Entrepreneur The Business of Healthcare

An Important Lesson From the Insurance Industry


Over the course of the past decade or so, carriers have ratcheted down payment and have begun a concerted shift away from compensating independent professionals to employing them directly at greatly reduced levels.

If you read the prior paragraph quickly, you might think that I was addressing compensation paid to physicians, but you’d be wrong. I was focusing on how insurance companies pay their most valuable business generating individuals, their own agents.

On the other hand, you’d still be right, because this is the same basic plan that is playing itself out in respect of the payment of healthcare providers, whether by insurance carriers which are adopting ACO-type reimbursement schemes, or by hospitals, which flipped with jujitsu like skill the business strength of physicians, seen a decade or two ago as the ultimate gatekeepers into the healthcare system, herding doctors into hospital employment at lower and lower compensation.

The future is bleak for independent insurance agents, who have to contend with salaried cubicle workers and online applications.

Unless physicians begin pushing back and begin seeking alternative structures for their practices, the future won’t be that different for you.

Leave a Reply