Wednesday, January 11, 2012
Peering in to a Crystal Ball
Do you want a look at what the future of health care will be? Here are some things you won't get on the 6 o'clock news.
During a recent conversation with insurance carrier "inside" contacts we discussed current and future trends as a result of Obamneycrap.
Several carriers have stepped up DTC (direct to consumer) advertising and have created or beefed up a staff of inside sales people to deal direct with consumer inquiries. Carriers have always had a sales staff, such as it is. To be honest, it is a crap shoot at best. The chances of getting meaningful answers to your questions are slim.
The staff is trained to take your order, not offer suggestions or point out limitations of one policy over another. I probably rewrite half a dozen policies a year for clients that have bought direct from a carrier only to later discover the policy didn't work as promised.
But I digress . . .
Truth is, the inside sales idea isn't working well. One carrier admitted they have cut their staff by 50% from a year ago. The problems?
Sales are off.
Applications submitted by the staff are not pre-screened for medical conditions which result in a higher declination rate vs. agent originated applications.
Inside sales staff applications that result in an offer as a general rule don't stay on the books as long as agent generated applications.
In short, the idea of DTC sales isn't efficient.
None of this was eye-opening. I have known about the deficiencies of DTC sales for some time, and this is not unique to one carrier.
The next conversation was a bit more enlightening.
It seems medical providers, doctor's and hospitals, are asking for significantly higher reimbursement rates. In some cases as much as a 30% pay raise.
It should be obvious to regular IB readers that health insurance carriers are simply conduits. When health care costs rise so must premiums.
This isn't rocket surgery.
What was surprising was the backside of this conversation.
It seems providers are unwilling to sign long term contracts for network pricing that extend beyond 2013.
If you have been sleeping under a rock, you should know that Obamneycrap, unless repealed or gutted, will fully unfold on January 1, 2014.
Did the light bulb go on?
Non incandescent of course . . .
Providers don't want to agree to pricing agreements that will extend in to 2014.
This is a perfect storm brewing, all set in to motion by government intervention. I don't think the public is going to be pleased with what they get.
Higher prices. Fewer choices. Poppa Washington.