AUGUST 21ST, 2020
I began my career in sales. Shortly after, Aetna recruited me to be part of a new project they were piloting - a small business unit in St. Louis. There, I connected with a mentor and went on to hold sales records for many years with Aetna. When my mentor left the company, I decided it was time for a change myself.
After spending some time at Caremark managing preferred provider organization (PPO) and health maintenance organization (HMO) relationships throughout the Midwest, a new door opened up for me.
I got a call from my old mentor, who was then the chief marketing officer at Blue Cross Missouri. He wanted me to take a regional manager position in central Missouri.
At Blue Cross, I worked with brokers across mid-Missouri. I also routinely engaged with my competitors and others within the industry, discussing industry trends and sharing our experiences. Over ten years, I built strong relationships with not only Blue Cross management, but professionals from United Healthcare, Guardian, Cigna, Aetna and more.
Eventually, Blue Cross was acquired by WellPoint, which was bought by Anthem. The company wanted to move my family and me to California, and I knew once more that it was time for something new.
It was then that I transitioned from working for carriers to becoming a broker at Sundvold Financial. The switch was unplanned and unexpected - and came with its own set of challenges.
As a broker, at least in my environment, you essentially eat what you kill. My wife and I had three young children, and I went overnight from making a good income to no longer having that guaranteed.
Despite the uncertainties, looking back, I wish I would’ve made the transition to broker even earlier in my career. It was challenging but it was an extreme motivator.
The most valuable piece of advice I could offer to anyone interested in being a broker is to first work for an insurance carrier. There’s no substitute for knowledge, and you really learn the guts of how an insurance company works. When you have success on that side of the fence, you have a differentiator on the broker side.
One of my priorities as a broker is to ensure my clients understand the details of the products they’re buying. I want them to know how their rates are developed and how they can influence their costs.
I’m also a firm believer that negotiations shouldn’t be one-sided. It’s a broker’s job to help both their clients and carrier partners find solutions that work for everyone. When you enter into negotiations with an employer and a carrier, all parties need to walk away feeling like they won.
I’ve seen many changes during my career, but one stands out. When I first got into this business, I was hired by clients to help them finance healthcare for their employees. Now, the demands of clients have blossomed into a wide array of various services.
They want me to give legal and compliance advice. Tax advice. They want me to be an extension of their HR department and help with their payroll needs.
As the benefits space has become more crowded, I’ve seen my competitors start to offer these expanded services. Soon, these solutions became table stakes.
While larger agencies have in-house experts or departments to handle these client requests, we take a different approach at Sundvold. My team and I build partnerships with third-party providers, allowing us to take a plug-and-play approach with their clients.
Rather than having an Employee Retirement Income Security Act (ERISA) attorney on staff, we put attorneys on retainer. If they’re not performing well or charging our clients high fees, we can shift that relationship around. That way our upfront fees are very competitive because we are not charging clients for a briefcase of tools that rarely get utilized.
The biggest change I would like to see is an increase in transparency. There’s a concerning lack of openness in many areas of the industry.
One of those areas is communication between insurance carriers and employers. If you’re an employer with fewer than 100 employees, there’s not a carrier out there that will give you your claims data. Even larger companies have limited access to their profitability for the carrier and the fees providers have charged for their services, especially Pharmacy Benefit Manager fee’s and rebates.
The most important steps toward improvement in this area are an increase in consumer education and a shift toward consumer-driven health plan strategies.
While some carriers have made an effort to publicize provider rates, adoption by consumers is still low. Employees simply don’t have skin in the game. If you’re paying a copay or a relatively low deductible, you have little incentive to know what those services cost.
In other words, there are two types of money: your money and my money. When it’s your money, I’ll spend it freely. When it’s my money, I’ll be more careful.
Strategic plan designs like offering high-deductible health plans (HDHPs) and including coinsurance after deductibles may help keep consumers engaged and educated on the expenses associated with their care.
During my time as a broker, I’ve found that the most successful employers build an employee culture that’s focused on two-way communication and appreciation.
I visit many clients, presenting benefits information to thousands of employees every year. At the companies that don’t foster this type of culture, the employees often feel like they don’t have a voice.
At companies that prioritize communication and feedback, the sessions are much more productive. In fact, those employees tend to be a lot more appreciative of the benefits they’re offered, compared to the other type of company.
Reflecting on my professional experiences with carriers and brokers, I would emphasize that the healthcare benefits industry desperately needs some changes. We’re on an unsustainable path. The status quo cannot continue. Healthcare costs are accelerating at much faster rates than employers’ bottom lines / profits.
We need to become innovative. We need to incentivize people to act in their own best interest, whether it’s an employee shopping for healthcare or the physician treating them.
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