Benefit Advisers Must Actually Advise

Sales is the name of the game, no matter the industry, but some professions should focus more on providing sound advice and less on promoting new and trendy products. Many benefit brokers fall into that latter category, and I say this as someone who has been in the insurance industry for 25 years. It used to be that group insurance brokers were more transactional. Get a good product at a fair price, provide some service, and your client is generally happy. Today, that same broker must create compliance initiatives, administer COBRA, FMLA, enrollment services, ERISA advice and some human resource functions. This new responsibility requires expertise beyond what's needed to get an insurance brokers license, yet, like most entrepreneurs, we adapt. We must, however, get back to basics. As group benefits brokers, we must turn our attention to the core mission of our profession today. That mission is strategic consultation and education for our clients, addressing the cost of providing healthcare in this country. It is, by far, the biggest driver of the increase in the cost of, and inability to afford, group health insurance. Certainly, maintaining an awareness of professional trends has its benefits, and often a new offering can make a big difference for clients, but advisers need to dial down the reseller role and concentrate on imparting guidance to address core issues. Next to payroll, the largest expense for most businesses is the cost of group health insurance. Yet many benefits advisers continue to go down the same old path by providing information on the same, tired, cost-shifting plans – this despite the fact that these plans's premiums are rising faster than the cost of living. See also: Benefits Advisers: It’s About to Get Real   Benefit brokers need to begin educating clients on what is really driving premiums. One significant lesson that should be learned upfront is that joining a large insurance purchasing group is rarely the solution for small to medium-sized businesses, because savings are short-term for most. The dominant problem facing health insurance prices is the cost of providing care. It won’t cost less for a small firm with a staff of 10 for an MRI or maternity stay simply because it is in a pool of 5,000 employees. Although these multi-employer plans may show short-term savings, unless there is a marked improvement in the risk pool, as with every other group collective purchasing arrangement for healthcare, it fails. And, oftentimes these plans are dangerous self-insured arrangements where the employer, and sometimes even the broker, has little knowledge of the potential risk. The need, from my standpoint, is for businesses to embrace measures that can result in less prohibitive healthcare costs, beginning with the use of telemedicine programs not owned by insurance companies. An eye-opening statistic from the American Medical Association indicates that over 70% of all emergency room, urgent care and primary care visits could be handled via telemedicine. This is a cost-effective alternative that will reduce the employers claims cost by a weighted average of $240 to $300 per visit. Offering telemedicine as a benefit not only decreases claims and keeps overall costs down, but the employees are less likely to miss work due to a medical appointment. An independent second opinion program is another avenue to trim costs, yet a mere 19% of health care consumers get second opinions. This is head-shaking as a study conducted in 2014 by the Houston Veteran Medical Center and the Baylor College of Medicine estimated that 12 million people in this country are misdiagnosed annually. The study went on to show a change in diagnosis by nearly 15%, as a result of a second opinion and as high as 26%. The course of treatment is changed an astonishing 70% of the time. An independent medical second opinion program can provide simplified access to high-profile medical centers/teaching hospitals, specialists, etc. in collaboration with a patient’s attending physician team, often for little to no cost. Result: Employees are less likely to miss work due to a misdiagnosis or follow-up appointments. Consider, also, that the third leading cause of death in the U.S. is medical errors. Offering employees a choice as to how they purchase prescription medications is another cost-efficient employer healthcare program. It fosters consumerism by deploying a comparative prescription drug environment and can lower cost for the consumer and the employer, sometimes substantially. Numerous online prescription drug programs can help members identify discounts, coupons and subsidies available for their high-tier prescriptions. Current and emerging technologies aggregate these programs so immediate access to potentially less expensive prescriptions drugs are identified and easily obtained by the patient. Also, some of these programs will have deductible and copayment assistance programs designed to keep people compliant with their medication regiments. Another easy way to reduce costs. Employers need to weigh the worth of group health insurance against self-funding; if choosing the latter, always offer a reference-based pricing option. This plan recognizes that insurance company payments to hospitals can be as much as 300% to 600% more than what Medicare would pay. Reference-based pricing plans might pay the hospital just 50% over Medicare. If an employer or local market isn’t ready for this aggressive approach, there is a solid opportunity to educate about reference-based pricing. See also: Reinventing Sales: Shifting Channels  Those of us in the insurance and benefits industry have the responsibility to shed light on strategies that address the real drivers of cost rather than simply regurgitating what we are told are current industry trends.