At Benaissance, we take documentation very seriously.  We believe in running a mature, process driven business where we can expect predictable results each and every time.  Our experience has proven these strategies translate directly into profits and efficiency.  “If it isn’t written down, it never happened” has become a motto to live by.

To get a perspective on the just some of the various documents we maintain:

1.            Accounting Procedures & Policies

2.            COBRApoint, SPMpoint and HBEpoint User Manuals

3.            Customer Support Policies and Procedures

4.            Data Security Manual

5.            Disaster Recovery / Business Continuity / Disaster Mitigation Manual

6.            Employee Handbook

7.            Employee Training & Management Policies and Procedures

8.            HIPAA Security Manual

9.            HIPAA Self-Assessment Risk Analysis Manual

10.          Human Resources Policies and Procedures

11.          IT Policies and Procedures

12.          New Customer / Deconversion Procedure Manual

13.          PaymentServices Customer Manual

14.          PaymentServices Internal Policies & Procedures

15.          Safety Policies and Procedures

16.          SSAE 16 Master Controls Document

17.          IT Incident Response Manuals

Each manual is owned by a department and assigned to a manager within that department.  Every time we make a policy or procedure change; it is immediately documented and distributed to key stakeholders.  Each document is versioned and obsolete manuals are archived for future reference.

Having well documented policies and procedures empower the company to better align resources, detect deficient procedures and hold staff members accountable to the standards set by the company. 

If your documentation is lacking, I strongly encourage you to make this a 2011-2012 priority.  I know it is never fun to program in Word, but it is worth the effort. 

This is one of those questions investors and board members love to ask.  Having an answer will help your business. 

Be careful, however, in how you answer.  If you answer with a lot of strategies, this will show the investor or board member that your company is lacking focus.  No business has the resources to pursue more than two or three new projects at once.  If you do not have a strategy, then the investor or board member may conclude you’ve lost your entrepreneurial drive.  They may conclude that the competition is ready to blow past you like a teenager texting on the interstate.

The COBRA and non-COBRA administration service sector is experiencing an unprecedented period of transformational change.  It’s the Serengeti Plains out there and ‘change’ always kills the slow companies and fattens the progressive and aggressive companies. Are you thinking about that "next step" in your business?

Recently, I had an interesting conversation with a friend of mine who runs the corporate development department of a large, publicly traded software company.  We were talking about how to best monetize one’s existing client base with new services.  It occurred to me our customers (who are national benefit administrators and health plans) have a terrific opportunity to locate and capture new revenue sources within their existing client base.  If you spend a little time thinking about your own company, you will see the resources you have available can be easily leveraged to offer complimentary services that are not specifically COBRA compliance administration.

My friend and I both agreed the hardest thing to rapidly create is the awesome power that comes with the infrastructure built over many years of running a successful business.  Consider what you’ve created in your own business:

•    You have significant ‘skin in the game’ and know what it takes to deliver shareholder value
•    You have a management team who is highly trained, motivated and knowledgeable
•    You have a productive team who values working for your company, who care about your clients and buys into your mission
•    You have a ‘can-do’ company culture that is both entrepreneurial and  aggressive
•    You have a proven brand, reputation and documentable references on the quality of work performed
•    You have an office with all the tools needed to execute your daily operations
•    You have a productive HR department who can recruit, hire, train, coach, promote and reward talented staff
•    You have a cost effective and efficient operation that delivers on the trust your clients place in you each day
•    You have well tested and mature processes and procedures for your daily operations
•    You have a productive distribution channel
•    You know and understand the markets you are attacking

Every business engaged in COBRA compliance administration needs to be thinking about how to leverage this powerful infrastructure in order to position the company to capture new opportunities.  Senior management’s business plans, strategies and budgets should have a significant focus on pivoting resources to take advantage of these new opportunities.  

If you buy into the notion that your existing resources can be aligned to pursue new service revenue opportunities, then taking this into your organization is the next step.  To begin the process, take a look at your core competencies and ask yourself what other services, markets, industries or partners can benefit from what you do best.  Second, ask your distribution channel, customers, partners and peers where they see as the greatest market opportunity for your company.  Third, look closely at the largest competitors to see where they are repositioning their resources and marketing messages.  Fourth, engage your entire team in looking for new opportunities.  Fifth, ask yourself if you have the right people in the right jobs with the right tools to capitalize on the changing market.  Going through this process will reveal those opportunities that best match-up with your company’s core competencies.

Our customers often ask us where we see the next big thing for Benaissance.  We are very excited about the direct bill administration service sector.  In fact many of our current customers are building teams within their organizations to handle individual billing for health plans and becoming substantial non-COBRA administrators.  Non-COBRA administration can be pre- and post-65 retiree, FMLA, Leave of Absence, worksite benefits and any other billing service performed.  In fact, one customer is using our technologies to perform tithing billing for a large church organization.

Customers of Benaissance have access to our powerful enterprise class SaaS system designed to empower the organization to attack new markets and service opportunities.  However, all the tools in the world will not build the house unless and until you develop a plan, pick up the hammer and start driving nails.  Build your plan, assemble the resources and start building the next generation of your business.  It will be fun and rewarding.

Disaster recovery is one of those buzzwords that gets a great deal of lip service in the business world, but not necessarily a great deal of forethought.  The unfortunate reality is that this concept is often taken for granted until it is already too late.  Allow me to illustrate with an example:

Jay Barnes is an executive in his company.  On an ordinary Wednesday afternoon, the distinct burning odor of an electrical fire starts to fill the office.  Previous in the day, workers were seen in the building with heavy machinery doing a construction job for the office below.  Sensing the construction crew is responsible, Jay scrambles to locate the phone number for his building manager to inquire with them.

Within a matter of minutes, the burning odor has become almost unbearable and a faint smoky haze has started to fill the office.  Jay is still clumsily sifting through his phone list for that building contact.  He has rarely had need to call the number so it is not readily available.  Meanwhile, staff members begin to approach Jay asking if they should evacuate.  Suddenly, the phone rings for Jay's 3:00 conference call.  And to top it off, the building's fire alarm suddenly sounds.

In the span of a few minutes, Jay has become overwhelmed.  A business-critical disaster is upon him and he's stuck at step one.  Jay has 10 minutes of decisions that he's trying to fit into a window not quite big enough.  If he had planned ahead, he wouldn't be scrambling around panicked in the midst of a crisis.  Let's see how this story would have differed with some proper planning:

Jay Barnes is an executive in his company.  On an ordinary Wednesday afternoon, the distinct burning odor of an electrical fire starts to fill the office.  Sensing a potential disaster scenario unfolding, Jay goes straight to his emergency contact list and calls building management to inquire if they have knowledge of the situation.

After the call, Jay orders his Operations Manager to gather the staff and leave via a pre-arranged evacuation route.  The company phones are redirected to an auto response message should any customers call in during the crisis.  Jay insures the office is now vacant before joining his staff at the evacuation point.

Disaster scenarios often require precise, calculated decision-making.  Take 10 minutes today to make sure you have a plan in place.  When a crisis comes your way, you'll be 10 minutes ahead of the curve.  And that's an eternity when seconds count.  

In the early years of my first company, I noticed a line forming outside my office door.  It was not a line of customers, but employees.  Each and every employee had a question that they needed me to provide an answer.  My day merely consisted of dispensing answers.  “Pay that bill”. “Fire that employee”.  “Buy that copier”.  “Call him, don’t email.”  All day, I would give hundreds of answers to questions my employees should have been answering themselves.  The madness had to stop.

I remember driving into the office one Monday morning and promising to myself that henceforth I would only give one answer, “I don’t know, what do you think we should do?”  This change in my management style had a big impact on my staff.

Employees no longer could abdicate their responsibility to me.  Before the change my employees reasoned that if my answer was incorrect they were off the hook.  I quickly was able to determine who on my staff were rock stars and who were clock punchers.  The rock stars on staff took ownership of their specific lines of business and had a serious increase in their sense of ownership.  The clock punchers simply left my employment…which was a good thing.

Drive decision making down into your company.  If you think this a dangerous course of action, perhaps you should look at who you have hired, how you have trained them and how you reward them. Also, you will personally get more accomplished by not having to babysit your staff. 

After graduating from university, my first professional gig was as a group and pension representative for a large national insurance carrier.  My Manager (we’ll call him Tom) was a kind, honest and hard working man who was a ‘lifer’ with the carrier.  Tom had one flaw in his management style and it was not until I started a new job as a group representative at another carrier that Tom’s flaw finally revealed itself to me.

Tom never wanted to hear bad news.  He would actually physically recoil when I told him negative information.  Just like Pavlov’s dog, I started to adjust my communication style and only reported positive news.  Over time, Tom’s perception of his office’s performance was skewed, employees lost confidence in their leader and morale suffered. 

My second Manager (we’ll call him Bruce) never wanted to hear good news.  Bruce would tell me that he could do nothing about the good news.  I remember he told me one never learns anything from success, but only from failure.  He would often quote Malcolm Forbes “Failure is success if we learn from it”.

Bruce’s office was built on trust, teamwork and a dedication toward excellence.  Our office performance was usually ranked in the top three of all offices and it was a joy to come to work.  In all my subsequent companies I have tried very hard to force my colleagues and employees to tell me only bad news.  This approach has always created such a powerful and positive corporate culture.  Look in the mirror and ask yourself if you are Bruce or Tom. 

We are often asked by our customers how we priced for COBRA and Direct Billing administration services at our former company.  Many administrators are not satisfied with their current pricing models and are looking for a better strategy.  This post contains our analysis of current pricing methodologies and offers several innovative alternatives.

The two traditional pricing models employed by COBRA and Direct Bill administrators have been either ‘Per Employee per Month’ (PEPM) or ‘Per Occurrence’ (PO).  Both of these models have their advantages and disadvantages. 

PEPM
We loved this pricing model at our former company because:

1. Easy for us to communicate to the prospective client.
2. Easy for our HR contact to understand, budget, and explain to upper management.
3. Allowed us to make sound revenue forecasts and budgets.
4. Easy for us to increase our pricing year over year to existing clients.
5. Easy for our Accounts Receivable department to manage.
6. We invoiced our services for the upcoming month.
7. Could impose early termination penalties based upon projected annual revenues.

The problems with the PEPM pricing models are:

1. Subjects the administrator to ‘inventory shrinkage’ risk.  There is not an efficient and accurate way for an administrator to verify that the employer is not subtracting employees of the billing statement each month.
2. As qualifying events occur, the expense increases to the administrator while the billing population shrinks.
3. Adds additional billing reconciliation burdens on the AR staff when a carrier bill does come in with an invoice.
4. Does not sync up work performed with revenue from the client.  PEPM causes an inverse (revenue to work) relationship with the client.
5. Empowers the prospective client to price-shop for administrators who offer the lowest PEPM fee.  This commoditization of pricing distracts the sales process away from the true value an administrator can deliver.

Per Occurrence
About 15% of our overall revenue came from a PO pricing model.  We liked this pricing model because:

1. The amount of work performed for the client was directly linked to revenue.
2. We could easily and accurately calculate monthly billing invoices -- eliminates the ‘inventory shrinkage’ risk.
3. Allowed us to calculate a ‘per letter processing’ cost and then add sufficient margin to ensure each letter processed was a profitable activity.
4. Processing events are emotionally more fun since the administrator is making money.  PEPM events cost the administrator money.

The problems with PO pricing models are:

1. Is more difficult to communicate to a prospective client.
2. Is more difficult for HR to understand, budget, and communicate to upper management.
3. Penalizes the company for a surge in qualifying event activity which can become a powerful sales tool for administrators who sell a PEPM model and are competing for the same piece of business.
4. Is hard for the administrator to make revenue and budget forecasts.
5. Billing occurs in arrears which expose the administrator to performing services for which they may never be paid.  Also, the expense associated with AR aging is introduced.

With the massive changes to COBRA looming on the horizon, it may be time to explore new ways to price for COBRA and Direct Billing services. Consider:

1. An administrator’s ‘same store sales’ are exploding.  With the contraction in the labor markets, more events from existing clients will come to administrator for processing.  Good news for PO administrators, bad news for PEPM administrators.  Invert this for perspective from your clients.
2. COBRA continuation periods will increase for a large number of qualified beneficiaries.
3. More qualified beneficiaries will elect to continue benefits under COBRA.
4. New letters and reporting requirements will increase the per client transaction costs

Alternative #1 - Bill based upon enrolled COBRA participants
Given the pending increases to COBRA elections and continuation periods, this pricing model empowers the administrator to match the work performed with the revenue earned. 

Alternative #2 - Bill based upon premiums processed
It looks likely a new type of qualified beneficiary is coming.  Assistance Eligible Individuals (AEI) will elect and pay a highly subsidized premium each month.  Since administrators will no longer receive 100% of the applicable premium each month, they may be able to have clients to pay for COBRA services by sacrificing a flat number of basis points off premiums each month, for example the administrator retains 2% admin fee + 30 basis points for all monies collected.

Alternative #3 - Bill based upon a mix of PEPM and PO
By creating a hybrid pricing model that balances the advantages of both while minimizing the disadvantages may surface as an attractive alternative for employers and administrators.

In conclusion, regardless which pricing model is adopted, administrators must always strive to ‘document the value’ of their services.  I always said to my sales team we only lost sales for one of two reasons a) we don’t provide the service requested; or b) we failed to document our value to the prospect.  Also, the downward pricing pressures for administration services will continue.  This will force every administrator to be hyper-efficient to make every single client relationship as profitable as possible.

Everything is a situation.  These four words have given me courage and focus whenever I have been presented with a serious problem or situation.  Saying the words “everything is a situation” is not meant to diminish the significance of the problem, but rather is designed to free your emotions and mind to focus on solutions to the issue at hand.   

More than a few years ago, I had a good friend who clued me into this mental trick.  She said to me that whether she was getting audited, missing a connecting flight, getting sued, or facing a tough decision; she simply distilled the problem down to just another situation in need of resolution. 

Before I adopted the mantra “everything is a situation”, I would easily become overwhelmed by serious problems.  Carrying the weight of a problem home usually ended up costing me ‘marriage capital’ with the family, robbing me of sleep, and making me a royal pain the Aspen as an employer.  By saying “everything is a situation” I am now free to place the problem in its proper context and do what I do best…solve problems. Next time you experience a big problem or challenge, try telling yourself and your colleagues, “Hey, it is just a situation that needs resolution”.  You will find, as I have, this is an empowering management device not only for yourself, but also your employees and family.

Hello, 

This is my first post at Benaissance Blog Management Matters.  I’ll be the first person to admit I am not Peter F. Drucker or Jack Welch (two people I respect immensely) nor would I ever place myself anywhere near these amazing individuals in terms of their accomplishments and intellect.  Within Management Matters, I have an opportunity to  share some experiences in building and running businesses.  These postings simply document lessons I have learned over the years that have yielded positive results and have made my professional career rewarding.  I hope you will find something of interest in these blog posts.

Chapter 1 - On Giving Advice

“Elves seldom give unguarded advice, for advice is a dangerous gift, even from the wise to the wise, and all courses may run ill. But what would you? You have not told me all concerning yourself; and how then shall I choose better than you?”  -- J.R.R. Tolkien

When I first read this quote, I was struck by its truth.  In all my interactions with people, I am constantly reminded in the dangers of giving and receiving advice.   

In the past when I was solicited for advice, I first felt honored.  It can be a sincere complement when a person trusts you enough to solicit your opinion on a matter.   I found myself getting personally invested in the advice I was giving.  This lead me to go to extremes in ‘selling’ my advice to the individual in the hopes that they would follow through with my suggestions.  Later on, I would often feel slighted if the individual did not follow my advice as given.  In some cases I would end up quietly blaming the person if my advice faltered in some way.  All of these emotions are unhealthy and a waste of energy. 

I have found the better course instead of advice-giving is to encourage the sharing of personal experiences.  That way the advice-seeker can learn from the advice-giver's experiences (which usually stems from a failure) and then craft a solution tailored to the unique situation.   

I now avoid advice giving with my children.  I want to raise strong, creative and independent thinkers who are at their core are problem solvers.  (Lord knows we have more than a few problems to solve in this world.)  I reason that I can help raise these types of thinkers if I offer my experiences and allow them to come to their own conclusions.  My children are blossoming under this approach as they learn sound decision-making.