Some of us live parallel lives. Others mirror one another’s career path. The latter is certainly true for Terry Shook and me.
I interviewed Shook a few weeks ago in Puerto Rico at the third annual YOU Powered Symposium, a gathering of health care disintermediators, their supporters and the curious. I had shared the stage with him a year earlier in New Orleans at a similar convening of agents and brokers, many of whom have had their own road-to-Damascus experiences that led them to rethink their careers.
Shook is a kindred spirit in many ways given our similar backgrounds and conversion experiences. Like me, he walked away from a successful corporate gig and is now an employee benefits advisor, making very different use of what he learned in a succession of industry roles that spanned 44 years.
Most of Shook’s career was spent with big health insurance companies. He worked with brokers and their employer customers in a sales-leadership capacity that included the nation’s largest not-for-profit, member-owned health insurer, a “B” in the acronym “BUCAH,” which folks in this crowd use, often with contempt, as shorthand for Blue Cross Blue Shield, UnitedHealthcare, Cigna, Aetna and Humana. (Elevance, previously known as Anthem, and WellPoint before that, is also a part of that health care cartel.) Early on he helped hospital systems create their own HMOs and PPOs.
But during most of his career, his allegiance, was to big third-party payers, the cartel members that both answered to and helped shape market forces.
But like me, Shook began questioning whether his efforts were honest or ethical – worrying about the impact of placing profit ahead of patients and stonewalling the marketplace with products and services that thrive on a lack of transparency. After some time of processing his professional trajectory, he came to realize he was spending the majority of his time burnishing his company’s balance sheet at the expense of employer customers and their health plan members.
Those days are long gone. As president of Primum Risk Strategies for the past six years, his chief concern has been helping employers control their costs and at the same time provide their employees with access to high-quality and affordable health care goods and services. “I think that’s a better avenue, based on transparency, with a focus on helping employers identify the best providers, ensuring the best care for employees and their families,” he told me.
Shook has been making the speaking circuit rounds much like I have, hoping to undo some of the damage he feels responsible for causing those who design or manage employer-provided health plans. He went into deeper detail about his professional reawakening during a recent webinar hosted by Matt Ohrt, co-founder of Self Fund Health. Perhaps not surprisingly, the event was aptly entitled “Bamboozled? Important Things to Understand About the Employer Health Plan Renewal Process.”
When Shook became a benefits adviser for employers, he decided that his income would be completely transparent: a monthly consulting fee with no hidden charges. It was an uncomfortable lesson learned from his years working for big insurers. “I was very well aware of how I created financial disadvantages for the customer, and it began to bother me,” he confessed, later noting the irony of having been bullied as a child but feeling an innate need to stand up for those who are being abused or oppressed.
As a regional leader for a Blue Cross Blue Shield plan, he was given leeway to manipulate rates for customers when their policies came up for renewal – a practice typically driven by broker politics, favoritism and greed. “I gave a local beer distributor a renewal decrease because I liked their brand,” he said, adding that the distributor’s broker was a former colleague when they worked at another big health insurer. “I had the power to manipulate rates and the marketplace. By and large brokers with the largest books of business received the best interventions.”
He'd often hear from brokers who actually requested a rate increase at renewal to goose their fee, then promise to negotiate it down for a clearly dissatisfied employer client – making them look a bit better in the process. Shook would claw back a half point of their commission, playing brokers as well as employers. It was a vicious and perverse cycle that he says continues to this day.
Recalling different avenues to generate revenue that went largely unnoticed, he said it was common for a per-employee-per-month broker fee to be added to the administrative fee, as well as commissions layered on top of stop-loss insurance that were rarely disclosed to employers. Some of the large brokerage houses also added a per-script charge of up to $5 to the pharmacy benefit manager’s fee that also flew under the radar.
Shook feels a responsibility to help employers understand the shell games being played out in the industry that are eroding their health care dollars–and call out the lack of integrity that is an inherent part of the process. He lamented that employers have become little more than a revenue-satisfying pool for insurance companies that are beholden first and foremost to Wall Street financial analysts, whose opinings have a huge impact on the companies’ stock prices and market caps, and second to shareholders who expect big returns on their investments.
In the end, he said, it’s all about working with trustworthy partners. He implored brokers and advisers to cease their misplaced and unconscionable allegiance to big health insurance companies and advocate on behalf of employer clients. By the same token, he cautioned employers to avoid the trap most have fallen into. “If your advisor program doesn't help achieve full transparency to the cost and quality of your health plan, get a new one,” he said. “There are plenty of us out there now. As I reflect back, I wonder if it ever occurred to employers that their pricing should be based on their underwriting risk and nothing else.”
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