There’s no such thing as “sales”

The word connotes getting someone to buy your stuff, solution, or expertise – but the direction is all wrong. After making many mistakes in the sales process, I’m finally beginning to learn what works and what doesn’t; here’s a few takeaways that may be helpful to you.

This doesn’t work…

Salesman offers

Don’t think of it as selling to someone, rather it is get people to buy from you. A seemingly small semantic change makes all the difference, because the focus shifts from you to them.

People buy because they want or need the service or product.  Sure, a few may buy just because they want you to go away and leave them alone, but they won’t buy again and probably won’t like what you sold them.

They buy because you have something that solves their problem, obvious or not. That problem may be they can’t achieve their objectives using current provider networks, they need to expand into other regions but don’t have the infrastructure, their addressable market is shrinking and they need to find another source of revenue.

How many times have you actually figured out exactly what the buyer’s problem is? Not their employer’s problem, but the buyer’s? Because it’s not unusual to find out what works for the buyer is different from what you think is the best solution for their employer. 

When you approach selling from the buyer’s perspective, it forces a completely different focus. Here’s what I see as keys:

  • Ask questions.  Ask more questions. Then ask even more questions.
  • Until you are ready to close the deal, Do NOT talk about what your company does for more than 15 seconds. No one cares about your history, awards, building, number of employees, or mission.
  • People buy, companies don’t. Figure out what’s important to the buyer(s), and why. Don’t get caught up in the “but this is the best solution to your problem” trap; if the buyer believed that they would be writing the check.
  • Powerpoint (and other types of) presentations are too often a crutch, take way too much time to prepare, and are rarely helpful. Avoid them until you can present a buyer-specific solution.
  • Do not present your solution UNTIL the buyer has helped you design a solution that s/he believes is the best answer.

There’s a lot more to this, but I’ll leave you with this: when the buyer is talking you should be listening really hard, and when you are talking, you should be asking questions.

Be this guy…


Monday catch-up

Lots has been happening, here are a few items that caught my attention.

WCRI’s been diving deep into hospital reimbursement. This is an issue I’ve been tracking closely – and I’d suggest you should too. I see hospital/facility costs and utilization as a major cost driver; hear from Carol Telles in a webinar Thursday January 18 at 1 eastern.

As we’ve noted here previously, work comp payers would do well to pay close attention to facility reimbursement and utilization; expect work comp, auto, and other P&C lines to become even more attractive to hospitals seeking revenues and margins.

Healthcare spending inflation actually slowed significantly last yearAn analysis by Kaiser Health News indicates trend in 2016 was 4.3 percent, higher than the overall 2.8 percent inflation rate, but a 1.5 point drop from 2015’s rate.  Notably, drug cost inflation was just above 1 percent (although that’s a lot higher than the double-digit drop we’ve seen in workers’ comp).

Key point – this slowdown in the rate of growth occurred after ACA implementation.  Not surprising that costs went up; we insured millions more people, most of which had pent-up demand for services they couldn’t get or couldn’t afford.

While costs continue to grow, life expectancy declines. We have the most expensive healthcare in the world – by far – yet our life expectancy has dropped two years in a row. As a result, we rank 26th out of 37 developed countries for life expectancy.

Here’s why – we’re paying hundreds of billions for low-value care…

An excellent piece on how to make analytics actually work from Harvard Business Review.  Key points:

  • attach an ROI to the analytics unit itself
  • hire experts from OUTSIDE your industry…

Enjoy your week.

The greatest health “system” in the world

Is responsible for a two-year decline in life expectancy.

Make no mistake, the profit motive embedded in the US healthcare system is directly responsible for an unprecedented drop in life expectancy; opioid manufacturers’ and distributors’ focus on profits coupled with lax governmental oversight led to the opioid disaster.

So, 42,000 of your kids, neighbors, friends, relatives, co-workers died from opioids last year.

But fear not, the addiction treatment industry is riding to the rescue.  Funded by your insurance premiums and tax dollars, a plethora of “treatment” centers are popping up.  While some are excellent, many are nothing more than “treatment mills”, operations set up to suck as many dollars as possible from patients, taxpayers and insurers. Once the dollars run out, the patients are kicked to the curb.

Here’s one example…

The schemes are many, with treatment mills paying body brokers to recruit addicts, false addresses to ensure insurance coverage, fake credentials for “clinicians” and huge bills for non-existent services.

The next time some uninformed individual starts babbling about the exceptionalism of the American healthcare “system”, stick this under his/her nose – we’re exceptional at creating addicts, killing people, lowering life expectancy, crushing souls, while making huge profits for investors legitimate and not.

What’s the solution? 

We pay more for healthcare than anyone else in the world, dollars that are diverted from education, job creation, infrastructure. Many of these dollars are well spent, but the opioid treadmill is just one example of waste and fraud.

A good start would be to much more aggressively prosecute the opioid shills and their buddies in the “treatment” business.  Long and hard jail time for the executives and investors would help prevent the next disaster, but the $209 million in lobbying dollars spent last year by the pharma and device industry makes that unlikely at best.

You get the government you deserve, and you deserve to get it good and hard. HL Mencken.



We haven’t seen anything yet.

Healthcare is changing really quickly and quite dramatically. Stuff we never would have thought of is happening every day.

  • A huge PBM is buying one of the largest health insurers in the world.
  • Provider consolidation is rapidly accelerating.
  • Many insurers are vertically integrating; they own thousands of providers, care-delivery locations, and are racing to build even more infrastructure.
  • Private insurers are pushing hard and fast into the Medicaid and Medicare markets.
  • Pharma is making gazillions in profits and driving medical costs higher: many employers are beginning to rebel.
  • The world is finally taking opioids seriously, while many fraudulent and sleazy people and companies are looking to profit from the crisis.
  • Medicare and Medicaid are facing major changes; the Trump Tax Bill is just the beginning of efforts to cut benefits and reimbursement.

The healthcare infrastructure of 2021 will look a lot different than it does today.

A couple things to think about.

  1.  While scale is critically important, the bigger the organization, the harder it is to anticipate and adapt to change. Huge health insurers and healthcare delivery systems must force their people to take risks and innovate – but most of these institutions are led by executives with little tolerance for failure. 
  2. The fee-for-service system is deeply entrenched in our entire industry. Provider practice patterns, sales rep incentive programs, provider marketing strategies, employer healthplan purchasing priorities, hospital financial systems, billing and reimbursement infrastructure, insurer business models all are fundamentally based on fee-for-service. Improving outcomes and reducing costs cannot happen without disrupting the very roots of our healthcare “system”.
  3. Our healthcare system is vastly inefficient – and that is precisely why tens of millions of Americans live off that system. Disrupting that system will cost hundreds of thousands of jobs.

What does this mean for you?

The winners will be those that understand where things are going.

There are two basic strategic options: those with a long-term view must become part of the disruption or short-termers will have to carve out a niche that’s sustainable over the near term.

This is the third option, which most will inadvertently pursue.  Business-as-usual folks will wake up one morning and find out they’re toast.

What we missed while we were in Vegas

The world didn’t stop while we were meeting, learning, and socializing in Las Vegas at NWCDC. Here’s what happened…

Sedgwick is getting bigger – again. The acquisition of Cunningham Lindsey makes Sedgwick the largest TPA in the land, with about 20,000 employees handling various aspects of claims and related functions.

Pharmacy and related topics

California’s work comp formulary goes into effect in 3 weeks.  Make sure you’re ready by hearing from those who know it best – the folks at CWCI. Their webinar is available here (free to CWCI members, $50 for non-members)

An excellent primer on handling opioid treatment issues – specifically effective ways to end opioid treatment – comes from Coventry’s Nikki Wilson, PharmD via WorkCompWire.  It’s simple, clear, and concise.

Sticking with drugs, Adam Fein reminds us “In 2016, U.S. net spending on outpatient prescription drugs was $328.6 billion, up only 1.3% from the 2015 figure.” [emphasis added] In contrast, CompPharma’s latest Survey of Prescription Drug Management in Workers’ Comp shows a drop of 11 percent year over year. 


Employment is going to change – a lot – over the next decade. A thought-provoking report by McKinsey includes this prediction:

One result – “the share of the workforce that may need to learn new skills and find work in new occupations is much higher: up to one-third of the 2030 workforce in the United States” – with major implications for worker retraining, potential claiming behavior, and re-employment. 

A reminder about the unseen consequences of the gig economy: airport revenues are dropping as passengers increasingly use ride-sharing services instead of paying for parking, renting cars or using cabs. I’ve reduced my use of rental cars; even if Lyft is occasionally more expensive, the hassle reduction factor plus the ability to work in the car to and from the airport are compelling.

A total of $5.8 billion was collected by airports from cab companies, parking, and rental car fees, more than they get from hotels, shops and restaurants combined.

Auto mechanic employment is also going to change – as more people switch to electric cars, there’s going to be a LOT fewer problems for mechanics to fix and even regular maintenance is limited to tires and wiper blades.  We have an electric BMW i3; it has needed zero maintenance other than tires.

Takeaway – the downstream effects of the “gig economy” are far reaching indeed.


Uncomfortable truths at NWCDC

Frank Pennachio is one of those people every industry really needs. He’s blunt, outspoken, deeply insightful and completely unafraid to challenge established practices.

Especially when those practices need to be challenged. Thursday at NWCDC, Frank and Denise Algire discussed the ways employers pay for managed care services, and how those are often disconnected entirely from the quality of the care delivered to patients.

Frank’s key question is this; do managed care programs improve care or create revenue for intermediaries?

My take is both. I’d also echo Frank’s view that employers and brokers are just as culpable, if not more so, than claims payers and managed care companies. Employers’ desire for simplistic fee arrangements and unwillingness or inability to dive deeper into fee arrangements force (or allow, depending on your perspective) TPAs to seek revenues elsewhere.

Transparency is what’s missing; contracts between and among TPAs and employers don’t allow employers to see the financial relationships between the TPA and managed care companies and providers and understand the motivations and incentives inherent in those relationships.


Fee arrangements are the key to the puzzle. TPAs charge employers a flat per claim fee or a loss conversion factor (losses x X.XX%) to cover the cost of handling claims, and that’s pretty much the only thing the employer looks at or cares about.  Thus, allocated loss adjustment expenses are rarely addressed. What employers should be paying attention to are undisclosed side agreements and Allocated Loss Adjustment Expense bucket, where those fees end up charged to the file.

Frank showed a report from an employer that identified bill review fees of over $500,000 for some 4600 bills.  Of course, this was based on a fee structure using a percentage of savings below billed charges – an arrangement that like vampires just won’t die.  Frank noted that many bill review companies are quite willing to charge a flat per-bill fee that includes networks, medical management, and other “savings”. (I have a somewhat different perspective and believe the price per bill should be considerably higher, but fundamentally agree with Frank)Part of me is stunned that we are still talking about this. This has been a subject of conversation many times over many years, and yet, here we are. And here we’ll stay until and unless employers demand something different – and


Albertson’s is one of the few large employers challenging this paradigm. Denise shared Albertsons’ network contracting strategy, and of particular interest were the outcomes measures they use. Albertson’s is quite willing to pay for better outcomes, and is diligent in tying outcomes to providers.


So what can you do?

  1. Require full disclosure of all fees and side arrangements among and between your TPA and other parties.
  2. Require reporting of all funds transfers
  3. Realize you are going to have to pay higher per claim fees and/or higher unallocated loss adjustment expenses.
  4. Require documentation and reporting on quality measures for all medical care including networks.
  5. Be willing to pay more for better outcomes.




The GOP bill “hits a snag”

This is a non-healthcare post.

The GOP tax bill is a mess, riddled with math errors, contradictory language, and un-implementable directives.

One  is a huge and possibly un-fixable problem for the GOP – unfixable without ignoring requirements to keep the deficit-increasing impact of the bill within strict limits..

Late Monday night, the news that drafters made a $289 billion mistake hit the wires, infuriating the very corporate bigwigs the bill was supposed to reward.

Without getting too far into the weeds, a last-minute addition to the bill in the Senate added the Corporate Minimum Tax back to the bill, which effectively killed a bunch of other incredibly popular tax breaks – like the Research and Development credit. That will raise costs by perhaps $289 billion.

Here’s what one totally pissed off Republican CEO said:

Robert Murray,C.E.O. of Murray Energy Corp., angrily estimated that his company’s tax bill would increase by $60 million. “What the Senate did, in their befuddled mess, is drove me out of business and then bragged about the fact that they got some tax reform passed,” Mr. Murray said in an interview. “This is not job creation. This is not stimulating income. This is driving a whole sector of our community into nonexistence.”

But both the House and Senate have passed the bill, you say, so they’ll figure it out in the Conference Committee.

Not so fast.

To “fix this”, conferees will have to find the same amount of revenue from other sources. So, other taxes are going to go up – a lot. Or the AMT for companies will have to disappear. And given the very tight timeline to get this done, and the intransigence of the “freedom caucus”, and the furor over many other provisions, the longer this thing is in the public’s eye, the less chance it has of becoming law.

And the less damage it does to health insurance companies, Medicare recipients, doctors and hospitals.

Which is a very good thing.

Folks, this stuff is complicated. We live in a very, very complex world, and there are NO simple solutions to the really knotty problems we have. It’s time to take a set aside the sound bites and get to governing.

Vegas day one

Got in yesterday, and the whirlwind started. Initial takes…

Thanks to the wonderful folks at myMatrixx for carting me and pretty much everyone else from the airport to our hotels.

The Mitchell last night event was very well attended; it was going strong well into the night.

Telemedicine is the next big thing – there are at least a half-dozen companies focusing on this, with many more touting their adoption of pieces and parts of telemedicine. Like anything else, there’s going to be a shakeout – more on this next week.
But make no mistake, unlike many flashes-in-the-work-comp-services pan, telemedicine (or whatever term you use) is going to be a big, big deal.

The CVS acquisition of Aetna will have zero effect on Coventry. Or maybe even less. The new company’s revenues are almost a quarter-trillion dollars; Coventry work comp’s annual take is less than a quarter of one percent of that.

A couple folks aren’t here this year. Bill Block is one. Bill passed away this year; universally liked, Bill was just a good guy, a relationship guy who knew everyone and had a good word for all. He’d been in the business for decades, working for several different companies, bringing his smile and good cheer wherever he went. Bill will be missed.

Funally, confession time. I have a horrible memory for names and faces. And most other important things. Please accept my heartfelt apologies!

Prepping for Vegas

Here’s a few pointers for those in or heading to the NWCDC confab in Vegas.

1.  Realize you can’t be everywhere and do everything. Prioritize.

2.  Leave time for last-minute meetings and the inevitable chance meetings with old friends and colleagues.

3.  Unless you have a photographic memory, use your smartphone to take voice notes from each meeting – right after you’re done.  Otherwise they’ll all run together and you’ll never remember what you committed to.

4.  Get the NWCDC app for your Droid or iPhone – there’s a web-based version too for tablets.  It has the schedule, exhibit hall layout, local map, and a bunch of other handy information and tools.

5.  Introduce yourself to a dozen people you’ve never met.  This business is all about relationships and networking, and no better place to do that than this conference.

6.  Wear comfortable shoes, get your exercise in, and be professional and polished.  It’s a long three days, and you’re always ‘on’.

Finally, I’ll echo one of Sandy Blunt’s points – in these day of YouTube, phone cameras, Twitter and Google+, what you do is public knowledge.  That slick dance move or intense conversation with a private equity exec just might re-appear – to your dismay.