And while Mavum Consulting's Rod Reasen is not quite Immanuel Kant, he is committed to taking a decidedly rational and reasonable look at the employee benefits marketplace, letting his actions be guided by those same principles. He's also proving such an approach is not only profitable, but also possibly mandatory for long-term success in the employee benefits marketplace of the future.
But I don't want to do that
Born in Marion, Ind., Reasen found himself working for a stockbroker as he toiled toward a 1997 graduation date and a degree from Greenville, S.C.'s Bob Jones University.
"I knew I didn't want to be in product sales," he says. Planning is what he was after.
Years passed, success in wealth planning came and with it came clients crying for help with health care.
"You helped me with my retirement plan, my investments, my life insurance, but this health insurance stuff, I hate it. Can you just take it," is how Reasen remembers his client's complaints.
His response? "I'm a financial planner. No one wants to be looked at as a health insurance guy."
Still, he found himself picking up a few health insurance clients and realized that he didn't have to be that "health insurance guy." At least, he didn't have to be the standard model of the day.
"I realized the people I was taking [business] from were not very professional, and I said, 'Hey, you know what this industry could use? A different level of professionalism, and I think I can make some money at it,'" Reasen says. He launched the firm that would eventually become Mavum Consulting in Indianapolis in 2001.
Reasen's commitment to doing things differently can be seen in a few key areas - one big one is how he gets paid. He says fee for service is the way for him. He also says it's where the industry is going, regardless of who disagrees.
"We've had this internal discussion for about four years now," Reasen says. There are thousands of producers reluctant to give up their commissions and his were no different. Just a fraction - less than 11% - of respondents to an EBA online quick poll confessed they either were or desired to be fee only.
For Reasen, it's another example where rationality should trump tradition.
"It's simple business economics," he says. "If I charge a client $100,000 [in commissions] a year and the client finds out and they think I'm only worth $25,000, they are going to be quite upset and probably fire me or find someone else that can do it cheaper. However, if I charge $100,000 [in fees], the client knows I charge $100,000 and they believe they are getting a deal for the $100,000. I have a happy relationship."
Colin Ingram, co-founder of FormFire - a Cleveland-based paperless medical insurance enrollment company - says Reasen's right to think critically about the role of the commission-based broker.
"Anywhere there is a commission and 'middle man' involved, there is always going to be a pressure to eliminate those costs," Ingram says. "The reality is the client still needs value."
Ingram admits that technology advances, not unlike those developed by his company, can hasten the demise of the middleman. But that's not stopping Reasen, the first adviser to roll out Ingram's product in Indiana.
"He's certainly leveraging as much technology as he can to do a better job for the client," Ingram says. "We deal with probably close to 1,000 agencies of Rod's size. He's probably in the 0.1% who have an outlook on the future which is both progressive, aggressive, but also at the same time pretty well rooted in the practical."
Just about one quarter of advisers say they have a paperless system for small group applications, according to a recent EBA online survey of brokers and advisers.
Practicality in practice
Reasen likes having happy relationships with his clients. That desire - coupled with an innate appreciation for statistical analysis - is what helps his firm to stand out from his competition in the ubiquitous arena of "superior customer service." Lots of advisers promise it, but Reasen's back-office management, his "every call counts" philosophy makes his pledge to do right by his clients look a bit more credible.
"I suppose you can call me a little strange, but one of my favorite classes in college was elementary statistics," Reasen says. "I loved the whole idea of outliers and looking at math and how, tracking things, you can see problems within business - and really anything - just through simple statistics," Reasen says.
One such simple statistic Mavum likes to look at is call volume. Who's calling? When are they calling? Why are they calling?
Reasen, modestly, insists it's no big deal. But he also confesses that it's a good way to blow a client's mind.
"This is where the data became very powerful in our retention of our client base," Reasen says. "We would look at every single phone call and find out which clients are calling in the most frequently."
The next step is to find out what the issue is. Maybe it's a carrier problem. Maybe it's that the client's HR staff is confused. Either way, the problem gets fixed. If it's on the carrier's end, Mavum works with them to get it resolved. Same story if it's the client.
"We were able to really add some teeth to customer service," Reasen says. "Instead of just answering those calls we were able to go back out and be very proactive with our clients. The first few phone calls that I made it was an enormous shock. They are used to our industry calling them to sell them more things, but to call them and say, 'We've noticed you have a lot of problems on this particular issue, how can we help you fix those. And then recommend some ideas.' That was powerful."
The effort pays multiple dividends, it also serves to educate and inform his own staff. That's something that his industry partners say also separates Mavum from its competitive set.
"It's a constant process of improvement and education," Vicki Perry, president of Advantage Health Solutions - a regional managed care company, says. "He puts more time and energy and effort into educating his team than I've ever seen. That translates in the way they communicate and the way they partner with and service their clients."
Reasen says it's no big deal, but a quick online survey of some of his peers shows that while that may very well be true, it's also true that few advisers take the same meticulous approach to client service.
Just 7% of respondents say they track calls similarly. Another 31% say they would like to, while the remaining 61% simply do not.
Dan Krajnovich, CEO of UnitedHealthcare of Indiana and Kentucky, agrees that Reasen's approach on this issue manages to be both new school and old school at the same time. It's innovative, says Krajnovich and something that not many agencies do consistently. At the same time, he adds, it's also basic.
"It's basic blocking and tackling, but it provides so much valuable information for that agency that is really looking to continue to grow in that marketplace to really understand their client and the difficulties they are having today in health care," according to Krajnovich.
Again, Reasen doesn't mind being in the minority, not on issues like this.
"I don't want to look like the 55-year-old plaid jacket insurance agent anymore. I want to look like a young, innovative, creative consulting firm that does insurance from a consultative approach," he says.
That's what fueled his firm to rebrand itself just a few years ago.
"We took a look at the market, hired a market research company and said here's where the market is. Here's what's perceived, and we want to be 180 degrees different from the marketplace," says Reasen.
The need for speed
Being different hasn't always been easy. Reasen confesses that his outlier status and desire for speed makes it hard for him to connect with the traditional health insurance apparatus, the trade groups and other organizations committed to the preservation and prosperity of his professional cohort - plaid jackets and all.
"Early on I tried, the NAHU meetings, the health underwriters, even the Big I, which is more property/casualty oriented. To tread lightly, what I found was that [they] were very stale and not open to new ideas," Reasen says.
He still finds himself at the occasional industry meeting or trade convention. It's mainly for recon, to help him stay ahead of his competitors.
"There are very few people that like change, and we move at light speed here because we're still a small firm and we like that. We like to be able to drop money into some new idea and see if it works ... and roll with it quickly," Reasen says.
One idea that's got Reasen's attention right now is corporate health. It's a fundamental component to the consultative approach many benefit advisers have adopted. Firms that can help their clients drive better business returns through a healthier and more productive workforce aren't going to want for work, regardless of what shape reform may take.
To that end, Reasen's launched a healthiest companies competition for his region.
Krajnovich says the industry could use a few more cooler heads when it comes to the burgeoning health and wellness marketplace. He questions just how helpful the industry has been as the hype surrounding wellness continues to build and confuse workers and their employers.
"This gets back to Rod's whole rationale around just sometimes simple blocking and tackling. If you have an organization that just has a very high prevalence of smokers, you really need to tackle that issue before launching some multi-faceted health and wellness program that has them out running around a track and eating this food or that food," Krajnovich says. "Someone like Mavum, like Rod Reasen, can bring clarity to the table."
But the path forward hasn't always been so clear or smooth, Reasen readily admits.
"I had no experience going down this benefits road, so there were a lot of trips," he says. "I didn't have a mentor over top of me that had been down this direction, that had started an insurance agency. There was a lot of going out and doing research, talking with other businesses, finding out what the market really wanted and what they were getting and then trying to deliver what the market wanted and not what they were getting."
He's not alone in that pursuit.
He meets monthly with Perry to talk about the market.
"We try to meet at least once a month to try and think through not just where the opportunities are, but where are the barriers and how we can bring a difference to the market," she says. Both agree that one of the big differences in today's market is that the value a traditional broker brings to the table is more likely to be questioned.
The carrier ranks have dwindled from the dozens to just a handful.
"That marketplace has shifted dramatically," Reasen says. And so have employer's needs. "The broker world is a dying world. The average age, from one of our major carriers here in town, the average age of my competitors, the broker in the state of Indiana is 55 years old."
Reasen turned 34 in March.
"That is an incredible opportunity for me," he says. "I think a lot differently than the 55-year-olds do. I have a lot more of my future ahead of me than they do. I'm going to approach business differently. We have an energy about our organization that is different. I hope when I am 55 years old I can say, 'Hey, I'm gladI did what I did when I was 34 so I can be where I am at 55.' But I know we bring a different energy to this than the 55-year-olds do."
Outliers
During a recent online seminar, we asked 200 benefits professionals, most of them brokers and advisers, to share their thoughts on issues like compensation structure, technology usage and general firm organization and management. Here is what we found.
How would you describe your internal operations?
34% — We're efficient and organized, leveraging technology where appropriate.
7% — We're pretty disorganized and antiquated.
54% — Somewhere in between those two.
Where are you and your firm with regard to fee-based consulting?
43% — Hybrid - blend of the two.
34% — Commission only.
7% — Fee only.
4% — We want to be fee only.
12% — Other.
34% — We're efficient and organized, leveraging technology where appropriate.
7% — We're pretty disorganized and antiquated.
54% — Somewhere in between those two.
Where are you and your firm with regard to fee-based consulting?
43% Hybrid - blend of the two.
34% — Commission only.
7% — Fee only.
4% — We want to be fee only.12% — Other.
Do you have a paperless system for small-group applications?
Yes — 26%
No — 74%
