Over promising and under delivering is as costly as healthcare itself
BY EMMA FOX
As our industry has fractured into its identifiable groups, we are constantly being fed the latest and greatest ideas to curb the cost of insurance in the U.S., but how many consultants know how to control the cost of healthcare instead? And isn’t that what truly drives the cost of care?
We hear words like status-quo, innovation, cost-containment, and disruption more than ever as we log into our LinkedIn these days. While all of these terms lend themselves to some very effective strategies, we’re finding that it’s often not much more than a sales pitch from the new and eager consultant.
Let’s cut to the chase — some consultants are selling something they can’t back up nowadays. Just this last year we’ve seen an influx of new consultants entering the market with claims of being the young innovators. Great! We need the fresh ideas and the renewed energy, but some of us have been at this “alternative model” a while and understand what works, what doesn’t work, and most importantly how to be transparent and embrace a truly aligned client-consultant partnership when we’re venturing into something new. In this same year, I’ve seen more division in our industry than ever. I’ve seen wannabe brokers interchanging terms and definitions in an attempt to set themselves apart from what they have been made to believe is ‘status- quo’. I’ve got news for you — status-quo set this stage for you. Those brokers you’re looking at as old, dried up, and out of fresh ideas — we laid the very path you’re skipping down. Your new attitude doesn’t work without the legacy and experience of the old. And boy am I tired of hearing people claim there’s only room for one or the other.
STOP USING A FALSE NARRATIVE
For those of you that have been exposed to the ‘disruptor’ community — I’m glad. We need to move theneedle in a big way. Most of us in this circle are working on larger, self- funded groups with independent TPAs and some alternative provider reimbursement ideas. Most of us in this community understand the difference between being self-funded and having a reference-based pricing (RBP) reimbursement structure. We understand that while those two things often have to exist together (i.e. you are usually self-funded if you are also RBP), we also know that self-funding comes in a lot of different shapes and sizes.
“Most of us in this community understand the difference between being self-funded and having a reference-based pricing (RBP) reimbursement structure. We understand that while those two things often have to exist together (i.e. you are usually self-funded if you are also RBP), we also know that self-funding comes in a lot of different shapes and sizes.”
The term self-funding should really be self-explanatory, but it would be more accurate to say that most medium and large employers are partially self-funded since there is usually a stop loss layer of insurance involved. But self-funding means that the employer is taking on the funding of the healthcare being consumed by its employees. A self- funded plan design can be administered by a national or regional carrier or a third-party administrator. It can have a leased network for all care, some of the care, or no network in the plan at all. Self-funding does not automatically equal no-network or reference-based pricing. And, if you’re selling something as turbulent as RBP, you also need to know (and communicate) that plan management and the quality of care being delivered are two glaring components that need to be addressed. If you’re not able to calculate the balance between savings and friction to best suit your client, you’ve done your second disservice of the sale — the first being that you told someone being “open-access” is akin to self-funding itself.
Similarly, there seems to be confusion over what referenced-based pricing really is. It is a provider reimbursement method. That’s it. Reference-based pricing is the methodology in which we find a reference price for a healthcare service and use that price to determine what fixed cost a health plan will reimburse a provider for their services. It’s not a catch-all or solve-all for cost- containment, but it can be a very effective backdrop to a self-funded health plan that wants to employ a lot of other strategies to deliver the transparency tools a consumer would need to actually take charge of their own health outcome. RBP is a challenging and highly effective cost saving measure, but it is not a requirement of self-funding and is not the definition of self-funding. If an employer is being told they are one and the same, or that the only way to be self-funded is to deploy an RBP plan, they should find a new consultant. Maybe they should choose one of the older‘status-quo’ consultants who have a good grasp of a thesaurus.
“… there seems to be confusion over what referenced-based pricing really is. It is a provider reimbursement method. That’s it. Reference-based pricing is the methodology in which we find a reference price for a healthcare service and use that price to determine what fixed cost a health plan will reimburse a provider for their services. It’s not a catch-all or solve-all for cost- containment …”
STOP HURTING THE MOVEMENT
We all understand that healthcare costs are out of control. And most of us are also acutely aware that health insurance carriers have contributed to an increasingly worrisome trend into the future for employers trying to keep up with the cost of providing benefits. We know that change has to happen, but that doesn’t mean it can (or should) be forced. If you and I are both at a hospital being treated for the same injury, my pain level might be a 6 when yours is a 9. While all employers are struggling with being able to afford coverage for their workforce, some employers’ struggle may be more painful and immediate than others. Business owners don’t want to unleash a disruptive and difficult new plan design on their employees if they don’t have to — yet. That doesn’t mean we shouldn’t be prepping them for the inevitable day that they will have to. Again, this isn’t an all or nothing type of thing. And, let’s not forget there are lots of employers that literally cannot self-fund their health plans or engage an RBP-type plan, even if they do really want to because they’re too small to even meet the minimum stop loss guidelines. But guess what? Those employers still need benefits and an advisor to help them along the way. I’m tired of hearing the newbies discount those advisors that are working the small group frontlines where choice isn’t really an option. Why don’t you try hitting the sidewalk and helping the local dry cleaner with their big carrier plan and a chronic condition for next to no commission? Let me know how that goes.
When we tell an employer that they have no other choice but to make a major change, it should be because they really, truly, don’t — because their financial line item attached to healthcare is literally unsustainable into the future. The art of consulting is not bringing your prospects something sensational — it’s being able to meet your client where they’re at and then pushing or pulling a little to get them to a better state that meets their needs as their business grows.
“The art of consulting is not bringing your prospects something sensational — it’s being able to meet your client where they’re at and then pushing or pulling a little to get them to a better state that meets their needs as their business grows.”
If you’re a consultant out there telling your prospects there is only one way to tackle this healthcare cost crisis, you’re wrong. And, furthermore, you’re hurting a much larger movement made up of consultants that understand the need for fluidity and flexibility. We’re not looking to build a small army of lieutenants; we’re looking to create a big army of privates and officers.
STOP COMPETING
This brokerage industry is as fit for reform almost as much as healthcare itself. Over the years as the methods we’re preaching and selling have evolved, we’ve managed to divide ourselves into opposing corners.
We’re not winning when we’re throwing pitchforks — we’re warring. It has been proven that collaborating with like- minded consultants, even of differing specialties and experience levels, is more effective for achieving the goals we’ve set for our clients and ourselves. That doesn’t necessarily mean you have to enter into a co-consulting environment like we’ve developed at E Powered Benefits, but it can. There are lots of excellent associations and organizations for us all to exchange value. Just take a look at Health Rosetta, or the National Association of Health Underwriters (NAHU), or the Free Market Medical Association, or our bi-weekly Coffee Break meetings. Each of these organizations and communities is setup to bring us together. Use them! We need to start dropping our egos and this belief that it’s us versus them. It would behoove us all to practice a little humility. I promise you’ll gain more, know more, and sell more while having a much larger network of friends and colleagues that will only contribute to your future success (and results) from then on.
It’s time to bring these corners together into a collaborative middle. We’re all aiming for the same net here. So, let’s get on the same team.
EMMA FOX is an employee benefits consultant specializing in advising large employers in a self-funded, open access health plan environment. She dedicates herself to bringing effective strategies to clients and the industry alike, to improve quality of care while lowering costs. Fox is the founder of the Empowered Leadership movement on Linked In that has since become the Empowered Community: an organization dedicated to highlighting resilient leadership and providing a public platform for all voices in the insurance and leadership industry. When she is not working, Fox spends her time between Oregon and North Carolina with her partner, two children and two step-children.