From Agency...
Our origins are on the agency side. As a relatively small firm, we built a sales model that we thought would allow us to compete with larger agencies, but we were still struggling to differentiate ourselves.
We invested significant resources into "Value Added Services" so that we could match up with larger agencies, but our competition had similar resources, and larger agencies continued to consolidate and use their buying clout as their primary weapon of choice in obtaining Agent of Record Letters. Added to this, was the exhaustive amount of time spent preparing, and then amending benefit proposals by utilizing extensive spreadsheets.
We knew something had to change after one sales appointment with a prospect. We had finished reviewing our impressive proposal loaded with value added services. The response...
Those things all sound great, but how will
they help me manage a 37% increase in premium?
We needed to find a way to differentiate ourselves, cut our costs by saving time and level the playing field with the larger agencies. This was our awakening, our light bulb going off. Dynamic Benefit Systems is the result of our change in focus.
To Technology Developers...
We created sophisticated worksheets that showed detailed financial analyses of various CDHC plans and their impact on employer and employee costs. Eventually, we modified these worksheets to allow for complex contribution strategies and multiple tiered HRA and HSA plans.
It was only a matter of time until we were doing real time plan design with our clients. We were able to change contribution strategies, HRA designs and projected costs, HSA contributions... all in real time.
This was the beginning of our development of the plan designer, but that is only one facet of the total system. Our philosophy is to not only offer transparency and speed in determining costs, but to also offer a different approach to creating a benefit plan based on a fixed budget rather than increasing premiums.
We have used Dynamic Benefit Systems to rapidly grow our agency’s block of business, and we realized that businesses and employers serious about Consumer Driven Health Care were turning to us for help. With the Dynamic Plan Designer, we had established ourselves as the experts to turn to for help.
As our analyses became more and more complex, we needed a way to simplify, allowing account managers to play a larger role in the renewal process. As the software was developed, we realized that we could modify it so other agencies could use it and find the same success we did.
To CDHC Strategists...
It was around this same time that Consumer Driven Health Care was replacing managed care as the industry buzzword for controlling cost. While managed care maximized the supply side of the health care equation, CDHC has become the accepted strategy for addressing the demand side of health care.
"Skin in the game" and "engagement" became the new mantra for controlling health care costs. Carriers scrambled to put together plans that could be labeled as CDHC. Defined contribution, HRA’s, HSA’s, and integrated wellness programs became new components in plans.
We focused on creative use of these plans as a primary strategy to control employer costs and how they could meet their budget without sacrificing employee satisfaction with their plans.
We observed the following...
Agents rely on antiquated spreadsheets to compare plans when CDHC plans have unlimited variables that cannot be adequately demonstrated with traditional static proposals.
Most agency spreadsheets are limited to total premium and cost comparisons that do not clearly break out employer costs and work around a budget.
It is difficult to review different premium contribution strategies and to illustrate multiple plans without going back and making complex formula revisions.
There was no agency emerging as the leader in CDHC.
The challenge was to sort through all the terminology and come up with a simple yet effective way to allow employers to understand how the components of CDHC interact, and how they can provide new opportunities to design fully insured plans with many of the cost saving principals that self funded employers have been utilizing for years.
And CDHC Specialists
By providing employers the right tools and the right information, they were able to manage every component of their plans and premiums to design plans that met their budget, all in real time.
We began to see a pattern as the full potential of CDHC unfolded right before us. CDHC is strategy which is often discussed, but seldom understood. To be a successful strategy, three phases of enlightenment need to occur. They are:
Phase 1 – Agency: Does the Agency/Producer understand CDHC well enough to effectively communicate the CDHC concepts and strategies to their Clients and Prospects?
Phase 2 – Employer: Has the Agency/Producer effectively communicated CDHC concepts to their Employer Clients so that the Employer confidently communicates CDHC to the employees?
Phase 3 – Employee: Does the Employee understand the CDHC concepts well enough to commit to CDHC plan adoption?
We secured agent of record letters from employers of all sizes and from all size agencies. Our reputation as CDHC specialists continued to grow. One of our AOR letters came from a "Big Agency" and the renewal spreadsheet they used showed the typical current vs. renewal with some higher deductibles and pages of alternate quotes from other carriers that were not competitive.
We were able to present a completely budget based strategy, and in real time, showing various plan options using Dynamic Benefit Systems and were awarded the business.