If you have read any of my previous posts/articles, you know that I don’t see anything in the current healthcare reform legislation, nor do I anticipate any future changes, that aren’t survivable. However, if you had read my previous thoughts on the subject, you also know that I don’t see it as survivable by those who are insistent on maintaining the status quo.
As in business, or reality shows, surviving healthcare reform won’t be determined on one specific day, it will be determined over a period of time, starting with decisions you make today. Those who survive will be the ones who have a have a game plan, form the proper alliances, and have a willingness and ability to adapt to changing circumstances.
Of course, whether on Survivor or in Darwinian theory, the weakest among us will be the first casualties. A look at who is in the game, why they will or won’t survive and the order in which they will be voted off the island:
Who are they? - They are the producers/agencies who compete on price & product along with promises of great service (unfortunately it’s reactive). The more “progressive” traditionalists will even throw in their list of value added services.
Why they WON’T survive – They won’t survive because they have placed themselves as the quintessential middleman peddling someone else’s commodity. In the eyes of the prospect, at best, they look just like everyone else. They are the first casualties.
Who are they? – They are the jack of all trades, but masters of none. Need employee benefits? I do that. Want a GL policy? I can do that too. Need a surety bond from our agency? Yep, I’m the one who does that as well.
Why they WON’T survive – While a one-stop-relationship may sound good on the surface, it makes it impossible to have enough depth below the surface to meet the true needs of a client in any single area, much less all of them. The more complicated our world becomes, the less of a future that exists for generalists. Second casualty.
Commission Based Specialists
Who are they? – These are the producers who understand the complexities of truly making a difference for their clients. They have moved beyond a value proposition based on price, product, and service. They have moved into a model focused on identifying the needs and opportunities of their clients and deliver customized solutions. Unfortunately, they allow the carrier’s commission structure determine how much they get paid.
Why they WILL survive – They will survive because they have moved out of the commodity business and can identify the specific value they bring to the process.
Why they MAY not - Because they are commission based, the Minimum Loss Ratio and threats to traditional commission streams will be a mid to long-term challenge for these players. While they can survive, they will see significant reductions in revenue and will have to find other ways to protect their bottom line.
Fee Based Specialists
Who are they? – They are very similar to the commission based specialists with the exception of how they get paid. At first, this may seem like a subtle difference between the two, but the true difference in the eyes of the client can be profound. In moving to a fee based compensation model, producers and agencies have accepted the challenge of having to be able to articulate and demonstrate the value they bring to the process. Because their compensation model has become transparent, the client can now clearly see the value being delivered.
Why they WILL survive – Simple: through their business model, they are making a difference in the business of, and on the bottom line of, their clients. Through their compensation model, that value becomes crystal clear in the eyes of the client.
Who are they? – These are the rare producers/agencies who are the innovators in the industry; they are changing the rules of the game. They have cast off the labels and expectations of what being a benefits producer/agency has meant in the past and are writing a new definition. They are building business models and systems that move beyond benefits, and even HR, to include driving greater returns on the investment their clients make into human capital. They are the producers and agencies that truly understand business and the challenges of running a business. More importantly, they understand how they can create plans and bring solutions that make their clients more successful at what they do. Bottom line, they become attached to the strategy of their clients.
Why they will THRIVE – That’s right, the strategists won’t just survive, they will thrive as a result of healthcare reform. They will thrive because what they do is something that is absolutely needed by their clients. They will thrive because they will be creating unbelievable value for their clients, and when you are getting paid for delivering that type of value rather than getting paid for delivering someone else’s product….well, it’s clear who the winner in this game will be.
No, there isn’t anything in healthcare reform that you can’t survive, but, depending on how you choose to play the game, you could still lose. Those decisions of today I mentioned at the beginning - it’s time to get serious about them.
What are your thoughts? Where do you see the line of survivability? Share your ideas in the comments section below.
Photo by Joan Campderros-i-Canas.