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A Broker Survival Guide: 4 Ways to Stand Up and Stand Out

November 2019

As a former broker, I remember when healthcare was more affordable and renewals were a whole lot easier. Those days are over. Brokers can no longer rely on their hustle and charm to guarantee business. Not in a world where annual increases are as automatic as the sun rising in the east. Quality brokers must differentiate themselves.

Most renewal meetings have become challenging affairs with brokers as the bearers of bad news — there to report another year of rising health plan costs. If you want to keep your clients’ business, you should think and work differently. Here are four ways you can stand out and survive in today’s increasingly competitive marketplace.

1. Ditch the cookie-cutter approach. Recognize, embrace and prepare for change
If you’re coming in year after year with the standard renewal, think about the message you’re sending. Clients expect brokers to be their health plan advocates — professional partners bringing them new ideas and helping them control costs with customized solutions designed for their workforce.

A study by the Kaiser Family Foundation shows the average total cost of employer-provided healthcare coverage has topped $20,000 for a family plan and healthcare spend is still growing. Health insurance is out of reach of many workers, causing them to have to make tough decisions. Is it possible that businesses and consumers — your clients and prospects — are more ready for alternatives than you are prepared to present?

You need to take a deep dive into their healthcare data and really crunch the numbers. But you also need to understand how their business is changing. By learning about their workforce, culture and company goals, you’ll be better equipped to support their health plan goals. You are the professional in this industry!

Desperate times call for desperate measures.
A recent story in the New York Times proves this point. Jessie McCormick, 27, has a heart condition and could have qualified for her company’s health plan. But she did the math and realized that her out-of-pocket expenses would be at least $1,200 a month, about double the amount she had left after rent and utilities. Instead, she stopped working so her income would be low enough to allow her to enroll in Medicaid. If you have to quit your job to get more affordable healthcare, then the system is not working. People are ready for a change.

2. Know your BUCA buyers and plan accordingly
There’s probably a percentage of accounts in every broker’s book of business that are Blue Cross, UnitedHealthcare, Cigna, Aetna or Humana (BUCA) loyalists. They are risk-averse, name-brand devotees and potentially unwilling to break free from their perceived safe haven. The key is to address their needs without being complacent.

Even the BUCA proponents should see alternatives. Consider this multi-year glide path:

  • In the first year, move the group from BUCA Fully Insured to BUCA ASO, perhaps level-funded or with extremely conservative stop loss risk-assumption terms.
  • In the second year, keep the same BUCA PPO network, but move the group to a large, independent third-party administrator (TPA).
  • Heading into the third year, nothing has changed for the’s HR department nor for its members — the same BUCA logos appear on the ID cards, same providers are in-network, etc. But now, you and your client can order more reports and see more data. You have maneuvered the group into the position of having more flexibility, increased transparency (into claims spend) and control.

Think about the numbers in this year’s RAND research report. After BUCA discounts, employer-sponsored plans pay an average of 241% of the cost Medicare. For outpatient treatment, that average jumps to 293%. In about one-quarter of our states nationwide, the outpatient average is far greater than 300% of Medicare. One day your BUCA buyers could have had enough — and you’ll be ready as the knowledgeable guide, with the group in position for you to navigate the health plan waters.

3. If money talks, then savings sing
Let’s face it, your clients may be sick and tired of yet another renewal increase. Of course, you’re going to shop their carriers, do the math on premium and out-of-pocket increases, but you’ll really get their attention when you offer solutions that reduce claim spend.

Consider options that will have a real impact on spend:

  • Direct contracts — This concept is becoming exponentially more popular as health systems also have BUCA or "middle-man" fatigue and are looking for direct relationships with area employers.
  • Pharmacy alternatives — Suggest alternative partners to the“big three”pharmacy benefit managers (PBMs). Pass-through PBMs, formulary substitutes (for more efficacious, less expensive Rx) and various specialty Rx solutions offer tremendous savings with little to no member disruption. In this bucket, alone, you often find six-figures are on the table for 200-EE Plan.
  • Advanced telehealth — Telehealth has evolved over the years with options that go beyond the basic primary care to include access to ER doctors, online physical therapy and mental health counseling.
  • Reference-based pricing — This money-saving model is gaining traction as more brokers and clients realize the substantial savings it can deliver.

4. Remember, fortune favors the bold
Your clients may not be ready for such bold ideas, but better that you introduce these alternatives than a competitor. The point is, to build and grow your book of business, you should offer legitimate alternatives — smarter, more flexible, employer- and member-friendly alternatives — that offer true savings.

Or come to grips with the idea that your livelihood may go extinct. A recent Wall Street Journal/NBC News poll found that two-thirds of registered voters supported the idea of allowing people to buy into Medicare. Should that come to fruition, employer-sponsored healthcare (and your position) would be forever changed.

At the end of the day, employers and their workforce are paying the biggest prices, and that’s why advocating for them — leading — is paramount. Few solutions will come from the providers or the BUCAs, the financial incentives are stacked too heavily in favor of status quo. Yet, all the trendlines indicate that the public has had enough, and the public is counting on you, the industry’s trusted, professional advisors.

Thus (and to repeat my first suggestion), brokers would be wise to prepare for and lead the change.

Woody Waters

about the author


As one of the founders of ELAP, a leader in reference-based pricing, Woody knows a thing or two about creating solutions that drive down costs and deliver results. His expertise in healthcare, insurance and risk management fuels his passion for out-in-the-field consulting with brokers, employers and health plan administrators across the country. Woody’s experience includes almost a decade at a national brokerage firm.

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