By Bill Rusteberg
This is a preview of an upcoming blog posting that will address worst practices in the brokerage and TPA industry in this country. These practices are some of the best kept secrets rivaling the mystery of the Loch Ness Monster.
A recent panel discussion at the World Health Congress in Washington DC last week entitled “Shaping Value-Based Benefits Consulting” touched ever so briefly on the importance agents, brokers and consultants play in our broken health care delivery system (Invitation to Join Broker and Benefit Executives). These centers of influence control the health benefits marketplace in collaboration with partner vendors such as insurance companies, TPA’s and others. Brokers are in the business of Supply Chain Management.
The insurance community is a tight net of co-conspirators known to everyone within the industry. It is a small world indeed. As the professional provider community has recognized for years, in every community there is a Dr. Hodad (Hands Of Death And Destruction). The same holds true in the insurance community. A concerted cone of silence effectively censors dirty laundry dialog.
That may be about to change. An effort to identify and credential brokers, agents and consultants that do no harm is underway:
“With the acknowledgement that many benefits consultants drive decision that are at odds with optimal health plan performance, benefits managers and brokers are increasingly advocating for consulting practice principles that align more directly with purchasers interest” – Brian Klepper
Renegade insurance advisers, a rare breed, are becoming more vocal and persistent these days. Consumers are aghast at learning, for the first time, well kept industry secrets (David Contorno – Status Quo’s Worst Nightmare).
They learn:
- Who gets paid what through hidden revenue streams
- How to lower costs by improving benefits
- How to demand and get full disclosure & transparency
- How to reverse medical trend without reducing benefits
- Unique risk management techniques that save money
When a traditional broker is asked what he does for a living, he may respond “I am a supply chain manager for health care!” But when a renegade broker is asked the same question, his reply should be “I destroy relationships for a living!”
In future blog postings I will outline some common schemes used to fool plan sponsors into paying undisclosed (and enormous) fees / commissions through ingenious means. I will show how one broker who represented to his client his annual fees were $128,000 was actually earning $611,000. I will show how a Texas TPA hoodwinks prospective clients into entering contracts with contract provisions never disclosed during the dating period prior to marriage, in effect tripling administration fees through fixed expenses disguised as claims. And, I will disclose more schemes that will surely be added incentive for the reader to begin early spring cleaning with renewed vigor this year.
