Tag Archives: acos

New Healthcare Brawl, Different This Time

For the thousands of healthcare consumers reading this post…and the millions in attendance across this great country…lllllllllllllllet’s get ready to rummbulllllll!

In this corner – fighting over a period of 68 years, with a track record of unaffordable and ever-skyrocketing premiums, causing long-term wage stagnation, plus lower rates of savings for individuals all over the land. The largely unchallenged, reigning champion in U.S. healthcare coverage for nearly all Americans under 65…….the third-party payers!

And in this corner – fighting for more than 25 years. They’ve captured and controlled healthcare populations, acquired and limited provider competition, all the while driving up costs, consumer medical debt and personal bankruptcies. With a long history of mass overutilization, lower care quality and high administrative salaries……the hospital and health systems!

Ladies and Gentlemen…this same fight took place back in the 1990s, for the purse strings of nearly all the private pay healthcare market. The hospital and health systems took on the risk of creating traditional health plans, and many of them took it on the chin. There were too many operational nuances, such as claims, underwriting administration and attracting sicker patient pools. Not to mention the ire of health payer executives.

The environment is different today. The stakes are far higher. The outcome may determine the direction of more than $1 trillion per year in consumer and employer-directed healthcare payments, transforming the model of U.S. healthcare into one of needed, sustainable long-term growth.

Today’s payer profits are limited, not only by the medical loss ratio rule, but now with provisions of the ACA to accept all patients with pre-existing conditions.

On the other side, health and hospital systems have successfully acquired a significant and well-diversified care “umbrella” over large populations. Many achieve greater leverage in securing higher payer reimbursement rates, all the while still capturing local practices, doctors and newly minted med school graduates, who willingly trade off past, present and future administrative headaches for more patient engagement and a steady paycheck.

See also: Keep the Humanity in Healthcare  

Yet within their growing mini-monopolies, hospitals and health systems, like payers, are also having a come-to-Jesus moment. Medicare quality scores give only 2.8% of all hospitals their highest, 5-star rating. Nearly 70% received only between two to three stars!

There is argument on the factors for these ratings, yet administrators clearly understand that future Medicare payments will be based on value of care, where quality of care is very important. This is especially true as health systems and affordable care organizations (ACOs) will continue to dominate healthcare delivery in the U.S. And yes — future private insurer payments are likely to follow suit.

Let’s Give Health Plans Another Shot

More than ever, we’re seeing health systems creating their own provider-sponsored plans (PSPs) and simply becoming their own payer, even where they can compete for covered lives in the growing Medicare Advantage and Medicaid Managed business.

PSPs come in multiple varieties, depending on the questions asked and resulting strategies formed: Starting fresh or acquiring an existing plan? Partnering or not partnering on risk with existing insurers and provider networks? Covering care only in their care system or with other systems and providers?

Though previously unsuccessful, PSP results appear more promising today. Atlantic Information Services (AIS) data shows there are more than 270 PSs in existence. This is up from 107 just two years ago — and more than one-third have more than 10,000 members. If the trend continues, predictions are that about 70 million Americans could be enrolled in PSPs in five years.

While that is happening, we are seeing payers such as Harvard Pilgrim and others seeking to go the way of Kaiser, adding medical facilities to create integrated care systems. Hence, both payers and health systems are blending more than ever, driving toward integrated care in smaller pockets of populations.

These smaller pockets of integrated care appear to offset more risk, especially when they seek to merge. We are then likely to run into a microcosm of the same anti-competitive pricing fears as with Anthem-Cigna and Aetna-Humana.

Let’s Bypass the Problem…With Direct Contracting

This option allows self-insured employers to work around health payers, by contracting with large, geocentric health systems to deliver care to their employees. By using third party administrators (TPAs), contracted transparent care and drug fees and in-house actuaries and risk managers, employers can also lower claim administration costs. Plus, employers gain other savings by working around payers.

Just a little wrinkle here…What about the many millions of individual members who remain under fully insured payer plans?

Well, we have the growth of health insurance captives, which pools together smaller companies to gain self-insured benefits. But the question still remains…

When health plans get further cut out of the self-insured employer client loop, what happens to pricing for the rest of the remaining payer risk pool? The revenues and profits for payers will need to come from somewhere.

See also: Healthcare: Time for Independence  

We know payers are not getting onto ACA exchanges to acquire more customers. That leaves subsidization from the government to fill in the affordability gap for the fully insured.

Other options are: 1) creating a single pay government plan; 2) providing government incentives to PSPs to be competitive in more local pockets or 3) offering incentives for the formation of fully insured and PSP plans, so payers and health systems can cover more with greater risk sharing.

Healthcare 3.0: Increased quality, better technology, higher taxes, greater unemployment and remaining unaffordability

Health systems have grown by implementing effective leadership, making strong IT investments, reducing geographic competition and employing better risk solutions and strategy. They are going to get stronger with direct contracting, mergers and acquisitions, growth of PSPs, improved care coordination and the use of new technologies in the emergence of value-based care.

Solutions in areas such as predictive analytics, mhealth, patient-generated healthcare data, diagnostic accuracy, supply chain management, population health, chronic disease management, telehealth and artificial intelligence will promote greater efficiency, better outcomes and increased patient satisfaction and drive down cost in key healthcare industries.

But driving down cost DOES NOT mean pricing for care, coverage and drugs will plummet for consumers. I expect mass unaffordability will largely remain.

Look, the first order for businesses in any for-profit sector is to make profit, grow customers and remain competitive. While healthcare consumers and advocates believe in reforming our system to a fairer, more affordable solution for care, coverage and medications, equally for all Americans….businesses don’t.

And they’re not going to succumb to guilt or public shaming, or be willing to give themselves significant salary haircuts to do so. In fact, I would expect that early cost-reduction successes will translate into healthcare companies largely funneling the differences back into themselves as re-investments or profits, while holding prices steady to claim consumer-friendly positioning.

“Hey, at least we’ve put the brakes on higher prices. We’ll try to figure out how to do more…but look, this is great news for now. Be in touch soon!”

The only path I see toward future consumer affordability is to push and provide incentives blending our three-party into a two-party system. With enough healthcare players, greater transparency and relatively equal levels of care quality, free market forces will ultimately work to create a greater downward push for consumer pricing.

A free market system would be painful in the beginning. Healthcare players will not only have to invest in and implement new technology, but also utilize augmented and artificial intelligence solutions. This would drive efficiency and accuracy to the obvious point where industry leaders would greatly reduce and replace their greatest expense…employees.

By the end of 2016, the healthcare sector will be the largest employment pool in the U.S. In a free market, you cannot have bloated employment with acquired technology capable of creating massive efficiencies to drive down cost and consumer price. However, today’s price-regulated market would allow that to happen, where excess expenses are simply passed down to healthcare consumers and employers in the form of higher prices.

Free market healthcare is for now a far-off dream. So as the market slowly transforms and reshapes itself, we will likely see personal and corporate taxes going up.

See also: Is Transparency the Answer in Healthcare?  

With no foreseeable surge in GDP, new jobs or average worker wages, we’re seeing the middle class slipping. Healthcare costs are not likely to translate into significant consumer price decreases. Add to that the past, current and future growth of healthcare subsidies per the ACA exchanges and ever-expanding Medicaid programs. Folks…that big nut will have to be covered at some point.

Parting Thoughts…

Woodrow Wilson once said, “The seed of revolution is repression.” Healthcare has operated on a model outside of free market forces, where consumers have paid the price, literally for decades. In the next era of healthcare, consumers carry an obligation, not just to continue funding this juggernaut, but to take on greater responsibility for their health choices and results.

No matter how this emerging fight changes healthcare, the patient, through greater engagement and care, should be at the center. I see population health management as both educating and necessarily empowering healthcare consumers. Not only to recognize poor past choices and grow from new healthier ones, but to appreciate and value how much they truly need healthcare services, coverage and medications that are simply out of their financial reach.

Perhaps their own transformations will turn large-scale frustration into massive targeted determination, demand and revolution, where elected politicians begin to cower and capitulate, not to special interests, but to a population of healthy Americans who recognize the importance of an affordable and sustainable health care system. So they and future generations can embrace the American dream – and live healthier, less stressful lives while doing it.

I hope to live to see that day.

healthcare

Future of Work Comp Healthcare Delivery

Reform is changing healthcare delivery models, but there is a large gap between the healthcare related to workers’ compensation and the group health approach.

As a result of healthcare reform, the industry has experienced significant consolidation of health systems and medical practices, with an added emphasis on patients as consumers of healthcare, all as providers continue to evolve. As employers, though, our message is confused.

We tell employees that we have a great healthcare system for them, encourage them to choose the best physician to meet their needs and remind them to get regular checkups. However, if an employee gets injured, we have a separate system with a separate set of doctors and a separate set of rules.

If employers can find better doctors to treat workers, they can improve the quality of the workers’ compensation system. Employers are not going to get better doctors just by paying more; but, if they can identify which doctors are doing a better job and reward them, results improve.

California’s model has been experimenting with the concept of rewarding doctors for providing superior care, which has resulted in significant cost reduction. Great doctors are actually reducing the amount of medical attention required and, overall, workers’ compensation claims costs. As a result of better care and employee satisfaction, litigation costs have also dropped. Quality matters.

With advancements in technology, reimbursement models, a focus on quality and the movement of connected care, health systems across the U.S. are offering accountable care organizations (ACOs) for employer benefit solutions. Many think mergers and consolidation are a bad thing, however, in this consolidated world where health systems have changed, mergers and consolidation are changing “well care” to “sick care.” By taking a holistic approach, you are able to take a patient from wellness to injury care. Workers’ compensation needs to be part of this discussion. If not, we cause an even greater divide.

This holistic approach is not a new concept. In the 1990s, there were three 24-hour care pilot programs that tried this approach and resulted in lowered cost and improved medical control. At the same time, 10 states also mandated 24-hour pilot studies. Employers generally liked the pilot programs, which resulted in benefits such as increased medical control and reduced costs. On the national front today, the National Institute for Occupational Safety and Health (NIOSH) has a total worker health program that considers the total person and the factors that affect the individual’s health. The workers’ compensation system could borrow and apply successful elements from these programs.

When you send an injured worker to the best and brightest, you make the workers and their families feel like you are treating them well. This gets the patient to do what the doctor wants and stops the unfortunate spiral of delays in care. Technology is going to refine this approach even further. Technology will enable patients to get in touch with doctors immediately and will make the worker feel like he was properly cared for. This has the potential to be extremely effective and efficient for the system.

When a connected care system is not in place, the gaps in care are leading to needless disability and extended absence. Technology and telemedicine are essential components of this connected care. Gathering and analyzing health data is also important to drive positive behavior and improve overall quality of care.

The patient base is also more complicated, and that is where finding the great doctor comes into play. Today, if you have a patient with a broken arm, you may, in fact, have a patient with a broken arm and diabetes, which is much more difficult to treat. We need to find these great doctors and find systems for them to work with that operate far more efficiently. Technology is a very big part of that.

The current workers’ compensation system is not set up to reimburse for payments under this new model, including the use of nurse practitioners and physician’s assistants. The system needs to move in this direction. There are simply not enough physicians to see everyone. These healthcare professionals are essential elements of the group system, and the workers’ compensation system could be improved significantly by recognizing the need for these important providers.

Workers’ compensation currently works in silos, and that is an obstacle. The health system ACO model is communicating directly to the employers. As this model becomes adopted, the board room is not seeing the financial benefits just yet. However, when employers decide they want change, change happens. It is just a matter of getting their attention.

Employers are paying attention to the data they receive on the types of health systems. If the data around what is working in group health becomes available to employers, they will evolve.

Holistic care is certainly a trend that is largely becoming a reality. Workers with sedentary lifestyles who become injured on the job bring complicated connections between injury and pre-existing conditions that are hard to separate. It makes sense to treat people as they are—as a whole person. It is very important to try to get all of the systems to work together to treat the employee as one person.

We need a network that drives total employee health, and we can only have that if group health and workers’ compensation can talk to each other. Data is going to drive this evolution. The best-case scenario is if all this wonderful science and data can be put to use to help patients and merge what currently are parallel systems.

These issues were discussed in more details during an Out Front Ideas with Kimberly and Mark webinar, which was broadcast on Sept. 30, 2015. The archived webinar can be viewed here.

End of Health Insurers As We Know Them

I want to start by saying that I am knowingly writing an article that is going to throw fuel on a fire. Being from New England, this article strikes me as the equivalent of writing an article in the Denver Post that says New England Patriots quarterback Tom Brady is better than Denver Broncos quarterback Peyton Manning. Letters will be written. Darts will be thrown. So, I will make sure I put on my steel vest before I publish.

I already started writing on this topic, in a recent article titled, “Apple HealthKit – The Next Step to the End of Employer-Based Health Insurance.” In this article, I will provide a more detailed analysis of why the premise presented in my first article may come true — that within five to 10 years employers will be out of the health risk business. I will then provide a plan for what I think benefit brokers should do to prepare. Taking action may be the difference between those that survive and thrive in this new health insurance world vs. those that may struggle or even fail.

What do I mean when I say employers will be out of the health risk business? To repeat what I said in my last article, “By health risk, I mean the cost of the employee’s health insurance will not be priced by the employer. It won’t be a function of average age of the employee population, claims experience or any of the standard underwriting/pricing rules today.” In fact, health insurance will most likely become an individually purchased product, and the insurers of the future may not be the companies that dominate the market today.

As a consultant to benefits brokers, I educate them on technology and advise them on how they can maintain a competitive position. My future depends on brokers’ remaining significant, so I am as concerned about their future as any broker would be. If you study the significant market events over the past few years, you get a picture of what the future may be like. While many may think Obamacare is the big market change, I believe that the health insurance market is going to change much more dramatically and that, while the government may be nudging things along, competitive market forces will drive the change.

So let’s get to the point. I believe that within five to 10 years health insurance will be delivered primarily through staff model health maintenance organizations (HMOs). These will be Kaiser-like plans where the providers of care will also be the risk takers/insurers. Individuals will pay a fee directly to a healthcare system that will be responsible for the health, wellness and treatment of the person. Employers may still give employees money to pay for some of the cost, but they won’t be in the “risk” business. We are beginning to see this evolution today through the expansion of what people are calling accountable care organizations (ACOs). However, the future will go well beyond the limited risk sharing of today’s ACOs.

Four Catalysts to Change

If you had been in the health insurance business in the ’80s, you would say we tried this before, and it didn’t work. Well, today, things are different. There are four major differences that will be the catalysts for the coming changes:

Changes in consumer buying behavior

In the ’80s, employers often paid for 100% of an employee’s health insurance and a large part of the family’s. When cost wasn’t an issue for employees, they looked at access to providers as the No. 1 variable. So, all the HMOs and preferred provider organizations (PPOs) tried to expand their networks to appease more people. Today, cost is the No 1 issue. As a result, we are seeing networks shrinking to save cost.

Expansion of government health insurance programs, combined with the reduction in Medicare and Medicaid reimbursements to providers.

If I am a healthcare provider and am getting less money to perform services on a growing population, then I need to do things differently. I need to get money from healthy people and from people needing less care. I would also need to keep people healthy or provide care in more cost-effective settings.

Advancing mobile technology

With advancing technology, it will be easier for providers to have real-time access to a patient’s medical information. Things like weight, blood pressure and blood glucose levels can be measured in the home, sent via Bluetooth to a mobile device, and immediately be available to the primary care physician in the individual’s web-based medical/wellness record. Other health metrics will also soon be possible. Systems can automatically notify the responsible physician of any changes in the metrics that warrant attention. Information will help provide proper treatment in a timely manner.

Change in tax laws, allowing personally purchased insurance on a pre-tax basis

With Republicans taking over Congress, the idea of making an individually purchased insurance policy tax-deductible is now on the table. While this is not a necessary catalyst for change, it certainly would put the nail in the coffin and get employers out of the health risk business.

Not only is there a perfect storm forming for the coming changes, but I believe the majority of the participants in today’s healthcare market will welcome this change. We have all heard the saying that “healthcare should be between the doctor and her patient.” We know the government wants this. I think employers, employees and healthcare providers would want this, too. It is the insurers, and by extension benefits brokers, that may not want this. However, as we all know, there is little sympathy for the insurance companies.

Employers would want this because I don’t think employers got into the health insurance business after World War II to be in the position they are in today. While I don’t think they mind giving employees money to pay for health insurance, they don’t want their profit margins affected by the health of their employees. Bad claims experience, and their profits go down. Every year, they agonize over the health insurance renewal, deciding whether to charge their employees more or make changes in plans (delivering bad news, either way) or absorb increases in the business. I don’t think employers want to be in the wellness business, either. They may want to provide wellness programs to make people feel better, be more productive at work or boost morale, but not to control or reduce healthcare costs.

Employees want change, too. Do employees want their employers asking for things like health risk assessments? My health should not be my employer’s business. To me, there is a slippery slope as it is. I do want my physician to care about my health. I want my doctor to know my weight and blood tests and care whether I got a colonoscopy when I turned 50. I often joke that I get an email from Jiffy Lube saying that my car is due for an oil change, but my doctor never sends me an email to get a check-up, test or whatever is needed to keep my engine running the right way.

I believe doctors and other healthcare providers want change, too. They want to practice health care. This would include helping their patients make the right lifestyle decisions and keeping them informed about what is good for them vs. what is not. Providers don’t want the paperwork. They don’t want third-parties telling them what to do, and they are getting tired of reduced reimbursements from the government.

The Market Reacting

I am not the only one using the term “Kaiser-like.” Emanuel Ezekiel, one of Obama’s healthcare advisers, expects healthcare insurers to be obsolete by 2025. According to Ezekiel, “ACOs and hospital systems will become integrated delivery systems like Kaiser or Group Health of Puget Sound. Then they will cut out the insurance company middle man — and keep the insurance company profits for themselves.” (Source: New Republic – March 2014)

Now, I am not going to just listen to Emanuel as my source. I am listening to the market. Hospital systems have been acquiring physician practices and entering the insurance business across the country. In my own backyard, there was this acquisition highlighted in the Boston Globe.

State insurance regulators Friday signed off on Partners HealthCare System Inc.’s acquisition of Neighborhood Health Plan, a transaction that will put the state’s largest hospital and physician organization into the health insurance business for the first time.” (Source: Boston Globe September 2012)

In Massachusetts, this is very big news. Partners HealthCare owns some of the leading hospitals in the country, including Mass General and Brigham and Women’s Hospital.

Hospital systems getting into the health insurance business is not limited to Massachusetts. In New York, New Jersey, Pennsylvania, Maryland, Michigan and all across the country hospitals are getting into the health insurance business. (See Kaiser Health News.)

Concurrently, insurance companies are getting into the healthcare business. According to Hospital and Health Networks Magazine January 2012, the following insurers have made healthcare acquisitions:

  • WellPoint bought CareMore.
  • Optum bought Orange County’s Monarch HealthCare and two smaller independent physician associations (IPAs).
  • United Healthcare acquired a multispecialty group in Nevada in 2008.
  • Humana purchased Concentra, which provides occupational care and other medical services.

Aetna Making Moves

What I have find most interesting is the acquisitions by Aetna and some of the comments by CEO Mark Bertolini. Let’s first look at some of the comments Bertolini has been making over the past few years.

“The end is near for profit-driven health insurance companies. The system doesn’t work, it’s broke today. The end of insurance companies, the way we’ve run the business in the past, is here.”

“We need to move the system from underwriting risk to managing populations,” he said. “We want to have a different relationship with the providers, physicians and the hospitals we do business with.”

In his presentation titled “The Creative Destruction of HealthCare,” he states:

“Not too far away from now – in the next six to seven – 75 million Americans will be retail buyers of healthcare. And they’ll come to the marketplace with their own money and either a subsidy from their employer or a subsidy from their government. And it doesn’t much matter – they’ll be spending their money.”

Aetna is not just talking. If you look at Aetna’s acquisitions and partnerships over the past few years, you can see that Aetna is preparing for the future that Bertolini describes. The company has spent billions of dollars acquiring technologies that can be critical to the future in managing healthcare and healthcare information, including:

  • iTriage – Mobile App for employee to check symptoms – Find doctor – Make appointment
  • ActiveHealth – View and update personal health record (PHR) – Personalized alerts and content – Communicate with doctor
  • Medicity – Promotes coordination of care – Real-time patient data

(Source: Aetna 2013 Investor Presentation)

According to Aetna’s website, Aetna was ranked #52 on InformationWeek’s 2013 list of the 500 leading technology innovators, surging ahead of many of the top names associated with technological innovation. Aetna ranked first among health insurers.

To move to this new model, healthcare providers will need to add capabilities that insurance companies currently have. For example, hospitals provide care but don’t have the actuarial skills to price their patient population in the event they were to get into the risk business. Many also don’t have the capital to assume risk. Those with enough capital can simply buy an insurance company. Others will have to partner with an insurance company that has the capital and reserves to share risk and provide the needed services.

So if I am an insurance company, I can either buy providers to stay viable or provide some products, services or capital that the new healthcare systems will need. Buying hospitals or physician groups across the country can be very expensive. So it may appear that a company like Aetna is setting itself up to be the technology, actuarial, reinsurer and other service provider for these future healthcare systems. I won’t claim to know if Aetna thinks the market will move as far as I am saying, to a Kaiser-like model, but the company certainly is preparing for a different healthcare model.

Some may think that this is somewhat what insurance companies are doing today. Here is the critical difference. Today, the risk-sharing arrangements are still in a fee-for-service environment. In the future, a hospital system may be in close to a 100% capitation environment (where the system receives a set amount per period for each person covered by the arrangement). Provider systems that purchase these services or develop a risk-sharing relationship with an insurance company in such an environment can’t have two such relationships. They will need a single risk pool to properly manage the population and risk. There won’t be a Blue Cross version, a United HealthCare version and an Aetna version of a local ACO/staff model system.

A good example of healthcare financing is my own healthcare. Since I moved back to Massachusetts 16 years ago, I have had the same primary care physician and used the same hospital facility on a number of occasions. Yet I have had seven different health insurance programs. Assuming an average insurance premium of $10,000 per year for my family, over the 16 past years I have paid $160,000 in premiums. I understand insurance, spreading the risk and all the other insurance arguments about where that money goes, but think of how it could be different if all $160,000 went to the system that was actually providing care to my family and me.

What Benefit Brokers Can Do

Okay, so the world may change. What would I do if I were a broker today to prepare for this change? First, change does not happen easily and overnight. The whole country of healthcare consumers, distributors and providers will need to adapt. As a benefits broker, your buyer may no longer be the employer but the employee. If this is the case, then some existing services may not be needed.

  • No more risk analysis/actuary and underwriting
  • No more claims analysis tools
  • No more wellness programs to reduce healthcare costs
  • No more disease management programs
  • No more company medical renewals

Before someone points out the obvious to me, I will say that I do know that most groups with fewer than 100 employees are community-rated and those with more than 100 employees are experience-rated. Small employers are still faced with balancing budgets based on their healthcare renewal. This anxiety will go away.

Most of these types of services are a core competency of many of the national benefits firms and the larger independent brokerage organizations. These services are viewed as key differentiators. For these firms, change may be even more dramatic because providing these types of analytical skills is part of their culture.

So let’s talk about the things brokers can do. I am going to break this down to a list of tasks.

1.       Understand what the players in your market are doing – Brokers should start analyzing their local medical market and see what the providers are doing in this area. Have they made acquisitions? Have they created new partnerships? What is their leadership saying publicly? Whatever they say or do, believe them.

2.       Add an employee call center – Employers will welcome the support in helping employees move to a new environment. Provider systems will welcome and pay for the support in helping those same employees navigate the market.

3.       Add personal financial consulting – It is estimated that close to 40% of employees lose some productivity at work because of financial stress. The healthcare insurance purchase is going to be a major decision for an employee, and it should be made in the context of an employee’s entire financial position.

4.       Understand the new technologies – How many of you who have read this up to this point understand what Aetna’s technologies for the consumer are? Do you know how to “Bluetooth” your weight from a scale to a smartphone? The place of employment can also be a great place to help employees with technology to track health information. Could an employer have a scale at work that is Bluetooth-enabled to send a person’s weight to their smartphone? Could the employer have a blood pressure machine at work? How about setting up a private room with teleconferencing capabilities so an employee can consult a doctor face-to-face via the web without leaving the place of employment? Could a broker make himself available to consult employees one-on-one as to how this whole system will work?

5.       Develop technology engagement and education strategy – After you learn what you need to know about the new technologies, are you ready to deliver? I believe the provider systems (the new Kaisers) will welcome the opportunity to educate the population through the employer. At the employer level, you can reach a large amount of people fairly easily. And the employers will care that their employees understand this new healthcare delivery system. Employers don’t want stressed employees, because stressed employees are not as productive. I believe employers and these new provider systems will pay to help these individual consumers.

6.       Invest in new internal technology and processes – If your entire infrastructure is geared around engaging the employer, then things will need to change. Can you record a phone call? Can you engage in online chat with an employee? Are you prepared to sell individual insurance? To sell a high volume of individual policies and service employees, you will need extremely efficient internal operations.

7.       Start thinking about helping employers exit the risk business – Rather than advise employers how to control costs and mitigate risk, should you start advising them on how to get out of the risk business? I guess private exchanges and defined contribution plans are the start. However, if the healthcare market changes, the pace will accelerate because there will be more options for the employer to get out.

8.       Engage new providers – Carrier reps are always calling on brokers, but these new organizations may not call on brokers in the same way. You may need to reach out to them. If you have something of value for the new provider system, you will need to engage the carriers.

To move to this new model, it will require that brokers invest in technology and people. To attract the provider systems benefits, firms will need to have the services, size and scale to deliver. Most independent benefits firms either don’t have the capacity or capital to move to this model. They will either have to sell to a larger firm or join forces with peers who share the same vision and are willing to collectively invest in preparing for the future. The national firms and larger independent firms with the capital and resources will need to have the will to change.

In today’s environment, many brokers may not feel the need to make these changes. Other firms have already started preparing for a much different future. For example, several national firms have opened call centers for employees. Whether that is for a future market I have described, or simply to service employees today, I don’t know, but the centers are a sign that the benefits game is changing.

I may not end up being right with my market predictions, but my advice is to pay close attention. There is change going on out there, and I think a picture of the future is being drawn that looks much different from the healthcare market today.