By David Contorno
I know I’m going to get a lot of flack for this, but here goes. And I challenge anyone who pushes back to tell me where I am wrong.
When I was a traditional health insurance broker, I had the easiest job in the world.
1) I had no inventory on my shelves spoiling or depreciating in value. Every restaurant, car dealer, computer reseller and more would kill for that.
2) I produced and created nothing. I didn’t manufacture or produce a product. I actually took the products and pricing of other companies and simply put it on a spreadsheet.
3) Because my clients got 10-15% premium increases year after year, I too got 10-15% pay raises. And the worse job I did at what my clients actually needed (controlling healthcare costs) the more money I made.
4) Keeping the business, because all other brokers came in with the exact same plans and rates as me, was based on how much golf I took the owner out for, or how much “free” services I gave away that I refer to as bright shiny objects meant to divert the clients attention away from the fact that I was incapable of doing what they really needed which was controlling healthcare costs. (Would you prefer $20,000 of free “stuff” or save millions on your healthcare spend?)
Many people call our healthcare system broken. It’s not broken. It’s working exactly as it was designed to work. It’s not working well for Employers, Doctors or Patients. But it’s working really well for brokers (especially the “big” brokers), carrier execs and their shareholders and hospital execs.
If you are an employer and you think switching brokers who get paid the same, switching carriers who all make money the same, or consistently worsening your benefits year after year will bring different results, well I ask you to just look at the 20 years. Has it ever worked for you?
The late Charlie Munger said “Show me the incentive and I’ll show you the outcome.”
Change the incentives. At the broker level. The plan level. The patient level. Even the doctor level. And you change your outcomes.
