Now For the Hard Part:
Knowledge, Tools and Support
Jerry L. Ripperger
Life Insurance Selling - February 2005
Producers selling consumer-driven health care might find better results with an updated business model.
The producer has educated himself or herself about consumer-driven health care (CDHC). He has sold his clients on the benefits of CDHC. He has held enrollment meetings and processed all the paperwork. He is done until renewal - but not so fast.
The rules have changed, and so must the producer's business model to become successful in the CDHC market.
The business model needs to have a new focus, new expectations, and a new role for him as a producer.
A New Focus
CDHC programs engage employees by simultaneously creating a consumer moment and providing a member with a consumer experience. A consumer moment is created when members are exposed to the financial consequences of their decisions.
These consequences are straightforward with health savings accounts (HSAs) and health reimbursement arrangements (HRAs), for many expenses are paid out of the account/arrangement.
For instance, the employee will pay the full cost for his or her regular physician's visit - which usually starts around $65 - as opposed to the former $15 co-pay. At the core, there is an underlying belief that someone will spend his own money more judiciously than someone else's.
Attaching a financial consequence alone, however, is not enough to change behavior. Members need knowledge, tools, and support to make better health decisions. Insurers must provide relevant, credible, and timely information to members. Employees need access to such health information as cost and quality measures to make informed decisions.
Members use this information to make better health care decisions. But this alone is not enough; members must be empowered to make these decisions. Meaningful long-term savings from CDHC will occur only when the members' health improves. The new focus is on health improvement, with health care still an important component.
Expectations are changing on all fronts as a result of CDHC and the focus on health improvement. Employers expect that these plans will encourage members to make better health care and health improvement decisions, translating into fewer trips to the physician's office.
Employer prospects expect that the producer will help them manage the education, enrollment, and communication process and bring wellness solutions that improve health. This requires a comprehensive plan that creates customer touch points not only at enrollment but also throughout the year.
Business owners expect that these actions are going to cause premium increases to slow. With careful planning now, the producer can ensure expectations will be met and his clients will be satisfied.
A New Role for Producers One thing is not changing: Employers continue to look to producers to guide and assist them with their health care benefits. Producers are becoming more valuable to their clients as the health care arena becomes more complicated and the solutions become more diverse. Employers rely on producers to bring them innovative solutions and assistance with implementation and education.
It all starts with partner selection. Selection of the insurer continues to be the key decision with a focus on rates and benefits. Other factors, however, need to be considered, such as the following:
- Does the insurer bring the tools and support the producer needs to affect member behavior, such as information on prescription drug prices or alternate treatment options?
- Does the insurer provide education and communication to members throughout the year, such as payroll stuffers or articles for internal newsletters or intranets?
It is important that the producer assemble a comprehensive suite of tools and capabilities that are transparent to the member. If the producer cannot find what he needs from his preferred insurer, he may need to supplement those with capabilities from other parties. This may be desirable because many employers can leverage local resources.
Putting It to Work
Teresa DeBruin of DeBruin Benefit Services, an Atlanta agency, stresses the importance of education with her prospects. It is important for employers to have reasonable expectations so as not to be disappointed if they don't see immediate improvement. "It took more than one year to break the system, and it is going to take more than one year to fix it," she says.
Ms. DeBruin counsels employees on the education resources provided by the insurer, such as Web-based tools and care advocacy programs. "It is important to communicate throughout the year, keeping employees aware of their role in making better decisions," she says. Whenever feasible, it is helpful to have one-on-one conversations with employees to explain their role in the program.
Ms. DeBruin has found that insurers are there to help. "I rely heavily on the insurers to assist with education efforts. Whether it be open enrollment or ongoing support, the insurer has a vested interest in getting members engaged."
Steve Flood of Holmes Murphy & Associates, a Des Moines, Iowa, based benefits consultant, emphasizes targeted wellness to his prospects. Using information obtained from health risk assessments, wellness initiatives can be targeted to those members needing assistance.
"Targeting the intervention engages the member specifically rather than the employee population generally," Mr. Flood says. This creates greater personal accountability and makes health improvement more likely.
Mr. Flood also likes to tie the health plan's operation to wellness initiatives, shifting costs to employees but rewarding members who take initiative in improving their health status. Possible rewards include lower premium contributions or additional health savings account deposits.
Mr. Flood cautions, "Make sure that you are rewarding behaviors and not genetics." It is important to affect those employees who have hereditary issues, for they can have a significant effect on the benefit plan's cost. "Even though you can't make everyone healthy, you can make everyone healthier," Mr. Flood says.
The producer shouldn't be afraid to think outside of the box or set high expectations. For example, a Lansing, Mich., manufacturer recently made several changes to its benefit program to encourage health improvement. Among the changes made were:
- Converting the smoking room into a fitness facility;
- Changing health benefits and using the savings to buy fitness equipment; and
- Implementing a program that rewards members for health improvement activities ($500 to stop smoking, $500 to get in shape).
The changes are making a difference. More than 95% of the company's 80 employees participate in the program. In addition, the company recently was recognized by an independent judging panel of benefits experts and the Principal Financial Group as one of the Principal 10 Best Companies for Employee Financial Security.
"[This company] is an excellent example of a company that is committed to helping its employees live more healthy lives, which is a critical step in reducing health care costs," Susan Bjork, SPHR, says. Ms. Bjork is the human resources director at Lancet Software Development, Inc.
"Not only is the company already saving money on their health care program, but they are investing those savings back into their wellness program and employees by using them to buy additional exercise equipment. We were impressed that a company of this size ... is so innovative."
Although the focus and expectations have changed, the producer remains an essential participant in helping employers achieve their health care goals. Changing the producer's business model to meet CDHC plans' needs will build client loyalty and help expand his practice.