Private Exchanges – Technology is Not the Differentiator

I was talking to a benefits broker the other day about benefits related technology, more specifically about Private Exchange technology and health insurance Decision Support Tools, and the broker made the claim that “such and such vendor (I won’t name names) had the best decision support tools on the market. It is powerful technology, he said.” I thought this was odd and wondered how this broker drew that conclusion. He then proceeded to say that Decision Support Tools will be the big difference in the Private Exchange market.  Now that claim stopped me in my tracks and I immediately had to disagree.  

One thing I know about technology is that it is always changing. Just think of your car, your cell phone, and your TV. Has that technology changed over the last 3-5 years? For anyone to think that one vendor is going to perpetually have the best of anything is, in my world, crazy.  And a tool that can help employees decide which of three or five health plans they should choose is not powerful technology. The Space Shuttle is powerful technology. A website that takes someone through some fancy screens that has some back end logic is not. Such screens (I can’t get myself to say technology) with back-end logic is easily duplicated in months if not weeks.

Let’s look at this another way. Let’s assume you have the best technology. What percent of the market buys the best? Does McDonald’s have the best hamburgers? Does Taco Bell have the best Taco’s? Are there more people driving Ferraris or Toyota Camry’s. Do more people shop at Walmart or …..? You get it. There is often a price difference between the best and what the majority of the market can afford or are willing to buy. And for the record, I don’t know too many benefits brokers whose strategy is to sell the highest priced products.

So if you are a benefits broker and think you have found that silver bullet, that powerful technology, that is going to separate you from the pack, give me a call and I will show you a long list of companies who are going to make sure that one company does not rule the day.  And if you want to see powerful technology go out at night in a dark place and look to the sky and watch all the satellites fly by. Then I may agree you are looking at powerful technology.

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