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Life Health > Health Insurance > Health Insurance

The Catch: Guardian Scans the Crystal Ball

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Guardian Life Insurance Company of America is not into sugar coating.

Guardian, New York, has published its predictions for small businesses for 2012 — and it’s predicting that small business owners will have less access to capital than they do today.

Meanwhile, “election-year campaign rhetoric will create an atmosphere of tension and negativity,” Guardian says.

Guardian’s advice for small business owners trying to get through all of this is, “Be optimistic.”

Uh, OK.


Paul Keckley points out that the current wave of federal health insurance reform is similar in some ways to the changes that rocked U.S. domestic airlines in 1978.

Keckley, executive director of the Deloitte Center for Health Solutions, Washington, recalls that the Carter administration reformed the airline industry that year by regulating less, rather than more.

Keckley notes that 8 of the 12 major U.S. airline companies that were operating in 1978 are no longer independent carriers today, and that airlines that did not exist in 1978 now fly about 18% of the miles flown by U.S. airlines.

Although some new airlines have flourished, “the top five today fly 79% of the total miles flown versus 64% in 1978,” Keckley says. “Consolidation seems a natural response in a competitive market wherein innovation in quality, service, and price-value are critical success factors.”

The U.S. health care and health insurance businesses are fragmented, and consolidation seems to be one way to increase efficiency, Keckley says.

Flying is more annoying in some ways than it was before 1978, but airlines continue to be very safe, and technology has improved some aspects of flying — such as efforts to make sure ticketed passengers get to the right destination, Keckley says.

Health care is different in some ways, but there, too, Keckley says he expects to get positive outcocmes, in most cases, without incident.

“In each, there is huge room for improvements to align price and value and, no doubt, continued consolidation as both industries adjust to their ‘new normal,’” Keckley says.

My own take on Keckley’s take: I agree that people in the health care and health insurance industries should be spending a lot of time thinking about travel agents.

My own father is a travel agent who was hit smack dab on the head by deregulation.

One year, he had a thriving business, and he had Sir Freddie Laker, the head of an early discount airline, out to North Kansas City, Mo., for a big promotional event. A few years later, Laker’s Laker Airways was bankrupt, and my father’s travel agency was shrinking. Then the Internet came along and changed everything all over again.

While the Carter administration was considering deregulation, my father wrote a comment letter to the federal regulators that looks much like the comment letters health insurance agents and brokers are now sending in connection with federal implementation of the Patient Protection and Affordable Care Act of 2010 (PPACA).

Lessons I’ve learned from watching my father’s travel agency that might be relevant to agents facing PPACA:

  • If you have any kind of existing business when the change comes, change is heck.
  • Nothing really takes the place of knowing people and understanding how the world really works. Services based on in-depth knowledge and a strong ability to close do a lot better than simple services based on order-taking. My father doesn’t even book his own airplane tickets any more, but he still books complicated trips for large groups.
  • Cutting out good middlemen can save money but will leave consumers in the lurch when problems crop up. Sure, it’s easy to buy an airplane ticket on the Web, but just try to ask the Web to saveyour bacon and re-book you if the airline that issued the ticket goes on strike.
  • The Internet is way more boring than an interesting middle man. The Internet is always awake, and it’s pretty efficient, but it doesn’t have a large collection of antique (and fake antique) travel posters on its walls, it doesn’t drink chocolate Cokes, and it doesn’t practice its 3 words of every foreign language on Earth out on anyone who seems likely to understand the 3 words.


Kaiser Health News says a major player in one of the first big hospital quality reporting programs is dropping out of the program.

The California Health Association started participating in the California Hospital Compare program in 2004 but now says the hospitals are dropping out of the program because they feel as if they are now filling out too many hospital quality program surveys.


Hub International Ltd., Chicago, has acquired Bay Benefits, Mobile, Ala. – a benefits brokerage firm — for a price that has not been disclosed. The firm’s operations will become part of the Hub International Gulf South operation, and the Bay Benefits employees will move into offices Hub already has in Mobile.

Hub was founded in 2001.

Hub also has acquired VBS L.L.C., Colchester, Vt., a voluntary benefits sales and enrollment firm, and named Barbara Sexton to be its voluntary benefits practice leader. Hub is not disclosing that deal price, either.

VBS was founded in 2005.

A mutual insurer delivers a sobering forecast, remember the revolution of 1978 and more.


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