Whose view depends on which side of the table you’re on!
We’d like to believe our health insurance broker is always looking out for our best interest, but without understanding how incentives work how can we be sure?
Anyone who has ever been responsible for choosing their company’s healthcare packages knows how onerous a process it can be. Most companies choose a broker to help them through this process and depend on that broker to outline the choices available and make recommendations that will provide the best options and costs for their company.
Understanding how your broker views you as a client, how that broker is incentivized, what the cost drivers are and what options they may not be telling you about, can help you make better choices.
The Broker-Centered View
- You believe your broker works for you “for free.”
- Your market knowledge comes to you entirely through the “broker filter.”
- Much of your healthcare strategy comes through brokers.
- You do not see broker overrides and back end payments on pharmacy, etc.
- Your broker has no incentive to recommend options brought by 3rd parties.
#1 sign that you have a broker-centered view:
“Let me take this idea to my broker and see what he thinks.”
The Client-Centered View
- My broker is a sales person incentivized by commissions based on premium size.
- Our company has outside analytics and market intelligence apart from brokers.
- Healthcare costs (10%+ of payroll) are owned by our CEO/CFO and not relegated to our HR department.
- We have full transparency and see all previously unseen commissions and back-end incentives.
It’s important for companies to understand their broker’s perspective if their goal is to get an objective analysis and the greatest benefits for the lowest cost. What drives a broker may inhibit this goal from being achieved.
When you, the client, fully understand healthcare costs you have the power to…
- Correctly see Aetna, Cigna, etc. as expensive payment mechanisms marketed by brokers.
- See and implement solutions with no “out of network” penalty.
- Get “pass through pharmacy benefits” so wholesale pricing with all rebates sent to group.
- Arrange for Pharmacy Benefits Manager to makes no commissions, just admin fees.
- Reduce claims costs up to 20% with 3rd party claims auditing/re-pricing facility claims.
- Only keep brokers in roles which allow for maximum client savings and service.
Healthcare costs are one of the largest line items for most companies, and one of the most important benefits for most employees. Keeping your bottom line health in mind when looking at your healthcare costs only makes sense.
DCI Solutions (www.dcisolutions.net) offers 3rd party independent reviews of company plans to provide insight into where savings may be hiding. Most of our clients see a 20% to 40% reduction in premiums. The no-cost review is available by calling (888) 395-0809 or emailing firstname.lastname@example.org.