Friday, July 28, 2006


A 95% Failure Rate

A recent article at Insurance Newsnet describes a disappointing situation (subscription required):
In response to the growing consumerism movement in health care, insurance brokers have begun providing wellness and other health management services to employers.

But even though most of the services are available at no cost-brokers offer the services to differentiate themselves-most brokers say they must persuade employers, particularly smaller employers, to take advantage of them.
Drawing from various large brokers' experiences a shocking conclusion is found. In the small to midsize employer market, less than 5% of employers are taking advantage of free wellness programs offered by their brokers. Apparently many brokers are offering free wellness programs to their clients in a bid to stand out from their competition. So why are so few employers taking advantage of a proven method of reducing long term health claims? Money quote:
"The savvy employers, no matter what the size, are seeing it has to be done a different way," (a broker) said. But, for the most part, "we're still carrying the message to the employers as opposed to being asked."(my emphasis)
Wellness programs normally face a difficult, uphill sale. They must justify their existence with strong ROI's and case studies. In other words, most employers don't even understand they have a wellness problem. Why fix what isn't broke? Convincing an employer otherwise requires education and hard work. On top of that, whenever a service is offered for free it cheapens the program's overall value. Take a look at health insurance. How many employees understand how much health insurance costs? How much has that misunderstanding of value contributed to the entitlement mentality we face today? If an employer doubts the value of a wellness program, not to mention even the need for such a program, why would they commit any resources to it? Offering wellness services at no charge may seem like a compelling sales tool, but ultimately only serves to devalue wellness initiates in the eyes of an already skeptical market.

And that brings us to the second problem. Adopting CDHP's or other "consumerism" approaches without undertaking wellness efforts is at best foolish and at worst downright destructive. Brokers advocating consumerism will look to provide their clients with a solid wellness foundation. But selling wellness is hard. Unlike health insurance, wellness programs are not demand products. So why not kill two birds with one stone? Offer wellness as a free, value added program, thereby eliminating cost barriers and adding another bullet to our list of agency provided services? When wellness is one bullet in a list of many it does not command the attention and education it deserves. Coupled with the fact that there is a strong disincentive to give the product away (cost), lackluster results should be expected.

When a pitch fails 95% of the time, shouldn't its merits be re-evaluated?

Wellness is a critical part of consumerism efforts. As such it should not be relegated to an uninspiring value-added program. Additionally, amassing an arsenal of value-added weapons amounts to zero competitive advantage if the dogs don't eat the dogfood. "We're still carrying the message to the employers as opposed to being asked." Well, as insurance brokers it is our duty to advise our clients what they should be doing, not just doing "what is asked." Brokers that successfully advise their clients to implement long term strategies, like wellness programs, will guide their clients to long term success. In doing so, they will overcome their competition and most definitely see a sales rate well above 5 percent.

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