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It wasn't long after Rick McKinley got his start as a benefits broker that he encountered one of his biggest frustrations in the business: data overload.
"You know, when you're dealing with a self-funded client, you just get this mound of paper with all this claims data in there," recalls McKinley. "You can draw some obvious conclusions out of it, as far as where problem areas are, but you can't get specific enough on a group to figure out how you should address those problems."
In time, McKinley's frustration led him to become one of the earliest adopters of software that analyzes health claims data in depth - a data miner.
McKinley heads the benefits practice, which he started in 1994, at the Lipscomb & Pitts agency in Memphis. Founded in 1954, it's the largest privately-owned independent agency in the mid-South.
A new sales philosophy
McKinley's initial interest in data analytics was sparked by an epiphany about changes in the insurance industry. "What was happening in the market at that time was that the number of insurance carriers was shrinking - we were going from a large number of carriers down to a very small handful," he recalls. "So, therefore, it didn't make sense for clients to go out and hire five different brokers and say, 'Go out and shop the market and bring me back the best deal' - we were stepping all over each other because the market was so finite."
McKinley saw the need for a shift in philosophy - to be able to talk to clients and say, "The best solution for you is to select a broker that can provide you with the services that you need, and will best serve those needs, and then let that broker represent you and negotiate on your behalf," he says.
"So we started talking to clients on that basis, making a philosophical shift to: 'You need to think about what you're getting for what you're paying for, from your broker,'" McKinley says. "It changed the dynamics of the conversation. You got away from vendor shopping and you got into a consultative shopping where they're looking at you as a true partner, just like they would look at a lawyer or an accountant. They...