80. Steve Watson: The CFO's Guide To Fixing The Healthcare Budget

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Hey, hey. It is Friday. It is time for Friday Bullpen Sessions. My name is Andy Neary. Each week I deconstruct my journey, my struggles through professional baseball to help unpack yours so you can live a life on purpose. I take the lessons I learned in baseball and help you apply them in business and in life. So if you're ready to join me, grab your glove, grab a ball, get ready to take the mound. And get ready, bear down to strike out the limiting beliefs in your life. All right, here we go. Hey, hey. Welcome back to Friday Bullpen Sessions. My name is Andy Neary and this is episode 80. Now this is going to be a unique one. Normally on Fridays, you know, I just like to go off and riff for about 8, 10, 15 minutes on a specific topic specifically usually tied to my pro baseball career. But today we're going to change it up a little bit. In fact, I'm actually conducting an interview today and this one's a little near and dear to my heart from the standpoint. For those that know me, I've spent 17 years in the health insurance industry and I'm excited to have this guest on. Steve Watson is not only very insightful when it comes to the world of healthcare and health insurance, but he gives such a good perspective to insurance brokers, of which I've been one for a long, long time on how to talk to C level executives.

Why?

Because Steve is a cfo. He's one of those unique birds that serves the CFO role extremely well. But he also has a passion for fixing health insurance inside organizations. And as you know, health insurance has become a very, very big numbers game. And so why not leave it up to a CFO who understands numbers to show other CFOs, other HR directors and organizations how to fix the out of control cost of health insurance. And let me tell you folks, you're going to learn health care and health insurance are not one in the same. But I wanted to have them on because guess what, we just had the elections about a month ago and guess what? Top. What's top of mind again?

Healthcare.

So buckle up, grab a pencil, grab a piece of paper. If you are a decision maker in any way, shape or form in your organization, specifically, you're a cfo. You're a CEO, president, coo, hr director. I don't care if you work for a company. Steve's gonna share some tips, some ideas to help you guys find the best access to healthcare at the lowest possible price. Because if we are going to turn this US Healthcare dilemma Around. It starts with the decisions we as consumers make. All right, here we go. Shift your mindset. All right. Steve Watson with Trend Breakers. How you doing, man?

I'm super excited to be here.

Yes. Now, this one's going to be a unique conversation because the Bullpen session podcast is often about, you know, I talk about the athletic mindset and how to apply the mindset of an athlete to business and life, but I wanted to take you down a different path because of your expertise, and it's a topic.

The athlete part of me didn't shine. Huh? I'm sorry.

Well, no, no, no, no, no, no, no, no. That's not. Oh, wow. I totally probably said that wrong, but I think what you. One thing you have a unique talent in is very top of mind right now, right? Because we've got the election. We've got. And every time the presidential election comes up for a conversation, guess what we're talking about Health care.

And so you and I have a common tie. I spent most of my career in the health insurance field. You have a really unique niche with the health insurance industry in that you are a CFO, but what you're doing today is actually helping other CFOs learn how to really bring control transparency to the health insurance costs that they're buying. Right. And so, but before we get into that, let's back, back, back up a little bit. Steve Watson, who is he? Where is he from? What led you to becoming a cfo? What. Just what makes you tick?

Always. Growing up, my dad was in business. He was a controller accountant for a turkey processing plant, of all places, out in central Utah. So I grew up on a really small community in central Utah. I had a thousand people in the town, but he loved business, and I just loved business accounting. When I was in high school, I loved it, and I just really loved learning why a business did well and why a business didn't do well. And so all through college, you know, went got my mba, CPA and everything. And that's why I ended up in finance, because that's where it lives, you know, trying to learn the numbers and figure out why a business does as well and not do well.

By the way, did I hear right? You grew up on a sheep farm?

I did, yes.

Ooh, what was that like?

You know, it's hard work. I hated Christmas break and spring break. I dreaded spring break because that was the busiest time of year. All my friends went off and traveled and stuff, and I was. It was lambing season, and we were shearing sheep. And doing all this stuff out there. And Christmas season we were cleaning out the shed and the pitchfork and stuff and summers, but, you know, idyllic in the fact that it's, you know, beautiful area. I was out outside, I was changing sprinkler pipes a lot and riding my four wheeler around town and stuff.

And so that was awesome. So not only was your dad help running a turkey processing plant, he also ran a sheep farm.

Yeah, my great grandfather like 125 years ago decided it was a good business idea to like start the sheep farm. And my family hasn't been able to get out of it since, so we. It's not for the money, I tell you. It's not for the money.

Well, guess what though, here is where being growing up on a sheep farm is very applicable to what we're about to talk about today. How many CFOs figure feel like they go in for their annual shearing every time their health insurance cost renewal comes out?

All of us. Right, right.

You feel like, oh, yep, here I go again. I'm about to get sheared once a year.

I'm left down the cold.

So let's just get right into that. Steve, I love your unique approach you're taking to the health insurance industries, an industry that's obviously near and dear to my heart. Healthcare is top of mind right. In this country. And I think where we have to level set this conversation. And if you're listening in, you're not an insurance broker, you listen to the podcast, I think this is gonna be a very applicable episode. You might be like, what? What does insurance have to do? But trust me, I think if anything, this is gonna help you become a better consumer of your healthcare. And that's really the goal of this. So, Steve, let's just start right here at the basic level. Are health insurance and healthcare the same thing?

Absolutely not. But it took me a long time to figure that out because we use those words interchangeably.

Healthcare, to me is the doctor. Right. It's going to visit with the doctor. It's different things. It's not the financial insurance component. Like, we would never mix car insurance and car maintenance or buying a car together. They're just completely different things. But in healthcare, we blend them all together.

Yeah. And I, you know, that's it at its core. Right. One fine, one's a financing arrangement, the other is the actual service itself.

Right.

And so.

As a cfo.

Where do you put the cost of the healthcare to an organization? On a scale of 1 to 10? 10. One being you know, it's not that important. 10 being, wow, this is one of the biggest issues we have right now.

For the company that I'm in, it's a service industry, we're in social works, a service industry. And so our top expense is wages. And guess what number two is? It's benefits. It's the second most expensive thing on our line and it's the thing that impacts every single one of our employees. And so the level, importance and different things, it's super high within our organization. But I will say until a few years ago, I just didn't know what to do about it. It was just something, it was like, this is what it is. It just always goes up. Can't really do anything. And kind of My journey started 10 years ago when I took over the HR department as well. And I was negotiating our first renewal and the broker came by and gave us a 30% rate increase. And I was like, 30%? I mean that's hundreds of thousands of dollars. As a cfo, I'm now trying to figure out where, I mean, I got to come up with that money somewhere. Right. Budgets and different things, but then there's also hundreds of them dollars for every employee. And as a cfo, for years I'd learned how to find value in all parts of my business except for this line item of healthcare. Like it was just this black hole that I didn't know how to manage and didn't know how it worked.

Is that a case of not know, just not knowing what you don't know?

Yeah. And I, you know, I'll ask any other CFO or even HR professional. You can have all the letters after your name. But how many classes have you taken on negotiating health care here or health insurance? Zero. I mean, we have no idea how to do this. Don't know the components inside of it. I'd never been taught any of this.

I think that's something I realized as an advisor myself is it could seem intimidating to work with an organization whose CFO went to Wharton Business School at Penn or have all these designations behind them. But what you have to realize is when it comes to the, the nuances of health insurance, most CFOs still struggle to figure out how to tame this beast. Right.

I would say for brokers, they tend to talk over our heads. Like they'll use acronyms, they'll be throwing stuff around and we have no idea what they're saying. Yeah, they don't want to sound embarrassed, they don't want to be embarrassed and kind of simplify dummy it down for the cfo. But that's where things get missed and we just don't get educated and it's hard for us to make decisions because we just don't understand what's going on and we just kind of move on.

So where did you, as a CFO in charge of that second largest expense in your company? When was that moment where you realized, okay, there is a different way to do this? Like, I now see light that there is a chance to control these costs. When did you have that defining moment?

So part of it was I got slapped in the face of that 30% increase. And so when you, when you're only getting like, I mean, 5 to 10%, still bad, but you're kind of like, well, it's not that bad. It's not enough time to invest a bunch of time. 30% is different. I mean, 30% slaps you in the face and the whole organization pivots and starts working on that. So I spent probably two or three years working on that. And then I read Dave Chase's book, the CEO's Guide to Restoring the American Dream. Highly recommend anybody negotiating these benefits to read that. Started opening my eyes, started connecting with other CFOs, started opening my eyes again. And then where it really started solidifying is I had a chance to be a CFO for a insurance broker on a kind of a contract basis. And that really opened my eyes to like kind of understand the ins and outs and everything. And so that's probably when my eye opening happened. So it was about the time I read the Dave Chase book, being my own cfo, buying it, and then seeing how an insurance broker, those three things coming together really kind of solidified it.

So let's, let's just make this thing super tangible. So right now, if there is a business executive listening in, whether that's a cfo, a CEO might even be an HR professional.

What should they be looking for when they look at their health insurance costs? I think so many are just focused on, I pay this premium. I just assume every year it goes up. And then what I end up doing is negotiating it to the best, worst case scenario.

Where can CFOs and other decision makers really start pulling up the curtain or lifting the curtain to see where the problems are?

Yeah, the very, very first thing. And we joke about, I have seven kids, right? So we joke about how many kids I have and everything, but we have to. And I may use the analogy about buying groceries for my kids because it applies to healthcare. So next year let's say Andy's gonna buy all the groceries for my, my kids next year. And you're like, oh man, how am I gonna do that? I gotta come up with this. Well, you're gonna try and look at my demographics, food cost, consumption, pricing, everything. And you're gonna have to come up with a rate admin fee to do all this stuff. And then we're gonna pre negotiate a rate for that, right, for buying that food for this next year. And that's kind of how our health insurance is built. This insurance company has to come and like, figure all that pre negotiate all that stuff there. But where it really hits and where CFOs need to know about it is there's a big difference between what you're paying in premiums, what that negotiated insurance rate is versus what the actual consumption, either in our analogy, the food costs or the actual claims costs are. So that's the very first number that every CFO needs to know. So, for example, I was meeting with an HR director here in Phoenix. They were paying $6 million a year in premiums and they were going to get a 5% increase. I said, well, let's stop, stop, stop, stop. What was your claims last year? And so they pushed back. They figured out it was $3.7 million. And at that moment, all of us need to stop and be like, where's all the money? Like, I. 3.7 million went to the doctor and the hospitals and stuff. Of course, there's a little bit of money for admin for the insurance company, but $2.3 million left on the table and they can't now they're going to give me a 5% increase. So if you know that claims number, that's the very, very, very first thing that you need to figure out claims and then start restructuring. So, yeah, that's where I'd start.

So doing the simple math, to regurgitate what you just said, they paid $6 million in premiums to provide health insurance for their employees. Technically, they cost the insurance company 3.7 million. And the insurance company wants a 5% increase.

That to me, yeah, they kept $2.3 million. Yeah, but that goes back to. Right. Like a broker is going to tell that client, 5%'s amazing. Accept it, take it and run. But you as a CFO have to really break down and say, hold on a second here, I'm doing the math, and 2 plus 2 does not equal 4 here. We paid in that amount of money. We did not cost them anything. And yet they still want more. That's where CFOs have to push back, correct?

Yeah. So that's the first one. And the second one is what you're kind of starting to get into is, I trust my broker. They're giving me the best rates, but.

There'S so many misaligned incentives. So going back to my scenario where I got the 30% rate increase, well, guess what? My broker was going to get a 30% rate increase as well. Like a raise there. So he got a raise going up, got more money. When I was going down, it was bad for me. And so what happens a lot in this industry, unfortunately, is that $6 million premium, that broker's tied to that $6 million. And so if I'm asking my broker to lower my rates down, I'm also asking him to take a pay cut. Now we can go in. We spent a whole podcast talking about all of that there and why that happens and stuff. But unfortunately, a lot of times you'll get rate passes because it's just kind of good for the carrier, good for the broker, good. You know, look, everybody's kind of happy when really you should be getting a 10 to 15% reduction if everybody did a little bit more work and stuff. And you're. As a cfo, you're the one that's going to have to do that. And if you're. Even if you're not a CFO and you're just an employee listening to this, it's important for you to start understanding this, because this is how your rates are being negotiated. And so if your CFO is not doing it or not HR professionals not doing it, guess what? You're the ones that end up paying those higher rates.

So, okay, so for CFO number one, look at claims, and if you literally cannot get access to your claims, that should tell you something right there that you need to be challenging back to.

Say, if you have less than. If you have less than 50 employees, it's really hard to get claims Data. If you're 50 to 100, you should start getting. If you have more than 100 employees, you should have claims data. And if you're not getting them, I would really push back on your broker. Then the second thing, I would start looking at your broker and their compensation and aligning that. So you want them to win when you win, and you want them to lose when you lose. Exactly. It's not, you know, people get mad at me. And it's not about the money because it's a smaller portion of it. It's aligning their incentives there. You don't want. You don't want your tax guy getting paid more money when you pay more in taxes. You don't want your insurance broker getting paid more when they get paid. You want them winning when you win and losing when you lose.

Well, it's funny you bring up the tax man because I use that analogy a lot, that why do you hire an accountant? Well, you wanna pay the least amount of taxes as you can, right? Would you trust your accountant if you learned they got paid by the irs?

Probably not. That's how the insurance world has worked, right? Brokers get paid by the carrier. And you're getting advice on which one you should be with when that broker more often than not is getting paid by that carrier. So you have to be very careful with those alignments. Now, if a broker's getting paid, commission doesn't end.

Cfo, that was really surprising to me. I mean, that was just kind of blue. And that's where I really got to understand that when I became a CFO of a broker. And I just really thought, well, if CFOs knew this, they would just make better decisions and do things in a different way. And that was also the birth of Trend breakers was just trying to figure this stuff out and share it with peers and stuff.

And we're going to get into what you're doing with Trend Breakers. I think it's really cool. But what you just said is so true. I guarantee if you ask most CFOs what their broker makes, the majority cannot tell you.

No. I mean, I'm in HR forums all the time. And not only they can't tell you, they're like, I don't set it, it's the carrier rates. I have no control over it. I mean, I was talking to companies of 500 employees thinking they have no control over, have no way to act. It's just what the carrier set. I'm like, absolutely not true. It's just not.

So let's talk about this, Steve. So we talked about, okay, a CFO claims. Make sure your broker compensation's aligned with your goals. Now let's talk about the healthcare in its impact on health insurance, we already established that they are not one in the same, right? One does impact the others because of the cost of the healthcare at which your employees are buying services has a huge impact on your premium. I think the common belief is if a hospital is expensive, if a drug is expensive, it must be good, right? Just like if I go out and.

Buy a car, expensive car, expensive tv. Right.

That means high quality. Right. But that couldn't be farther from the truth when it comes to healthcare. As a cfo. Put your perspective on that. How?

What is your take on the healthcare system right now? And is it true that the higher the cost, the higher the quality?

So this is where another one of my hats come to play. So I work in social work. I negotiate with insurance companies all the time for our own. So as a provider. Right, Go out there and do it. It's never about higher quality, gets paid higher rates. It's usually about leverage. It's usually about when trying to get people into the network, they want to, like you think about PPOs, and they're trying to expand these big network, and let's say they have that one hospital system that wants to play hardball, but they know if they don't get that hospital system into that group, they're gonna have a hard time selling that insurance plan. And so the hospital can drive those rates up irregardless of the.

Quality of those services, right?

Yeah. So you've done something really unique that I like, because it's kind of unheard of in the insurance industry, is you are an actual cfo and you have now built a little business around the CFO to the CFOs who are gonna. Who's gonna help you control your healthcare cost, which I absolutely love. Tell us a little bit about Trend Breakers. Like, what was the purpose of founding it, starting it, and kind of what is it you are doing right now to help employers win this messy game called health insurance?

It was two parts. One, it was selfish. And so I can go back to that day that I was meeting with all these other CFOs and stuff. And I was just sitting there as a social work cfo, and I'm looking out my window, and there's a hotel across the street. They have about 300 employees. I had about 400 employees. We're not competitors at all. I'm like, why don't we talk to each other? Like, why don't we, like, compare plans and ideas and different things? But there was no forum out there that I could find. There's no consumer reviews, no Yelp, no anything. Just for benefits. And so I created a Facebook group and a LinkedIn group called trend Breakers. And the name comes from Breaking the Rising Trend. I'm just sick of this. Everybody's saying the trend of healthcare keeps going up, so we're gonna break it. And I just wanted to be able to hear from other people around the nation, like, what are they doing? I want to learn from them and stuff. And then I wanted to be able to share my success stories with them. So that's the start of trend breakers. And then I started getting asked to speak a lot of different broker conventions and connect with a lot of different brokers. So I was learning all these different ideas and I wanted to bring those ide to the group. And I felt that, I felt like I was starting to understand this messed up healthcare system. And if I didn't share that with my peer group, I was almost complicit with this messed up system. So I personally was not sleeping well knowing that I could do something to help my peer group.

Absolutely. And I think as a cfo, that's something most are focused on. Right. Is I've got to go out and hire the best talent, I've got to keep them happy. And part of that is providing a quality benefit package that, that can be used to attract talent.

You know, I was able to save $500,000 from a year for my, my company. $500,000 goes a long ways. I mean, you can hire different staff, you can do bonuses, you can add benefits, you do all this stuff. And so then I just start looking at that hotel across the street, like what could they do with $500,000? Or that manufacturing company or that whatever company. It's a lot of money. You know, it's again one of our second or third largest line item there. And so if you can redo it in a better way. Carriers. I say this a lot, but the carriers have enough of our money. So let's take some of that money back and let's put it back in our employees and back into our company.

Absolutely. So I'm gonna do a little rapid fire here on you. Not so rapid, but definitely fire.

What are some of the myths, and I'm gonna call them myths that CFOs might hear from an insurance broker when it comes to the ability or perceived inability to control their cost. So as a cfo, what have been some things you've maybe have been told by brokers in the past.

Where you're just like, I now know that's just not true.

Unfortunately. There's the myths of taking the market. Can't help. Right? We need to, let's just leave it with this carrier and do it. They'll give us the best options. I think one of the biggest myths is that they're showing you all the options. Like when they bring it in there, like we just as a cfo, we think that they're going to go out to the thousand different options out there, bring them down there, when in reality that broker is really just going to go get their 20 options that they work with and bring us the best out of their 20 and not show us the other 800 that may be out there.

Okay, what any other myths, any other things you were told in the past? You know, hey Steve, this is the best you can do. There's nothing else you can do. The rates are the rates are the rates. I just think about so many things that our clients, we've all been guilty of probably saying to our clients that.

I think I'm biased, I'm biased. My book of business, I have a large book of business with that carrier. So that means I get the best rates.

I'm not tied to any of these carriers. I'm carrier agnostic. Is one you hear a lot. I work for you, I don't work for them.

That's honestly one of the ones that my biggest pet peeves of saying you work for me, but they pay you. Really do you really work for me? That's just like yeah, well let's, let's.

Talk about how to fix that. So if you are a CFO right now listening in again or somebody within an organization that could be taking this to their cfo, because this is important information right now, moving, especially moving forward, what should a CFO be looking at? Like what could, what levers as we like to call it with CFOs, what levers can they be pulling right now to really make an impact on their health insurance costs? We established get claims, address your broker compensation. Is there things they now could be doing with the health insurance plan really carrier side.

So we've kind of addressed like you need to know yourself, learn yourself, get out there, do stuff. Second thing, work with your, your broker and stuff. The third, third thing I talk about the lower formulas, the one I use for trend breakers. So we're in like the third one now about the carrier, the plan, different things. I'm gonna set a little context. So why I am a CFO of a company, about 500 employees. I really work with companies between 100 to hundred plus thousand plus. Like if you get really small, the stuff I'm going to talk about don't really, it doesn't really apply and doesn't really work. So let's say you're over 100 employees. You have to start.

I'm going to say this, instead of pre negotiating those rates, you have to start paying those, those claims. As you go throughout the year. And I like analogies. Let's just use a really simple analogy and say you're athlete, you know, you're an athlete, you like going to the gym. Let's say you pay $30 a month, you pre negotiate that rate for the whole year. It's $30 a month. Doesn't matter if you go one time or a thousand times. Well, let's say you could have an option where you Pay, let's say $2 a month fixed $6 every time you go to that gym, and then you'll never spend any more than $30, even if you go 100 times. And it sounds a little bit more complicated. Right. You're kind of listening to this, being like, okay, that's a couple different numbers there. Let's rule that out. So the first month you go 100 times to the gym, you still spend 30 bucks. But if you get to July, you're on vacation, you don't go to that gym, you only spend $2. So you get it cheaper.

It's almost like people that or in December, you know, you don't go to the gym at all and it goes cheaper. You pay those claims as you go. They're called self funded plans or pay as you go plans, or different things. CFOs with more than 100 employees really need to start looking at those different options. And it doesn't mean you have to change carriers, doesn't mean you have to change anything to employees. You just have to pay for those things in a different way. You have to finance them in a different way. Just like we ask employees. Employees can have the same Blue Cross plan, and some employees can do a PPO plan and some can do an HSA plan. But as an employer, we can do a pre negotiated full insured plan or a self funded plan. And that's where you can save a ton of money without adding any risk to it.

Well, that's a good point because go back to the example you used earlier. When you finance your plan through what they call the fully insured model, this group paid $6 million upfront, basically throughout the year, prepaid that right. To come find out, they actually spent 3.7.

Right.

And so in the pay as you go, or what we call the self funded financing model, you're paying a very small portion every month, but the claims are paying each month as you actually incur them. So like you have a bad month, like you said, you cap out.

Let's say that.

Yeah.

And let's say that that plan Was max, you're never going to pay any more than 6 million. You're going to pay it up to that $6 million point. But if you pay anything less than 6 million, guess who gets to keep that money? You do. If you, in that case, where they were on when they didn't, they didn't get to keep any of that savings insurance carrier got to keep that money.

It's interesting because I, one of the things I struggle with is I start to geek out on these things and I start to go into all the details of it. But there are things that you can control as a cfo and it's not complicated, it's not hard. It's just digging into those lines a little bit. Just take it down a layer.

So let's go there quick. What are some lines, some layers that I as a CFO could be controlling when I look at my health insurance budget?

So that's that insurance component, like just the pay financing. Yeah, the financing piece of. That's, that's the layer that I'm getting down to. Like if you think about an insurance plan, what are the components of it? There's the claims that you do it, there's the admin to do it, there's the pharmacy part of it, and then there's like an insurance part of it. Those are like the four kind of components of a plan. You can just start negotiating those, those rates, those different things inside of it and save a bunch of money there.

Okay.

What should a CFO be looking at right now in a relationship? A partnership with the broker? Because I think in the industry, as, as an acting advisor myself, historically, we have a lot of control because it goes back to a lot of CFOs don't know what they don't know. Right. Which often gives that broker kind of that unfair leverage. What should.

I never realize what.

Wait, how much should they be looking for?

The brokers had.

Yeah. So what should CFOs be looking for right now? When it, when it comes to choosing a broker, what are certain characteristic traits? Is there, are there unique ways brokers are getting paid today that they should be looking at?

Yeah, I would say fee only. So they, they should work just for you. Right. They shouldn't be getting any bonuses or commissions or different things from, from the carrier. Because when you include those things, it creates bias, it creates connections to the carrier. You're kind of who you're negotiating with versus connections to you. I ask a lot about their book of business and I want to know, I mean a lot of brokers will come and show their shiny object. Like let's do this new thing or this new thing and this whatever.

I don't want to hear about anybody's shiny objects. I want to hear about case studies. And so when I'm talking to my broker, show me clients, you personally, not your company, not somebody in the other side of the country that you are working with that you help do something. And if I like it, then I'll help, you know, then I want to replicate it. So show me case studies, show me your book of business, show me what you're doing. Show me that mountain that you've been up. And I want to see if I want to go up that mountain with you or not.

It's a great point because I think what I heard you say is number one, find a broker who practices what he or she preaches. Number two, make sure your broker's compensation is aligned with your goals. When you win, they win. When you lose, they might lose too. And I do think the odds have been stacked against employers for so long. Let me flip it on you quick. Steve.

Yeah. Just one last thing you talked about that I've heard. That's another myth that we as CFOs believe is that a broker can help us with all different types of options. And as a cfo, I am a cfo, I have my cpa. I've never taken a company public. I have no idea how to take a company public, even though I'm a CFO and I technically people would think I know how to do that. So a broker, can a broker do fully insured and self funding and reference based pricing? I would challenge that. There's no. Brokers specialize in different areas. And as a cfo, you need to know what your broker specializes in because those are the options that you're seeing. And it's upon you if you want to move into different types of funding arrangements to go find the broker that specializes in that funding arrangement.

So let's flip it then.

For the brokers who are listening in. You are. I love. The reason I wanted to have you on is you are a cfo, right? You can definitely tell them what they need to be doing to attract the attention of a cfo. So what advice would you give the broker community right now? As one, to be an advisor who's going to win moving forward? Number two, what kind of conversations do they need to be having with CFOs to really attract the attention of that CFO who and ultimately get him or her to take Action. Because I think often brokers get viewed as just this health insurance broker, right? And historically, that person has then been pushed off to the human resources department, where this now has become a financial conversation. How can a broker succeed by having a conversation with the cfo? What should they be focusing on?

And I'll kind of bring those two things together because it comes down to insights. I think we've lived through the age of relationship selling of like, you know, golfing with people and doing stuff, and that's who you would pick. And I think we're coming to an end of that. Like, I value my partners that are bring me insights that show me how to do things in a different way, help me implement things, help me do things that other companies are doing to help replicate them in my company. So if you are the. If you are the person bringing me insights, you may not even be my current broker, but if you're the one continually giving me insights throughout the year, guess what? It's not going to take me long to, like, say, well, why am I listening? You know, this other guy that's not giving me any insights. I'm going to move the business over to you now. Insights. What's interesting about Insights is as a cfo, I know in your world as a broker, you're dealing with health insurance 24 7, and that's what you live and breathe and all that stuff. As a cfo, it's just one little piece of my overall life of dealing with budgets and PPP and government and revenue and wages and all this stuff. So those insights don't have to come from just insurance. And so if you're able to help me grow the business, I'm going to like working with you. And I know some brokers will be like, well, I don't know anything else outside of that. Well, one of the things that brokers have that they don't realize is they have connections. They know lots of people in lots of different industries. And so if you kind of hear from me, get to know that business and what I'm needing, and maybe I need a supplier that does that. It's like, oh, well, I know that connection. I know a supplier over here that does this. All right, I'm looking for a lawyer. I'm looking for an auditor. I'm looking for these, everything. If you become that connector that I can call you up and say, I'm looking for somebody like this and you're able to help connect them. That's very valuable as well in the expertise in all those different Areas.

Yeah, there's a couple things to unpack there. Number one, I heard you say, be a business consultant. Don't just be a health insurance broker. Number two, actually help me solve my real problem because Steve doesn't go to work every day saying, how in the world am I going to solve health insurance? Steve goes to work saying, I need to grow this company. I need to find it, make sure my expenses are where they need to be. I need to find ways to, to create revenue. You help me do that, I'm all ears. And so I think that's. I'm glad you said that because I think so many insurance brokers get caught in this. No, your problem's health insurance. Often you're not solving that CFO's real problem, and that's why they're not doing business with you.

Yeah. And you could say my problem is recruiting and retention. Maybe my wages, like, I'm not able to give as many, you know, the sours that I want to give to recruit and retain the people. You can help me solve that through benefits, but that's not my problem. Benefits is not my problem. Right. You're helping me solve whatever that issue is. You know, I need to buy a new building, I need new staffing, I need like whatever. You know, you may help me through your solution, but that's not my problem.

Yeah. I tell brokers that all the time. You need to be able to plug in what you do.

Into the actual goal they're trying to achieve and the challenge they're trying to overcome.

Yeah. And I would say right now, in 2020, it's survival and cash flow.

Exactly. Cash flow.

Like all of us, right?

Yep. And, and I think that's a, that's a tough thing, Right. I think for CFOs out there, the message is important too. It's so easy to resist change right now.

Oh, yeah. Because everything's changing in our life. Right. So it's like we don't need more.

And more and there's so much uncertainty out there. And so it's easy to not want to do anything but that, especially when it comes to the insurance, the health insurance. That could be at the expense of doing what's right for your employees.

And I hear a lot of people say, because you'll hear brokers like, I'll say, as a cfo, my biggest concern is cash flow. And they're like, well, I can save you 10 to 15% on health insurance. Well, that kind of sounds like that Geico lizard. Right. That can save you 10% 10 to 15% on your car insurance. Well, guess what? I've heard those. We all know the advertisement. We know all that stuff. How many of them actually picked up the phone and called Geico Lizard? Not very many of us. Why? Well, because all the other stuff that rolls through your head, well, you know, are they going to. If I get an accident, are they going to be there? Is it going to be like the same and blah, blah, blah, blah, blah. It's all that other stuff that rolls through CFO's head when you as a broker call them up and you're all talking about saving them money. Well, I know this broker. He helped me two years ago, or he helps me with payroll, or I don't want the CEO's wife calling me up because something changed and now they can't get that prescription that they were looking for. Blah, blah, blah, blah, blah.

Yeah, no, it's tough. It's definitely. There's resistance to change. But I think if I could myself throw a piece of advice out to the CFOs and the other decision makers on a very, very large and expensive line item on the budget, it's number one, you can give your employees better benefits for less money.

That's the biggest myth right out there.

I think that's that we, because we, the broker community, have sold you on the fact that you want to increase your, your, your benefits. You're gonna, but if you want to pay less, you're gonna have to cut something out. And that's just not the case anymore. You can actually have both. So as a cfo, go search for that, find those opportunities. If not, find the dang broker who can do it for you. So let's finish here, Steve. Trend breakers. I love what you're doing. Why not for the people out there, what are you doing with trend breakers? Kind of. What, what, who are you helping, what are you doing, and what's the ultimate mission?

So I specialize in helping the key decision makers at companies between 100 and 1,000 employees. So CFO, HR, professional, CEO, depends on the company. But those ones are really sitting down at the table and negotiating the benefits for their employees. And I help them by sitting on their side of the table, helping them either work with their current broker, find different brokers, work with their current carrier, find different carriers, and kind of bring these ideas from around the country and help them implement these things that we've talked about here. So I do that through consulting services with them, sitting down with them, get paid by them, working on their side, and it's almost like if you think within an HR department, a lot of times we have a benefit manager. Like, they'll be the HR director and we'll have a benefits manager, but usually their focus is more on the eligibility files and the transactional side of it. Well, I'm like an outsourced benefit manager, but I specialize in the financial side of, like, negotiating the benefit benefits. And I bring my CFO and my HR hat to that table to manage, like the broker and the carrier, you know, world, and bring the best benefits to that company.

That's awesome. And that's why I think that's what makes you unique, is you can say, I'm one of you.

I'm a CFO and an HR professional. We're both hats.

But I'm going to show you how you can do what I've done for organizations that I've been involved with. So I love that. And I think there's a lesson to be learned there, too, Steve, about, you know, if you are an employer out there right now and you're just trying to figure out what the heck's going on, our costs go up every year on our health insurance budget, and we can't figure out why this is happening. We don't know how we're performing. This is why people like Steve are such an asset for you. And if you're a broker out there, I'll tell you, don't look at Steve as a competitor. He can help you become better. And look at Steve like an asset.

Yeah. And I really. I feel like my kind of genius. I don't want to say genius like that, but more of, like, where I specialize in is bridging the gap between cfo, hr, and the brokers. Like, I really can live in those three worlds and bring those three worlds together. And one of the ways I do it is through that podcast. And so that's kind of one of the ways we met, too, as I had you on my podcast. But it. It brings a lot of cfo, HR and benefit topics there to talk about these different areas and then those two different groups. And so you don't have to pay for those groups. You know, if you're an employer, come join the Facebook group or the LinkedIn group and, you know, hear from other employers out there and what they're doing.

Absolutely. And that's. That's why I think this top. This is a topic that's top of mind. We got the elections around. You know, healthcare is going to be a hot button, but I think for. For what you're providing out there. This is such a big asset right now to have CFOs and HR professionals, have somebody that's on their side, that's done what they've done, that continues to sit in their seat, but can really help them laser in on what they can do to build that better benefits plan. While saving money at the same time is an enormous, enormous asset today, let's.

Just kind of bring it all together. So I don't know how many of the listeners have heard of Goodrx, but if you haven't heard of Goodrx, you need to download that app right now. And so Goodrx, you put on your phone and let me just tell you a quick story. So last year, I had allergies in my eyes. And so the doctor says, go over and get these allergy drops and run over to Walgreens. Get over there. The pharmacist looks at me and says, ooh, this is kind of expensive. Like, that's not a good, good point. He says, well, it's $235. I'm like, well, I got my insurance card. So I whip out my Blue Cross car and put that down there. He says, it's $231. I'm like, really? 4 bucks? You're gonna send me 4 bucks? Big blue Cross insurance company? And I was about ready to walk out there. I'm like, my eyes are red, but not that red. You know, I can. I can deal with this for a while. And then, like, I remember this app called Goodrx. I pull up Goodrx app on there. I look up the exact same prescription in the exact same place. For in Walgreens, it was 75 bucks. It's $150 cheaper to use Goodrx there. And then within Goodrx, it said, If I drove three miles, the local grocery store, guess what? It was 20 bucks. So I've gone from $231 all the way down to 20 bucks for the exact same prescription, the exact same thing that I need. And it just really solidified to me that we think that everything costs the same, and it doesn't. There's many ways to get things at a different price, and that was one transaction for one employee. And so if you're an individual, I've saved hundreds of dollars by using that app as an individual with my family. But now take that up to a CFO level. If you took a better way to buy your benefits for all the transactions for your employees, it adds up to hundreds of thousands of dollars.

So.

Let'S bring it home with that statement because there might be, there probably are some people listening in that are not CFOs or not insurance brokers. But you know what? They probably are healthcare consumers.

Right. My son just got, got in a bike accident this, this weekend. And guess where my wife is right now? At the doctor's office with my son.

So, so if you were to, able to, if you were to break it down into two, maybe three.

Good pieces of advice for the health consumer of today to empower them to become a better decision maker, what would those pieces of advice be?

So let's just break off pharmacy. Pharmacy is one of the, there's huge variations in prices within pharmacy. You can, there's, you can look up Drexi. I have them on the podcast. GoodRx is another option. Cash prices, like we think the insurance prices are the cheapest ones and a lot of times they're not the cheapest ones. Ask for the cash prices there and you'll be amazed at how you can get things at a much better price. The second thing is I highly recommend folks get connected or at least start looking for direct primary care doctors where you pay them directly, that they're not tied to hospital systems, they're not tied to anything. It's almost like a membership model with the doctor there. And it's amazing. I just, I got one this past summer. I can text them, I can call them, I can just, you know, when I have questions, I don't have to go in the office, I can do it. And you just pay them a flat fee and then everything, you know, it's just part of that package there. And instead of them being tied to referring you to the hospital system because that's who owns them and different things, they can give you a lot of different options there. The third one is.

Really.

We want to be healthcare consumers. And it's one of the things with like the HSA plans that got pushed out to everybody, like try and be healthcare consumers. It's still really hard, let's be honest. Like a lot of us can't find prices on them and different things there. I would start just.

I wish it was easier and I wish it was better, but it's still coming. But you know, ask for the cash prices even at hospitals and shop, shop around. And just because you said just because it's expensive doesn't mean that it's the high, you know, the high quality place.

Yeah, I'm glad you said all three of those because I think this is a great place to finish if you're listening in. And again, you don't have a decision making responsibility for the health insurance at your organization or you're not a broker. What you just, I hope you just took from Steve was number one to become a better healthcare consumer.

Seek non insurance solutions. Right.

I mean health care and health insurance are very different. Right?

Goodrx is not insurance. It's more of a cash price type deal. But guess what? It can save you a lot of money. A direct primary care doctor is not insurance. I love how you say I called it. It's like primary care country club. You pay a monthly membership to be a part of it and you get all these services as part of your membership.

What original healthcare was like, you pay a doctor and they would do you service. Right?

That's it exactly. And then you ask for cash prices which is not using your insurance. Here's my point. I know that insurance card feels warm and fuzzy. As a consumer of American healthcare, I know having that insurance card makes you feel all good inside. Here is the point I want to make to you. It doesn't mean you're getting the best access to care and it, hell, it doesn't mean you're paying the best price.

Yeah. Treat insurance like you do your homeowners insurance. Like you're only going to use homeowners insurance for the fire. The big, the big stuff. Right. Everything else you really should be doing, just buying it straight and not worrying about the insurance side of stuff.

So Steve, if, if I'm a cfo, I'm an HR professional, I'm a broker and I want to get in touch with you. What is the easiest way to do that?

So LinkedIn. I'm on LinkedIn all the time. So Steve Watson, CPA, you can find me on there. Trend Breakers.

Either the Trend breakers podcast, you can search Trend breakers on Apple or Trend breakers on LinkedIn or on Facebook and the trendbreakers.com awesome.

Well, thank you again Steve for taking the time to be on this this week's episode. I know this is probably a little divergence of my normal bullpen session podcast interviews, but the reason I wanted to have you on was health insurance is near and dear to my heart in what I've done in most of my career. It's allowed me to put a lot of food on the table, which I'm blessed. But it's also very top of mind right now when we've got the elections going on and all the things that are tied to 2020 and if you're out there, whether you are a CFO, whether you are a broker, or at the end there getting nuggets, as a healthcare consumer in this country, it is so important that you challenge what you've been told. So if you're a CFO out there, there are ways to build a better health plan for less money. Quit negotiating the less bad renewal or the best worst case scenario, if you're a broker out there, start finding ways to help your clients build better health plans for less money. I know it sucks sometimes that you don't get that commission raise when the rates go up, but it's time. You have to bring more value. And if you're a healthcare consumer again, that insurance card might feel warm and fuzzy inside, but it doesn't mean you're getting the best deal. And it sure is doesn't mean you're getting good access at the right facilities. So my point is this challenge, what you've known to be true for so long in healthcare, healthcare, health insurance, two totally different things. One, finances the other. But most importantly, take ownership of the decisions you're making, whether it's for your company's bottom line or for your own family's bottom line. So, Steve, thank you again.

You're welcome.

Thanks for having me on, guys. You know what happens when confidence and clarity collide? Action happens. So go make it happen today.

Hey, thank you for taking the time to listen to this Friday bullpen session. If you are enjoying these episodes, please do me a favor, go over to Apple, subscribe, give it a five star rating. And if you know of anybody in your life, whether it's in your family, personal life, your friends, business colleagues that you think would find benefit in listening to these episodes as well, do me a favor, please share the bullpen sessions with them. I'd be extremely grateful if you did and again, go out and make it happen today. Thank.

You.