagination, leveraging imagination to problem solve. I always found that there's always a better way to do something than the traditional normal way to do it. It's not that I'm lazy, but I know I can get things done a little quicker if I think it through and use my imagination, or at least I thought I could. That's what led me to this role.

I've heard the term, “If you're not cheating, you're not trying.” There are obviously some boundaries to that statement. That's a military statement, in fact, if I remember right. Tell me about your interest or leverage of artificial intelligence. It's been a topic I've had. The understanding of AI is getting to be greater and greater. What have you experienced with AI? Where does it play a role in what you do?

I've been in the benefits space and insurtech space for an excess of twenty years. One of the things that I've found in the industry itself, we spend a lot of time, energy, money, and resources on strategizing planning, procuring, deploying, measuring, tweaking and redeploying wonderful services on behalf of our members and our employees. The challenge that we face as an industry is that people tend to make decisions that are not necessarily in their best interests, not because they don't want to, but because they don't know how to make a decision.

There's always a better way to do something than the traditional way to do it.

Some of these are foreign concepts. The jargon is difficult. Ultimately, where the AI plays in is we ask people to predict their own risks or what they think is going to happen with their health. Health is fluid, difficult to do. It's what AI does, which is solve complex problems in a short amount of time. At least with what we do here at Picwell is we're helping people optimize their decisions around their benefits plans. In doing so, we have to run thousands of scenarios in real-time to help someone figure out what might be the best for them, not what's the cheapest or maybe what has the most coverage, but what fits them best.

It’s funny because, in 2020, I was on the highest plan you could get with the lowest deductible. My kids are 17 and 18 at the time and my wife had some preexisting stuff, “Let's max it out.” You're the CEO of a company and you go into the next year and you say, “Let's maximize for some savings this year,” and then something hits you. My son had a little bit of a burn incident that he's now recovered from but it sure would have been nice to be on that exact plan that I had. I suspect AI could look at, “Let's look at this family. Where did they live? How many kids do they have? How many cars do they have?” All of it and mix it in a blender and come out and say, “This is your best plan.”

As the CEO, I have to go in and look at all the plans that are available for the employees. Not only am I making my own decision that's inaccurate and invaluable, but I also have to make the decision for these other four plans that will be available for our employees. I hear you on that. What are some of the outcomes as a result of deploying your technology? What are the benefits to everybody who's involved in the use of this kind of technology?

It impacts pretty much all of the constituents in this ecosystem. Starting from an employer perspective. When we look at plans that we're going to release to CEOs, to our employees, or as benefits professionals, we're trying to provide enough optionality or choice that we think that people can take advantage of and make those decisions around what's best for them and their families. One of the challenges is that we can design phenomenal products and market them that people still purchase against their own best economic self-interest. In your case, you over-insured the first year, and then you under-insured the second year. The reality is that people do that all the time. The answer isn't just about the price, the answer is about protection and preference.

You got all three of those pieces. You got to weigh them all. That’s what AI can do for you. What that does, if you're properly pricing your plans, designing them as an employer, and selecting them, what you're going to do is you're going to see people migrate to the plans that fit them best. There's going to be less churn in those plans. Quite frankly, the outcomes are going to be better from a cost standpoint, which means, depending on what type of employer you are, your trend won't grow as fast. You'll save dollars. On the employee side, you get to take advantage of things like a health savings account, which we know that many more people across the country should be enrolled in a qualified high deductible health plan with a health savings account.

Benefit Plan: The answer isn't just about the price, the answer is about protection and preference.

If you want every Wednesday off, you can have every Wednesday off. This is a choice, the freedom it gives you. You can throw me into the Gobi Desert and I'm confident I'll be selling something to the local within three months. I have no idea what it is but I'll figure it out. That confidence is very positive for some people. You got to be careful before you choose it. It's a lifestyle choice. You don't think about vacations that normal people do. On your wedding anniversary, you're checking your email under the table, pissing everybody off. That's how it goes.

It's funny because I've also tried to hire sales teams. I've been a sales leader with 100 people on the team. If I have a customer, it's a 43% close rate prospect. If my CRO has a meeting, it's 35%. That's pretty darn close. That's a rounding error in my opinion but if you go to the sales reps we've had over the last years, it’s 11% to 17%. That's unacceptable. I can't scale to that. That's the final gap and chink in my armor that I need to figure out as a leader.

That is a hard thing to do. The good thing is AI is to the rescue because this is the area where AI is going to play a huge role. You can look at sentiment analysis. You can bring it to analyze the email conversation between your sales rep and your customers. Smart algorithms, they can figure out. Is your salesperson being true to themselves? Are they overly optimistic? Do they sandbag? With sentiment analysis, analyzing the conversation, the words your customers are using, you can have a layer on top of your sales forecast, a truth serum layer. Those products are not quite out there yet but they're getting close.

I met this SVP of Sales from Clari a couple of years ago. They've done some pretty good work with Zoom video and some others. There was another customer too. I know the VP will. That's evolving but you're right. It didn't traditionally see into the email but bringing all of that to your point, the Internet of Things, it's all accessible. I wonder if that's what's going on in the world with trackers on your phone and the rollouts. We all become endpoints and we already are. If you have Google on your browser, half of me thinks that by putting myself out there as an endpoint, you can cure a lot of health problems. You can preempt things and yet there's the privacy concern of, "Am I giving up too much information?" What are your thoughts on the AI ethical side of the equation? That's always an interesting part of the dialogue.

I don't have the answer but my thoughts are we all respect privacy and privacy should be a prime concern but we may be taking a simplistic approach to privacy. I don't want to see baby diaper ads because I'm in the stage of my life that it’s not relevant to me. The more you can customize what ads I see and what things come my way as an offer, so I don't have to go through a lot of unnecessary clutter, it is a plus column. On the negative column is that if my medical history becomes public to my employer, they may be reluctant to hire me. It needs some safeguards. That's another extreme.

There's a lot of gray areas in between. My overall short answer to your question is privacy should be taken seriously. This already started in Europe. We should be able to control and monetize our data. We are the end product for Facebook and companies like that but we get nothing in return. I see a future when I'll be able to set some dials. I can check $146 a month because advertisers use my data to target something, then I don't feel so bad. I'm getting something for me. I'm the product.

It becomes a win-win-win versus win-lose because you're the customer. The win is starting to become lower and lower.

I'm the product. I'm being sold except I'm getting nothing for it but there are changes. Companies are working on that. There could be a smarter model of how this can all become more palatable.

Entrepreneurship is not for everybody. It’s a tough life and a calling that not everybody's suited for.

Let's go tangential here because we'll get into agriculture in a minute. What about the news? I talked to a guy years ago who said, "If we could crowdsource a thing at the bottom that said, these are known people that know the information. If you do 500 thumbs up by all these known people and then there are only ten thumbs down, then you can say, 'That's real news.'" There's so much misinformation and even disinformation. I'm curious about your engineering brain. Have you thought through that dilemma? How would you think about solving that?

We have started a class project on that in my Berkeley class. It's similar to what you said. What I was proposing was that we have a good housekeeping seal equivalent on it or think of that like your credit score is a number but it's a complex algorithm. Imagine a number of 1 to 100. With every story, you can go to a site, which can show what is the truth serum number? I can say, "I only show the things 88% and above. Anything below 88%, I don't trust." Somebody will look for anything over 55%. Somebody said, "I need to see 98%." It's some kind of a rating, which is independently done. A credit score is independent. They are not always accurate but are a close indicator. There's a need for something like that, which can validate any posts with some third parties like Good Housekeeping or used to be that. Consumer Reports gives an independent number to each appliance before you purchase it.

Some SVP at Riverbed years ago said, "Chad, you've got 100 salespeople on your team, but they're not quota-carrying. They drive for meetings, SQLs, MQLs and that whole thing.” He said, “What’s the one number that you can share with me that if they’re a federal salesperson versus an inbound lead follow-up person, give me one number to stack rank people." I worked on a pretty basic algorithm but it was 25 inputs. It spits out. You're either 99%, 100% or you're down to a 50%. It was amazing. If you look at some of the people, the top guy was Brad Munro, I remember. I'll bet you dollars to donuts. Every time I look him up on LinkedIn, he's always moving to the next level. He'll probably become a VP of sales at some point. The algorithm knows that kind of stuff. This has to be solvable.

Somebody has to do it. That's another thing. That's so exciting. There are so many opportunities, so many things we can do.

There's a time and place to do it and it seems like that time is now. Let's go into agriculture a little bit. If I'm looking at your website, it says, "Maximize the value of your post-harvest grain." You gave a little bit of an example. This batch goes bad after two months. This batch goes bad after five. Tell us the size and scale of this business problem. Are we talking about, “Here are the ten towers of grain?” Are these big, massive problems that you're solving?

They're big, massive problems. It's a worldwide problem. Problems are about $12 to $15 billion a year. This is just in the developed world. If you add China and India, it's $71 billion. The numbers are big. In the US alone, we have in corn and soybean $25 billion bushels every year in the eleven states in the Midwest. This translates to $118,000 storage locations and bins or temporary storage piles. The problem is huge. In the modern world, in the US, about 1% to 2% is lost to spoilage but in other parts of the world, it could be 14% in Brazil, 22% in Africa, 30% in India. The numbers are big. Spoil is only one part of the equation.

There are other issues like energy used. You're drying corn comes off the field with 23%, 24% moisture. If you store it at that moisture, it will be bad within a week. You drive down to 17%, 18%. If you dry it down to 12%, it'd be good for a year but what used to be 1,000 pounds now is 950 pounds. You just lost money. You don't want to over-dry it. You have a dilemma. How much do I dry? I'm fighting between the weight, which has some money or moisture, which is possible potential for spoilage? It's a tricky situation.

In some of these other places like Brazil, they're probably fudging it a little more and saying, "This one's only two months old. It's fine to sell it to the marketplace."

It gets worse because what happens is biological activity creates a hard spot. You have 500,000 bushel piles and there are some pests or moisture. Biologically, it gets bigger and bigger. If we don't cure it, don't cool, it catches fire. We see bins going up and smoke all the time. This happened on barges when they're transporting grain. Advanced knowledge through sensors and AI software when things will go bad is vital to running a clean operation, protecting the world's food supply, knowing when to turn the fans on and off to save energy. There's so much to harvest here if you're going to use the time.

Benefit Plan: Our ability to share information and still protect it from a privacy and security standpoint is far greater now than it was years ago.

We spend a lot of our time now servicing employers ranging from 250 lives to 50,000 lives. That's our wheelhouse. It's a wide one, but it's a wheelhouse. Also, we spend a lot of time with brokers and consultants in the marketplace that are trying to do their best to enhance the programs of their employer clients and are looking for ways to say, “We've taken you all the way to that last mile but trying to get those employees to take action or to migrate into the right plans for them and their families, we're having a hard time doing that.” That's where we fit in.

I remember every year when it's time to go through that process. We have the best of intentions, “Here are my two hours from 5:00 to 7:00. We're good. Tracy, we're going to go with Plan B1. We got to print out all the forms. We've got to look through everything.” Giving that level of, “This is the best bet based on who you are as a family,” makes a lot of sense. Don't over-insure and underinsure and what's the right package mix.

People want to know what to expect. They want to be helped in understanding what to do and they want to know what to expect. It’s no different than as a business owner what you want. You want predictability. One way or the other, you want to understand what's going to happen. That's where AI helps.

On the good news, the little accident situation that we had, first of all, my son's doing great. He's virtually fully recovered. Second of all, they're supposed to be sending us a check back for the deductible and I don't understand why, but they said, “We've got a check in the mail. Thanks for paying the ambulance bill, but we're sending it back.” We’ll take it. I must've chosen the right plan. It’s doing right by us. This is a fabulous conversation. Matthew Sydney, several years at Picwell as CEO. I appreciate you're shedding some light on how AI is being used in this field. It's always exciting. Thank you, Matthew.

Chad, thank you so much for having me. It's a pleasure.

Everybody, we'll talk with you next time. Cheers.

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