NEW MODEL, SAME PRINCIPLES
Bob Gearhart Sr. and Bob Gearhart Jr. are the successors to a longstanding insurance consulting business. Gearhart Sr.’s mother, Connie Gearhart, founded the company in 1991 to help people who were falling through the cracks between employer retirement insurance plans and Medicare.
“There was no Medigap insurance then,” Gearhart Sr. says. “It spoke volumes about how screwed up the claims system was at the time that you had to have an intermediary help you know how to file a claim, first with a company retirement health plan, and then with Medicare. So we started out as health care claims consultants.”
The Gearharts’ company, DCW, is today emphasizing consulting over a traditional insurance brokerage model. With a focus on developing a fee-for-performance approach, they say the firm represents a step forward for the industry.
“Last June, we stopped quoting,” Gearhart Sr. says. “We will not quote any group, regardless of size or circumstance. People will not change for a slightly better version of what they already have. What we do is manage the health care supply chain—as well or better than anybody, I believe.” “We’re not insurance professionals, we’re business consultants.” Gearhart Jr. adds. “This organization started in the first place by responding to a demand, listening to a client and providing value where they needed it.”
Disruption within the industry in recent years has been a good thing, notes Gearhart Sr., and he credits his son for thinking outside the box and helping the company thrive in a post-ACA world. “In 2006, everybody seemed to be relying on similar tactics and strategies with rates and benefits,” Gearhart Sr. says. “Everybody was doing the same things, including me. I was thankful for the changes that came with the ACA—this was an industry ripe for change.”
Walking away from business
The Gearharts have created a firm that emphasizes transparency and full-fee disclosure. They believe so strongly in their approach that they have turned down business from clients who prefer a more traditional system. “The outline of the small and midsize model is, ‘Let us quote for free, and you’ll make your decision based on who gives away the most stuff,’” Gearhart Jr. says. “The model in the jumbo arena is similar, but slightly different: ‘We have a chief medical officer, we’ll bring in a team of five people, four of whom you’ll never see again…’
“I get a lot of pushback from other advisors, but from our perspective, if what we’re telling you will actually work, why shouldn’t we tie our fee to results?”
On the other hand, Gearhart Jr. adds, “I have yet to get pushback from an employer who is self-funded.”
Communication and engagement
Much of the fee-for-service movement is associated with technology, specifically data analytics, but the Gearharts say technology is just one part of the new model. “We deploy technology at a very high rate,” says Gearhart Sr., “On the account management side, we need to free people up to communicate, and technology enables us to do that.” Gearhart Jr. notes that while data can help employers identify cost drivers, companies have to work closely with consultants to monitor and understand the data. “In order for us to be effective at managing the health supply chain, we need to double the amount of employee engagement and communication of your typical advisor,” he says.
Back to basics
Gearhart Jr. says that even though the firm that he and his father lead has evolved over the years, it still comes down to responding to the market. “That’s what we do: we listen to the clients, we watch the market, and we continue to deliver value,” he says. “Clients will pay you more for results than carriers will pay you to distribute a product. It’s a business model issue, and it’s one that has always been in the background of our story.”