The New Playbook — Manipulating HR
This year marks my 20th year in the employee benefits industry. It’s hard to believe two decades have passed since I took my first steps into employer-sponsored benefits — a world that continues to evolve and leave me scratching my head for answers, which has way less hair on it than it did 20 years ago. As I reflect back, it’s evident that human resources has been the one to decide who plays and who doesn’t in the benefits world. It’s clearer now that the strategy for many solutions wasn’t to give HR what they needed; it was to give them something that looked good during warmups.
With the First Pick …
In 2005, the landscape was just beginning to shift. High-deductible health plans were gaining traction, and health savings accounts were the new kids on the block. We were implementing debit card substantiation with IIAS technology and dipping our toes into the possibilities of mobile apps for healthcare spending.
Then came the big waves — the Affordable Care Act implementation, the explosion of interest in private exchanges (spoiler alert: most really didn’t want one), and the evolution of benefits technology. Employers were eager to consolidate point solutions into a unified enrollment experience. Third-party administrators emerged with more sophisticated offerings, and reference-based pricing found its foothold in specific markets and made an indelible mark.
Fast forward to today. Conversations now point toward direct primary care, mental health, financial wellness, flexible work support and the elusive quest to control rising healthcare costs. The complexity of benefits has increased but so has the opportunity to make a meaningful impact. Through this entire onslaught of solutions over the last 20 years, HR has been responsible for analyzing and determining what is legit and what isn’t.
Understanding Game Conditions
- Change is the only constant. From ACA to COVID-19, and now AI-driven solutions and digital health, the only way to thrive is to evolve. Adaptability isn’t optional, it’s survival.
- Relationships matter more than ever. Clients, colleagues, brokers, HR teams — they’ve all taught me that communication and trust are the foundation of this work. Benefits may be complex, but empathy and partnership never go out of style.
- Healthcare is confusing. For the average employee, navigating coverage, deductibles and networks is a full-time job. Benefits done well speak the language of care. We need to continue to simplify the experience.
- Healthcare is broken. The phrase is thrown around so much it’s lost meaning, but the sentiment is real. The system is fragmented, opaque and often misaligned with the needs of real people. Fixing it starts with admitting what doesn’t work and pushing for what might.
- It’s all about the money. For small and mid-sized businesses, healthcare isn’t just a line item. It’s the biggest expense after payroll. The financial strain is real, and the need for smarter, sustainable solutions is urgent.
Throwing Curveballs
Looking back now, I chuckle. My work was an insignificant piece of the healthcare puzzle —evangelizing solutions that often struggled to deliver on their promises, or worse, weren’t built to scale in the first place. I thought they were good solutions, yet they didn’t solve the true problem. They were transactional solutions that didn’t move the proverbial “cost” needle but made everyone feel like they were adopting something cutting edge or staying “ACA-compliant”(I don’t miss 1094/1095 reporting demos).
Back then, the challenge was product quality and scalability. Today, it’s something else entirely.
Modern RBP — the way ClaimDOC does it — will deliver, but the challenge is getting buy-in from the establishment. For the first time in my career, I have a product I genuinely believe in — comprehensive, sound and backed by some of the most dedicated customer service advocates in the industry. Heck, I can even pair it up with major national networks so everyone on the plan can select what is right for them, weaving in that wonderful term of “consumerism” we all added to our vocabulary in 2005. But building a great product is only part of the battle. Getting it into the hands of employers through brokers — that’s where the game is played. Now, they are the ones throwing the curveballs.
The Broker Conundrum
In the health benefits space, we partner with brokers to distribute health plan solutions. These brokers work directly with employers, advising on benefits solutions that are purposefully designed to attract and retain top talent. In theory, this should be a simple process: align the best products that best match an employer’s needs. But theory doesn’t always translate into reality.
Why? Because brokers, like everyone else, are trying to make a living. Their incentives — both financial and time-based — don’t always align with the best interests of the employer or the employee. And that misalignment is the hurdle we must constantly navigate in our race to educate employers about new RBP solutions.
There’s a saying in the tech world: “No one gets fired for buying IBM.” The same mentality exists in healthcare benefits. Brokers stick with the big four commercial insurers because it feels safe, predictable and risk-free.
But safe for whom?
The Hidden Ball Trick
The commercial carriers love to tout their deep discounts: “We’re offering a 50% discount!” But off what? What’s the starting price? Is the discount real or just a cleverly inflated MSRP?
To cut through the noise, you have to go back to the fundamentals. What does it actually cost to deliver healthcare services?
Fortunately, we have a benchmark. Thanks to CMS, hospitals are required to submit their annual costs to determine Medicare reimbursement rates. These numbers represent fully loaded costs. From there, it’s just a question of fair profit.
What’s fair? In most industries, a net profit margin of 10% or higher is considered healthy, but let’s get really greedy and say a 50% markup is acceptable. So, if something costs $100, a reasonable charge might be $150.
In today’s employer-sponsored insurance market, however, you’re looking at that $100 service marked up to $600-$800. Then the saviors will jump in and get you the magical 50% discount to bring that charge down to the $300-$400 range. That’s not healthcare economics. That’s smoke and mirrors.
The Moneyball Moment
Just like moneyball revolutionized baseball by questioning outdated assumptions, we need a moneyball moment for human resources. It’s time to stop worshipping big brands and start asking better questions.
- What does the service cost?
- What is the markup?
- Who benefits from the current system?
If the answers make you uncomfortable, that’s a good thing. It means we’re getting somewhere.
In this new world, human resources shouldn’t be a target to manipulate — they should be the ones driving change. Demanding we bring transparency, alignment and fairness back to the table.