This episode features an interview with Dan Hodges, Senior Vice President of Employee Benefits at Woodruff Sawyer, where he provides strategic consultation and counseling to clients on their employee benefits programs. Dan has over 25 years of experience consulting a large cross section of employers including those in healthcare, not-for-profit, high-tech, service, and hospitality. He is also an expert in self-funding, consumerism, and HSA style plans. In this episode, Sasha and Dan discuss transitioning to self-funded health plans, choosing a TPA versus an ASO, and the future of employer benefits.
This episode features an interview with Dan Hodges, Senior Vice President of Employee Benefits at Woodruff Sawyer, where he provides strategic consultation and counseling to clients on their employee benefits programs. Dan has over 25 years of experience consulting a large cross section of employers including those in healthcare, not-for-profit, high-tech, service, and hospitality. He is also an expert in self-funding, consumerism, and HSA style plans.
In this episode, Sasha and Dan discuss transitioning to self-funded health plans, choosing a TPA versus an ASO, and the future of employer benefits.
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“You also have a lot more flexibility just on how you design your program. The different pieces that are baked into a fully insured program, how you can break those out, how you can go to specialty markets and get either better service or lower cost for that part of your program. How you can get better programs for your employees to take advantage of within a self-insured program. There's a lot of flexibility that you get, both in terms of service to the employer, service to the employee, and cost savings to the company.” – Dan Hodges
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Episode Timestamps:
*(01:22): Dan’s career background
*(06:33): Dan breaks down transitioning to self-funded health plans
*(23:25): Choosing a TPA versus ASO
*(26:00): Woodruff Sawyer’s unique offering
*(34:32): The future of employer benefits
*(36:52): Dan’s advice for people new to the industry
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Links:
Learn more about Woodruff Sawyer
Connect with Sasha on LinkedIn
Learn more about Collective Health
Sasha Yamaguchi: Let's face it, healthcare is confusing and costs are continuing to rise. Employers are looking for ways to improve the health of their people and their bottom lines. The good news? Many leading companies are leveraging self-funded health plans and innovative benefit solutions to do just that. Learn from some of the best minds in employee health.
Sasha Yamaguchi: Welcome to the Benefits Playbook, Strategies for Self-Funded Health Plans. I'm your host, Sasha Yamaguchi, Commercial Leader at Collective Health. On today's episode, we are joined by Dan Hodges. Dan is a partner and senior vice president at Woodruff Sawyer, where he provides strategic consultation and counseling to clients on their employee benefits programs.
Sasha Yamaguchi: Dan has over 25 years of experience consulting a large cross section of employers, including those in healthcare, not for profit, high tech, service, and hospitality. He is an expert in self-funding, consumerism, and HSA style plans. Thank you, Dan, so much for being with us today.
Dan Hodges: It's great to be here, Sasha.
Dan Hodges: Thanks for having me.
Sasha Yamaguchi: Great. So, of course, before we dive into self-funding, which I know we're going to talk a lot about today and clients that you work with, I would love to start a little bit with your career journey and share with everyone, uh, you've been with Woodruff Sawyer for about 18 years. Give us a little bit about your background and how you ended up at Woodruff Sawyer.
Dan Hodges: Yeah. So, it's, it's a, uh, somewhat interesting story, I think. I graduated school in the late nineties, which was During the dot com boom, so all of my friends were going out to the latest startup and trying to strike it rich. And after I graduated, I was kind of looking around for a job and my mom actually worked in the industry.
Dan Hodges: She was a benefits broker here in the Bay Area. And she said, well, why are you looking around? I have a position that at our firm, if you're interested. And I said, sure, why not? I'll try this insurance thing till I figure out what I really want to do. And here we are 25 years later. The interesting thing for me was I started there and I think I got like two paychecks or something and we got bought, we got acquired by another firm and I worked there for about a year and we got acquired again.
Dan Hodges: By Aon this time, which most people are familiar with. And I was there for a total of about five years. So it was interesting within a year and a half timeframe to work for three fairly large brokerages and see how they sort of tried to get to the same place in very different ways. You know, they, you know, tried different things.
Dan Hodges: My role was a little bit different at each, worked with different people at each of those companies. So really gave me sort of a very good. Fast track experience to the industry. And from there, I left Aon and worked at a very small boutique brokerage firm for a while. So really got sort of that feel of really, really large multinational firm, and then very small boutique firm.
Dan Hodges: And then from there moved to Woodruff Sawyer, which. has turned out to be a perfect fit and sort of that great combination of, you know, mid sized firm, great customer service, but all the tools of the large multinational firms. So it's worked out great for me.
Sasha Yamaguchi: Well, that's great. I love that story because I know a lot of us That's kind of happened into healthcare.
Sasha Yamaguchi: We don't plan on it after school or whatever it may be. And so I'd love to touch on that later. But although now I feel like people are going to school and starting in healthcare by choice, which is great. And I have three teenagers so I may have one of them end up in healthcare as well. So I love that story and how you, how you started.
Sasha Yamaguchi: So you just touched on something that I think is interesting and there's the boutique firms and the large firms and maybe later we can talk a little bit about that, but. I would think having that experience was really helpful for you to be at the big jumbo and have that experience, but also the boutique and then all of that leading you to Woodruff Sawyer.
Dan Hodges: Yeah, it really was. It gave me a really good baseline for where I wanted to be in my career and knowing sort of what I wanted to do. capabilities you really need to have as a broker, but also a lot of the red tape and other things that go along with, you know, working in a very, very large firm.
Sasha Yamaguchi: I definitely understand that.
Sasha Yamaguchi: I moved from a 90, 000 employee company to an 800 employee company. So it's been a transition. So tell us a little bit about your role at Woodruff and what type of clients are you working with?
Dan Hodges: Yeah, sure. So I'm a senior vice president and a partner in the firm. Which really means my main role is production of new business and managing a book of business.
Dan Hodges: I get involved in the leadership aspect of our benefits segment and the firm overall as a partner as well. And really my sort of specialty area work. We're broken up into sort of three different segments in the benefits practice. So we have our smaller group, we call that club 100, mainly four groups, a hundred or less.
Dan Hodges: And then we have our middle market area, which is really sorted at Maybe 100 to 200 up to 500 employees or so, and then large group, which is sort of that 500 and more. So I specialize in large group self-funded employers and really sort of grew up in that segment, both at Aon and the previous employers from Aon and also the boutique firm I worked at.
Dan Hodges: I just sort of started. And gravitated towards those larger, more complex clients. I find them super interesting and you also have a lot more flexibility. I'm sure we'll get into a lot of that later, but there's a lot more things that I feel like as a broker, as a trusted advisor to my clients, that I'm able to get done for them.
Dan Hodges: And that feels good.
Sasha Yamaguchi: Oh, that's great. I love the name Club 100 because I feel like smaller groups, that feels like they're part of a club and it's not just small group, right?
Dan Hodges: Yeah, I actually think we had an internal contest to figure out a good name for them. Yeah.
Sasha Yamaguchi: Yeah, I like it a lot. So I obviously today want to talk a lot about self-funding.
Sasha Yamaguchi: It's something that you're passionate about. It's one of the main reasons we started this podcast was to talk about self-funding and that option to employers and brokers. I would love to start with, you know, you're working with a company. What would you say those first signs are that they should start looking to move to self-funding?
Sasha Yamaguchi: And then obviously, I would love to talk a little bit about how you start consulting with them on that process.
Dan Hodges: There's a couple things that I think are really important for any particular employer to understand before we even have sort of that self-funding discussion. I think one, they need to have curious leadership that is interested in how they can manage their healthcare dollars.
Dan Hodges: I tell people a lot. It's interesting because I can almost, without knowing anything about a company, I can almost tell you with 100 percent accuracy if that company is successful or not very successful based on how they manage their benefit programs. Because a lot of companies will just sort of Hey, this is just healthcare.
Dan Hodges: It's something we have to do. And, you know, we just deal with the renewals as they come and they don't, they're not super engaged, right? They let the HR department handle it. And we go from there and other companies really do have curious leadership. They want to be involved. They want to understand what their options are.
Dan Hodges: And so I think that's, it needs to be an employer that really has that mindset. Because otherwise. There's a lot to self-funding and there's a lot of stakeholders that get involved when you have a self-funded program and they all really need to work together and understand all of the concepts and how self-funding works.
Dan Hodges: Otherwise, you're just sort of setting yourself up for a lot of Sort of Monday morning quarterbacking and second guessing on the back end, because nobody really, or not everybody understood how the process goes. So I think that's really sort of number one. And then the second piece is you really do need to understand, you know, who's involved, who the decision makers are, and get those people involved and have them understand Upfront, how self-funding works, what their role needs to be in self-funding, what they're going to be responsible for, and then what will provide them as well.
Sasha Yamaguchi: I love that. And curious leadership is something I haven't heard before a lot. So I love how you started with that. And it makes sense that they need to be curious and especially with something as big as moving to self-funded. So I think that was, I love how you put that. And so maybe go into your process a bit more of what's kind of that first conversation look like.
Sasha Yamaguchi: And then I would love to hear, to your point, you need everyone's buy in, right? So it's the HR team, but then it's also the financial team, the CFO, whoever it may be that makes these decisions. How are those conversations different for you? And do you think they each have different interests?
Dan Hodges: Yeah, so you're right.
Dan Hodges: So I think part of our process at Woodruff Sawyer is to have a strategic discussion, usually around Q2. Most employers now are on a calendar year renewal process. So Q2, we have a large strategic planning meeting with our clients. So part of that process. Planning meeting and strategic discussion is, okay, what's new in the market?
Dan Hodges: What can we be considering? And a lot of that for clients that I work with is should you be self-funded? And so that's sort of where the conversation starts. And that's typically with the HR team. And so we'll ask some questions around that, like, you know, who would be involved? You know, who would we need to talk to if we explored this idea?
Dan Hodges: Yeah. And we need to set up some meetings with those folks to really educate them on self-funding, see what they know initially, answer their questions, make sure this is really a road that we wanna go down before we start doing any right. So that typically will be someone in the finance department. And someone on the leadership team.
Dan Hodges: Sometimes those are the same people, sometimes not. So that, that's really sort of the first step is to have that conversation with HR Gage, sort of what their feeling is on, you know, how curious their leadership is. You know, is this something that they think that they'll be interested in, right? I've had clients have been fully insured and have said, you know what, Our CEO or our CFO or somebody else in the organization has had some sort of terrible experience self-funding.
Dan Hodges: They don't know what the details are, but they've been told, I'll never do that again, right? So, okay, I mean, that's typically the end of the conversation, right? Or maybe we have a follow up conversation to try and find out more. But typically, if that sort of, A move forward. Yes, let's have some discussions.
Dan Hodges: Then we'll have some initial education discussions and we have some, you know, prepared decks that we go through explaining sort of the concepts of self-funding, answer their questions and see what, you know, if there's some buy in and some, some agreement to move forward from there, and then from there, there's more steps around.
Dan Hodges: Doing a feasibility analysis, really understanding, you know, what your claims look like, what the data looks like, you know, having our actuaries do the work involved in, you know, here's what we think the outcome might look like if you decide to self fund.
Sasha Yamaguchi: And would you say in all of your history, is it more the HR team has bought in and you've had to get the finance team on board or vice versa, or have you just seen a mix out of curiosity?
Dan Hodges: Yeah, I think it's more of a mix. Um, I think HR is always, uh, a little reticent for a couple of reasons. One, they're typically not finance people, so it's a little harder for them to understanding, understand some of maybe the moving pieces and the financial aspects of how it works. And then secondly, you know, they might think that Well, this feels like a lot more work for our team, um, and we're not sure if we're ready for that.
Dan Hodges: So, from an HR perspective, there can be some hesitation there. From a finance perspective, I would say for the most part, um, they're usually interested, uh, because usually there are some savings involved, right? Um, but not always, you know, again, there has been some finance or leadership folks who have had a bad experience self-funding and there's reasons for those bad experiences.
Dan Hodges: If you don't do it right, it can go poorly, but typically those are the hesitations from both sides, but it's really a mix. Sometimes HR totally understands it and says, yeah, we think this is a great idea. And for whatever reason, leadership doesn't want to do it and vice versa.
Sasha Yamaguchi: So, I would think in those bad experiences, tell me if you agree, I think that's even why it's so important to have the right broker and the right consultant, right?
Sasha Yamaguchi: Would you say that you've come across a few where they may have had a bad experience because it wasn't It wasn't, you know, showed to them how different it could be. Obviously there could be, they got tons of claims that year that they didn't expect, but I feel like that's where your role as the advisor is so important for these employers.
Dan Hodges: Yeah, there's no question. In the circumstances where we're able to sort of dig into, hey, why was your experience poor? What happened? What do you think? Typically, it's, One of a few things, but most of the time it's that the broker didn't really have the tools or the knowledge to properly set up their self-funded plan.
Dan Hodges: And one of the big issues with self-funding is you need a broker. An employer needs a broker who can set an appropriate budget for them, right? That's the biggest issue because over the long term. An employer is always going to pay less being self-funded and fully insured. But if the broker gives them a budget and a lot of times there's lots of reasons for this, but a lot of times brokers will say, okay, yeah, we think you'll save a lot of money and here's a budget.
Dan Hodges: And they don't really have the tools to be able to set an appropriate budget. And then all of a sudden. End of the year comes, employer's way over budget, they don't understand why, broker can't quite explain it. They maybe bought aggregate stop loss, but it wasn't the same budget, so that's actually not even paying out.
Dan Hodges: So there, there are some things that an employer needs to be aware of and does have to have a broker that has that expertise and understands how to do those things to have a good experience.
Sasha Yamaguchi: I think that's super helpful, especially for anyone listening in that's an employer that's considering self-funded.
Sasha Yamaguchi: That that process is so important. So you and I are both based here in California. I think of all across the country, the West Coast is still smaller percentages of self-funded than the East Coast or the Pacific. Central. Would you say there's still opportunity to move self-funded? And then is it, I mean, we have still a lot of HMO, Kaiser, of course, in play.
Sasha Yamaguchi: Is that keeping employers from being able to move self-funded because they do have some of those programs in place?
Dan Hodges: Yeah, I, I, well, to answer your first question, I think there is a lot of opportunity. One of the things that we're focused on is really approaching employers that have three, four, five hundred employees that historically Haven't thought they were big enough to, to self fund.
Dan Hodges: And then really having sort of that process that I talked about earlier, that education process, you know, making sure that all the stakeholders are involved in that they, their questions are answered to really just do that education for employers. Um, because I think that's a lot of on the West coast, really what hasn't been done and what's been lacking over the years to really properly explain.
Dan Hodges: What self-funding is, what that risk really looks like, and how over that long term you're going to be saving money by self-funding. So, I do think there's a lot of opportunity, and we're seeing, frankly, a lot more employers now having that conversation, willing to have that discussion around, how can this work for me?
Dan Hodges: I do think that, The Kaiser piece, maybe a bit more capitation on the West Coast than the other parts of the country, you know, has been a little bit of a deterrent in the past. I don't think that's as much the case anymore. If you have a super large segment, Of your population in Kaiser, that can change the conversation a little bit, but even depending on the size of the employer, even Kaiser's been more flexible around self-funding their plans even too.
Dan Hodges: So I think a lot of that frankly is changing. And fairly recently, I would say over the past, You know, three to five years, I've seen a significant amount of interest in self-funding from employers that normally wouldn't have been in the past.
Sasha Yamaguchi: Yeah, I would agree with that. I mean, years ago, it was employers with thousands of enrolled, at least 2, 000 or plus.
Sasha Yamaguchi: And it is pretty cool to see smaller groups making the leap and looking, at least looking at it as an option. So yeah, it has changed quite a bit. And I feel like it changed pretty quickly for those size groups, right? Like. Over a period of time in healthcare, usually it takes years for things to shift, but I feel like it's really changed pretty quickly in the last couple of years.
Dan Hodges: Yeah, I do too. And you know, I think part of that is just because we've gotten to the point where the dollars involved. are getting so big. Let's go back 10 years. When you got a 6, 7, 8 percent renewal 10 years ago, the dollars were, the dollar increase, while it was still big, was so much smaller than a 6, percent increase now, 10 years later, right?
Dan Hodges: So now, You really are starting to get the attention of the finance folks, the leadership, because it's getting to be such a huge part of the budget that when, now, when you start having conversation around, hey, self-funding might save you 8 10 percent a year. Going forward, that really starts to get people's attention, just because that 8 10 percent dollar amount can easily be in the millions of dollars.
Sasha Yamaguchi: Yeah, that's a great point of how it's changed, and the numbers are much greater. So not to get into too many details, but can you share maybe with people listening that aren't sure or don't understand how you can save and where? So, when you're talking to a group, what would you say the first or the top two components are that they automatically get that savings moving to self-funded from fully insured?
Dan Hodges: So one of them that is just savings right off the top is taxes. So, when you are fully insured, You pay state tax on your entire fully insured premium. And it changes depending on what state you're in. Obviously, California is 2 point something percent, I believe. So when you self fund, you're only now paying taxes on a much smaller portion of that premium.
Dan Hodges: Your, typically your stop loss premium is the only thing you pay taxes on. So that's savings right there off the top. You've got profit margin that's built in into a fully insured premium. You've got risk margin that's built into a fully insured premium. That's all taken out. When you self fund, you get to keep your reserves.
Dan Hodges: When you say that's something that's baked into a fully insured premium that you're just giving to the insurance company in case you ever leave. So they can pay run out claims. Now you get to keep that right. And that if that's 10 to 15 percent of your budget, again, that's millions of dollars that you're now keeping in house.
Dan Hodges: That you can get some sort of rate of return on. So, and there's some other things that are involved in there that add up to that eight to ten percent, but those are the big ones.
Sasha Yamaguchi: No, and that's helpful, and I think that's where the finance team usually will perk up, right? They're paying so much for healthcare as it is, so anywhere they can save money.
Sasha Yamaguchi: And then also, again, they have flexibility with benefits as well. Maybe touch on that just for a second of, you know, there's the financial piece, but really what we see or I see groups moving to self-funding is just to have more flexibility with their overall program, with their benefits, what they offer.
Sasha Yamaguchi: I mean, would you agree that's a big part of why companies transition as well?
Dan Hodges: Yeah, absolutely. There's a couple things that go on in the marketplace. So one, depending on, again, The size of the employer, sometimes they're stuck with sort of the, we'll call them off the shelf plans that the carriers offer, right?
Dan Hodges: And sometimes you have some flexibility, but it's oftentimes relatively limited. When you sell fund, one, you're not subject to state mandates. So, you don't have to offer things that state mandates are offered in fully insured plans. So, you have that flexibility there too, but you also have a lot more flexibility just on how you design your program, how the pieces, the different pieces that all sort of are baked into a fully insured program, how you can break those out.
Dan Hodges: How you can go to specialty markets and get either better service or lower costs for that part of your program. How you can get better programs for your employees to take advantage of within a self insured program. So there's a lot of flexibility that you get both in terms of service to the employer, service to the employee, And cost savings to the company.
Sasha Yamaguchi: That's great. So, and speaking of that, you mentioned customer service. When groups move self-funding, they have, they can go to a direct carrier through their ASO model, but there are a lot of, uh, third party administrator options. So, When you look at TPA versus direct ASO, what is the main thing that your clients are asking for that help you decide which route is best for them, whether it's a TPA or maybe just direct with the carrier?
Dan Hodges: Yeah, that's a great question. For me, I think a lot of it has to do with how long they've been self-funded. And again, what that sort of education level is on how a self-funded program works, because you can make a self-funded program that's fairly simple relative to a fully insured program, right? And that would sort of argue for an, a direct carrier ASO approach, right?
Dan Hodges: And a lot of times, so if I have a client who's going to self-funding for the first time, it's their first year, it's sort of new to them. They want to get their feet wet and kind of try and understand this for the first year. A lot of times sort of that direct AOSO model works well just because it's still the same carrier that they had before.
Dan Hodges: It's all that the administration's done with them. The stop loss is done with them. All these pieces, the pharmacy is still done with them. So it kind of feels all the same to them a little bit. And with the employee experience as well. And then once we sort of get past year one, maybe year two, then we start talking about, okay, there's some additional savings here that we can get through an, a TPA model, right?
Dan Hodges: So we have a TPA through the administration, maybe cost less, maybe not, but typically you get better data. You get quicker data, they're more flexible and then you can start carving out other pieces as well like the pharmacy where there's significant savings available through a third party or the stop loss through specialty stop loss vendors.
Dan Hodges: There's typically better deals and better contracts out in the marketplace. So it's, for me, it's kind of that step by step process and it largely depends on how comfortable that employer is with the concepts of self-funding.
Sasha Yamaguchi: No, I think that's extremely helpful. And, you know, you, there's different paths and you can start with the direct.
Sasha Yamaguchi: And then when you're feeling more comfortable and want to do more creative things and start, you know, piecing things out, then you can look at those TPA models. What's great is there are a lot of options out there now. And so employers have a lot they can look at that makes sense for their plan. And every couple years, look, maybe it's the next, it's the time to switch to the next thing that makes sense.
Sasha Yamaguchi: I would love to talk a little bit, kind of going back to Woodruff Sawyer and your role there and knowing the benefits that you all offer. Is there anything that you're currently offering or you guys have as a unique offering at Woodruff that you think others should be doing in the industry?
Dan Hodges: Yeah, I mean, I think there's a lot of things that we do that we're really good at.
Dan Hodges: And that are important when an employer is considering self-funding. The first one I think is just to have a broker who can do some strategic thinking. And that sometimes maybe sounds obvious, but I think there's unfortunately a lot of brokers out there that You know, they're used to fully insured programs and that's sort of all they work with is fully insured programs and fully insured programs are relatively easy.
Dan Hodges: So it's easy to sort of do that renewal once a year and then collect the commissions on the back end and not really do work on the, maybe the relationship with the client, but not do a lot of strategic thinking. I think that's really, really important because when you talk about Different options in the marketplace or self-funded versus fully insured.
Dan Hodges: You really have to sort of go through this thought process. And some of the things I was talking about earlier, make sure that you have that curious leadership, make sure it's the right fit for that particular client, because even if the solution might be the right solution, it might not be the right fit for that client, or it might not be the right time for that solution for that particular client, right?
Dan Hodges: And that's what. I think we at Woodrow Sawyer do really well, and I think one of the things that's maybe oftentimes overlooked when you start talking about what's good in a broker and what they bring to the table. So I think that's number one. I think number two is just having a broker that's willing to do the work.
Dan Hodges: self-funding is a lot of work, and they have to have the right level of, Data analytics, the right level of evaluation, the right team members who can do some of these things that are involved there. And, just sort of separate from self-funding, there are so many different solutions in the healthcare marketplace.
Dan Hodges: And, I mean, there's new ones. Hardly a day goes by where I don't get an email or a phone call from some new vendor. It's in the marketplace that's going to solve healthcare magically, right? So, a big part of our job is knowing what's in the marketplace, vetting all of these different solutions that are in the marketplace.
Dan Hodges: And then where appropriate, bringing those to certain clients that are either interested in those types of solutions or that those types of solutions might solve a problem that particular client has. And that's not an easy task because they're, I mean, they're coming from the skylight range. So, you know, when you have to quickly pivot and quickly understand what's out there in this ever changing marketplace, that's a hard thing.
Dan Hodges: And you have to have a broker who's committed. to doing that work and understanding all of those solutions that are out there. And then the other thing is just, you know, may sound simple or may sound obvious, but just doing the right thing for the client, I think is really important. It's one of our company values.
Dan Hodges: And I think that it's something that we do really well is, you know, always do the right thing for the client, which doesn't always end up being the biggest revenue for Woodruff Sawyer, but it strengthens our long term relationship with clients because they know that they can trust us and we can be an advisor that they can lean on and know that we're coming to them with the solutions that are best for them.
Sasha Yamaguchi: I think that's extremely important that employers have that trust because you're right. There's like you're talking about, you do the right thing, but sometimes that's not always the case. And there's many reasons behind that, but that does happen. So you just made me think of something back to all of these solutions falling out of the sky.
Sasha Yamaguchi: It is true. I mean, it's. I would say five to ten new ones a day. Just a couple years ago, right, this all started, some of the newer supplemental solutions. Has any, you don't have to name them, but I am curious, has anybody stood out to you? So you've got all of these reach outs in the broker community from everybody.
Sasha Yamaguchi: What stands out to you? What does get your attention out of curiosity? Has there been a point solution, for example, that how did they get your attention? And then how did you build that into your program? Because you're saying this, and it made me realize I would love the broker side of that, How does one out of 10 companies get you looking at them?
Sasha Yamaguchi: And maybe you have a recent example that is top of mind.
Dan Hodges: Yeah, I, you know, I think, I don't think that there's any one individual that can possibly keep track of all these solutions in the marketplace. There's just too many of them. So I think it really needs to be sort of more of a, a global approach or global philosophy from that particular broker.
Dan Hodges: And so how we handle it is that we have some solutions that internal to us and some partners, frankly, that work with us, that their main job is just to vet all of these solutions in these different areas. Right? So from my perspective, I'm out there talking with employers, talking with my clients, having these strategic discussions with my clients.
Dan Hodges: And, you know, knowing the main areas that are in the marketplace with these types of what we call point solutions. It's really my job to understand Where that client is, what that client is particularly interested in, knowing what the data says behind that particular client, where some of their pain points might be, whether it's cancer claims or musculoskeletal, or, you know, maybe something in their RX program, maybe they're struggling with their specialty medications.
Dan Hodges: There's all kinds of different issues that any one particular client can have. And it's really our job. Not to necessarily say, Hey, there's this great solution out there that I think you should be looking at. It's really more, here's what your particular issues are, and there's two or three different solutions that we can bring to the table if you're interested in looking at.
Dan Hodges: how they can potentially help your program. There's everything in between from solutions that we sort of just they're too early, they're not proven, we're not even going to sort of put them in front of clients. To, okay, they've been around for a little while, they've gotten some good traction, they understand the marketplace, they do have some good sort of case studies on what they've been doing.
Dan Hodges: And those are the types of solutions that then we'll put in front of our clients and say, Hey. This might be good to solve problem X, Y, and Z that you have.
Sasha Yamaguchi: Yeah. It's pretty amazing that most places are needing extra team members just to vet because there are so many great options out there, which is good.
Sasha Yamaguchi: I think employers need these, right? I think everyone's putting them in because the need is there. It's just figuring out which ones are the best fit, which can be a lot of options.
Dan Hodges: There is. And I think, you know, one of the issues I think We have in our industry and just healthcare in general Is there's again because there's so much money involved, you know, you get firms out there or Other players out there that are just in it to get a piece of the pie, right?
Dan Hodges: So you got to really in my opinion You need to have a partner an employer needs to have a partner who's going to put solutions out there That fit them Instead of solutions that they've partnered with that maybe they get some of the money if they put it out to their clients and they try and sort of fit their client into this box because it works for the broker or for them instead of you.
Dan Hodges: Finding a solution that works for the employer, not the broker.
Sasha Yamaguchi: So along these lines, kind of wrapping up this topic, seeing what's changed in the last just couple of years around self-funding being more popular, point solutions, just other options being available, when you think about just even five years from now, what do you see changing the most around employer benefits and employee benefits?
Dan Hodges: That's a great question. Our industry changes. So much so fast that honestly, I think if I told you what was, what it was going to look like two years from now, I may be totally wrong. But I do think that there's some things within healthcare that have to change. We've got to get control over the healthcare costs in general.
Dan Hodges: We just cannot keep this environment of escalating costs year after year after year. It's just, it's unattainable. So I think that's number one. Is the industry, in general, as a whole, has got to figure out a way to get control of escalating costs. I think the prescription drug world is a big opportunity, and I do think that we'll see some significant changes there.
Dan Hodges: I think we have to see some significant changes there, whether that involves legislation of changes or something different. I do think that we need to get a handle on those escalating costs. And I do think that let's say five to 10 years from now, I think self-funding is going to be the norm. I think it's going to be the norm for clients of almost any size.
Dan Hodges: If you've got a hundred participants on your plan, I think. Five to 10 years from now, they'll be self-funded. I think it's going to be more like, you know, we treat car insurance these days, right? Everybody has a deductible and a pre sizable deductible and self funds a lot of their car insurance or, you know, those types of things.
Dan Hodges: So I think, I think that's going to become the norm. And then I think we're going to see, you know, data just continue to be more and more and more important and play a bigger and bigger part in how employees manage their programs.
Sasha Yamaguchi: Yeah, I think the data piece is so important. And for those of us on this side, providing it to you so you can talk to the employers in addition to us about what's going on with their plan and where we can make recommendations.
Sasha Yamaguchi: Yeah, I agree with you. I mean, just two years from now, we'll have to touch base this time in two years, and I'm sure that's going to be completely different. It's pretty amazing how much has changed. So, kind of, let's talk Looping back to where we started, I do think there's some young individuals joining our industry straight out of college or really their first part of their careers.
Sasha Yamaguchi: So I would love, maybe, share a little bit of advice if there's either someone moving into sales or somebody becoming a broker and starting out their career. What's some advice that you would give them in just, you know, your background of doing this for a bit.
Dan Hodges: Yeah, you know, I, I think what I tell sort of the, the younger folks at Woodruff Sawyer or people just getting into the industry, what really worked for me, and I think this is more or less universal maybe in any industry, is number one, you know, find, find a mentor, find somebody who's passionate.
Dan Hodges: been in the industry and soak up as much knowledge as you can from that person, right? And it doesn't have to be like one person that you have to find, but find people within either your firm or the industry that you respect. And touch base with them, offer to take them to lunch, pick their brain on something, ask them if there's things that you can help them with, right?
Dan Hodges: Cause that's the only way you're really going to learn this industry is to find out what's made that person successful, what that person's style is like. Oftentimes, and I've learned a lot from my career about what I'm not going to do by seeing what other people have done that either didn't work or I didn't agree with.
Dan Hodges: So I think just the more you put yourself out there, the more experience that you get from people who have sort of been there and done that. I think that there's no real replacement for that. But I think also wanting to participate in certain things, asking to do more, asking to be more involved in a particular project that's going on.
Dan Hodges: There's so much to learn in this industry. And like we've been talking about, it changes so fast. That there's always new things to learn. So I think having that curiosity is probably the number one thing that I would tell people that they're going to be successful in this industry. If they can, you know, have that curiosity and really go out and act on it.
Sasha Yamaguchi: I love that. And curiosity is clearly our theme, but one follow up to that. So, those of us that have been doing this before, remote working was an option, right? And now we have the luxury and the flexibility, which is amazing. But do you feel like there's one or two things you did when you were starting out that even with the remote option, people should be doing in the, I, I feel like our industry is such a relationship industry that sometimes are we losing a little bit of that because everyone is so remote.
Sasha Yamaguchi: I would just be curious as you're talking to young people, you know, what advice are you giving of, Things that we did before remote that are still really, really important. Is there one or two things that they should find a way to make that happen and not do it remotely?
Dan Hodges: And I think it's, your point's well taken.
Dan Hodges: I think it's a lot harder these days because you're not constantly around all of your coworkers and overhearing discussions that, you know, Oh, I'm curious about that. Can I join that discussion? Or can I? You know, help with that project. So it is harder, but I do think in certain respects, it makes it a little easier to maybe connect with people one on one as well.
Dan Hodges: So I would just encourage people to, you know, make it a point, whether it's each day or once a week. Whatever works for them to make an outreach to somebody that they know that they haven't connected with for a while and offer to take them to lunch, buy them a cup of coffee, just have a conversation and be prepared for that conversation, right?
Dan Hodges: Have some ideas in your head that you're curious about, things that you want to get involved in, right? Not just, hey, can we go have coffee and I want you to tell me everything you know. Right? There's got to be some certain questions that you have and some ideas in your mind that you can actually have a productive conversation and get something out of it.
Dan Hodges: It is a two way street, right? So, I think that most people will find, if you're asking somebody for advice, Typically that's flattering for that person, right? And they'll want to help you, right? But you've got to put that effort into it. Just doesn't come magically. So it can be a little bit harder these days without everybody in the office, but that doesn't make it impossible, right?
Dan Hodges: You just need to act on it.
Sasha Yamaguchi: I love that. And I really, really liked the point you just made that I hope. People are listening in on is going to conversation. I think that happens a lot where people are like, Oh, I'll just, I'll get a one on one with somebody and I'll learn from them. And they don't actually prep for even that one on one conversation.
Sasha Yamaguchi: And so I love that advice as simple as it is. It's really important. Go into that with two or three things that you want to get out of it. I always tell my team, we're going into meetings to share what we do, but really, this is your chance to learn. about the people we're meeting with, right? That's just as important.
Sasha Yamaguchi: So, I don't know. I really love that advice of set up that time so you can learn, but be prepared and have a few questions or just topics to hit on and not just put it on that person that you're bringing out to lunch to do all the talking.
Dan Hodges: Yeah, that's right. It's really just comes down to networking, right?
Dan Hodges: And networking just sort of maybe looks and feels a little bit different than it used to. But it's still the same thing. It's still asking, well, who else would you suggest that I talk to about, you know, this particular subject or this idea? It's just having that drive to get out there and learn from other folks.
Sasha Yamaguchi: Well, and you're not going to, you're not going to find out if you don't sometimes directly ask either, which I think is important. So well, that's great. I know everyone listening has learned a lot and I appreciate you diving into self-funding because it's just such a big topic for employers and brokers.
Sasha Yamaguchi: Please share with everybody how they can reach out to you on LinkedIn any other way.
Dan Hodges: Oh, yeah. So, obviously, I'm on LinkedIn, and you can find me on our website, too. We just redesigned our website, so a little plug for WoodruffSawyer. com. Feel free to go there. You can find my information there, as well.
Sasha Yamaguchi: Oh, that's great, Dan.
Sasha Yamaguchi: And I will go check out the new website today. Thank you so much for being with us and talking to us today.
Dan Hodges: Yeah, thanks, Sasha. Thanks for having me. I really enjoyed the discussion.
Producer: This podcast is brought to you by Collective Health. A health benefit solution that guides employees toward healthier lives and companies toward healthier bottom lines.
Producer: Check us out at CollectiveHealth.com