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12/17/2010
Letter from Brady Cass
To Asuris Producer Partners,
I wanted to reach out to you all as a producer community to further address the Individual and small-group commission changes that we announced last week. While I wish I could address each of your concerns in a more personalized manner, I wanted to at least provide this response to your collective feedback.
First off, I want to thank those of you who have taken the time to write or speak with me. I've appreciated the opportunities to engage in a full dialogue on the challenges facing our industry and our traditional business models. Thank you for that partnership. And I certainly understand the emotion that accompanies any financial impact to your business. Please know that we haven't taken lightly any of our decisions regarding our total expense reductions.
As you're all aware, we're embarking on a new era, and the simple fact is that health insurance costs too much. This is a top priority for us, and we continually strive to do our part to help contain the total cost for our members. And while we've made great strides in reducing our expenses (steps that include our platform consolidation to eliminate redundant system costs, staffing reductions, salary reductions for management, and salary freezes for line staff in the recent couple years), total health care system costs continue to rise. Earlier this year we realized that additional steps were needed to help contain costs for our members. We identified that agent/producer commissions represent a large part of our operating expense, and decided to address those expenses in order to align our total cost structure with the appropriate cost of serving each business segment.
As a general rule, the spirited discussions I have had with many of you have resulted in concurrence on the points above. I also appreciate that, while you understand the need and saw these changes coming, this financial impact will require many of you to engage your clients in candid discussions about the valuable services that you offer and the compensation you receive for those services. Aside from prompting the financial challenge, you highlighted that Asuris has also created a time challenge. You explained to me that in the midst of this busiest season, you simply don't have enough time to engage all of your clients in that important discussion and reach alternative, direct compensation arrangements with those customers. Therefore, we've decided to delay the implementation of our group commission schedule change by two months. The changes will begin with new and renewing business effective April 1, 2011. Our Individual product commission change will proceed as originally communicated, effective Feb. 1, 2011.
I know that you would certainly prefer a change in the schedules themselves. But, as I shared in the letter from last week, we can't sustain viable products for these important segments of our community by looking through a single lens. We must maintain a broad perspective and explore every component of total cost on behalf of our members. I hope that this delay in the implementation of the change will enable you to modify your approach to your markets and customers and develop a sustainable business model for your service offerings. The new environment has had and will continue to have substantial impact on how we all conduct business across all market segments into the future. I hope that as we transform our business model and you transform yours, together we will continue to deliver value to our mutual customers.
Thank you again for your partnership and your willingness to collaborate on our shared challenges: to rein in health care costs for our local communities. I'm happy to discuss these changes or others that affect our business moving forward. Please don't hesitate to contact me.
Sincerely,
Brady Cass
President
Asuris Northwest Health
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