Download 2016 CBC Health Care Guide a supplement to the Cincinnati Business Courier

The 2016 Health Care Guide,a supplement to the Cincinnati Business Courier, focuses on McGohan Brabender and our approach to empowering our clients. Download a copy, and learn why we are Good, Smart People Effectively Managing the Entire Health Care Dollar. 

“Good, Smart People Effectively Managing The Entire Health-Care Dollar”

When Pat McGohan, founder of McGohan Brabender, started as an insurance broker in the 1960s, a man approached him looking for a better deal on group medical benefits. Pat compared those benefits with the plans he could offer and said, “You’re better off staying with what you have, and here’s why…”

It clearly was not what the guy expected to hear from a salesman, but he was impressed by Pat’s knowledge and honesty. Pat didn’t make any money that day, but he did the right thing.

And he had found his niche. By focusing on the health insurance market, McGohan Brabender has grown into one of the largest independent employee benefit brokers in the country.

It’s a brand that’s built on trust.

“We still believe in doing the right thing,” said Erick Schmidt, vice president and managing principal at MB Cincinnati. “And knowledge is still our greatest asset.”

But this is not your father’s benefits plan.

Health care reform has radically changed the industry. “We’ve had to reinvent ourselves,” Schmidt said. “And today we’re in a great position because of our innovative approach. Where other brokers saw challenges, we saw opportunities, and we capitalized on them.”

Today, MB helps its clients develop long-term strategies to manage the entire health care dollar with a focus on claims, not just administrative costs. When you strategically target the claims side of that dollar ? which accounts for 87 cents of every dollar spent on health care ? employers can realize significant savings.

MB developed a sustainable health management strategy to control claims cost, one that goes way beyond shopping for rates. It’s called Empowering Healthier Living, or EHL, and it’s a data-driven, outcomes-based approach to lower costs and healthier populations. Other brokers have access to the same information. But it’s what MB does with data that sets it apart. “Our brand is ‘Good, smart people effectively managing the entire health-care dollar’,” Schmidt said.

EHL is a multifaceted approach that works best when all the parts work together, including:

• Technology that transforms the way we identify and manage risk.

• Transparency that changes the way we utilize and pay for services.

• Data analytics that reveal claims trend and highlight a path to mitigation.

• Engagement strategies that elevate employees from passive to proactive health care consumers.

Here’s how EHL works to lower claims cost: Historically, claims were primarily viewed on a retrospective basis, or said another way only through the rearview mirror. They happened, they were paid, the end. Now, with a forward-thinking approach, employers can accurately identify the next big claim and take steps to prevent or reduce it.

How? By identifying and mitigating the risk within the workforce. Biometric screenings, for example, reveal a population’s risk for costly conditions like diabetes and heart disease. Programs that advocate lifestyle changes can reverse or eliminate that risk and deliver measurable ROI with fewer claims, lower absenteeism and increased productivity, Schmidt said.

Screenings also identify undiagnosed conditions. These conditions can lurk undetected, and often are diagnosed after an episode that required costly medical intervention.

And statistically, these are not long-shot scenarios. Looking at diabetes alone, according to the Centers for Disease Control and Prevention, the “average” population of 100 employees has:

• 39 with prediabetes.

• Three with undiagnosed diabetes.

• And seven diabetics who don’t test regularly.

Those are all potentially huge claims just waiting to happen.

Another way that MB says EHL can control risk is by encouraging primary care relationships. Today, more primary care physicians are reimbursed based on healthy outcomes, so they take a more active role in managing their patients’ health … and their patients do likewise.

Patients with a primary care physician are more likely to schedule and keep follow-up appointments, follow their physician’s recommendations and take medication as prescribed ? something that fully half of all patients fail to do, according to the CDC.

Screenings and primary care are two simple yet effective strategies that have been shown to lower claims cost. But lowering risk is just one component of MB’s EHL strategy. For unavoidable claims, Schmidt describes how employers can mitigate the cost before it’s incurred ? through utilization practices and price transparency tools.

For example, most emergency room visits are not for actual emergencies. An urgent care, walk-in clinic or primary care physician is equipped to handle most medical situations, and will save both money and time.

Price transparency in health care is something that’s long overdue. There’s no other segment in our economy where it’s acceptable to buy something without knowing the cost. With health care you have to focus on quality as well.

And a funny thing happens once you start comparing cost and quality in medical services. More often than not, the higher the quality of care, the lower the total cost. By focusing on quality, most of the time you get fewer readmissions, infections, re-dos, etc.

We as consumers have come to expect that the more you pay, the better the quality. But it doesn’t work that way in health care.

For one thing, Schmidt points out that the MRI you get can vary greatly in cost from one facility to the next, yet the quality could be the same as the more expensive hospital-based MRI.

And he shows how the cost of knee surgery can vary by hundreds, even thousands, of dollars at facilities in the same town ? even if it involves the same surgeon. The reason has nothing to do with quality and everything to do with the contracts that carriers have with providers.

“When people are made aware that quality care options can save them time and money, they become better consumers,” Schmidt said. “With the right tools, education and encouragement, your employees can save money ? out of their pockets and yours ? without sacrificing quality of care.”

So the big question is, how can MB be sure that EHL works to control claims costs? Schmidt has the data to back it up.

“MB ran data analytics on the 96,000 local lives it has in some stage of an EHL program, and we saw it made a statistical difference in just a few years,” Schmidt said. For example, engaged populations saved an average of $142 per member per month compared to non-engaged populations.

“That’s real money employers can use to grow their business,” he said.

“Anyone can get the data. But our teams of financial experts know the questions to ask so they can see the story behind the numbers. When we view your claims, risk and other statistics through the lens of our data analytics, we can identify opportunities to save money,” he said.

Schmidt points out that even the best-laid plans won’t succeed without one important element: employee engagement. “And this is where McGohan Brabender really stands out,” he said.

“We know that poor choices are a major driver of health care costs. Unhealthy lifestyle choices and uninformed consumer choices are behind a lot of your claims. That won’t change until people change,” he said.

There are the usual strategies ? things like premium incentives, HSA contributions, cash rewards ? that can have an impact. And MB recommends them, when they make sense.

But to really engage people, you have to know what motivates them. To do that, MB has a “secret weapon” – psychographics.

Psychographic segmentation has been used successfully in other consumer markets for years, and it is already have an impact in the health care market. “McGohan Brabender is proud to say we are among the first to recognize the value that this game-changing strategy brings to our clients,” Schmidt said.

“When we employ psychographic segmentation, we learn what motivates individuals. When you know what motivates people, you can focus your communication for maximum appeal,” Schmidt said. “For example, some people respond better to a clear directive; others are more likely to respond if they see it as benefiting their family.”

In all, there are five distinct segments. Individuals are classified with 91-percent-plus predictability based on their answers to 12 health-care related questions.

The Affordable Care Act forced brokers to rethink their approach, and not all of them have adapted. While the ACA’s future is uncertain at this point, MB’s strategic approach will remain relevant and impactful.

“As the fallout from legislative changes and lifestyle choices weigh heavily on other brokers, McGohan Brabender is leading the industry into the future. We studied the trends, adjusted our course and forged a new path,” Schmidt says.

“And it’s working. We’re gaining momentum and growing in Cincinnati, Columbus, Dayton, and beyond. We’re innovators, and we’re making an impact with companies that are ready to think differently about their health benefits.”

McGohan Brabender wants to provoke you to think differently about your benefits. And their podcast, “Side Affects: Disrupting Health Care,” does just that.

Launched in spring 2016, “Side Affects” features spirited discussions with CEO Scott McGohan, Shareholder Anne Marie Singleton and frequent guests. With a focus on leadership, health management and workforce transformation, each episode will open your eyes to new opportunities.

The podcast is concise, with episodes averaging 20 minutes — perfect listening for your commute. The topics are timely, relevant and aimed at CEOs, CFOs, HR and other key stakeholders, but there’s something for everyone. Things like the impact of feedback, social media and millennials in the workplace; data analytics, psychographics, and other groundbreaking innovations.

The information is presented for the benefit and betterment of all business owners and executives, whether they’re MB clients or not.

“Side Affects: Disrupting Health Care” is available through iTunes or at