We work in an industry in desperate need of innovation. Thanks to forces beyond our control, transformation is already happening all around us – and to us. The unfortunate thing is that it was not driven by us, but rather by the Patient Protection and Affordable Care Act and all its intended and unintended consequences.
For enterprising companies, however, there is still opportunity to take the reins, rather than being dragged behind the horse.
To better understand where to focus our attention, we must first consider that our definition of "client" will be altered over the next three to five years. Brokers will no longer target just employers; we'll work through them to advise employees. It's the most profound structural revolution ever to face the employee benefits sector. This is the territory that's ripe for innovation, because we have to rethink the way we do business, expand capabilities and modify how we staff our organizations, and reconfigure our approach to the marketplace. Right now, there's a lack of widespread investment in solutions that will support this sea change. But the opportunity is tremendous – neither employers nor employees can navigate our marketplace complexity without people and tools to do so. At this nexus, innovation will thrive.
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It's important for brokers to understand where they fit in this changing dynamic. In the background are the carriers, which essentially serve the role of "product manufacturers." On the front end, we have new software solutions emerging. Technology is part of the answer and why developers, such as Zenefits, are grabbing headlines.
But software advancements aren't enough. They don't address the human factor – the need for a point of connection between the software and the product. That's the realm of employee benefits advisors. We're neither software developers nor manufacturers; we're the trusted, empowered intermediary "connecting" Americans to a healthier future. This is honorable work being pursued by both investment and intellectual capital, but it's ground we can own if we expand our thinking now.
Historically, businesses like ours thrived on asymmetry of information – we always knew the products in the marketplace better than anyone else. That advantage is quickly disappearing. Just as people now shop online for automobiles and other financial services, rather than relying on auto dealers or stock brokers, the Internet will become a great equalizer in the benefits arena. Employees – our new clients – will begin shopping for more simplified products that they can more easily understand. The need for a trusted agent could vaporize, unless we find new ways to deliver value.
Tomorrow's successful advisor will operate as a data hub, synthesizing, analyzing and comparing data to help consumers make informed choices. Our new role will be to aggregate information, present it efficiently and effectively, and advocate for our customers.
For example, we could guide individuals to choose carrier A over carrier B, because the former has a track record of keeping people with similar medical conditions healthier. We also can help interpret hospital and provider costs and outcomes data, as well as wellness, lifestyle and market trends. Today, consumers lack an understanding of how costs are trending and in what direction or which approaches produce healthier results. Tomorrow, we will need to know who is winning in the marketplace and why.
This is the territory ripe for innovation. The people we work with and the information we process will be different, but those who find innovative ways to bridge this phase will not only thrive, they'll be instrumental in recreating our industry for the future.
Mike Sullivan is vice president and chief marketing officer of Digital Insurance and Digital Benefit Advisors.
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