When it was announced that Paris-based financial services firm AXA Group had bought Chicago-based human resource IT startup Maestro Health and its MaestroEdge benefits platform for $155 million earlier this week, industry observers noted that this purchase was part of a trend of insurers buying technology providers to deliver data fueled healthcare services to their adviser and employer clients.

The merger also, they believe, pushes technology to the forefront of benefit advisers’ missions if they want to lead in the coming year.

Jack Kwicien, managing partner of Daymark Advisors, believes the AXA-Maestro deal proves that 2018 is going to be a “dynamic time” for the average adviser.

Bloomberg

“They're not only going to have to pay attention to if AXA has a sales force here in the U.S., advisers have to ask if they are going to be someone they can collaborate with. If they can't then, they probably need to align with someone else that's has similar technology capabilities,” he says.

Kwicien says major carriers like United Healthcare and Aetna have already made moves in the technology space by investing in and purchasing technology from smaller IT firms that resemble Maestro. These carriers and other industry players “want to gain more control over the employer and employee relationship and all of the data that is associated with that interaction,” he says.

“I would expect firms like ADP, which has already stuck its toe in the healthcare and employee benefits water, might be curious because they not only have the financial wherewithal but they are interested” in forming new tech partnerships.

Also see:The 15 biggest HR challenges in 2018.”

The AXA-fortified Maestro might be a powerful competitor thanks to the financial backing of its French owners. According to Barbara Gniewek , principal with PWC, a benefit brokerage that's pushing its own healthcare technology solution could create competition to less tech-savvy advisers.

“If you're helping employers figure out other ways to engage employees and control healthcare costs,” that is the key for today’s benefits adviser, she says.

Proprietary platforms that advisers could white label or use outright could be a way forward for advisers. Broker networks like United Benefit Advisors and BAN (now affiliated with The Alera Group), “would benefit tremendously from having a proprietary platform like Maestro and make that available to their broker network to benefit them and their clients,” says Kwicien.

Future focus

Maestro CEO and founder Rob Butler says that the firm’s client base of 400 to 500 small to large scale clients — which include Blue Cross and Blue Shield of Arizona, Aflac, The University of North Carolina and the University of Texas — was not a primary selling point for AXA. He says the French firm looked primarily at its management team, technology and culture.

Going forward, Butler says the management team will remain in place and the firm will focus on population health management, strategy, disease management and wellness in the coming year.

“That means trying to help the employee become a better consumer of that healthcare yet at the same time help them get healthier,” he says. “When you help them get healthier, that's a great way to take out the cost.”

The merger could also affect how employers deliver technology to more tech-savvy employees who expect this method for receiving information. “HR is trying to figure out how to change because the talent paradigm has changed where unemployment is low, and it's hard to get good people. I think the workplace has morphed nicely and the consultants have done a decent job of showing how you can package technology and benefits to optimize the benefits and engage employees,” says Gniewek.

Employers are trying to “help employees be better consumers,” she says.

Kwicien predicts more mergers between insurers and technology firms and even larger adviser firm and tech startups in the coming year. He cites IT incubator StartUpHealth in New York is “investing quite heavily and just raised another round with their financial partner and they're investing exclusively in an early stage healthcare technology firms.”

Kwicien adds that some benefits tech startups don’t have an easy road ahead of them.

“Some are going to survive and thrive and then ultimately they're going to get gobbled up. That's just the natural progression.”

Register or login for access to this item and much more

All Employee Benefit Adviser content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access