Why I Have Spent 18 Years on Benchmarking, and Why Healthcare Is Next

Fewer than 15 percent of people stay with the same employer for more than 20 years. Fewer than 35 percent stay in the same occupation. I have spent 18 years building benchmarking services for retirement plans, and I am not done. The question worth answering is why.

It is not that benchmarking is glamorous work. It is that the problem it solves is real, the harm from ignoring it is concrete, and the solution, which is independent, rigorous, and grounded in what the law requires, genuinely changes outcomes for employers and the people who work for them.

The tool that did not exist

When I co-founded Fiduciary Decisions in 2008, the retirement plan industry had a structural problem. Employers were paying fees they had no independent way to evaluate. Providers disclosed what they chose to disclose. Employers accepted what they were given. The fiduciary obligation to determine whether fees were reasonable was written into ERISA, but no practical tool existed to meet it. We built that tool.

Over 18 years, Fiduciary Decisions became the industry's leading independent benchmarking service for retirement plans. Our reports were used as evidence in litigation. In at least four cases, federal judges cited our methodology in written decisions. That means our approach held up under adversarial conditions, with opposing experts challenging every assumption. That is the credential that matters in this work.

The same approach, a new industry

Now I am applying that approach to health insurance, and this time I am not building alone.
Joshua Jeffries has founded, funded, and operated multiple healthcare businesses. He understands how health insurance actually works, and where the incentives to keep it opaque are strongest. Babu Sivadasan has taken two companies public and spent his career turning complex data into decisions people can act on. HealthPlanIQ is exactly that: complex industry data made usable for the employers who need it most.

A benchmarking expert, a healthcare insider, and an entrepreneurial technologist. The three things this problem has always required, finally in the same room. The method transfers. The market data does not. Everything else does.

Health insurance has not had its moment yet

One regulation changed retirement. Section 408(b)(2) of ERISA required service providers to disclose their compensation to employers, in writing, in advance, with enough detail that a fiduciary could judge whether it was reasonable. When it took effect in 2012, record-keeping fees dropped, revenue sharing became visible and in many cases disappeared, and litigation exposed the plans that had paid too much without documentation. The industry resisted the change, then adapted, then got better.

Health insurance has not had its 408(b)(2) moment yet. The Consolidated Appropriations Act is beginning to create one. The question for employers is whether you wait for litigation to force the issue, or begin now, while the next step is still manageable.

This is where it started. Over the coming weeks I will lay out what we built, why it matters for healthcare, and what you can do about it.

Part of the Countdown to Change series.