Why businesses need an experienced adviser to negotiate the health insurance industry Featured

8:01pm EDT May 31, 2011

Frank Marrone, Senior Vice President and Partner, Millennium Corporate SolutionsThe health care delivery system is broken and costs are spiraling out of control.

Federally mandated reforms have only made the system more confusing. Now, more than ever, you need someone on your side to help you make sense of the mess.

“If your health care consultant doesn’t understand how the system works, then you’re forced to become an expert in health care when you should be focusing on your core business,” says Frank L. Marrone, senior vice president and partner with Millennium Corporate Solutions. “There are qualified insurance advisers out there; investigate, interview and then engage with one that fits your needs.”

Smart Business spoke with Marrone about how a skilled consultant can help you navigate the confusing aspects of the health care system during health care reform and any other time you need a trusted adviser.

How is the health care and insurance system changing?

In our country, health care is a trillion-dollar industry that is driven by Wall Street. Wall Street and medicine are opposite forces. I’m not saying that one is good and one is evil; they just work in different directions. Wall Street exists for profitability. Executives of insurance companies keep their jobs by being profitable.

The health care system is a triangle consisting of the patient, the doctor and the insurance company. When the two most significant players are pulling in opposite directions with the patient in the middle, you have a broken system.

Employers, employees, family members — all patients — need to be able to make sound decisions with what we know to be true. Costs are not coming down, services are being stretched and the realities of health reform are only going to mean increased costs for the currently insured, while offering greater and more timely access to the uninsured or underinsured.

There is good and bad in almost everything. The good in health reform is going to cost a lot more than anyone knows.

Why are costs out of control and how can they be fixed?

The key element to health care reform and pricing is that the delivery system has not figured out a way to compensate doctors for keeping us healthy. Today, there is no incentive for a physician to have healthy patients because the physician will most likely go out of business.

Another reason costs are out of control is litigation. Everyone pays for medical malpractice claims; doctor premiums are passed on to all consumers. In fact, as medical products get priced, it’s necessary to factor in the cost of medical malpractice.

What can consumers do to survive in today’s health care system?

For example, A PPO rate for a family may be $2,300 per month, or $27,600 per year, just to have medical insurance — to prevent the risk of huge personal costs if they get sick. Who can afford that? And, how long can it be afforded?

The one thing consumers can do is ask themselves these questions: Do you exercise regularly? Do you consciously plan a healthy lifestyle? Do you eat proper food? We, as a nation, need to get healthy. If you are an overweight smoker with high cholesterol and hypertension and you want to eat a burrito at midnight, you are more likely to increase your chances of a heart attack.

First Lady Michelle Obama is promoting wellness and fighting child obesity on television, but I’m not sure people understand that getting healthy is a long-term process. Everyone wants to see immediate results, but patience is necessary. Just like no one gains 10 pounds in a week, no one loses 10 pounds in a week.

How can a health insurance broker or consultant help companies navigate the system?

You need someone on your side who understands how the system works. You cannot negotiate simply by telling an insurance company, ‘Give me a better price.’ You have to bring facts to support your claims.

The role of a good broker or consultant is to gather information from insurance companies and use that information to battle for his or her clients. At end of the day, insurance carriers will work cooperatively with good data and research — they want to make the best decisions too, so a good consultant will help develop that story.

For instance, if I let insurance companies know my client has had a good year, I will show them the utilization statistics to support my claim. If the carrier wants to charge my client a higher premium to compensate for other companies that have had a bad year, I will tell the carrier to get that increase from someone else — not from my client.

Frank L. Marrone is a senior vice president and partner with Millennium Corporate Solutions. Reach him at (818) 844-4120 or fmarrone@mcsins.com.