Humana First Look?

[MedicareWAA]

I have worked telephonically for over 30 years and yet, somehow I have managed to develop relationships with my clients. Actually, it is quite easy for me.

The hardest part was learning to listen for buying signs vs visual cues.

Jeff Root's organization is 100% telesales and they are quite successful. Several other "big hitters" do the same.

Wonder how they make it work without pounding the pavement?

Not sure. Good for them.

But so far, no one has figured out how to profitably sell MAPD at scale - for example, 75,000+ MA sales per year nationwide. And that’s even with the benefit of the highest possible overrides and obscene soft dollars. Far more than the field.

Selling on the phone gives you a relative advantage on efficiency and a relative disadvantage on retention and referrals.

 

[somarco]

no one has figured out how to profitably sell MAPD at scale

Data to back that up?

You may be at a disadvantage for retention and referrals but that is not my problem. Closing ratio and retention is in the high 90's. And I get plenty of referrals, sometimes too many at one time.

Are you jealous?

Don is an expert at throwing out "data" without any backup, and very few buy into his "inside information". Don't go down that road.

 

[rmhaire]

I have worked telephonically for over 30 years and yet, somehow I have managed to develop relationships with my clients. Actually, it is quite easy for me.

I've been virtual for 20 years now.

Could have started sooner but I decided to wait until Al Gore invented the internet.

 

[sman]

Selling on the phone gives you a relative advantage on efficiency and a relative disadvantage on retention and referrals.

I'm not sure why people think you can't have good retention and referrals when selling over the phone. I've been doing it that way almost exclusively for nearly 20 years. I buy no leads and do zero marketing. 100% referral. And my retention rate, once you remove death and clients moving to a state in which I'm not licensed, is probably 98%+. I rarely lose a client to another agent.

 

[somarco]

@sman, you give good phone . . .

 

[rmhaire]

@sman, you give good phone . . .

But does he have any goats?

 

[sman]

@sman, you give good phone . . .

That's what she said

 

[Sam]

There are several scaled MA telesales agencies that are cashflow and EBITDA positive, although most of them aren't. The ones that are profitable are either very tightly run or have some durable advantage of leadflow through provider, affinity or other...

The biggest problem with scaling these businesses is that there is always pressure to grow and the last agent you hire and the last marketing dollar you spend are always very underwater.

I do think that some of the new tech available to generate training calls with AI rather than expensive marketing will shorten the ramp time and increase marketing efficiency when bringing on new classes, which will help.

But at the end of the day, there was just too much capital chasing the same opportunities which created an inefficient market for lead costs and agent costs and until more of that shakes out of the system, the profitable companies will be few and far between once they hit any kind of real scale.

 

[somarco]

But does he have any goats?

I never asked but he may have sheep . . .

 

[somarco]

too much capital chasing the same opportunities which created an inefficient market for lead costs and agent costs and until more of that shakes out of the system, the profitable companies will be few and far between once they hit any kind of real scale.

Excellent analysis and spot on based on my limited knowledge of agencies and FMO's that heavily promote MAPD products.

If/when overrides are squeezed there will probably be shakeout which will leave a bigger pot (of prospects) for those who remain.

This is how it has been in many industries for years, including the insurance market. I saw this first hand in the mid 90's when the medical stop loss business hit critical mass and then collapsed to only a handful of players. This took place over a 2 or 3 year time frame that saw roughly 80% of MGU's leave the market.

The collapse was fairly quick and expected once loss ratio's started to increase and reinsurance for those MGU's evaporated.