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Trends that Affect the Way We Do Business in the Health Industry
by Ted DeCorte - Insurance NewsNet
President, Clark County Association of Health Underwriters - President-Elect, Nevada State Association of Health Underwriters
If you havent noticed, one of the hottest must-read books last year was Thomas Friedmans The World Is Flat: A Brief History of the 21st Century. The New York Times Foreign Affairs columnist outlined a scenario not of what is to be, but where we already are, in todays global economy. For Friedman, according to Tom Nissley of Amazon.com, what Friedman means by "flat" is connected: the lowering of trade and political barriers and exponential technical advances of the digital revolution that have made it possible to do business, or almost anything else, instantaneously with billions of other people across the planet.
Nissley states, Globalization 3.0, as (Friedman) calls it, is driven not by major corporations or giant trade organizations like the World Bank, but by individuals: desktop freelancers and innovative startups all over the world (but especially in India and China) who can compete--and win--not just for low-wage manufacturing and information labor but, increasingly, for the highest-end research and design work as well.
The economic playing field has leveled. Such American corporate giants as Dell, Wal-Mart, McDonalds, and UPS are taking advantage of this globalism on amphetamines and are bringing products to consumers faster, easier and more efficiently than ever. Yet, we know that there have been and will continue to be casualties in the process as globalization in its rawest sense is a take no prisoners process.
Friedman aside, whats to become of the health insurance industry?
For one, Its All About Wall Street. Small regional carriers are and will continue to be swallowed up by national and international conglomerates. Outsourcing and centralization are givens in this global quest for market share and hitting the right EBIDTA for shareholders a must. In the U.S., health carrier choice may become a casualty and will be traded for standardization of health plans nationwide. So-called consumer driven health care is a fig leaf, driven not by consumers but by businesses that want out of the health care benefits delivery mechanism. Just ask GM or Walmart execs. Dont misunderstand me. Consumer responsibility is essential in the new healthcare and benefits marketplace. CDHCs alone though wont fix our healthcare crisis.
The good news: Many of these changes will make our jobs as client advocates more important than ever. Consumers will look to producers to add a sense of humanity to the seemingly impersonal Healthcare Benefits Behemoths. Yet, in the not so distant future I can see a scenario where there are only four or five nationwide health carriers and Americans will enroll in a myriad of standardized benefits on-line either from a home PC, a PDA, or in national Benefit Open Enrollment centers set up in Wal Marts or Costcos. This is not a Brave New World nightmare, but a benefits delivery alternative discussed by powers that be (irrespective of political persuasion) to replace our current employer-based healthcare benefit model.
And, this dialogue of fix-what-isnt-working is happening more and more among CEOs of major international companies including health insurers. They know that to compete in the new global economy and meet shareholder expectations, they must get a handle on employee healthcare benefit costs. Technology and standardization is one way to meet these objectives. Unfortunately, this may mean going down a road that our tradition-based health insurance industry finds unnerving.
For health insurance producers, it is NOT a time to bail out; it is a time to make certain we are clearly engaged in the course of global events for our industry. The marketplace, not government, will drive most of these changes. Government though will be used as one vehicle to get there.
In the long run, pragmatism, not politics, will claim what road we will take.
Technology, and with it Globalization, has changed our World forever. And, there is no going back. Our health insurance industry will change for some, kicking and screaming - in directions that can for now only be imagined.
