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The finance and delivery of the American healthcare system is undergoing what can only be described as a dramatic reformation, and the broker industry plays an integral part in reshaping the new ecosystem on behalf of the millions of consumers we represent. The healthcare system has never faced such sweeping innovation aimed at lowering costs, providing transparency, increasing efficiencies and improving patient outcomes. We’re moving at light speed toward an entirely new way of managing the client relationship, and it’s only the beginning!
The obstacles facing the current finance and delivery of our healthcare system are numerous and ever-increasing: State and Federal Legislation aimed at price transparency, pharmacy PBMs under withering attacks from lawmakers and consumers, large hospital systems and their PPO carrier cohorts being challenged on fiduciary responsibilities and the stewardship of healthcare dollars are just a few. The climate of change has created broker competition like none other in the history of Employee Benefits delivery. We are at a significant crossroads in our industry. To stay vibrant and successful, agencies should focus on several critical tasks in the immediate future: Admit we have a problem and embrace the solutions – If your agency is still quoting carriers, comparing deductibles and placing rates on spreadsheets, frankly, your days are numbered. Our nation’s runaway healthcare costs are unarguably unsustainable. At the current rate of inflation, there aren’t deductibles high enough or carriers abundant enough to allow agents to skate by. I recalled several years ago a peer said that her client’s rate hold meant they were “put to bed for another year.” Today, nothing can be further from the truth. Successful agents should be well versed and comfortable reviewing the absolute latest concepts and innovations. While these tools won’t be a good fit for every one of your clients, rest assured other professionals are speaking to your clients about these new ideas. If your toolbox doesn’t include an ever-increasing array of innovation then you’ve got to revamp your workshop. “Successful agents should be well versed and comfortable reviewing the absolute latest concepts and innovations.” Embrace Transparent Compensation – Successful agency management in the new global world of healthcare and employee benefits is mostly dependent upon an unwavering foundation of complete transparency and full compensation disclosure. The days of secret carrier/broker deals with commission terms scribbled on the back of a cocktail napkin following a round of golf are long gone and in the rearview mirror (believe me, I witnessed this decades ago). Accepting any undisclosed portion of agency compensation from “the system” should be utterly forbidden in the new ecosystem of benefits delivery. These opaque revenue streams include new sales bonuses, carrier overrides, steerage incentives, percentages of premiums, trips, junkets, sporting events or even golf. Our industry has been clouded in suspicion for decades, and it’s high time we separate from the status quo. Forward-thinking agencies will thrive on specific consulting agreements where fair and balanced fees are fully-disclosed and reimbursed outside of the represented vendor system. A successful agent can no longer be beholden to a carrier for their livelihood. Instead, agents are genuinely independent and working for their customers without any level of impropriety. Whenever possible, compensation should be tied to performance or client savings as a method of reimbursement, a success fee. An agency should become completely comfortable putting some or all of their compensation at risk if the plan doesn’t perform as expected for their customer. This ensures that your agency and your customers row in the same direction. Invest in real-time data translation – How many times have you sat around the table at your client’s year-end meeting while the carrier representative reviewed data reports to substantiate the rising costs? If you had the nagging suspicion that the data seemed to conveniently fit the carrier’s narrative, trust me your customer is thinking the same thing and your both right. What’s the point of regurgitating data if it only describes where the costs have gone after the fact? I’ve heard CEOs say, “These fancy reports look great, and they slice and dice the data, but what has it done to lower my costs?” The point is, if your agency isn’t investing in substantial data systems that can translate care costs in real-time to impact the current course of treatment and member experience, then you’re nothing more than a steward of the plan. Data translation in real-time allowing your agency to make immediate and impactful intercessions on behalf of your client is one of the most critical investments an agency can make. Don’t be afraid to collaborate – Some of the most exceptional solutions and ideas I’ve learned came directly from one of my peers who happen to be a competitor for business in my area. These weren't trading secrets obtained by some underhanded method or corporate espionage. They were openly shared for a greater good. Employee Benefits and healthcare solutions exist today and need to be replicated, and collective intelligence widely shared. If your agency believes you can live in a vacuum taking an adversarial position with your peer colleagues then you may be missing some incredible resources and expertise. Learn How to Get Comfortable being uncomfortable - I recalled in 1986 my former CEO declared, “Our policies are written in wet sand, and our progress is measured in stone.” It’s as accurate today as it was 30-years ago. Successful agencies should view change, not as a single static event, but the constant flow of opportunities for evolution and improvement. They should understand that embracing change creates distinct advantages and a stubborn refusal to accept the status quo. Regardless of your agency size or book of business, failing to change, grow and adapt could easily lead your organization to complete failure within a few years. Are there moments when I dream of bygone days when you could rest your feet up until your client’s renewal came in? I’d be lying if I said no, but those old days are long gone. By no means is an agency transformation journey simple, painless, or secure. Changing the well-established status quo system is complex and daunting. At times it requires bold measures and audacious approaches. But, continued and uninterrupted success in the future depends on alignment and understanding of the latest innovations our industry can offer.