Every time I turn around these days, one word keeps popping up – transparency. Normally, I get tired of these buzzwords-of-the-day really quick; I know I’m not alone. A simple Google search of overused buzzwords will return such favorites as innovative, disruption, guru, and, on at least one list, transparent is right there.
I believe these buzzwords come to exist for the same reason as stereotypes – there is a degree of reality to them. However, when they cross over from something meaningful to being just another platitude, their welcome wears off fast.
I see this one as a bit different. I don’t think this idea of transparency is going away any time soon; at least not in our industry. It just can’t. I know this is an over simplification of a ridiculously complex problem, but I believe that transparency is the linchpin to solving what is wrong with our healthcare system.
It’s an obvious part of the solution. We all see it and seem to agree. This is validated every single day via the online rally cries and demands for that very transparency.
- We demand transparency in the pricing of medical services, BEFORE they take place!!
- We demand transparency from big pharma!!
- We demand transparency from you, BUCAH carrier!!
- We demand transparency in being able to tell which providers have the best outcomes!!
- We demand, we demand, we demand!!
When I hear these rally cries and demands, I want to yell out “Hell, yeah!!!” Who can argue that transparency isn’t needed, isn’t reasonable, isn’t the ultimate driver of the real solutions we need?!
Do as I say, not as I do
The system is rife with inefficiencies, confusion, unnecessary services, unnecessarily expensive services, and, seemingly, outright fraud. The ONLY way to clean it all up is if transparency is a cornerstone of the solution.
While advisors are often leading the charge in demanding transparency in every corner of the healthcare/insurance system, they quite often stop short of including themselves in that demand/expectation. Yes, I know I know, there are exceptions and, as I write the remainder of this blog, I readily admit I am making some generalizations. If you are one of those exceptions, good on ya, mate. We need more of you.
You’ve seen the same postings I have. Advisors posting copies of hospital bills with absolutely ridiculous charges, quasi-transcripts of conversations with providers who admit to not being able to provide a list of fees, obvious billing errors, and on and on the examples are shared. I’m not gonna lie, it’s a powerful strategy.
And, honestly, I have never felt bad for those who are being outed. When the pharma companies, hospitals, carriers, etc. won’t willingly be transparent, the sentiment is that their hand needs to be forced. It looks suspicious doesn’t it?
I don’t argue with this tactic AT ALL. If there are inefficiencies, antiquated practices, confusion, sloppiness, and, especially, fraud, I say bring on the spotlight. It HAS to be acknowledged and corrected! Drastic times call for drastic measures.
Here is where you lose me
My problem is the hypocrisy that so often is being demonstrated by those advisors making those posts. I have yet to see one of them post their fee agreement and scope of services they have in place with each of their clients. I wonder how many would be comfortable having every one of their clients post their 5500 (or some comparable summary for smaller groups) along with a breakdown of what the advisor did to earn that compensation.
Not only do I not see advisors voluntarily demonstrating the kind of transparency they demand of others, I actually hear of/from advisors who, in very hushed tones, express their outright reluctance to be transparent. Not only that, but some go so far as to be vocal and even demand that certain industry groups with political influence protect them legislatively from transparency requirements.
Transparency for all
To those who have embraced complete transparency in all of their compensation with every single client, I apologize. This is for the other 99%.
Here are three reasons why you, as a benefits advisor, need to embrace transparency for yourself.
1. It’s the right thing to do
As a consumer, you expect to know how much you pay for goods and services and to know very clearly what you get in return. It is only with this knowledge that you can ever know if you are receiving fair value.
Don’t your clients deserve the same peace of mind? Don’t they deserve to know how much they are paying you and what you deliver in return so that they can know you are a good value for them and their business?
If you find yourself afraid of having this conversation, one of two things likely needs to happen. You either need to deliver more value, or you need to offer to take a pay cut. But I don’t believe that pay cut is necessary.
This industry delivers exceptional value, more than you likely give yourself credit for. If you will sit down and create a stewardship report (documentation of the value you delivered) for each client, I believe you will feel empowered when you see your value on paper. I believe you will feel confident and willing to go have the complete transparency conversation with your clients – what you did that had a positive impact on their business and the compensation you received in return.
It’s the right thing for your clients and it’s the right thing for you.
2. It protects your future revenue
One of the biggest struggles I see in agencies are the reduced profit margins resulting from reduced commission schedules and eliminated bonuses. The financial reward in the business just ain’t what it used to be.
If the carriers are turning down the spigot, there is only one other source you can go to replace the revenue – your clients. But, that isn’t an option if you aren’t willing to discuss your compensation with them.
“We’re free” are the two most damaging words this industry uses. Not only are they damaging, they are insulting to your clients. Your clients know you have to be paid. To pretend to be free is an insult to their good business sense.
Besides, your clients don’t expect you to bring them free services, they expect you to bring them great results. The clients you want to have value those results and are willing to pay for them. But only if you give them the opportunity.
If you would sit down with each client today and have the stewardship/compensation I described above, you would be taking a huge step forward in protecting your future revenue stream. Not only does it help protect your revenue stream, it sets you up for increases in client revenue.
By being very clear about what you do for a client and how much you get paid, this conversation establishes a baseline for your engagement. You protect your revenue stream because if/when there is a reduction in the built-in commissions, there is a logical expectation that it must be replaced by fees in order to maintain the current level of service. Additionally, when you start delivering additional value through new solutions, there is also a logical expectation that there will be additional fees/compensation.
3. To protect your ass from becoming THE target
As we move further into the next election cycle, the health care/insurance issue is going to gain even more political attention. We’re already seeing it. All of the transparency demands I listed above are going to be made on a much bigger, much more vocal, much more visual, much more bitter stage.
The calls for transparency will be made by the politically motivated and self-righteous as much as they are by the well intentioned and altruistic. And the audience largely won’t be able to tell one messenger from another. They’ll simply stand there and join in, “Hell, yeah!!!”, as they hear the demands and arguments for transparency.
And what if you, as an advisor, are the lone remaining non-transparent part of the system? What if you are successful in avoiding the conversation? What if you are successful in making your demands of the politically influential to protect you from transparency?
That should scare the freakin’ hell out of you!!
The reason why it should scare you is that you will become THE biggest target of those making demands. Your value will not only be questioned, it will be assumed to be inadequate and unfair to your clients.
As obvious as it is to you as an advisor that the rest of the system needs to be transparent, it will be equally obvious to your clients that you are part of that system.
How will you respond to your client who watches your online rants about transparency and then questions you as to why you haven’t been transparent with them? And, maybe it isn’t even you they see ranting, maybe it’s other advisors. But don’t you believe they are still left with the same question about your lack of transparency?
Lick the frog
I do understand that it’s scary to have a compensation conversation for the first time, I really do. However, when we have convinced our clients to go have that conversation, they find their fears were unfounded. Not only do they almost never get any pushback, they quite often hear shock that their amount compensation isn’t greater.
I have said from the stage for years, pretty soon every single client will know exactly how much they pay you, it’s only a matter of who has that conversation. It needs to be you sitting down with your clients and having a conversation about how much you are getting paid on their behalf, along with what you do in exchange for that compensation.
If you won’t have that conversation, it will be one of your competitors who will emphasize that you must be overpaid or else you would be comfortable having the conversation.
So, go be transparent. It will protect you from becoming the target. It will protect and enhance your future revenue stream. And, besides, it’s just the right thing to do.
Photo by twinsterphoto