A little less conversation, a little more action

This article introduces a new five-part series that will take you step-by-step through the process of becoming a next gen advisor and examine the challenges involved in so many of the non-intuitive issues you will face, so you will be ready to tackle them head on.

There’s lots of discussion in the broker community about high-performing health plans and next-generation strategies to control health care costs. But the problem is most benefit brokers and those who train them are talking at high levels about strategies and solutions that they don’t know how to execute, don’t have the resources to execute, or worse, have no intention of executing and just use as a parlor trick to add new clients. So even in a time when many non- traditional competitors are entering the space, not much changes, the results continue to be less than promising, and thus our industry becomes a target for elimination in the next model of health care.

There are a few advisors that have taken on this new model, but not many. If there were more advisors who were truly implementing the next-generation strategies they’re posting all over LinkedIn, the industry as a whole would be clamoring for answers to an entirely new set of questions, such as:

For those of us who are leading the field, these are natural challenges and questions that come up as advisors truly convert their books and deliver real, positive change to their clients. The fact is, those questions aren’t being asked, so it’s clear that most advisors are not fully implementing the strategies that will work for their clients in the future. Anyone who is not teaching advisors how to navigate the questions above to prepare them for what they will be dealing with next is just doing glorified sales training.

Of course, it’s usually easier and more comfortable to hold on to the status quo – the traditional producer model. But that model’s spreadsheets, auction-based solutions, and carrier overrides aren’t accomplishing the goal of lowering costs for employers and will not stand up as we see the rapidly approaching wave of non-traditional competitors enter the health care space.

A new way forward

For benefits brokers, the ultimate goal has always been and must remain to deliver quality medical coverage at a lower cost to employers. But what does that look like in today’s business climate? If you build an independent, high-performing health plan with the right cost controls for your specific client, you are offering a solution that could be perceived as directly competing with the insurance products offered by your carrier partners today.

If your commissions connects you directly to insurers, you are contractually tied to them more closely than you are to your clients. It is very hard to separate yourself from the insurers to do what you need to do with no outside influence. In order to create that freedom, you must first minimize the commissions you accept from insurers and instead charge your clients fees for the high-level, comprehensive services that you provide. By changing the payment structure away from the carriers, advisors of tomorrow can focus more on delivering value to their clients and not continue to be beholden to the carriers.

Related: Where do benefits brokers fit in Amazon’s new health care venture?

As you piece together the different parts of a high performing health plan, build in the cost controls that you know will work, and leverage economies of scale, you can allow a midsize employer with 250 employees to offer a health plan similar to what the Fortune 100 companies offer now. It brings savings that can’t happen when each employer is buying health coverage separately.

Some firms resist change because they are worried about negative reactions from their employees, clients and carriers as they adjust to a new business model. However, the status quo is forcing brokers and employers to settle for 5 percent or 10 percent premium hikes year after year, enormous deductibles, and a small subset of insurers holding the majority of firms revenue. So why not embrace change?

As with most things, the overview provided above is easier said than done. If we as an industry are going to begin delivering true value to our clients, we need to tackle the hurdles associated with those changes head on rather than talk around the strategies that drive value only to act as we have for decades.

The next five articles in this series will take you step-by-step through the process and examine the challenges involved in so many of the non-intuitive issues you will face, so you will be ready to tackle them head on. The articles will focus on:

The industry has changed a lot in the past 20 years, including more consolidation by large insurers and pharmacy benefit managers, plus a greater focus on consumerism, high-deductible health plans and cost-sharing for employees. Advisors need to let go of their past practices and embrace a new way forward. That’s a culture change for a brokerage and its clients, but it’s worth it for the results.

It’s truly time for “a little less conversation, a little more action.”

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