A lot of people ask me “what is it that I do”? I could go on and on about what I do, but it’s best summarized by telling them “I try to get people to do what they don’t want to do” and they ask “what’s that”? I say “change”.
I’m a healthcare consultant that works with specific employers who partially self-funded their health plan benefits for employees. For this discussion I use the term partially self-funded and self-funded synonymously. Unless you’re over 1,000 or 2,000 employees you’re always going to be partially self-funded utilizing stop-loss reinsurance.
When I was a kid I used to ride the bus after school over to my Grandparents’ house and help them in the yard raking leaves, mowing the lawn, washing windows, and the like. When I got done working I would inevitably go inside the house and watch TV waiting for one of my parents to come and pick me up and take me home for dinner. Back then the TV was built into a Hi-Fi Console – a large credenza like piece of furniture with the TV built into the middle of it, the speakers were also built into the cabinet, and on the top left side there was a turntable, and on the top of the right side there was a tuner and AM/FM radio. This was all built into one have big heavy piece of furniture.
One day I was over there and went inside waiting for my parents after working and the Hi-Fi was gone. I asked my Grandma what happened and she said it had blown a tube or something and Grandpa had ordered another one. So a time or two later I went back to do more work and when I went inside after working there was a brand-new Hi-Fi, only this time it was a maple cabinet instead of oak, but everything was still all built in.
We all know they don’t make those anymore and people have their entertainment system built through components. They may have a Sony TV, a JVC receiver, Infinity speakers etc. Everything is built and assembled through components. The beauty of this is that when one of the components goes bad or you choose to add another component, you can do so without changing the integrity of the entertainment system.
What I do is build health plans through components. If you’re contracted with an insurance company then you have the Hi-Fi Console. Everything they provide is under their roof. For example, if you’re with Blue Cross then they are providing the administration, it’s their reserves, it’s their network, it’s their pharmacy, etc. – everything is provided by them. So if you get a renewal increase that you don’t like you either go find another Hi-Fi or pay the increase. You have to change everything.
With a health plan that is built through Best In Class components, if one of the components goes bad you only have to replace that component, not the entire Hi-Fi. For example, if you get an increase in stop loss, you simply go out and shop for new stop loss and it’s invisible to employees. You don’t have to change the ID cards, the benefits, the pharmacy, the administration, etc.
It’s important for your broker to know how to put an entertainment system for healthcare together. And it’s extremely important that your broker knows not only which components to put together but which companies/vendors in the marketplace offer Best In Class components.
Unfortunately, the brokerage benefit business is one which is over promised and under delivered. You don’t know what you don’t know.