The Secret to a Perfect Broker-Partner Relationship

This video provides an in-depth exploration of building strong, trust-based broker-partner relationships in the self-funded healthcare benefits industry, while also delving into broader themes of personal and professional development, particularly for women in leadership. The hosts, Cara Kirsch and Libby Henry, share their journey of forging a highly effective partnership, emphasizing radical transparency, integrity, and the ability to navigate difficult conversations. They illustrate how these principles led to significant cost savings for a client, transforming a 74% fully insured renewal into a self-funded plan that saved millions.

The discussion progresses from the personal anecdotes of their initial "virtual lunch" meeting during COVID-19 to the professional strategies that underpin their success. Key themes include the importance of clear expectations, mutual respect, and a commitment to solving problems together rather than assigning blame. They highlight that the best partnerships are not solely driven by the lowest numbers on a spreadsheet but by unwavering trust, especially when challenges arise. The conversation also touches on the unique pressures faced by working mothers in high-powered careers, offering insights into balancing professional ambition with family life and the importance of instilling independence in children.

Furthermore, the video shifts to a critical analysis of the self-funded healthcare market, advocating for employers to take greater control over their healthcare spending. Cara Kirsch recounts a pivotal experience where she challenged a 74% renewal increase for a client, ultimately saving them $3 million by implementing a reference-based pricing, self-funded plan. This case study underscores the power of education, transparency, and innovative financing mechanisms in an industry often plagued by misaligned incentives. The speakers also forecast future trends, anticipating increased financial strain on hospitals, a growing demand for transparency in claims management, and a continued bifurcation of the risk pool as more employers explore self-funding. They stress the fiduciary responsibility of employers under ERISA and the need for consultants to act as stewards of the craft, empowering clients with knowledge and options.

Key Takeaways:

• Radical Transparency and Integrity in Partnerships: The foundation of a strong business relationship lies in radical transparency, honesty, and integrity. Partners should be able to have difficult conversations without fear of damaging the relationship, fostering an environment where mistakes are owned, and solutions are sought collaboratively.
• Beyond the Spreadsheet Numbers: The most effective partnerships are not solely based on the lowest price or "best deal" but on the ability to trust and rely on each other, especially when things go wrong. This long-term trust often leads to better outcomes than short-term cost-cutting.
• Clear Expectations and Mutual Respect: Establishing clear expectations early in a partnership, even if it means initially turning down business that doesn't fit the established process, builds respect and long-term commitment. This allows for more frank and productive discussions later.
• Continuous Learning and Adaptability: Successful professionals in the healthcare industry must be "stewards of the craft," continuously learning and adapting to rapid changes. It's crucial to be open to different approaches and learn from others, even if they don't align with one's initial methods.
• Fiduciary Responsibility for Employers (ERISA): Employers, as plan sponsors, have a fiduciary responsibility under ERISA to use their employees' healthcare dollars appropriately and transparently. This mandates a proactive approach to understanding and managing healthcare benefits, not just accepting the status quo.
• Challenging the Status Quo in Healthcare Benefits: Employers should challenge their consultants and carriers, especially when faced with exorbitant renewal increases. Innovative solutions like self-funded plans and reference-based pricing can provide power and control, leading to significant cost savings.
• Data-Driven Claims Management: Self-funded plans offer greater visibility into claims data, enabling employers to understand the "how and why" of healthcare spending. This actionable information is crucial for implementing cost management tools and addressing issues like specialty drug costs and inpatient care.
• Misaligned Industry Incentives: The current healthcare benefits industry often has misaligned incentives, where brokers and consultants may earn more as fully insured costs rise. Employers need to be aware of this and seek consultants who prioritize their clients' best interests and education over traditional commission structures.
• Managing Healthcare Cost Drivers: Employers should focus on understanding and managing key cost drivers such as inpatient care and specialty drugs. Solutions exist in these areas, and employers should ensure their administrative partners support the implementation of these solutions.
• Bifurcation of the Risk Pool: The healthcare market is likely to see a bifurcation of the risk pool, with employers willing to embrace self-funding and active management achieving better outcomes, while those reluctant to change face worsening risk pools and higher increases.
• Empowering Women in the Industry: The video emphasizes the importance of women claiming their seat at the table in male-dominated industries like healthcare. It encourages male colleagues to support and defend women, and for women to mentor and empower younger generations to enter and succeed in these fields.
• Prioritizing Personal Well-being: Balancing high-powered careers with personal life, especially motherhood, requires intentional prioritization and acknowledging that "balance" is often a myth. It's important to set boundaries, delegate, and make time for personal well-being without guilt.
• Instilling Independence in Children: For working parents, fostering independence, problem-solving skills, and personal responsibility in children is a valuable outcome. This prepares them for adulthood and allows parents to manage their demanding careers more effectively.
• "Follow the Money" and "A Closed Mouth Doesn't Get Fed": Employers are advised to "follow the money" in healthcare spending and to "ask more questions" until they fully understand the answers, even if they don't like them. This proactive questioning is essential for informed decision-making.

Tools/Resources Mentioned:

• Paro Health: Described as the largest benefits captive in the United States, making self-insurance simple and accessible for small to midsize employers and arming them with cost management tools.
• Nomi Health: Positioned as a company that has rebuilt self-funded benefits from the ground up, offering solutions like no co-pays, no deductibles, and zero out-of-pocket costs for members.
• Claim Doc: A medical claim auditing and member advocacy company providing fiduciary services to employer-sponsored benefit plans.
• Veilance: An integrated ecosystem solution driven by data that manages and simplifies medical claim costs for self-insured employers.
• Gallagher: Mentioned as having robust data, specifically regarding the 40% increase in cancer costs since 2020.

Examples/Case Studies:

• 74% Fully Insured Renewal to $3 Million Savings: Cara Kirsch recounts a pivotal experience in 2017 where a home healthcare company faced a 74% increase on their fully insured plan. By developing a reference-based pricing and self-funded plan, she saved them $3 million over three years, demonstrating the power of challenging the status quo and innovative financing.
• Walmart and Mayo Clinic: The example of Walmart requiring employees to go to Mayo Clinic for certain treatments is cited as a large employer strategy to control healthcare costs, suggesting that middle-market employers can explore similar solutions.
• Iowa Employment Conference Client: Cara mentions that a group from the Iowa Employment Conference in 2024 became her client after 14 meetings and a year and a half, highlighting the long sales cycle and the importance of educating clients about their consulting agreements, compensation, and compliance.