The Bystander Effect and the Employee Benefits Broker

I’m pretty sure everyone has at least heard of the show Seinfeld. Do we remember the finale of the series? The gang ends up arrested, imprisoned, and go through a trial as a result of a duty to rescue violation that requires bystander to help out in such a situation. To remind you of the scene, the group witnesses an overweight man getting carjacked at gunpoint, and instead of intervening, they crack jokes about his size while Kramer films it all on his camcorder, but then proceed to walk away as passive bystanders. The victim noticed their presence and told the reporting officer, who subsequently arrests them. In a similar vein, I could have used the death of Princess Diana to highlight the inaction the following paparazzi, but l’espirit de l’escalier.

Sometimes referred to as the bystander effect, it is defined as a social psychological phenomenon in which individuals are less likely to offer help to a victim when other people are present. The greater the number of bystanders, the less likely it is that one of them will help. Alongside the market performance of any company within the healthcare sector, it is alive and well in the employer-sponsored health insurance market.

Article after article is published, whether it be in JAMA, ProPublica, or KFF, that outline the unsustainable rise in healthcare costs year over year and the monumental impact of healthcare costs upon employers and their employees. Often, providers, Big Pharma, medical device makers, and carriers, AKA the “bad actors”, are called out, as they are grossly benefiting from this abnormal, dysfunctional market.

But isn’t there another party that we fail to mention within these articles who benefits from these bad actors, who quietly go about their business, and gain from the previous trends above?

If you haven’t figured out who I am referring to, it’s the employee benefits broker. But not all of the brokers out there fall into this category. It’s the unenlightened, status-quo-adhering, progressive-averse broker (UEBA). I’ve been communicating and working with this group of professionals over the past 15 months, in an attempt to provide a healthcare system navigation solution within the employer group space. This communication began because I joined a start-up who has excelled at providing an experience for the employee, employer, and broker that assists in the optimal course-plotting through the healthcare system labyrinth. It’s the power and strategies that are available to these key stakeholders that my company looks to highlight and deploy to drive positive, cost-cutting change.

From strategizing, designing, and quoting renewals to receiving enrollment and employee benefits survey feedback, advisers are constantly on the move for their clients (at least according to their response rate to me). But when we begin to discuss results for their clients, the UEBA generally benefit, no matter which way the pendulum swings. Employers expect bad news, with a rate increase ranging from 5% up to 25%, and yet the UEBA has tended to stick around. Imagine how pleasantly surprised parents would be when their child informs them that they failed a class, only to learn later that they received a C. Not too shabby. But, and I think everyone would agree, not too shabby is no longer acceptable. Or tenable.

You know who has seen first-hand the unsustainable rise in healthcare costs over the past 20 years, and who has labeled themselves as simply the bearer of bad news? The UEBA. They have been silently (whether passively or not) complicit in the rise of healthcare costs for employers. They have believed that someone else will take care of this issue and help the victims.

The benefits industry talks a lot about its efforts to control healthcare costs, but nothing is happening. Financially it makes sense since health and benefit providers have done exceptionally well as healthcare costs, and therefore, premiums have increased.

Now I know that there are advisers who strive to deliver savings, who refuse to accept the status quo and aim to provide the best results possible year over year. Are they the majority? I would say they are growing daily. They are the enlightened, status-quo defectors, progressive brokers (EEBA).

There is an opportunity for redemption for the employee benefits broker community as a whole because of the EEBAs. They educate their HR leader clients. EEBAS give them all the information they have access to regarding health & benefits. EEBAS pound the messaging into every corner of the employer community. This cost trend is not sustainable. The math for future generations does not add up.  And I fear to see what the tipping point could look like if the EEBAs cannot shepherd us to sustainability – Healthpocalypse??

To become a doctor, physicians must take the Hippocratic Oath. An incredibly significant component of the oath highlights “First, Do no Harm.” Given the abuse that employer groups have faced over the last decade regarding healthcare costs, shouldn’t brokers be held to a similar code? That they will abstain from all intentional wrong-doing and harm and apply, for the benefit of the sick, all measures that are required, avoiding those twin traps of over-treatment and therapeutic nihilism. (That’s a fancy way of saying, don’t overwhelm clients with solutions, just deliver the best solutions possible, and leave it at that.)

EEBAs have already, or would, agree to something like the messaging above, but it is the UEBAs that must be converted. And the conversion is occurring. Since I joined this space, I’ve seen more willingness to engage in active problem-solving and root cause analysis to address and attack this unsustainable cost curve. No longer can employers accept the bad news.

I commend the EEBAs who strive to deliver cost-saving measures. Who are resourceful in their strategies and fiercely determined in delivering the best consumer experience for their employer and employees. Who fight for what’s right and look to engage and educate employers about their healthcare costs, and tactics they can deploy to overcome these cost burdens. Employers can no longer accept the bad-news from the UEBA, and must transition to the EEBA, because the EEBAs will lead them on the path to savings.

“We cannot solve our problems with the same thinking we used when we created them.”- Albert Einstein


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