They call themselves consultants rather than brokers. They intend to make their money ultimately by delivering measurable value to clients, rather than taking fees for services that may or may not be in the client’s best interests.
These new breakaway brokers are generally taking two paths: They either specialize in a certain market (region, industry or type of care), or they are rebuilding comprehensive health insurance coverage for an eclectic clientele. They are often young, just entering the field, or they could be an old pro, who, observing what’s happening within the industry, decided to make a shift. “They want to do it right,” according to Health Rosetta founder Dave Chase. “At some point the light bulb came on.” Health Rosetta is a nonprofit focused on changing the way health care is paid for and delivered. A key component of its mission is to educate and train insurance brokers so that they can provide insurance coverage to employers at lower cost, with better coverage for plan members.
“There is this commonality of purpose,” Chase continues. “These people want to share what they are doing. They are ruled by a spirit of collegiality and humility.”
Chase points to one of Health Rosetta’s programs—the “How I Did It” series—as a powerful example of breakaway broker networking.
“These are individuals talking about the problems they’ve faced. ‘How did I deal with stop-loss, direct-contracting, reference-based pricing or a single-hospital town?’ It’s the power of a network of like-minded people, helping each other.”
In 2011, Taylor Lindsey graduated from Elon University in North Carolina, and went back home to Richlands, Virginia (pop., 5,823) to work in the family insurance business. Three years into the job, he began to feel frustrated. Where was the value he was delivering?
He heard about brokers who were casting off the ways of the past, exchanging them for a more proactive role in providing businesses with with a system that allows for a more strategic approach that would give brokers and plan sponsors more control, and hold both accountable for the outcome.
He determined to become one of those brokers; but he had to sell it to one key stakeholder: his father, York Lindsey, who’d run the business for 30 years.
“I told him, ‘This industry is changing and if we don’t get ahead of it, we will be left in the dust.’” While giving his son much of the reins, he didn’t know how monumental this shift was going to be.
At the end of the day, Lindsey says, his mission is to help employees be smarter consumers of health care. These strategies work for employers of all sizes. ”I am helping employers understand what it is they need, not just want they think they want,” he says. “It’s not selling insurance anymore; this is a business of discovery and implementation.”
The mindset shift had allowed the company to grow and evolve. “The commitment we made to do things differently paid off today. We are focused around employers who have the desire to make a positive change,” Lindsey says.
With the support of like-minded brokers around the nation, Lindsey is bringing new ideas to the table—ideas that have been tested in other markets and delivered value for clients.
In 2017, he joined Health Rosetta, a nonprofit focused on changing the way health care is paid for and delivered. A key component of its mission is to educate and train insurance brokers so that they can provide insurance coverage to employers at lower cost, with better coverage for plan members. He also belongs to Q4Intelligence, another organization testing new methods for insuring employees and supporting innovative brokers.
Lindsey no longer feels isolated in rural Virginia, but instead is connected to brokers around the country. They are sharing ideas, mentoring one another, and recommending new products and services designed to improve insurance plans without ratcheting up the cost.
Like Taylor Lindsey, Susan L. Combs has carved out a niche for her business. While Lindsey’s is geographic, Combs’ is largely by industry. The CEO of Combs & Company in New York, Combs came to insurance from the hospitality industry. Two of her three niches—entertainment and food—grew from her hospitality background. She chose a third, foreign businesses new to the U.S., because it was relatively untouched at the time.
“Any time I advise other brokers, I say, ‘If you can develop a niche base, it’s the best,’” she says. The key advantages to niche services, she says, are knowledge of the industry and common insurance needs, as well as word-of-mouth referrals.
“With entertainment, the big deal is discretion,” she says. “So if someone hears that so-and-so uses Combs, then they want us too.”
It’s not that Combs and Lindsey won’t work with larger organizations looking for comprehensive services. “I will never turn away an opportunity until I know the full story,” Lindsey says. “A true advisor/consultant doesn’t show up with a product to sell; it’s more to learn about how you can help solve their problems. If we can make the connection that premiums have a direct correlation to claims spend, a light bulb goes on.”
Combs is a partner with a major insurer, The Capacity Group, an EPIC company, which helps her with business and evaluates new products and services for her. She also works with a general insurer that reviews new health insurance products and services to further expand her horizons.
A Combs & Company client, Counseling in Schools, switched to Combs’ firm when its broker “didn’t provide the support I wanted,” says human resources director Paul Miraglia. “He was slow to answer questions, and would say, ‘This is the plan we have, take it or leave it.’ I told him, ‘You should be working for me! You’re out!’”
With Combs, the level of service immediately ramped up. “They really go to bat for you. They present clear and concise information so that I can present it to the employees and the executive director, making the process easier.”
Braden Monaco, managing partner at Blue Horizon Benefits in Danvers, Massachusetts, carved out a niche in construction. This was a natural path for the son of a former owner of a small construction firm who is still entrenched in the industry, although he has many clients in other industries, as well. He went into insurance in 2008. “A terrible time,” he recalls. “But that’s where my brand started to resonate with construction companies. They are fighting for talent, offering high wages and good benefits. Then along comes the recession; they needed ways to stay alive.”
For the first time, he sold creative financial strategies—HRA, HSAs and defined contribution plans—and quickly built a book of business focusing on helping companies stay alive. But as the economy turned around, he looked for better ways to work with the industry. How could he add value instead of simply selling a traditional plan?
In 2016, he and his partners left their agency to go on their own with Blue Horizon, offering a concierge partnership approach to clients. That’s when he shifted from sales to consulting. “We present ourselves as nimble and proactive, and ask people, ‘How can we help?’”
His construction clients can be risk-averse. As a result, he has learned to patiently move them from traditional health coverage to a newer model of value-based services.
“It’s a matter of whose agenda we’re working on. It’s about the client. My job isn’t to push them into something, but to help educate them and let them know what’s available,” he says. “It may be self-funded or Blue Cross Blue Shield. I have to meet them where they are. It’s a constant evolution and it comes down to communication and collaboration. I say, ‘Lets talk through the pros and cons of these new programs. Is it right for your workforce? For your culture?’”
Trey Axe, an account executive at Alliant Insurance Services in Austin, found himself selling insurance in 2009 and not liking it very much. He immediately began to gravitate toward consulting, while others in the agency (and the broader industry) just sold insurance. He helped clients with Obamacare compliance issues, then began to take on more advisory roles. When he joined Alliant’s Austin office, he knew he’d found the right fit.
“We are not a producer model. We have a sales team, but I’m an account executive and we’re salary-based. We’re supposed to put in what’s right for the client. We are evaluated on a different basis, and we are keeping clients, which is the name of the game.”
The work is demanding. He meets with clients year-round, evaluating new products and services and making plan design recommendations. He steers his clients toward value-based comprehensive coverage plans with a multi-year strategies to constantly upgrade coverage and control costs.
“At other agencies I’ve worked for, you could handle 40 accounts with one person. Here, people want a full year of engagement, good strategic guidance, and collaboration. Yes, the work is harder, but it feels better to deliver value.”
Will it pay off? Over time, he believes it will.
“It’s an extremely competitive market, and it’s actually pretty easy when we’re up against a traditional broker. You don’t want to be offering the bare minimum in this environment. Our clients are smarter than that. Clients need to be on a strategic path,” he says.
And yet he constantly comes up against brokers who successfully sell their clients on traditional plans, modified to shift cost to employees, with annual double-digit cost increases.
“You still have the old-school brokers; the golfing buddies who are impossible to fire. That’s still a thing. But I feel comfortable being a consultant and servicing accounts. I feel very good about our model. It’s the future.”
Thrive Benefits’ Rachel Miner broke from the pack years ago. She also focuses her work on high-level, comprehensive services, but she recognizes that she can’t convert clients from traditional to value-based plans over night.
“If you think there is any silver bullet for every client, you’re fooling yourself,” she says.
She does recommend self-funding to clients, though, either for now or later.
“Self-funding puts control back into the employer’s hands, which is where you want it to be if you want to start controlling costs. You can’t predict what you can’t measure. Beyond that funding strategy, it depends on the client’s appetite for change. All the different value-based insurance design strategies with direct primary care, carve-out PBMs, surgical centers—they’re all fantastic, but is it right for every client? Absolutely not.
“When you start dissecting every part of the traditional health plan with different vendors, it makes it harder for the employer at first, and harder on the consultant to manage. They are just not used to it, but it’s what the market needs. If you asked Henry Ford to ask his target market what they wanted when he was creating the automobile, they would’ve asked for a faster horse. A lot of consultants need to realize we need to give some companies time.”
Miner constantly searches for better ways to manage costs for the employer. Often, the solutions are out there; but implementation may be difficult.
The process of reducing the pharmacy spend is arduous and time consuming, she says. “But if we can take a $10,000-a-month drug to $1,000, is it worth it? I think so.”
Then there are those who play both sides—niche and comprehensive—on behalf of their clients.
Gary Becker falls into both the niche and the comprehensive boxes. Becker, chief executive officer at ScriptSourcing, LLC, and Becker Benefit Group, bangs the drum loudly for change.
ScriptSourcing was founded with the intention of replacing the current tiered drug purchasing system dominated by Big Pharma and old-school pharmacy benefit managers (PBMs). With that drumstick, Becker exhorts large self-insured plans to chuck their current drug programs and let his crew implement PBMs that uphold fiduciary standards while ScriptSourcing focuses on proactive solutions.
On the benefits consulting side, he advocates for managing the entire health care supply chain to deliver value. That means increasing the value of benefits to the plan member while reducing the plan sponsor’s cost.
On the niche side, Becker explores the value of solving a single problem. On the comprehensive side, he puts together pieces that add up to higher value and lower cost plans.
“We are delivering value by managing the health care supply chain for the client. We will put our compensation at risk to prove that, by managing the entire insurance supply, you can reduce cost and improve benefits.”
Serving the client’s interests and working for returns on value delivered rather than a fee for services rendered, takes a tremendous amount of time, as the new brokers will testify. Not all companies will be drawn to it—there are still plan sponsors who would prefer to grumble about annual cost increases and renew last year’s plan rather than take on the responsibility of of truly managing their health plan components and costs.
The golfing buddy broker may be a long-time fixture of the industry, but the day may be approaching when that golfer golfs alone.