Although most employers who move to private exchanges are seeing some cost savings below trend in their initial years, that is not sustainable over time, says Rob Harkins, practice leader, private exchanges at Willis Group. For Willis, the exchange is not designed to be a long-term money-saving product on its own, but rather part of a larger program for its clients to manage health and wellbeing.

What is the structure of your exchange? Why makes it different?

The structure of our exchange is that we have partnered and built a private exchange customizable platform with Liazon, which is part of Towers Watson. From our perspective, we have created this platform that ties into health management. That gives people the ability and the opportunity to control costs for the long run.

We believe that private exchanges can and do result in lower costs for an employer in the beginning and in the first couple years. There is some proof now that we can see that. That proof comes from the fact that there is a buy-down in benefits that individuals will experience. As a result of that buy-down there is lower cost overall. But that is not a sustainable thing and sooner or later trend will kick back in. Therefore, we believe you need to integrate the private exchange tool —which we consider it to be a very effective tool — with other tools.

Also see: Sears employees discover value in private exchange

How do you recruit clients?

Our approach is a consultative process versus a product. We find that a lot of companies have gone out there and given what we consider to be a lot of misinformation about what a private exchange is. There is a huge expectation and a lot of confusion in the marketplace around private exchanges versus public exchanges versus what  the market thinks it is.

When we talk about the consultative process with clients and prospects, that resonates with them. We have a proven track record that we not only place on our exchange that we built but we also place business on other exchanges. That makes them feel we are still an independent consultant in the process.

What is your relationship with brokers?

We are one, and we do get lots of request from brokers to place business on our exchange. … We are exploring the possibility if that’s something we want to consider as well — creating different types of relationships with others brokers that are out there in the field.

Also see: How private exchanges are helping with overall health improvement

How does 2015 open enrollment compare to 2014?

We rolled out our private exchange at the end of 2013. In terms of having business on the books for 2014, we had a growing book of business. As of now, we have 37 client on our private exchange platforms and most of them came onboard for 2015.

Where do you see private HIXs fitting in the health care system moving forward?

We consider it to be something that is going to continue to be a part of the opportunities for clients to consider. We think private exchanges are here to stay; it is something useful for clients. In my opinion, it takes the concept of benefit administration, which has been around for a number of years, and it turns it into a whole different technology functionality. It’s similar to when we moved from mobile phones to smartphone technology. Once that technology goes forward, I don’t think we will ever go backward.

You will continue to see private exchanges as a technology tool become more and more utilized and growth to continue. The expectation of that growth, while it has been widely reported, we don’t necessarily see that it’s going to be that rapid and that large, but we do think it will be a major force of change in our industry.

Editor’s note: This story is part of an continuing series of one-on-one interviews with private exchange leaders and top decision-makers across the U.S. Know of an exchange expert who should be profiled? Email Brian.Kalish@sourcemedia.com.

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