Are you paying your benefits advisor for activity or for results? Are you paying them to administer your plan or to control your costs? There are eight questions you can ask to find out.
1. Are you able to provide my medical and claims data and insights from my fully insured health plan?
You will find out that the answer to this question is typically no, but it doesn’t have to be. You might get a little bit of detail if you have more than 50 employees, but it’s limited….maybe just the large claims or maybe a bit of detail on everyone… but not a complete picture.
There is a cost-effective and easy-to-use tool that you can use to get a complete claims picture report that will allow you to determine if what you’re paying is fair, if you’re getting a great deal (because sometimes that happens), or if you are being overcharged by a significant amount (which happens a lot). Then, you can use that data to make decisions about how to change your plan. I encourage you to ask your advisor about doing this. If they tell you that it’s not possible, then find somebody that can do it.
2. How do you get paid? Are you paid for activities or are you able to be paid for outcomes?
There’s nothing wrong with working with an advisor who gets paid based on commission. However, many forward-thinking advisors, those who used cost containment tools to help you control your costs and work based on commission, will be willing to put part of their compensation at risk. What that means for you is that if what they recommend doesn’t work, then they will forfeit a percentage of their compensation. As such, their interests are highly aligned with yours.
3. What are the most effective strategies you have implemented to reduce the frequency and severity of claims?
If you receive an answer to this question, you should expect a two-part answer. First, there are tools like reference-based pricing, direct contracts, bundle pricing, and a host of other services to control the cost of an actual claim. Many of you have heard of reference based pricing. Sometimes it’s a great tool, and sometimes it’s a little bit like being hit over the head with a sledgehammer. So, it’s important to know how that is implemented. Plus, if that’s the only tool in your plan’s arsenal, you should ask more questions.
Second, frequency is a bit more difficult to manage and it is going to require you to shift the way you think about how your healthcare is managed.To control frequency you will need to ensure that your employees are accessing high quality care when they need it and that they know how to go about doing that. This is actually quite straightforward to implement and simply requires a shift in how you communicate with your employees about your health plan.
There are several tools that can be incredibly effective in controlling the frequency and severity of claims, including:
- • Direct Primary Care,
- • Care Assistance,
- • 24-hour Advocacy,
- • Care Management,
- • Direct Contracts,
- • Bundle Pricing, and
- • a whole host of other services.
4. Does working with your firm create any conflicts of interest?
This is an important question to ask. For example, our interests are aligned and we use a compensation disclosure form with our clients.
Businesses exist to make money. We’re all in business to make a profit, pay our employees, and run our lives. However, if you’re paying the bill, you have a right to know what it is that you are paying for -not just the base commission, but the override, retention override, block override, bonuses, trips, awards, advisory councils, and any other perk that an advisor gets for placing a block of business with a particular carrier. You need to ask these questions, and depending on the responses, you will need to decide whether or not it’s acceptable.
We’ll continue with the next four questions in the next article.