Edition 5 Linch Pin - Magazine : simplebooklet.com

E D I T O REmilyNote From TheAs we hit the midpoint of the year, now’s the time to stoke your fire—not just to keep warm,but to build a blaze that carries you through the rest of the year. In this edition, we’re focusedon growing with intention and scaling with resilience. True resilience isn’t built in comfort andtakes a conscious decision to take action. We don’t have to know exactly how everything will work out, we just need to take the nextright step. It’s a choice to stay relentlessly solution focused. Rather than getting stuck on whatwe can’t do, we focus on how can we do one small thing or what is the one small thing we cando. The last two years have been a study of chosen resiliency for many, it’s hard to run a business,do life, and have a family. Use this time to prepare for the end of year push, build up yourreserves of cut wood so to speak, so that you have plenty for the winter fires. Lastly, I’d like to share my gratitude for everyone who’s helped make this publication possible.Pouring into others is a passion of mine and I love finding so many other leaders who arewilling to do the same. Midyear SparkP.S. The best fires are shared. Share with someone who needs this spark.

Page 4

Page 5

Grow yourpeople.Scaling a business requires more thanoperational efficiency or a strong product. At thecore of sustainable growth is an evolving strategyfor attracting, retaining and developing the rightpeople. Here are some practical ways to alignyour talent needs with the needs of your growingbusiness.Grow yourbusiness.Make sure that you are focused onwhat skills you actually need. If thepeople you need to grow yourbusiness require a certain set ofskills, certifications or education,make sure that this is accuratelyreflected in your job descriptions tokeep it top of mind while goingthrough the selection anddevelopment process.01Job Descriptions:Look for candidates who have agenuine interest in serving people.Whether it is working withcustomers or teammates or leadinga team, people who are serviceminded are oftentimes moreengaged. Engaging personalities canbe contagious, having a beneficialripple effect on other employees andyour customers! 02Service Orientation: By: Laura Frederickson MBA, PHR, SHRM-CP, AI HI

Page 6

0504When speaking with applicants, it can be helpfulto find out not only what job they are currentlyqualified for but what they may have potential todo in the future. Use behavioral and situationalquestions to determine adaptability, curiosity andhow they handle challenges. If you have identifiedcareer paths in your organization, share them!While it’s important to be careful not to promisefuture promotions, it can be very exciting forapplicants if you can demonstrate a vestedinterest in employee development and promotionfrom within. 03Present and Future:Transparency is key if you are using AI tools inyour hiring practices, inform candidates howthese tools are used and how decisions are made.Transparency in hiring practices builds trust fromthe start and reinforces your organizationalcommitment to working with integrity.AI in Hiring:Share your commitment to career growth,training and development, culture, benefits andcompetitive wages. This should not be a salespitch for external applicants, but rather ameaningful communication shared regularly onceemployees are hired as well. When you candemonstrate the level of investment placed inyour most valuable asset, your people, it not onlyhelps to attract top talent, but keep them happyand engaged for years to come!Employee Value Proposition (EVP): Laura Frederickson is a strategic HRleader who knows that culture ismore than a buzzword. It’s thefoundation for attracting the rightpeople and keeping them engaged.With over two decades ofexperience, she has helpedorganizations create environmentswhere talent thrives and businessperformance follows.As CHRO at Village Health Clubs &Spas, Laura has led culture-focusedinitiatives, redesigned total rewards,and introduced hiring practices thatimprove both the candidateexperience and employee retention.She combines technology,psychology, and practical leadershipto drive meaningful results.Laura believes the best workplacesare built on purpose, trust, andthoughtful execution. Her workhelps companies hire smarter,retain longer, and build teams thatcare about where they work.Laura Frederickson MBA, PHR, SHRM-CP, AI HIGrowth starts with people. Hiring intentionally andinvesting in those who align with your vision, mission andvalues will position your business to successfully scale withpurpose and resilience.

Page 7

Page 8

BEYOND THE BOOM"The Great ArizonaStagnation"– Scott AdamsIf you’re leading a business in Arizona right now, you have every reason to be proud. Ourstate’s economic engine is humming, growth has been robust, and you’ve skillfully navigatedthe turbulent post-pandemic years to build a successful enterprise. From construction tomanufacturing, technology to services, Arizona has been the place to be. But as we look ahead, a critical question emerges: Is the strategy that fueled your growthyesterday the right one for tomorrow?As an industry analyst, my focus is on identifying the unseen trends that will shape the future.And my analysis points to a gathering storm that most Arizona business owners, busymanaging today's success, do not yet see. It isn’t a recession, but rather a fundamental anddangerous shift in our state’s competitive landscape.I call it “The Great Arizona Stagnation.”This is a quiet threat. It's a comingperiod where your top-line revenuegrowth will no longer easily translateinto real, transferable enterprise value.It’s a frustrating plateau where you’llfind yourself working harder fordiminishing returns, caught betweenbeing too big to be nimble and too smallto compete with the goliaths definingArizona’s new economy.THE HIDDEN THREAT THAT WILL DEFINE ARIZONA'S NEXT BUSINESS CHAPTERBy: Scott AdamsThis stagnation will be driven by threepowerful, converging currents:continued...

Page 9

BEYOND THE BOOMFor years, we’ve talked about a "labor shortage."What’s coming is different. The massive, celebratedinvestments from global giants in semiconductors,data centers, and advanced manufacturing arecreating a black hole for resources. They are notjust competing with you for front-line workers; theyare creating unprecedented demand for the exactsame high-skilled technicians, engineers, projectmanagers, and leaders that your business dependson.The Unseen Impact: Suddenly, you're not justcompeting with your local peer for talent; you're ina bidding war with global corporations who canoffer packages you can't sustainably match. Thiscollision extends to water and power, whereescalating demand and sustainability pressures willinevitably drive up your operational costs. The coreresources you need to run and grow your businessare about to become dramatically more expensiveand harder to secure.The Resource Collisioncontinued...The era of "growth covers all sins" is rapidly comingto a close. In a booming market, it’s easy tooverlook operational friction—clunky processes, areliance on a few key people (maybe even yourself),and a lack of scalable systems. A strong top line canmask a multitude of weaknesses.The Unseen Impact: As Arizona's growth ratenaturally moderates, these hidden inefficiencieswill be brutally exposed. The margin squeeze willbe severe. The very things that were minorannoyances during the boom will become fatalflaws that prevent you from adapting. While yourmore streamlined competitors pull ahead, you’llrisk getting stuck, unable to fund the innovationsneeded to break the cycle.The Inefficiency Exposurecontinued...

Page 10

The capital looking at Arizona—whether it's private equity, astrategic buyer, or even the next generation of your ownfamily—is more sophisticated than ever. They’ve seen thismovie play out in other high-growth markets, and their duediligence process has evolved into a “SophisticationGauntlet.”The Unseen Impact: When you decide to sell, raise capital, ortransition your business, the questions will go far beyondyour P&L statement. Buyers will demand hard data on yourtalent retention, your operational scalability, and your planfor environmental stewardship. Without a compelling, data-backed story for how your business can thrive in theresource-constrained, hyper-competitive future, you will facea painful valuation gap. The business you poured your lifeinto will be seen as a "fixer-upper" with hidden risks, and theoffers will reflect that.The Sophistication GauntletBEYOND THE BOOMcontinued...How do you navigate a challenge you’re just now beginningto see?It starts with acknowledging that the strategies of the boomyears are insufficient for the chapter ahead. It requires aproactive shift from a purely revenue-focused approach toone that is obsessed with building durable, transferablevalue.The next era for Arizona business will not be defined by theboom itself, but by how leaders prepare for what comesafter. The question is, will you be reacting to these shifts, orwill you be ready to capitalize on them?From Awareness to ActionInterested in exploring these topics further with peers and experts? We arebuilding an exclusive roundtable series focused on strategic transformationfor mid-market businesses. Connect with me directly on LinkedIn to learnhow you can be included in this emerging group. We'd love to have you.At JetStream Advisors, we partner with business owners to see around thecorner and prepare for what's next, using our proprietary JetStreamWay®framework—a system designed to build resilient, high-value companies.JetStreamWay.comScott Adams

Page 11

Page 12

If you’re the one responsible for the employee benefits in your company, then you likelyalready know these concepts. It’s possible that no one has ever talked to you about them likeI’m about to today... using LEGOS. I’m going to break down three foundational conceptsabout health insurance every business owner needs to know. On Benefits:Linch PinThree ConceptsFoundational Knowledge On Health InsuranceThe goal is to help equip you to make the bestdecisions possible when it comes to youremployee benefits. As the fiduciary for yourbusiness it’s imperative that you are able toknow these concepts and implement them inyour benefits. They will help make sure thehealth insurance “vehicle” you’ve chosen, andthe strategic roadmap you’re using, is going toget you where you want to go. Before we geton the road, so to speak...By: Emily EvansLet’s talk, really quickly I promise, about your responsibility as a business owner aroundemployee benefits. As the plan sponsor, you’re a named fiduciary: every renewal you mustrun a documented market check (quotes, networks, fee disclosures) and choose the optionthat best serves participants, or prove why an existing plan remains prudent. Fail to shopcompeting carriers or hide commission/margin data and ERISA considers you negligent.Keep it simple: grab at least two bids every 12–18 months, jot a one-pager comparingcost/benefit/networks, file the 408(b)(2) fee disclosure PDF in a “Health Plan Binder,” andhand members their SBC. Renew, compare, document—rinse and repeat. Ok, let’s get on tothe three foundational concepts.

Page 13

Concept #1: The Game They PlaySince 2010, the Affordable Care Act hasn’tslowed the BUCA’s—Blue Cross, United,Cigna, Aetna—one bit. Instead, they havefigured out how to turn the law’s controls intoa profit expansion pack. Carrier CFOsstopped asking this question years ago “Howdo we lower costs for members?”; instead,they ask “How do we hit a 25-30% grossmargin without ever appearing to exceed theMedical Loss Ratio (MLR)?” Their answer: pileevery dollar above medical claims intorebranded categories called “qualityinitiatives,” “clinical data optimization,” or“administrative excellence expenses,”categories the ACA lets them code as “healthcare related spend” even though it neverreaches a consumer.At the same time, BUCAs arm-lock hospitalsinto 4× (or more) Medicare sticker pricecontracts, then promptly lease those inflatednetworks back to employers at “greatdiscounts” nobody can audit. Transparency?Not here.Next let’s talk about prescription benefits...Prescription benefits? A company called aPBM (Pharmacy Benefits Manager) getswedged between drug maker andpharmacies. The idea is that they help getbulk pricing for those they are contractedwith, kinda like how Costco gets theirmembers discounts with their buying power. What has actually happened is some of thePBM’s, and now hospitals too, are controlledby the BUCA’s.They are calling it vertical integration. Now,rather than the rebates, or other similarmoneys, going back to the health plan tohelp reduce costs they’re being re-classifiedas member triple-dips: rebate paymentsfrom pharma (marked as “cost savings”),claw-backs from pharmacies (hidden incontracts), and mail-order kickbacks(counted as administrative). Each one landsin the margin column, not the MLR calculatorand so the required loss ratio targets get hit. Last in Concept #1 let’s talk about thepeople that are often thought of as being onyour side. Brokers. Brokers get paid multiple ways from“representing you”, and a law was recentlypassed requiring them to disclose how theyget paid. Transparency right? Still NO. It’s notjust commissions based on what they sell, it’sother incentives too. Things like “volumeoverrides”, “product promotions”, and“marketing support” to name a few. Theseprograms to pay brokers are deemed alegitimate part of fiduciaries’ duties toshareholders, not plan participants (you andyour employees).Think of it like this: The carriers win the gameevery year by “paying more in claims” due toincreased costs from hospitals, and verticallyintegrating to “save money”. Market share isprotected by multi-year exclusivityagreements, and a mountain of paperworkthat masks true costs that get passed alongto the people footing the bills. Again, that’syou and your employees.Linch PinOn Benefits:Three ConceptsFoundational Knowledge On Health Insurance

Page 14

Linch Pin“If you don’t realize you’reactually the only fiduciaryon the hook for employees,you keep playing—andfunding—a game riggedagainst you and your teamfrom the start.”If a plan sponsor (you) doesn’t realize they’reactually the only fiduciary on the hook foremployees, they keep playing—and funding—a game rigged against them from the start.If you already knew all of this, awesome!You’re likely ahead of the curve from wheremost people I meet come into theconversation. If you’re a little like me, the pastfew paragraphs pissed you off... an not a littlebit. Learning this over the past few years iswhy I keep going. The more I learn, the more Ihave a burning desire to figure out how to dothings in a way that will actually put every daypeople first. Ready for concept #2? Concept #2: The Building BlocksWhen we look at health insurance, we all seethe big logo. It’s recognizable, and mostpeople see it as comforting because it’s whatthey are familiar with. They think they knowhow it works, they know it’s not perfect, butit’s “the devil you know”. Here’s where LEGOS come into play... What if, just like a LEGOS build... you couldtake all the pieces apart and build somethingelse entirely? It’s likely something that many people havenever thought of. Insurance is just insurance,that’s all that there is right? Thankfully theanswer is a resounding NOPE. Health insurance is just like a LEGOS build, itcan be taken apart and rebuilt to your ownspecs. It definitely helps to have someonewho has built what you’re wanting before, andextra helps for them to have directions tofollow so you’re not left holding a bag of extraparts with your employees looking at you likeWTF. The point is, it’s possible... and moreimportantly it’s the only way to get thetransparency you must have to be able tocontrol future costs. Now, if you’re ok with how things have alwaysgone... where costs go up anywhere from 8-25% every year. It’s not really sustainable butit’s the “easy button” and doesn’t take mucheffort. If that’s you, you can stop reading here.On Benefits:Three ConceptsFoundational Knowledge On Health Insurance

Page 15

Linch PinOh... you’re still here? Awesome! Let’s get intothe different bricks that make up the build ofthe “BUCA health insurance”. Here’s a list witha brief description of each: Primary Doctor Network: Regular office,urgent-care clinic, or telehealth. They getpaid on a fee model based on thecontract agreed upon. They may alsocollect additional fees directly from thepatient (aka people like you and me)called copays, and coinsurance.Hospital & Surgical Centers: Theseconsist of Inpatient beds + ASC /ambulatory surgery centers. They get paidon a fee model based on the contractagreed upon, like a per diem for each daysomeone is in the hospital, and may alsocollect a “facility fee”. Diagnostic/Imaging: These are standalone locations that can do MRI, CT scan,X-ray, and ultrasound. Fee-for-servicemodel per scan or bundled with clinicvisit. They can have a huge price spread(same MRI: $350 vs $2,200) betweenvendors.Diagnostic/Imaging: These are standalone locations that can do MRI, CT scan,X-ray, and ultrasound. Fee-for-servicemodel per scan or bundled with clinicvisit. They can have a huge price spread(same MRI: $350 vs $2,200) betweenvendors.Laboratory & Pathology: These are thingslike Quest-Lab, LabCorp drive-thru draw,in-suite hospital lab etc. Primarily fee forservice model, but can also be contractedrates. Pharmacy: These are usually familiar topeople as CVS or Walgreens on the retailchain side, and can include specialtypharmacy, mail-order bundle. They getpaid based on the contract tiered feemodel typically, and can have PBM hiddenrebates. Tiered rating system means abrand-name drug can be $300/month, vs.the generic at Costco being $35/month.There’s more... a lot more, but I’ll stop herefor brevity. In my monthly workshop I have agreat visual for this. I use a huge LEGOSstorage brick to hold a whole bunch of otherpieces. Think of the storage brick like BlueCross, or carrier of your choice. All thesepieces are inside the big storage brick, andwhen a BUCA plan is chosen it’s the easiestway to have everything together. Easiestbecause all the pieces are contained in onespace, people recognize it and think theyunderstand it, and it doesn’t take a lot ofwork. More or less. Just like all complexthings, when we hit the easy button, it’sexpensive... and you’ve given up control overthe entire thing. This is the most familiar“vehicle” when it comes to health insurance.On Benefits:Three ConceptsFoundational Knowledge On Health Insurance

Page 16

Linch PinIf all three “vehicles” arecovered by the sameinsurance at the end of theday, why is one consideredmore risky than the others?Any claims over what was expected getscovered by stop-loss just like the other twovehicles, and you have a bit more control, aswell as transparency. Before I get into whythat’s important I’ll describe the third vehicle,“self insured”. With this type of plan theemployer is the one responsible for payingthe claims, don’t freak out... there is still thestop-loss coverage in place here too. Here’s where control, transparency, and riskmanagement come into play. Have you everhad a year where no one has really needed touse the plan, and yet when renewal rollsaround the rates increase anyways? Why does the increase happen? Foremployers with less than 50 employees it’s allbased on the same sized employers in yourarea and the factors of playing the gamewe’ve already covered. For employers withmore than 50 and less than 99 it similar, butwith a discount applied for lack of a betterterm, where the carriers do look at claims butwon’t share the data. For employers 100+that’s pretty much the only size that carrierswill listen to negotiations around how much inclaims were paid vs. not. They have morebuying power, and because of the number ofpeople they are given a small bit oftransparency into the claims paid or not. They are one of three vehicles that get’s builtusing the building blocks we’ve discussed sofar, and like any good business they have saidthat when the risk gets too great, they wantsomeone else to take it on. To protectthemselves, they use a type of insurancecalled stop-loss. This type of coverage is whatkicks in when the claims they thought wouldneed to be paid, and what actually happensvary drastically. It’s a better way for them tomanage the risk vs. carrying it all themselves. This type of vehicle is called “fully insured”,premiums always remain the same, untilrenewal, regardless of claims, and any unusedclaims dollars, or pharma rebates, stay withthe carrier. If this is the “easy button”, with theleast control, what else is there? The next vehicle that can be built is called“level funded”. These type of vehicles are ahybrid between fully insured and self fundedplans. The premium stays level, just like a fullyinsured plan, but depending on who you workwith you may have the benefit of unusedclaims dollars being returned to you. On Benefits:Three ConceptsFoundational Knowledge On Health Insurance

Page 17

Linch PinOn Benefits:Three ConceptsFoundational Knowledge On Health InsuranceThe next concept is where control,transparency, and risk management comeinto play. If you keep trying to play the samegame the BUCA’s are, you will continue tolose. (And nobody likes losing.)Concept #3: Change The GameWhat do I mean “change the game”? If it’s allthe same building blocks, what differencedoes it make? Is it even possible? The answer is a RESOUNDING YES... it ispossible. It matters who controls the buildingblocks, and what their end goals are. If thecontrol of the building blocks is based onprofits to shareholders, and not performanceof the plan, there will never be alignment ofgoals. There simply cannot be a goal of a bestin class performing health plan when profitsare ultimately what matters. The two goals willfight each other.This is where control, transparency, and riskmanagement come into play. It’s not until youhave control that you can get transparency,and not until you have transparency are youable to manage risk effectively and efficiently.Here’s the really cool part, when done wellthe outcome for you is savings. The out comefor your employees is also savings, but evenmore importantly a better quality of care. (Wecan talk one on one if you have questions onthat last part. Or stay tuned as I’ll be writingabout it later.)So HOW? I’m sure that’s the burning questionin your mind right? Here’s what you can do to get on the pathof “changing the game”. The steps aresimple, but not easy, and I invite you toinspect closely the philosophy of yourbroker/benefits consultant to make sure italigns with how you want your benefits towork and outcomes you desire. First, develop a long term strategy. With myclients we call this a roadmap, and just likewhen going on a long trip we start with theend in mind. If you don’t know where you’regoing, you’ll never get there. Next, your team will likely need somehandholding, and a whole lot of education,along the way. Think of these like snacks forthe trip, feeding them info little bits at a timeso they will eventually become smartshoppers of care. This will help you, andthem, save money over time. Lastly, find ways to help your team stayhealthy to begin with. It may seem obvious,but when people are healthy, they don’t usethe health insurance. A simple concept thatI have yet to find elsewhere as part of astrategic plan to reduce costs. This is not an easy path, I hope you have the right peopleto support you along the way. Cheers toyour journey. About The AuthorEmily is the Founder/CEO ofWellth Journey, a creativethinker & benefits consultant.Specializing in helping leadersinvest in their people, health,and wealth. To work with hergo to wellthjourney.com

Edition 5 Linch Pin - Magazine

Page 1

Page 2

Page 3