EP 80 – Steve Watson: The CFO’s Guide To Fixing The Healthcare Budget

Hey, hey! Welcome back to The Bullpen Sessions! Before we get started, I’ve got to say that today’s episode is not like any other. I had the pleasure of interviewing this really special guest and I was constantly taking down notes during our conversation. 

My guest today is the incredible Steve Watson. Steve comes from the health insurance industry. Now you may be wondering — Andy, I thought you were only interviewing athletes? Well, yes, I usually do and this is definitely not our podcast’s usual cup of tea. But with the election just taking place a month ago and the current health crisis still rolling, I thought that it was best and appropriate to have somebody enlighten us on this issue. As soon as I learned about Steve, I immediately wanted him here to share his expertise to all.

In this interview, we’ll take a look at his inspirational story, beginning with that budget-breaking million dollar claim that launched Steve’s journey of helping others. It was when he was on the top of his career as a CFO/CHRO, that he faced a dilemma that made him doubt himself and his capabilities. 

However, after finding a solution, Steve made it his mission to serve others by sharing what he knows. You will be amazed not just by his intelligence but also by his belief in the importance of accountability and commitment to a life of purpose.  

So, are you ready? All right, here we go!

Who Is Steve Watson? 

Despite his amazing contribution in breaking the rising costs of healthcare, Steve Watson does not consider himself or want to be called a genius. It was with his current position as a Chief Financial Officer (CFO) and Chief Human Resources Officer for Child and Family Support Services, Inc., that he encountered an opportunity to look and evaluate their company benefits more closely. This situation led him to the discovery and understanding of the health insurance market and eventually inspired him to build his innovative consulting company, Trendbreakers.

Steve’s mission is to lower the healthcare costs of 1,000 employers by helping them replicate what he did with his own company. Though seemingly simple, his tested strategies have successfully recreated the wheel without impacting employees and their benefits. His secret? Have a life committed to serving others.

Aside from being a Certified Public Accountant (CPA) and a Certified Society for Human Resource Management-Senior Certified Professional (SHRM-SCP), Steve also works as an outsourced benefits procurement manager and a resource speaker. His speaking engagements on the subject of revolutionizing health benefits for the good of everyone are highly sought and recommended by those who have heard of his expertise. 

Having him share his knowledge in The Bullpen Sessions was something I knew would make a positive ripple to the lives of our listeners, whether they find themselves in insurance or any other profession. I can’t wait for you to hear his wisdom, so let’s dive in.

Remembering the Claim That Started It All

The story of Steve’s journey to a life of purpose unfolds like a movie. Steve was the protagonist who had just taken over a new department, and he quickly found himself in unfamiliar waters.

 “My journey started ten years ago when I took over the HR department as well. And I was negotiating our first renewal, and the broker came by and gave us a 30% rate increase. Another 30%. I mean, that’s hundreds of thousands of dollars as a CFO… But then there’s also hundreds of dollars for every employee. And as a CFO, for years, I’ve learned how to find value in all parts of my business, except for this line item of healthcare. Like it was just this black hole that I didn’t know how to manage. And didn’t know how. ”- Steve Watson

Hailed as one of the best in the business by his peers, I was surprised to hear such honesty coming from a man such as Steve Watson. He just freely exposed his vulnerability, self-doubt, and insecurity. I would have never thought that this kind of work could be something remotely alien to him. As a young man, Steve was always fascinated with numbers and possessed immense patience, but when this new issue hit him, he was at a loss of what to do. 

Yet, with his roots coming from a family of businessmen, it is also no surprise that Steve’s mindset was focused in addressing the problem full-force. After all, the 30% increase in health insurance costs was considered a slap to the company’s finances and to their customers.

Eventually, his consistent and persistent efforts paid off. The answer he was looking for fell on his lap when he needed it most.

“And then I read Dave Chase’s book, the CEO’s Guide to Restoring the American Dream. I highly recommend it to anybody negotiating these benefits to read that. My eyes started connecting with other CFOs. And then it really started solidifying that I had a chance to be a CFO for an insurance broker on a kind of a contract basis. And that really opened my eyes to kind of understand the ins and outs and everything. And so that’s probably when my eye-opening happened. Being my own CFO, working with an insurance broker, and reading the book solidified my realizations.”- Steve Watson

Initially, Steve felt like he was working on a puzzle that was too difficult to be solved. However in the end, he accepted that the increase demanded by the broker was bank-breaking and needed to be dealt with.

But it was the claim that started it all.

Delineating Healthcare from Health Insurance and Beyond

Armed with this new knowledge, Steve knew that he could now solve the problem he had for the past two years.

The time came to finally lift the curtain to see where the problems originated.

Gathering with other CFOs and decision-makers of various organizations, Steve and his team were able to pinpoint the first problem — there was a huge discrepancy between what companies pay for health insurance premiums and what employees actually consume for their healthcare.

“So for example, I was meeting with a HR director here in Phoenix. They were paying $6 million a year in premiums, and they were going to get a 5% increase. I said, “Well, let’s stop. What were your claims last year?” And so they pushed back. They figured out it was $3.7 million. And at that moment, all of us needed to stop and be like, ‘Where’s all the money?’ We went to the doctor and the hospitals and stuff. Of course, there’s a little bit of money for admin for the insurance company, but $2.3 million left on the table, and …now they’re going to give me a 5% increase…” – Steve Watson

Even the seemingly innocent insurance broker did not escape Steve’s scrutiny. 

He learned that the increase in health insurance is usually calculated for misaligned incentives of brokers. When a company pays a 10% increase for claims, the broker gets a 10% increase too. Similarly, when there is a 10% reduction, the broker’s incentive gets reduced by the same percent. 

Steve knew something that everybody else didn’t know. He knew that the burden of paying these costs is shouldered by the company through its employees and their salaries. It is them who ultimately pay the price for additional costs they haven’t even heard of.

“And even if you’re not a CFO and you’re just an employee listening to this, it’s important for you to start understanding this because this is how your rates are being negotiated. And so if your CFO’s not doing it or not, HR professionals are doing it. But guess what? You’re the ones who are paying those higher rates.” – Steve Watson

Through these discoveries, Steve was able to delineate the difference between healthcare and health insurance. That gray cloud hovering over his head finally cleared. He could finally come up with ways on how to reconcile the needs of the company he loved and the people he worked with for many years. He thought his job was finally done.

But it was not yet over.

During a meeting with other CFO’s, something dawned on him that would change his life forever.

“I’m looking out my window, and there’s a hotel across the street. They have about 300 employees. I had about 400 employees. We’re not competitors at all. I’m like, why don’t we talk to each other? Like, why don’t we compare plans and ideas and different things, but there was no forum out there that I could find. And so I created a Facebook group and a LinkedIn group called ‘Trend Breakers. And the name comes from breaking the rising trend. I’m just sick of this. Everybody’s saying the trend of healthcare keeps going up, so we’re going to break it.” – Steve Watson

And break it he did.

Serving with a Higher Purpose

There are many people like Steve who are smart and authoritative in their fields. They have connections, they have skills, and they have talents that make them respected and considered as experts. 

But what makes Steve Watson stand out from the rest is he decided to take his knowledge and share it with others in order to serve with a higher purpose.

Steve could have chosen to stay within the four corners of his office and just go on with his usual life. But with that picture of the neighboring hotel fixed in his mind, Steve decided to use his voice and his status as an expert in the field to make a positive impact on so many organizations. He knows the ins and outs of the healthcare insurance system, and in order to bring balance into the field between brokers, employees, and clients, he decided to share his knowledge with the world. 

Soon after launching the Trendbreakers community, Steve was asked to speak a lot of different conventions and share his success stories with several organizations. Through his teachings, Steve has encouraged brokers to be better partners to their clients. He’s also used his voice to emphasize to his fellow CFOs the impact that sound financial decisions can have on a company! 

When was the last time that you authentically felt satisfaction from helping a client? Do you have their best interests at heart? 

Or maybe you’re a  business leader — when was the last time you sat down with your company policies and thought of revising it for the benefit of your employees and clients? It’s a shame, but some companies only care about their own personal benefit rather than the benefit of those they’re supposed to be serving. What if instead, we considered “compassion” and “service” as central parts of our work ethic and culture?

“And I think as a CFO, that’s something most are focused on, right? They’re focused on hiring the best talent. I’ve got to keep them happy. And part of that is providing a quality benefits package that can be used to attract talent.” – Steve Watson

Let’s face it — if you’re a business executive and you’re not offering your employees adequate pay and benefits, they’re not going to want to stay. Plus, you’re not going to attract real talent into your company. Steve knows that when you treat your company, employees, and clients with respect and try to add value to their life, you make a bigger impact and a better company as a result.

Why You Should Listen to This Steve Watson Podcast Episode Right Now…

Do you feel empowered now to make the best decisions for your business? After interviewing Steve, I sure did. 

As someone who coaches and advises people, I felt even more energized and inspired to share what I know about the mindsets that will give you success. And after all, that’s what The Bullpen Session is for. And on another level, my eyes have been opened to the ins and outs of the health insurance markets!

Guys, if ever you need someone to help you in your next renewal, do not hesitate to hire Steve’s expertise as an outsourced benefits procurement manager. He can definitely help you manage the broker/carrier relationships and bridge the gaps between the finance and HR departments. You can also book him for training and speaking engagements to revolutionize your current HR and employee benefits policies. 

Follow or send him a message on LinkedIn, or call him at 602-320-3099 to know how he can help your business. You can also email him at stevew@trendbreakers.com or check his company’s website to sign up for his services! And check out his podcast Trendbreakers where he talks about benefits, finance, and human resources with the sharpest minds in the business. 

And if you learned something from this episode, let me know! You can tag me on Instagram, @andy_neary, on Instagram with a screenshot of the episode and your greatest takeaways! 

But before I leave, I want to share my own takeaway: Remember that there is always a bigger purpose behind everything you do. Focus on how you can make an impact and keep your eyes on that mission. Steve Watson made it possible, and so can you. So keep crushin’ it, man!

Thanks for reading!

Andy Neary Signature

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