ITPAs have a tremendous opportunity to innovate, and even dominate, in the middle market, just as employers are asking for more.

In my over three decades in the technology-enabled HR services industry, one thing became indisputable to me: delivering premier service to clients, their employees and their advisors is essential for success. I would go as far as to say that it is one of the few things that is not a commodity. I have partnered closely with brokers and advisors to provide great service and doing so has been a consistent, clear driver of growth for all parties.

For independent third-party administrators (ITPAs) today, I see an opportunity to apply this same approach to better serve middle-market employers, who have scarce internal resources and rarely get the same level of attention or best-in-class service as larger employers.

Further, I believe the ITPA market has reached an inflection point. While preparing to transition leadership or consider strategic alternatives for their go-forward growth plan, many ITPAs that have been operating for several decades are facing evolving market dynamics and seeing capital flood into their space. This presents a tremendous opportunity for ITPAs to innovate, and even dominate, within the middle market, just as employers are asking for more – namely, targeted healthcare plans for their employees with increased ability to control costs.

But doing so will require exceptional employee outcomes and service, a comprehensive, one-stop technology platform, and a broker-friendly experience. It’s worth reiterating – outcomes and service will be the key differentiators.

Below, I’ll outline the game-changing opportunity for ITPAs today and identify key ways to capture them.

The unmet opportunity: ITPAs serving middle-market employers

Middle-market employers are eager to shift to a self-insured model, one that reduces costs for them and their employees while creating far better health outcomes for those same employees. The issue is that middle market companies are typically ill-equipped to manage the necessary technology, service model and infrastructure internally. Their true need is for an integrated healthcare benefits offering, backed by dedicated support.

Administrative service organizations (ASOs) and larger legacy TPAs that focus mainly on enterprise clients aren’t able to provide smaller clients with the flexibility and attention they need at a competitive price point. At the same time, many smaller, regional TPAs serve the market through disparate point solutions, but don’t provide the holistic packages middle-market employers seek.

With these needs in mind, ITPAs can capture profitable opportunities by serving middle-market employers through the following three key areas:

  • Delivering high-quality service tailored to middle-market employers
  • Providing a comprehensive and fully integrated service offering and technology platform
  • Enabling broker and advisor partner success

Service is one of the few things that is not a commodity, particularly when it relates to very personal issues such as health, medical care and finances.

Don’t underestimate the value of service

As mentioned, service is one of the few things that is not a commodity, particularly when it relates to personal issues such as health, medical care and finances. It’s worth investing in a high-quality service organization that earns client trust and is responsive when they need it most.

Consider how a strong ITPA partner may help employers realize the benefits that motivated them to self-fund their health plans in the first place. In crucial moments, such as when an employee faces a health decision, an exceptional service team can offer accurate healthcare information, data-based perspectives, and relevant recommendations. This guidance may encourage employees to make full use of their healthcare options such as going to the doctor when needed, engaging with and sticking to care plans, and making prudent decisions in terms of cost and quality of care. The results may be not only lower costs but also fundamentally better healthcare outcomes.

ITPAs that can innovate through a mix of internal product development and external partnerships to create a truly integrated, one-stop platform that unites disparate offerings will set themselves apart.

Recognize the opportunity for a unified platform

Perhaps the biggest opportunity facing ITPAs is to provide middle-market employers and employees with a comprehensive and fully integrated service offering and technology platform.

Few comprehensive platforms currently exist for this segment that integrate crucial offerings such as care management and concierge services, pharmacy administration, analytics and reporting capabilities into one streamlined point of service. And this gap has meaningful consequences.

For instance, consider a recently diagnosed diabetes patient. The patient and their family may be filled with questions about how to access care, learn about the prognosis, obtain medications, manage costs, and more. Yet, navigating the overly complex and fragmented healthcare ecosystem is difficult. Benefits administrators and other employer partners face similar challenges when they seek administration, analytics, and reporting information.

ITPAs that innovate through a mix of internal product development and external partnerships to create a truly integrated, one-stop platform that unites these disparate offerings will set themselves apart. Of course, this undertaking calls for more than just capital resources. It will take veteran experience, insight into the industry landscape, and genuine expertise in serving middle-market employers’ needs.

If there’s one thing I’ve learned over the years, it’s that successful ITPAs need to be easy for brokers to work with and offer reliable, exceptional experiences for brokers’ clients.

Serve brokers and advisors as true partners

My experience at benefitexpress confirmed the value of prioritizing strategic broker and advisor partnerships. If there’s one thing I’ve learned over the years, it’s that successful ITPAs need to be easy for brokers to work with and offer reliable, exceptional experiences for brokers’ clients. Brokers want to feel confident recommending ITPAs that can drive ROI for their customers. This means that ITPAs need the tools to enable collaboration across key stakeholders and ensure outcomes that put the employer first. Their go-to ITPA partners will be the ones that provide robust portals and reporting functionality, offer an array of value-added technology and services, and not only help them grow but also retain their client base.

Here’s the bottom line.

As the industry evolves, ITPAs are in a prime position to serve the middle-market. To fully embrace this opportunity and achieve significant growth potential, ITPAs must commit to high-quality service, invest in developing a comprehensive and value-added technology and services platform, and partner with brokers and advisors in a way that drives their mutual success.