How Benefits Brokers are Reducing the Cost of Healthcare, Blah, Blah, Blah…
Lately, I’ve been networking with employee benefits brokers in the under 1000 lives, marketplace.
It’s a totally different ballgame from the way the National Human Capital consultancies approach the insurance business.
But, based on the type of content that they are putting out on LinkedIn, it’s good to know that employee benefits professionals in the small employer market are very passionate about fixing the broken healthcare system. This is in terms of improving quality of care for employees and reducing cost for employers. If you’re new to the Industry, then this is the indication that the typical Broker-to-employer conversation from a solution perspective – is shifting from the insurance company side to the hospital side of the healthcare space.
But the question I continue to ask myself – what if you ask ten different Brokers how they reduce the cost of healthcare, will you get 10 totally different answers?
So, every time I read or hear what a Broker has to say about reducing the cost of healthcare for their clients, I am reminded of two conversations I’ve had with health & benefits consultant from one of the National Human Capital consulting firms.
The first conversation is with an individual who I believe is the new visionary leader of employer-based healthcare cost reduction. If you ever hear her vision of hiring data scientists and leveraging AI technology to bend the healthcare cost-curve at the employee workplace, instead of the hospital and the Doctor’s office – it makes every Brokers’ method sound like blah, blah, blah.
And, even though venture capitalists, global employers, insurers, government and high-tech firms are jumping on-board with her initiatives, her conversation is the subject of another post. If you’d like to learn about this new visionary leader, you can view her LinkedIn profile here.
The conversation I want to focus on in this post – is the one that took place early in my health & benefits recruiting career – it gave me clarity on how top consultants in the employee benefits space, performed at a very high level.
So, she called me from the conference room of one of her assigned clients. Apparently, she had some time to kill and I could tell from the tone in her voice that she was not in a very good mood.
Her story was that it was the client who requested the meeting; how she had to battle traffic to get there on time, and only to find out that two of the major stake-holders were not available.
To make things more complicated, she wasn’t exactly sure of the reason they invited her, and that was the main reason why she decided to wait.
The client was a major Wall Street firm and they had a rich employee benefit plan. And the interesting part – they were paying the entire cost for all their employees – the employees paid zero.
When I asked if it was unusual for Wall Street firms to cover the entire cost for all their employees, she said something that I will never forget.
“only if you’re trying to attract the type of talent who are going to make you money…and with the type of money they’re making, they can afford to pay for all their employees”
Then I said, maybe that was their reason for inviting you in – to hear your ideas on how to better engage their employees, so they will improve performance and as a result, increase revenue, ha-ha.
Fast forward one year later. That client meeting turned out to be a huge success, it led to subsequent meetings. The end result – consulting revenue from that one client grew from $500K to over $1.5 million. She became known on her team, as the expert in cross-selling and expanding existing client relationships.
Here’s the point of this story, even though employers are experiencing increasing costs in healthcare spend, they remain more interested in hearing about ideas on how to generate revenue. I’m not saying that cost reduction is not important to employers, what I’m saying is that they believe that generating more revenue will some-how cushion the sting of increasing costs.
In the example above, the client was spending a significant amount of dollars on employee benefits, yet they found additional dollars to spend on other issues they determined to be also as important.
That is why, I believe that some Brokers (not all) need to change their conversation from cost reduction to revenue generation.
Here are three reasons why:
- More prospect meetings. How? It will separate one broker from many – because his/her conversation will be about solutions to the issues that are keeping HR leaders and decision makers up at nights – and not just during the renewal season, but every night.
- More BOR letters. How? Which broker do you believe is more valuable to a client? The one who knows how to reduce healthcare cost, or the one who knows how to reduce healthcare cost and drive revenue through employee engagement?
- More revenue. How? The National firms refer to is as organic growth- solving many problems for one client. In the mid-market, Brokers are leaving a lot of money on the table. Most are focused solely on retaining the health insurance commissions, and as a result, they lose sight of additional HR pain-points, and non-traditional solutions for those needs.
What can an employee benefits Broker learn about employee benefits from an employee benefits Recruiter?
Bad hires put more clients at risk than a huge renewal increase!
Let me explain that in simple terms: everyone Broker should know that hiring talented performers for each job vacancy is the foundation for generating revenue for their clients. But unfortunately, those talented performers who the Broker attracts through his/her employee benefits efforts, are not being successfully recruited and hired.
Because that the recruiting strategies are executed by a Recruiter, not the Broker!
And, most Brokers are not aware; but the Broker and the Recruiter are both strategic partners on the same team. They do not know each other, but they both share the same client, they’re under the direction of the same HR leader and are partners in executing each other’s initiatives. The Broker’s role is attract talented performers, and the Recruiter’s role is to successfully recruit and on-board those talented performers. The Broker is then charged with responsibilities for retaining those talented performers/employees.
What is also not known to the Broker is that – just like the broken healthcare delivery process, the recruiting and hiring process is also broken. And unfortunately, it is the Broker who shoulders the responsibilities for both bad hires and huge renewal increases. So, a huge renewal increase represents the straw that breaks-the-camel’s-back,
OBTW: It’s a total coincidence, but the consultant in the second conversation, now works with the visionary leader in the first conversation. You can read about that in the “Recommendation” section of my LinkedIn profile.