Chasing perfection: A Q&A with Nick Hansen

How did you get started in the industry?

My dad started PSG almost 40 years ago, so it’s always been in the background of my life. But I had zero interest in ever joining it. As a kid, things were comfortable and I got to go on vacations but I didn’t really think, “Wow, we have a comfortable life because of what my dad does for a living.”

I got a degree in Finance and Economics, thinking I was going to be a Wall Street stockbroker, but I started talking to people about what that actually involved and decided I wasn’t interested. So I ended up going to my dad and saying, “What do you think about me working for you?” He said, “I told your mom I’d never ask you to work for me but the second you came asking for a job, you’d have one.”

How is working with your dad? How has your business evolved?

When I came on, there was no silver spoon. It wasn’t like I was the second highest paid employee at the company or anything like that. I laugh with my wife when I think about how little I made when I started. Dad had his book and he went on his sales calls and I had mine and went on my calls. But it’s never been one of those horror stories about working with family. I don’t think there’s anything he could say to me that would make me move on. It’s never been an issue.

For years, we were a status quo brokerage, but the last five or six years, we’ve lined up with ASCEND and it’s gone from everything being fully insured to doing everything we can to move away from the carriers. We’ve changed our sales process; my Dad and I now do everything together. He still has his list of prospects and I have mine, but when we get a meeting, we both go together.

When we’re on our own, the message is presented differently, but with the two of us in the room together, we don’t miss anything. I’m the analytical and numbers guy while he’s the relational storyteller. When we hold meetings at different locations, I say, “You guys got lucky; our meeting will be done in 20 minutes and the other group will be there for an hour listening to my old man tell stories!”

We both bring something different. If we’re sitting down with the CFO of a thousand life group who’s been there for 25 years, he’s probably going to take my dad more seriously than me, regardless of what I say. It’s nice because I’ve got the numbers and he has the experience to prop them up. It’s been fun. You go into a meeting and even if you get knocked around a little, at least you’re there together.

What’s it like to have a small brokerage today? Any unique challenges or opportunities?

The phone is always ringing and the big boys are always wanting to talk, but at this point, we’re having too much fun to want to sell or work for anyone else. My dad and I can look at our schedules and cover for each other if someone wants to take time off.

HR will sometimes look at us and say “they’re too small.” But size has nothing to do with our abilities to bring the right people in. We will only work with the C-suite; it’s got to be a CFO or CEO or we won’t have the conversation. It’s OK if HR is there but we need to have someone with P&L responsibilities in on the conversation. So our size does get brought up, but it doesn’t matter. If you look at the bigger houses, they work in teams; there are usually only three or four people working on an account anyway.

The nice part is that we’re not tied to any one organization. We were talking to another advisor who told us, “I like a lot of the innovative ideas and strategies I’m hearing about these days but if I try to implement them, it would have major repercussions on my business because of some of my relationships. “We’re not tied to the carriers; we have great TPA partners but if we ever had to move one, we’d do it. We don’t get overrides from anybody; it’s totally performance-based and it works for us. We’re nimble and we can pull the ripcord if something’s not working; we can pivot and move to something else.

What are you watching when it comes to plan design and other trends?

We’re starting to roll out more reference-based pricing; it often takes two or three renewal cycles with clients and prospects for them to start to get the idea or have enough pain to want to try it. There’s noise, but we’ve found it’s not anything you can’t overcome.

We’ve recently found a company that creates robots for robotic surgeries. Right now, our medical care management team is denying robotic surgeries because there’s not yet enough data to support these procedures. But this company’s whole goal is to create a database that can start rating these surgeons so that we can start sending people there. We’re meeting with them in a few weeks to try to start figuring things out. We’re hopeful that within a year or two, we’ll have a database similar to what a company like Quantros has done for human surgeries that will provide transparency about success rates, infection rates and that type of thing. It’s something we’re watching closely that could be a gamechanger for people across the country who are building plans.

Are you getting more buy-in from prospects and clients these days?

We’ve reached the point where we think our strength is that we’re able to communicate this stuff to people. Once you get going on it, self-funding really isn’t that complicated. But if you have no idea how it works, it can be very daunting. We’ve gotten good at explaining, “Here’s why we think what we think. We can show you how these companies are performing.” We can break down the numbers and say, “Here’s where your claims are coming from” and it gets to the point where it’s so simplified that I could explain it to someone who’s never even heard of it before.

And the pandemic has made it so that many people are more willing to talk. I don’t know if I’d say people are moving any more than they were before, but at least the conversations are happening more often. These things take time and a lot of trust needs to be earned. It’s a slow process but I definitely see more of an openness to hear about what’s happening.

Do you target any size(s) of company?

I don’t think I have a single client with less than 30 employees on the plan that is still fully insured. My smallest group that is self-insured has 32 employees on the plan, all the way up to a few thousand.

A few years ago, my dad and I were coming back from a meeting and we said, “We have to stop doing the same things.” So when we go into a group now, we say, “Look, if you want to stay with the big carriers and what you’ve been doing, that’s fine, but if you want to talk about something that’s innovative and that will save you and your employees a lot of money, we’re here for you.” We’ve just gone head first into this. We don’t want to be a part of that other stuff anymore.

So the self-insured model is working for smaller employers now? Will that continue?

I’m amazed when we meet with a fully insured prospect with hundreds of people on their plan. You almost have to bite your tongue. It’s like, “What are you doing? I don’t care what your claims say, there’s no way you should still be fully insured. There are so many pieces we can plug in that will skim fat off the plan.”

But we see more companies across the country who are moving to self-insured. Our 30-life group that’s self-insured might be our best running group.

That’s the thing that’s made us dig in our heels with this stuff; we’ve found new groups with fully insured carriers telling them they need a 3% rate increase to keep them and then we come in and do all the right things, involve the right players and they’re suddenly saving 30%. We’ve seen it enough to know this is not a fluke.

How do you stay motivated and positive working in a broken/rigged health care system?

It’s the little victories. We had a client we took over a few years ago from one of the big carriers and my dad told the CFO in the initial meeting, “If we don’t save you a million dollars, then we didn’t do our job.” And we sat down at the renewal the next year and the guy said, “You did exactly what you said.” That’s one of those moments where you can pat yourselves on the back and say, “That was fun.”

We’re always chasing perfection. We’re always looking for the next thing we can add to our arsenal to plug in and save money.  We don’t worry about the outside stuff; we can’t control that. The health care system is working exactly like it’s supposed to. It’s definitely not broken, it’s a well-oiled machine that’s running just fine. It’s just going in the opposite direction of what we want.

How do you deal with the volume of info and filter out the noise?

We can’t always expect another advisor to show up at our door and say, “These people are great, you should work with them.” We need to go out and talk to vendors and partners, and if I hear something I like, then I’ll start asking around. If we get a few people who tell us, “Yeah, they had something interesting to say” then that gets my interest. But we typically don’t do anything unless they’ve been somewhat vetted. If I don’t have someone I respect who can vouch for them, we typically keep chugging along. That might mean we’ll occasionally miss the next big thing for a year or two, but I feel like we have a good system going.

Do you and your dad ever have differing opinions?

For the most part, we think enough alike that we can work it out. Depending on the topic, we’ll decide which of our peers or partners we can reach out to for advice. We’ll sometimes get a third-party mediator in to give their perspective, but we both have thick skin and get along. If he says, “I really don’t think we should do this,” I trust him. And he’s the same way with me. It’s been pretty smooth sailing so far.

Internal disruption is changing the industry. Do you see that as a good thing? How will it all play out?

We feel good about what we’re doing. You hear about the revolution that’s happening right now, but it’s still just peanuts compared to everything else that’s happening. But if I went to a conference a few years ago, there were only a handful of people who were trying to disrupt.

Now I look around and go on LinkedIn and, although it’s still a very small percentage of the industry, we’ve got ourselves a nice little group of people who are doing this. It’s because groups like ASCEND, Q4i, TRUE Network, and Health Rosetta all think alike. There are minor differences in how we operate but for the most part, I think we’re all doing the same thing.

What’s one thing you know now that you wish you’d known when you started?

Basically everything about the self-insured industry. I started my career pretty close to when the ACA came along and I wish I’d known what effect it would have and the ways it would change the landscape. I wish that instead of being on year five or six of working the way I do, I had been doing it twice as long.

Our industry is getting younger and more diverse; how can we keep the momentum going?

I think it’s all about the culture of the company. In this job market, it’s so hard to find the right people. I’d like to think that because we’re doing some things that are innovative and fun, it makes it easier to create a culture that isn’t “Grandpa’s insurance company.” I think it’s on us as the top leadership of organizations to create a culture where people want to come work for us because we have fun and are doing some cool things.

Finish this sentence: The key to success in this industry going forward is…

To keep learning. I’m often amazed when I realize just how much I don’t know. Surround yourself with people who know things you don’t. The second you start thinking you know it all, you’re in big trouble in this industry.