Fall 2007 / No. 73
Pieces and parts do make a difference
By Guest Contributor, William M. (Bill) Bennett, CFP, CFCI
It is interesting how many pieces and parts there are in the insurance business and how different the culture is with each of them. The industry has evolved, grown, and contorted into so many segments – each with their own products, processes and delivery methods. Take the medical/health side of the business and the voluntary market, for example.
Both of these segments have their own idiosyncrasies and require a great deal of expertise. Both of these segments have the ability to significantly impact the employer and employee in a very positive manner. Both of these segments could work together much better than they do as pieces and parts.
There is a real need today for the group medical and voluntary segments to come together for an acceptable and financially efficient solution to the issues with both the employer and the employees. It’s like someone is focusing on the fuel intake area of an automobile and someone on the electrical part without consulting the other. A coordinated effort would yield a huge impact for the consumer as well as the providers of product. It is proof of the old saying about the sum of the parts being greater than the whole. Here’s what needs to happen:
Integration – This is a crucial area where everyone looks at the holes and discusses the role each can play in the process of delivering products and services. It is an opportunity to present a unified front to the workforce so that it is seamless and perceived to be a well thought out process with the employee in mind. For instance, it is looking at deductibles and co-pays as well as out-of-pocket expenses to see what fits best, looking at long-term disability and waiting periods as well as sick pay to see what is a logical fit, and looking at plan provisions for limited benefits to see where there are holes.
Ease of accounting – This is an area that has prevented too many sales – ones that are logical and meaningful to the employer and the employee, but not the accounting or human resource department. Discussions ahead of time with all the service and product providers to develop an acceptable approach are critical. Whether it is a common bill or coordination for eligibility, everything should be addressed before the presentation to the employer so a solution is already in hand and not struggled for at the last minute, showing confusion.
Possible single service point – This is done well by only a few firms. It is simply an extension of the human resource department that can handle issues with the various plans. This not only relieves the HR department of problems they have struggled with in the past, but ends up being another revenue stream for the provider.
Communication – Everyone knows this one, and it has become the mantra of many in the business. At the same time, everyone is rarely at the table when it is being planned. Most of the communication efforts take place after everything else is done and needs to be discussed with the employees in some manner. Integration of these efforts can yield a better process, be more effective and, frankly, increase retention.
While it is great to have a “barrier to entry” with your competitors, the strongest position is to have a “barrier to exit” with the employer. Being able to bring these two worlds together certainly is a strong first step to accomplishing that very thing. It is a bit like the procreation of porcupines – certainly a tedious process but one that is very successful in the long run.
Bill Bennett is the CEO/Principal of WORKsiteRx, a firm that delivers an integrated medical plan administration and clinical process to the worksite. The firm focuses on employers and employees and the urgency to find new ways to address the escalating costs of medical care. WORKsiteRx integrates a web-enabled system with its strategic partners, which allows costs to be better managed and employers and employees to be better educated and informed on a 24/7 basis. He can be reached at BillBennett@worksiterx.com.
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