My Epiphany Bridge Story

The Backstory:

Mid-way through my career, I became aware something that shook me. I realized I was a marginally effective benefits consultant. I tried to win new clients by giving away HR software, offering to do in-person benefit enrollments and helping their employees file insurance claims. 

I really wanted to make a difference and bring value to my clients, but I began to see that the market as a whole was already doing these things. I even became aware that many firms were doing all this better that I was.

My Desires:

I had a desire to bring real value and become an asset that my client valued. I felt like each time I met with a prospect or one of my clients, I was on the opposite side of the table. They had desires, goals and dreams and I was just pushing a carrier’s product. 

I wanted to find a way to sit on the same side of the table as them and become a true business partner. A partner that would last through good times and bad… one that wouldn’t be replaced when a broker brings in a new shiny object.

My External Struggle:

At the time, I was struggling with the fact that I saw value in the things I did for my clients, but the owner’s and leadership of those client’s did not. That meant that I was always in jeopardy of losing a client to a competitor. Furthermore, the prospective employers I met with saw the HR software, benefit enrollment support and employee claims support as a feature and benefit of having... any broker. 

I began to see that all my competitors were doing the same thing. I was becoming a commodity. They didn’t really see anything that separated me from any other vendor they had used.

My Internal Struggle:

To make things worse, this made me feel like the last few years of my business life was a waste. I struggled to differentiate myself in the market but ended up just blending in. I was doing things that the employer didn’t value and could easily get from any broker in the market.

The Wall:

Then I had some employees leave my company and I felt like giving up. This meant that I had client’s question if our company would stay in business, we even had some of them leave us. We took a substantial loss in revenue and had to make a choice to throw in the towel or search for a new path forward.

Then, as if by chance, something amazing happened... 

The Epiphany:

I found myself in jury duty reading random articles on LinkedIn. I stumbled across an article about a company that had significantly lowered their health insurance cost by improving the benefits the employee’s received. 

This employer understood that money spent toward employee pay raises elevate their overall cost (after including payroll taxes) but money allocated toward the group health insurance plan resulted in reduced overall cost because it was a tax-free benefit to the employee. Employee’s saw this as a raise because they weren’t crippled with the out of pocket expenses associated with the company’s health plan.

I thought to myself...

“This is impossible…. I should tell my clients to lower the deductibles, lower or eliminate copays, make many prescription drugs free, and healthcare cost go down?”

It was now crystal clear… I could revitalize my business if I could learn how to lower an organizations healthcare costs by making the health plan better. I figured that, since I was stuck in jury duty all day, I could research what I thought was an impossible topic, “how to lower healthcare costs while improving the benefits”. 

I knew that if I could figure this out; employers would be given the opportunity to choose to simply save the money, significantly improve the health plan benefits, increase the company’s 401k match, or achieve whatever other goals they had with this newly found opportunity. I knew organizations would finally be able to control what most believe to be an unmanageable expense.

As a result of my research, I ended up on a call with a physician about a company he had recently started. He led a team that audited medical bills for self-funded health plans and told me a story that has stuck with me throughout the years. 

He found a medical bill in which the hospital was charging the employer’s health plan for two permanent cardiac pacemakers. There was a problem—it was for one person and humans only have one heart. So, why would a hospital bill for two? 

This physicians’ company received the hospital bill before the employer’s health plan paid the claim. After reviewing the itemized bill and patient medical records, he reached out to the hospital and pointed out the billing issue. After the mistake was realized, the second, unused pacemaker was removed from the patient’s bill.

Since the patient only pays up to their max out-of-pocket, 100% of the savings was realized by the employer (because the plan was self-funded). 

Said another way, if the member in this scenario had a max out of pocket of $10,000, they have no way of knowing that such a large bill was artificially inflated since the insurance picks up everything after the $10,000 (in this example). Furthermore, the patient has no incentive to see the total bill reduced since they won’t have to pay anything past their $10,000 responsibility.

I asked the physician that audited the bill, how much a pacemaker was. He told me about $50,000 on average. I was noticeably shaken.

I said,

“So, you saved the employer $50,000 since you were able to get the 2nd pacemaker removed from the bill?”

He replied,

“Well, we charge them a small part of the savings after it is realized, but yes.”

Suddenly, I thought,

“What other items can be found inside a company’s health plan to lower costs?” 

At the time, my only thought on how to lower costs for our clients was by raising deductibles, eliminating co-pays, pressuring vendors to reduce their admin fees, and getting carrier health plan discounts by implementing wellness programs. I also filled up most of my client meetings talking about all the activities we could do for them like helping enroll employees, providing free or nearly free software, and other HR support services. 

At that exact moment, however, my mind shifted. My mission now was to educate employers on how to control what makes up 80% of their health insurance cost, the actual health insurance claims. 

That’s when I realized without a doubt, that this crazy idea was true. After well over a year of research, I discovered that what this physician was doing was just one of dozens of strategies that an employer could implement to lower healthcare cost while simultaneously improving their health plan. 

The Plan:

My plan was to get this message out to every business owner, C-Suite executive, political leader, or union head that would listen. We placed outbound calls, sent mailers and even emailed these people directly. 

I thought, how could anyone resist this. I can save your company money and improve their health plan. I knew what drove cost and how the games were played, and I knew that these employers didn’t manage healthcare like they manage other items on their P&L.

But there was still a problem... 

The Conflict:

Nobody believed me… the market had been telling organizations they can lower their health insurance costs for years. 

These organizations were living with a familiar routine, one that says we will help you lower cost but inevitably pay more from year to year. This caused them to argue for their limitations and surround themselves with other employer organizations that were doing the same. 

I understood that this had created relationships with their large name brand vendors, brokers and carriers. These entities had been reinforcing these limiting beliefs and further ingrained their emotional attachment. 

They told them that if they shifted to a high deductible plan, implemented a wellness program or “shopped the market” every year that it would produce savings.

In fact, I learned that nearly every broker was singing the same song, “make us your broker and we will save you money”! 

In fact, I even began to see a pattern… organizations had a series of almost pre-recorded responses. They would say things like:

• The CFO would never approve that.
• The CEO is not involved in employee benefits. 
• We have tried things like this before, but it didn’t work.
• The owner is a friend of our consultant.
• I just gather the information and get it to upper management.
• If this was real, our current broker would have told us.
• Our company is different
• Get us a quote.

I even learned, along the way, that I not only had to get past these predictable and pre-conditioned responses but also had to demonstrate to the employers, unions and municipalities that there was a cartel-like influence that was keeping all of this from them. These cartel-like organizations were the same organizations that sponsored the local little league events, ran national commercials and gave away free flu shots.

I learned that these influential entities were responsible for “managing” a company’s healthcare supply chain. These entities were the large health insurance companies, pharmacy benefit managers, and institutional benefit consulting houses.

The Achievement

In the end we finally broke through to a few employers that were struggling to fix their company’s group health insurance plan. This allowed us to proof-out all the different ways we knew would substantially improve the benefits and reduce costs. In the beginning, I was just as shocked as the employers when these strategies worked. Many even worked better that even I anticipated. 

We even had clients that received dividend checks from there health insurance company. All of them thought it was impossible, even after I showed them how it was done. They were stunned to discover these things had been hidden from them all this time, but now they felt more empowered with the information and the roadmap we had provided them. 

All these things meant we could now achieve what we set out to do: measurably, predictably and repeatably reduce a company’s healthcare expense, improve the benefits, and bring true value to the partnership. 

As a result of all this work, we were able to achieve the following: 

The “before” is what the employers would have paid if there were no intervention, strategy change, or change in workflow, and the “after” represents the actual cost or exposure my client experienced. 

*Real life examples. Each healthcare item noted can be situational. Numbers rounded for simplicity and to account for average costs.

What these employers realized, by following my process, was that by reducing the underlying claims, you could reduce the cost to insure those claims. If you could reduce the cost to insure those claims the company could become more profitable, lower their OpEx and increase their EBITDA. 

The employees would also benefit by seeing a reduction in their insurance costs, a lowering in their deductible and a reduction in the overall anxiety many employees feel toward their health plan.

Since I understood that healthcare is paid for with company profits, these strategies could not only reduce the organization’s healthcare spend but also help solve some of the other items many companies may struggle with, like employee turnover, recruiting or increasing the 401k match. 

My clients could now use their health plan as a weapon to compete in the market.

The Transformation:

When all is said and done, I was able to feel like a true partner to my clients and no longer saw myself as someone who just sold insurance. I was able to show my clients that their health plan can be used as a weapon to free trapped capital, bring goodwill to their members, and a way to gain a competitive edge in their market. 

I saw that my interest was aligned with my client’s best interest. I no longer wanted to win a new client just to make more money, I wanted to win new clients because I knew the impact I could make on their bottom line and for their employees. 

I realized that if we could reverse the misaligned incentives hiding in their healthcare supply chain, fix all the corporate greed tactics used by the Cartel, and address the irresponsible behavior I saw in the industry then everyone would win. 

I would compel more employers to address this blind spot on their P&L; my clients would save money and the employees of those companies would have a substantially better health plan. I felt like I was bringing immense measurable value and that I really had an edge on my competition. 

My hope in writing the book, Misdirection, is to pull back the curtain and give you actionable ways to turn a liability into an asset. 

In this book, I am casting a compelling vision of the future, a new opportunity of sorts, as opposed to showing you incremental improvements on what you already do today. This book will give you the insight on what corrupts your health plan, why all the players in this game are incentivized when you pay more and why you have been intentionally kept in the dark. 

I not only reveal all the hidden agendas, but I detail actionable insight on what you can do to correct it. After reading this book, you will realize that your healthcare renewal increase is optional, what to look for when seeking out advise, and how to give your employees the best healthcare plan they have ever had.

"Misdirection" can be found on Amazon, or free (plus shipping) on misdirectionbook.com

I hope you enjoy it.