The risk and rewards of ‘Uberizing’ benefits
The role of technology is growing exponentially in employee benefits, with an array of new platforms eager to partner with advisers every year. For brokers and consultants, this brings a mandatory need to be consistently knowledgeable of the ever-changing technology surrounding benefits communication.
At Sun Life Financial’s recent summit, experts discussed tech trends as well as at what point technology could become a problem, rather than a solution.
Jeff Yaniga, chief revenue officer at Maestro Health, said technology begins with big data, and that data needs to be “people friendly. All that data that exists in claims can inform decisions,” Yaniga said. For example, Uber’s data inform other industries of the most popular locations and common traffic patterns used, he added.
Relating Uber’s experience to making use of such seemingly extraneous data such as utilizing claims data in the employee benefit landscape, Yaniga said, “If you are looking to make an informed decision, if you know all of the information about your utilization over the last 10 years — and that can inform what you’re doing in the next 12 months — you now have a different experience all together.”
By identifying what benefits employees have enrolled with in previous years, Yaniga said the experience of benefits can be altered by investing less in the programs being underutilized and increase investment in the more popular benefits.
“Data is only people friendly when it is actionable,” Yaniga said. “The value of collecting all of this data over time and putting it in a format that is people friendly that can be actioned, it’s the next generation of benefits.”
Even so, in carrying on the Uber comparison, Scott Millson, principal at MillsonJames, an HR technology and administration consulting firm, said there is a big difference between a ride sharing app and the benefits industry. “You’ve got an industry in ride sharing, moving people from point A to point B, which is relatively straightforward, and in comparison you have healthcare, not so straight forward,” Millson said.
Millson compared the dynamics of healthcare to an aircraft carrier that is so large it is unable to make quick course corrections. “In a ride sharing industry, things are able to turn on a dime and you can have something develop overnight that didn’t exist before,” Millson said. “It’s a little bit harder to have something in our industry that will come on the scene and take that aircraft carrier and start whipping it around… We will begin to see disruption in innovation, but it will be a little bit slower than some of the consumer-type apps being produced.”
Jeff Goldberg, SVP of research and consulting at insurance technology consulting and research firm Novarica, said advancement in the benefits industry will not come from one portion of technology such as AI or big data, but rather the intermingling of multiple forms of technology.
“We are at an intersection of these new technologies where the Internet of Things has this ability to gather all types of new data that we didn’t have access to before. Big data is actually the technology that allows us to consume that data and manipulate and visualize it,” Goldberg said. “Then you look at AI being the third pillar, allowing us to gain new insight from that data in ways that we really couldn’t use it before.”
The rate at which technology advances within the benefits market depends on how easily people can comprehend benefits, both from the provider side and the consumer. With only 14% of employees understanding the concepts of a deductible, a copay, co-insurance and out-of-pocket maximums, according to a study by Carnegie Mellon University, Millson said it is unlikely benefits will see trendy cutting-edge tech anytime soon with such low comprehension.
“The ability to bring in something new and flashy is absolutely critical to engage the user, but we got to address the root cause which is [that] people struggle with their benefits [comprehension],” Millson said.
Evaluating the effectiveness of technology
With such advanced technology hitting the market such as AI and machine learning programs used by companies like Benefitfocus – via their Informatics products – brokers need to have an understanding of how these technologies work and whether or not they are beneficial to their clients.
Millson said if a broker is unsure of the effectiveness of a certain type of tech on the market, they must seek out those who do have the knowledge to make an informed decision — even if that means hiring a HR tech consultant.
“Brokers, by and large, are exceptional at understanding the industry, understanding the legislation and understanding what the client needs. Technology is something new [to their knowledge base],” Millson said. “They need to stay focused, to keep their eye on the ball of what they are gifted at and what they have done historically, but leverage the expertise of people [who] can come to the table.”
Goldberg said brokers need to be aware of who is actually paying for the new technology being used in the workplace. “Is it the employer paying for access to new technology that’s going to help their employees? Is it the broker or is it the carrier who is providing technologies that the broker will white label and take advantage of to provide to their clients?” Goldberg said.
Goldberg adds that it is mostly likely the vendor that will bare most of the burden for the cost of technology in most scenarios. However, larger brokerage may invest in advanced tech for their clients, which would put them in the position of covering the cost.
“[Carriers] will normally say, ‘Work with us, we’ll manage this data and give you feedback,’ or some will say, ‘We’re going to build tools that the broker can use to work with [the employer] on the data,’” Goldberg said. “In the end, what the broker is bringing to the table is not really the technology, but the relationship management — and that’s more important.”
Yaniga, Millson and Goldberg agreed that although not all brokers utilize the most advanced technology on the market, they encourage everyone to examine what is available and decide what is relevant to their clients.
“Don’t just assume people just want lowest price,” Goldberg says. “Sometimes there is a rush to embrace new technologies in a way that does not always make people happier.”
Goldberg refers to tech that is taking the place of the human experience, such as automated recordings taking the place of call centers, thereby costing people jobs and putting clients at the risk of not being satisfied by the replacement technology. “Sure, there is a risk, and some companies will do it well. The companies that don’t either rush to embrace technology or use technology as a way to cut costs without thinking about how it impacts the clients,” Goldberg said.