FEBRUARY 20208IN MY OPINIONThe finance and delivery of the American healthcare system is undergoing what can only be described as a dramatic reformation, and the broker industry plays an integral part in reshaping the new ecosystem on behalf of the millions of consumers we represent. The healthcare system has never faced such sweeping innovation aimed at lowering costs, providing transparency, increasing efficiencies and improving patient outcomes. We're moving at light speed toward an entirely new way of managing the client relationship, and it's only the beginning!The obstacles facing the current finance and delivery of our healthcare system are numerous and ever-increasing: State and Federal Legislation aimed at price transparency, pharmacy PBMs under withering attacks from lawmakers and consumers, large hospital systems and their PPO carrier cohorts being challenged on fiduciary responsibilities and the stewardship of healthcare dollars are just a few. The climate of change has created broker competition like none other in the history of Employee Benefits delivery. We are at a significant crossroads in our industry. To stay vibrant and successful, agencies should focus on several critical tasks in the immediate future:Admit we have a problem and embrace the solutions ­If your agency is still quoting carriers, comparing deductibles and placing rates on spreadsheets, frankly, your days are numbered. Our nation's runaway healthcare costs are unarguably unsustainable. At the current rate of inflation, there aren't deductibles high enough or carriers abundant enough to allow agents to skate by. I recalled several years ago a peer said that her client's rate hold meant they were "put to bed for another year." Today, nothing can be further from the truth. Successful agents should be well versed and comfortable reviewing the absolute latest concepts and innovations. While these tools won't be a good fit for every one of your clients, rest assured other professionals are speaking to your clients about these new ideas. If your toolbox doesn't include an ever-increasing array of innovation then you've got to revamp your workshop.Embrace Transparent Compensation ­ Successful agency management in the new global world of healthcare and employee benefits is mostly dependent upon an unwavering foundation of complete transparency and full compensation disclosure. The days of secret carrier/broker deals with commission terms scribbled on the back of a cocktail napkin following a round of golf are long gone and in the rearview mirror (believe me, I witnessed this decades ago). Accepting any undisclosed portion of agency compensation from "the system" should be utterly forbidden in the new ecosystem of benefits delivery. These opaque revenue streams include new sales bonuses, carrier overrides, steerage incentives, percentages of premiums, trips, junkets, sporting events or even golf. Our industry has been clouded in suspicion for decades, and it's high time we separate from the status quo. Forward-thinking agencies will thrive on specific consulting agreements where fair and balanced fees are fully-disclosed and reimbursed outside of the represented vendor system. A successful agent can no longer be beholden to a carrier for their livelihood. Instead, agents are genuinely independent and working for their customers without any level of impropriety. Whenever possible, compensation should be tied to performance or client savings as a method of reimbursement, a success fee. An agency should become completely comfortable putting some or all of their compensation at risk if the plan doesn't perform as expected for their customer. This ensures that your agency and your customers row in the same direction. Invest in real-time data translation ­ How many times have you sat around the table at your client's year-end meeting while the carrier representative reviewed data reports to substantiate By Robert Sankey, VP, Benefits Consulting Division, First Commonwealth Insurance AgencyTHE FUTURE OF INSURANCE AGENCY MANAGEMENT; 5 KEYS TOWARD CONTINUED SUCCESS IN A CHANGING LANDSCAPERobert Sankey
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