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Boom time for TPAs is Starting

President Roosevelt has two messages for your upcoming business planning:  In his first Inaugural in the depth of the Great Depression, he said “We have nothing to fear but fear itself.”  His campaign theme song was “Happy Days Are Here Again”.

I hear so many TPAs moaning and predicting that the end is near for TPAs, self-funding, and the whole private employee benefit system.  However all the evidence is just the opposite!  I pass along news of a constant stream of surveys, polls, and research showing that employers are not going to ditch plans + more employers  and smaller employers are going to move to self-funding + having an employer-sponsored benefit plan is going to take on a more-important role + most of your non-TPA non-self-funding “competition”  (including insurers, exchanges and government programs) have uncertain futures in the marketplace for an assortment of reasons, so clients will shy away from them.   Closer cooperation between TPAs & Stop-Loss will be a key to maximize this success, and SPBA is working to improve understanding & minimize unhappy surprises. (Read the discussion of the SPBA Spring 2011 Stop-Loss Summit on the member-only website.)

PPACA is creating more administrative services for TPAs to do for a fee.  You notice that I mention “new profit center opportunity” a lot when describing PPACA.

My big fear is that TPAs will fall into their old self-defeating habit of giving away or under-charging for the value and breadth of services they offer.   So, an important part of your business (and survival) planning is to use this time when employers and everyone knows there is much change, and be sure that you are charging what you are worth.

The only other worry (which I have mentioned in past annual forecast/reports) is if some TPAs get lazy, and not  stay on the cutting edge of expertise.  You need to read everything SPBA sends you…and you need to be sure that enough of the right mix of people from your firm attend SPBA meetings. SPBA allows your TPA to have more breadth of knowledge and sharing of experience than any mega insurer or competitor.  Careful attention to insights from SPBA and resources on the website also help you avoid about 90% of the problems TPAs & Stop-Loss Partners encounter.

OK, just in case you are thinking I am just giving you “happy talk” hype, let me report yet another survey.  SHRM has done a study of its HR professionals.  The study finds that 69% say their biggest goal in coming years is to make employees feel wanted, appreciated & recognized (“engagement”).  63% also say employee recruitment & retention is a major goal.  These are your clients’ HR officials speaking. Does this sound like they are planning to pull the plug on their customized self-funding plan and dump employees into Medicaid, exchanges or some other government-micro-managed health coverage???  This is your market opportunity!  Make it happen!

Also, if you think your clients and plan participants will be lured by free or subsidized government-regulated plans (including state exchanges & expanded Medicaid), consider this report from the Congressional General Accountability Office (GAO) reporting on the lack of access to doctors for children & youth on Medicaid & CHIP compared to access to doctors.   GAO found that 45% are not accepting uninsured patients, …but 53% are not accepting Medicaid or CHIP patients.  Why are totally-insured patients preferable to the government plan patients??  Easy.  Government-regulated plans tend to pay low and have a very high hassle factor.  Therefore, for a medical provider, it is better to receive some  at the time of service…even a minimal amount…from an uninsured person than face government hassle.

Access to medical care (as differentiated from having “coverage”) will be the biggest key to employer loyalty to having a customized health plan they can design and have a TPA administer.  From a morale & business-survival business perspective, employers can not afford to have employees with delays in getting access to medical care.  So, to employers, having quick access to heath care for employees is as natural a business decision as having an instant-service contract for expensive computers & machinery the employer needs.  So, you add that practical economic factor to the comments from the HR officers, and you see that employers & TPAs will remain an even stronger team.

Meanwhile, economists & business-watchers are amazed at an unexpected phenomenon that will boost your business.  Two leading surveys of US companies are finding a strong trend of “reshoring”….bringing factories & manufacturing back to US facilities from overseas.   This is especially in the advanced manufacturing sectors such as semiconductors, machine tools, pharmaceuticals, etc.  Why?   It is practical business.  They found that when they moved overseas, they lost as much as half of their home markets to imports.  So, tune your marketing radar to early signs of any of these returning manufacturers in your market area who will be hiring new workforces who will need employee benefits.

OK, at this point, sing “Happy days are here again” and go maximize all the opportunities coming your way.


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