Introducing CAP: The Future of Healthcare Sales
What’s Wrong with Health Insurance Sales?
Historically, health insurance is sold via a commission model. Companies like Blue Cross, Aetna, etc. offer health insurance brokers a 3–5% cut of the sales they make for them. For example, if I am a company with 100 employees and a broker sells me 100 policies for $150,000, he/she would get $6,000 (4% of the total). Brokers are also given commissions to make supplementary sales (e.g., dental and vision plans, indemnity plans), although this does not contribute significantly to their incomes.
Unfortunately, this system has many problems. First, under a commission model, you are paid more to sell more. This means that if the cost of health insurance goes up by 6% this year, the broker is also getting a 6% raise. While large insurance companies do periodically adjust the commission percentage downward such that broker income growth lags healthcare cost growth, the incentive remains. While companies and individuals strongly detest having to pay 5–7% more for the exact same care each year, the outcome is hardly surprising given that they rely on advisors who are financially motivated to exacerbate their misery.
Second, a commission system utterly undermines brokers’ passion and creativity. Given that health insurance costs are poised to wipe out the profits of all but the largest companies within the next decade, employers need a groundbreaking solution, and they need it fast. Even health insurers, who have happily watched their stock prices skyrocket over the last decade at the expense of the country, could use a lot of creativity to increase their paltry 2% profit margin. Sadly, as Daniel H. Pink explains in his seminal work Drive: The Surprising Truth About What Motivates Us, while most brokers likely came in with a strong interest in health insurance and a desire to make the system better, being exposed to the commission system has completely eviscerated any real passion in their jobs.
For decades, brokers have been rewarded for making a health insurance sale — the bigger, the better. While that system has likely increased overall sales for health insurers, it also shifts brokers’ primary motivation in their jobs toward getting the financial reward. This change displaces what was likely a genuine desire to help companies lower their healthcare costs. As a result, today’s brokers have little motivation within their work, only thinking from a “what’s in it for me” perspective. Without the 3–5% financial commission, any work pertaining to selling or creating health insurance plans simply is unfathomable to them. Given that many brokers have had decades of experience in the healthcare industry, they are invaluable resources toward any effort to think of solutions to fix our present woes. Unfortunately, if they have no interest in the activity, how can we expect them to find the motivation to be the creative change makers our country so desperately needs them to be?
Introducing the Cure Advisory Program (CAP)
While many solutions to problems within healthcare require a combination of revolutionary technological breakthroughs and novel management practices, giving brokers a central role in the forthcoming creative renaissance in healthcare only requires the latter. As a result, we are proud to introduce the Cure Advisory Program, or CAP, as our successor to the commission-based system.
With CAP, we offer the opportunity for independent health benefits advisors (what we call brokers not on the commission model) to focus on helping employers lower their healthcare costs while getting compensated with a full salary. We will pay all CAP advisors their highest yearly income of the three years prior to joining the program, adjusted for inflation. This will be a flat rate; there will be no commissions for each individual sale. Ultimately, by taking money off the table in decision making, we hope to negate the perverse incentive many brokers must keep their clients’ healthcare costs skyrocketing.
Advisor Responsibilities
As part of the CAP program, advisors will have three responsibilities: advising employers, assisting our product managers, and preparing monthly reports. While we do require that CAP advisors introduce Cure’s products to any employer clients, they are free to implement any company’s solutions to help their clients lower their healthcare costs. All we ask is that at the end of each month, CAP advisors create a report explaining the rationale behind their choice of products they had their clients implement. If their client chose a Cure product, we are mainly interested as to what part of that product was most appealing for them; if they did not, we are curious as to what the non-Cure product is doing so that we can integrate those features into future product rollouts. While we ultimately do want every company to use Cure’s product suite for their health benefits needs, we believe we must earn our right to do so. However, we do deduct any sales commissions received from other companies from CAP’s guaranteed income to ensure that advisors remain truly independent and impartial. Finally, advisors will advise our product managers when requested on how to improve Cure’s products to better serve the needs of clients (e.g., one-on-one meetings, beta testing Cure’s releases and offering feedback).
To encourage creativity, we will do our best to keep CAP advisors intrinsically motivated in their work. As previously noted, years of chasing after financial rewards has killed any real excitement in their work for many brokers. Without bringing back this passion, how can we expect brokers to muster the ingenuity needed to make a serious dent in their clients’ healthcare costs? To replace the extrinsic, “if-then” reward associated with sales commissions, CAP uses a new system based upon mastery. On our monthly reports, we ask our advisors to evaluate their own performance. How well did they do in improving their companies’ health care plans? What could they do better? What ideas would they like to try out next month? What do they need to learn to improve their advisory skills and what resources should the company provide them to achieve their goals? By having CAP advisors set their own goals and regularly measuring their performance against them (and collecting our and their clients’ feedback to do so), we hope to rekindle their original intrinsic motivation — the passion that led them to join the health benefits advisory industry in the first place.
How to enroll
Finally, to join CAP, health benefits advisors will have to enroll one employer customer onto a Cure product. While not all Cure products will be eligible, we will clearly state which ones will be as we launch new offerings. Advisors can join under either the employee or contractor employment models; total compensation (cash, benefits, employer-portion of the Social Security and Medicare taxes, etc.) will be the same regardless of their choice. Advisors can stay in for as long as they would like, with CAP membership protected against termination due to lack of work available. In other words, if you become so successful in helping all their clients create world-class health benefits programs that they no longer need your help anymore (even if none of those clients end up using Cure), no worries — we will find you something even better to do!
Ultimately, with CAP, our goal is to give health insurance brokers the environment they need to become creative changemakers trailblazing the way for affordable and accessible healthcare.
Read more: https://www.curebenefits.com/cure-cap
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