A broker survival guide: 3 ways to stand out
With tensions high over health care costs, brokers have gained a reputation as the bearers of bad news. Let’s consider how we break that stigma.
Increases in employer-based health insurance premiums and deductibles have outpaced the rise in workers’ earnings, causing many people to delay or forego care, and giving rise to deep feelings of frustration and resentment.
With tensions high over health care costs, brokers have gained a reputation as the bearers of bad news. Let’s consider how we break that stigma.
Related: What health care costs will look like post-COVID-19
With more cost containment options available, you are poised to offer your clients a better option – one that saves them money and improves their benefit offering – while also solidifying your position as a trusted advisor. Here are three ways to break away from the status quo to maintain and grow your business.
1. Be an advocate
As a broker, clients expect you to be their health plan advocates. If you come to them year after year with the standard renewal, what message does that send?
Be aware that companies and consumers – your clients and their employees – might be more ready for alternatives than you would predict.
Embrace your role as an expert advisor. Scrap the cookie-cutter approach and develop customized solutions that meet the needs, culture and goals of your clients.
In addition to quarterly reviews and detailed plan performance and utilization assessments, take note of how your clients’ business or industry may be changing. Ask about their opinions or frustrations with the status quo products coming from the big-box insurance carriers and the big three pharmacy benefit managers (PBMs). The insights revealed will help you stay on top of clients’ evolving needs.
2. Don’t rush change
This is not a contradiction to point number one. Every broker has a book of business that is loyal to the large, traditional insurers. These groups take comfort in the familiar – in this case, broad-access networks and recognizable logos – and are hesitant to make any drastic changes. You won’t win any business with these folks by proposing a swift and abrupt departure from the way they’ve always done it.
Also: What will it take to be successful in the changing benefits world?
Rather, the key is to acknowledge their entrenchment with the status quo while showing them areas for improvement. Consider proposing a multi-year glide path toward more control, transparency and flexibility. It could look something like this:
- Year 1: Move the group from a traditional, fully insured plan to an administrative services only (ASO) arrangement – either level-funded or with extremely conservative stop-loss risk assumption terms.
- Year 2: Keep the same traditional PPO network, but move the group to a large, independent third-party administrator (TPA). This will give you and your client greater opportunities for customization and the option to select from a spectrum of cost containment programs.
- Year 3: Nothing has changed for the group’s HR departments or its members. Employees have the same large carrier logos on the same ID cards, the same providers in the same networks. But you’ve positioned the group to have more visibility into their claims spend, and greatly increased their flexibility and control.
No matter how steadfast their loyalty to the big box carriers, at some point, it will be hard for these businesses to argue with the numbers. Eventually employers will tire of blindly paying 241% (or more) of Medicare and will seek change.
So, if you tell them they could save 20%-30% on health care and lay out a safe, gradual path for them to get there, you’ll be one step ahead of your plentiful competition.
3. Educate your client on the options to improve plan performance and claim spend
Clients expect the annual renewal increase, but that doesn’t mean they like it. Imagine their reaction if you show them options that reduce spend. Talk to your clients about:
- Reference-based pricing (RBP). Most RBP solutions start with the amount Medicare would pay for a service and add a percentage to establish the reference price. In doing so, they guard employers and members against potentially inflated and unpredictable charges for treatments. Use an interactive calculator to run through different savings scenarios with your clients to demonstrate the long-term revenue impacts of an RBP model.
- Pharmacy alternatives. Pass-through PBMs, formulary substitutes, and specialty Rx solutions can yield six-figure savings for 200-EE Plans, with little disruption to members.
- Direct contracts. Employers can select and negotiate directly with health systems, hospitals and doctors to establish cost-competitive rates and drive members toward high-quality providers. In addition, many providers are tired of the “middle-man” big box insurance carriers and welcome direct relationships with employers within their communities.
- On-site or near-site clinics. Convenient access to medical services can improve employee health, control costs and increase productivity. Employers with a concentration of covered members have seen success with on-site and near-site clinics, reducing health care costs by 64%, reducing time lost from employees leaving work for medical appointments by 70%, and lowering emergency room utilization by 63%.
- For employers with a more widely distributed or remote workforce (in industries like trucking, for example) telehealth may be a strong option. Nearly 9 out of 10 employers now offer access to remote medical care. Online medical services available today extend beyond primary care to include physical therapy, mental health counseling and even access to ER doctors.
Solidifying your position as the trusted advisor
Health care spending isn’t slowing down. Private employer medical costs are projected to continue to increase 6% in the coming years. If not now, then at some point in the future, your clients will look for alternatives to the high-cost options of the big carriers.
Take the time to truly get to know your clients and understand both their needs and appetite for change so you can align your recommendations accordingly. The brokers who lay the groundwork now, who introduce and educate their clients on smarter, more flexible, and more employer-and member-friendly options will be best positioned to guide clients through that shift.
Be bold. Lead the change.
Woody Waters is the co-founder of ELAP Services (www.elapservices.com), a leading healthcare solution for self-funded employers across the U.S. Founded in 2007, ELAP has helped more than 450 U.S. organizations reduce their healthcare spend by as much as 30%.