Healthcare Brokers

A Hidden Obstacle in Controlling Healthcare Costs: Brokers

If you are a large company, you probably don’t have one person or department contacting various insurance agencies, hospitals, and pharmacies to get everything in place for the health insurance you provide to your employees. You likely work with a broker who is your agent in negotiating with insurance and healthcare companies. They help you understand the contract you sign with a carrier, and if you are going the self-insured route, they likely help navigate hospital and pharmacy contracts as well.

 

The broker you choose can greatly influence how much your company is going to pay for the health insurance provided to employers, for the administration of a self-insured plan, and even for individual services with providers. Brokers often position themselves as buyers agents, that is as representatives of the company looking to purchase coverage or administration, however, many brokers are simultaneously working for hospitals or for insurance agencies. What’s more, the hospital or insurance agency might compensate the broker more than your company, making the broker more of sellers agent than a buyers agent. Dave Chase highlights and explains this in his book The Opioid Crisis Wake-Up Call:

 

“Your business is just one piece of the total, but keeping it with the same carrier can boost the broker’s total compensation by 50% or more. Because this compensation isn’t specific to you, status quo brokers will often claim they’ve disclosed fees and commissions. But they are actually only disclosing your account-specific fees and commissions that may not even be the most significant piece of their overall compensation.”

 

If a broker is getting paid by an insurance carrier to keep your company with that carrier, then your chances of shopping around to find better alternatives are slim. Your broker is likely to encourage you to stick with your current carrier and accept whatever fee increase they present you with for next year’s coverage.

 

Chase continues, “Forward-looking brokers have sent me letters from insurance carriers saying they’d be fired when they spoke the truth about egregious practices the carrier was inflicting on the broker’s clients. This makes it clear that the carriers view brokers as a quasi-employee they can fire at will. In other works, they are working for the carrier, not your organization.”

 

The company that Dave Chase runs can help you identify trustworthy and high quality brokers. If you select a broker at random or just because you have a good relationship with them, you run the risk of working with someone who is not as independent as you think. The connections and world of insurance carriers and brokers is complex, and navigating it successfully on your own is challenging.

 

At another point, when addressing brokers, Chase writes, “You should always ask your benefits broker or claims administrator if a local hospital is a client, as that is a clear conflict of interest, especially when the hospital itself owns the insurance carrier.”

 

It is clear to me that the healthcare industry has too many entities that are tied together in unclear ways. If we hope to change the system in the future to be more equitable, to reduce prices, and to actually provide quality services, these status quo relationships will have to be broken up. That might be a task the government can solve, but Chase would argue that companies have the tools to do that work as well, they often just don’t utilize the leverage that they have.

Create Great Work

A real challenge across the globe in the coming decades will be helping people find ways to do meaningful work. A lot of our work today really is not that meaningful, and as more jobs can be automated, we will find ourselves with more people looking for meaningful work. Helping people find meaningful work will preserve social order and cohesion and will be crucial for democracies, companies, families, and societies as a whole as we move forward.

 

Michael Bungay Stanier looks at the importance of meaningful work in his book The Coaching Habit suggesting that coaching people is easier and better when you are helping someone with meaningful work. When you give people tasks and ask them to do meaningless jobs, you will never get the most out of them and you will never inspire them to go above and beyond. He writes, “The more we do work that has no real purpose, the less engaged and motivated we are. The less engaged we are, the less likely we are to find and create great work.”

 

The company I work for makes a real difference in the medical world. Our work leads to better health outcomes for patients and families and it is easy to see how our work has real purpose. But even within the work that I do, there can be tasks and responsibilities that seem unnecessary or burdensome. These little things can build up, and even within a good job they can begin to feel tedious and disengaging. To combat this, my company encourages efficiency and automation within the important things that we do. We are encouraged to think about ways to improve systems and processes and to find new ways to do things better. It is the autonomy and trust from our leadership that helps us stay engaged by allowing us to continually craft our jobs to an optimal level.

 

Not everyone is in the same situation that I am in. Many companies hold people to specific processes and inefficiencies, perhaps just to see how conformist and loyal individuals are to the firm. This holds back growth an innovation and demotivates and disengages employees. As this happens to more people and as meaningless tasks are displaced to robots, we will have to find new ways to motivate and engage employees, because our employees are our fellow citizens, and because motivation and engagement can be thought of as a public good. We all rely on an engaged citizenry for our democracy, and work helps us feel valued and engaged. How we face this challenge as individual coaches and as companies will make a big difference in how engaged our society is in the future. One approach is to help ensure everyone on your team and everyone you coach understands how their work contributes to the overall mission and goals of the firm. This does not simply mean that you hand everyone a nice slogan about why their position and duties are important, you must actually show how the company plans to move forward and how the department and the individual will contribute to the new direction. A recent challenge for myself that I have been thinking about is how you direct resources and attention to groups to also signal their importance. Without the leadership demonstrating how specific work contributes to overall goals and without time and attention appropriately directed to an individual or department, even important work can begin to feel meaningless or forgotten, and firms and societies will never benefit from the innovation and dedication of great work.