Ted Kane, Partner at Brown & Brown and employee benefits industry veteran, joins us to discuss trends in hospital employee benefits and shifts in employer expectations among medical professionals. Ted shares how healthcare systems can leverage flexible employee benefit plans to attract and retain top healthcare talent and stay competitive.
Eric Sutton, Laurel Road Head of Design & Content
Ted Kane, Partner at Brown & Brown
Eric Sutton [00:00:08] Hi everyone. This is Eric and you’re listening to Financing Ambition, a Laurel Road podcast.
Today, I’m excited to kick off a new year and a new season of Financing Ambition with a discussion about employee benefits within the healthcare industry. We’re going to look at how hospitals and healthcare systems can leverage employee benefits to attract and retain top talent, as well as the growing emphasis on the idea of holistic financial wellbeing, which is a concept that recognizes how the physical, mental and financial aspects of a person’s life are interconnected. Top health care industry employers have found that financial wellness is integral to improving mental health, to increasing productivity and morale, to improving employee retention, and to controlling health care costs. So, to help us better understand the changing landscape of employee benefits and what it means for health care systems. I’m joined today by Ted Kane, Harvard graduate and partner at Brown and Brown, who has been in the employee benefit business for 35 years. Ted, welcome to the Financing Ambition podcast. I’m grateful that you could be here with us today.
Ted Kane [00:01:24] Thank you very much, Eric, and I’m looking forward to our discussion. And I think January is a great time to put financial wellbeing and financial resolutions and everything that we can do to put employees’ financial health on the table. So, thank you.
Eric Sutton [00:01:37] Hear, hear. I couldn’t agree more. Okay, so I’d love to start, if you don’t mind, Ted, with a quick introduction for our listeners, would you mind telling us a bit about your background and where you’re based now?
Ted Kane [00:01:49] Sure. My name is Ted Kane. With brown and brown, located just outside of Boston. I’ve been in the employee benefit business for over 35 years. I started with MetLife and co-founded my own consulting firm, and then joined Brown & Brown in 2015. I’m a generalist consultant that deals with large employer employee benefit plans, but I also, spend a lot of time in the financial wellbeing space. And then the practice leader of our wealth and financial security practice here at Brown & Brown.
Eric Sutton [00:02:21] All right, so, it’s clear that you have the right experience and expertise. We were looking forward to having this discussion today. So, thank you so much for sharing your background, Ted. Let’s get right into it by unpacking this concept of holistic financial well-being. Can you tell us about how you define that phrase and what you think factors into it? And you know what it means in the context of employee employer relationships?
Ted Kane [00:02:48] Sure. I think you’ll find many different definitions of financial well-being or financial wellness. But they all include three primary components, and that is helping employees or individuals with their short-term expenses, you know, helping with their budgets and things they need on a day-to-day basis, helping them to protect against unexpected expenses. And it could be a refrigerator that, breaks down or, a medical condition that requires hospitalization. And then with the third component of financial well-being is the long-term vision. So, saving for things like college, housing, and retirement. So those three components are critical for any sort of holistic financial well-being strategy. And I would say, you know, I guess further than that, we recognize that financial well-being is not it’s not the only component of well-being. It’s they’re integral with the physical well-being and the mental well-being. Because financial stress will have an impact, certainly, on somebody’s physical health, and their mental health. So, they’re all they’re all intertwined. There’s a cause-and-effect relationship that goes back and forth between those three categories. So, we’ve spent a lot of time actually looking at trying to document for our employer clients how that connection is made. Because oftentimes there’s an investment they need to make into a program. And we want to be able to underline the return on investment for them. But some of the surveys that we looked at, there was a good one recently, in 2023 from PricewaterhouseCoopers, that reported that:
So, we know we know that it’s all tied together. And I think some of the statistics and survey data, is making that clearer that we need to address this.
Eric Sutton [00:04:47] Yeah, those are definitely concerning statistics. And they do help make a case for employers to take action and address that financial stress among their employees. So, can you talk a bit now about how hospitals and or health care systems are specifically addressing financial stress and, you know, embracing the idea of holistic financial well-being?
Ted Kane [00:05:11] Yes. We work with a lot of large healthcare systems. And, you know, we recognize particularly in that field, there’s a high prevalence of student debt that nurses, doctors, and clinicians are carrying, probably more so than any other industry we work with. And when you think about the size of the debt, and the number of years of schooling that they need to get their certifications, you know, it could be well over $100,000 on average. So, for a nurse, for instance, that makes $80,000 a year that there’s a long time between when they start work and when the loans are going to be paid off. So that alone, situation, particularly in health care, is more, I would say acute than in other industries. So, our health care clients recognize that the key to attract and retain professionals is to help them address their student loans. And that could be with help with navigating the Public Service Loan Forgiveness program, refinancing options, or loan repayments themselves. In addition, they need tuition reimbursement. So, I would say most of our healthcare clients recognize that this is critical for them to retain employees. And we’re also finding that because of the debt that, that students are coming out of school will be looking at, should they pursue a health care career? You know, often deciding to do other things with their lives because they just realize they’ll, they’ll take themselves into a huge financial hole that’s going to take a long time. So, to the extent that health care employers can. Provide programs to help with student loan debt, not only helping today’s employees, but they’re also helping employees of tomorrow and their staffing needs up tomorrow.
Eric Sutton [00:07:08] Yeah, I want to touch on that student loan conversation. But first let me ask you, you know, as I understand it, competition for health care talent is a pretty big issue today. So, you know, I’m thinking also of other current conditions in the marketplace, like the skyrocketing cost of education that you mentioned, post pandemic burnout and spikes in inflation, etc. Would you say that these conditions are actually creating more competition among health care employers to get that top talent?
Ted Kane [00:07:39] Yes, absolutely. Particularly because of staff shortages already. And compensation of benefits has always been an important aspect of the recruitment of medical professionals. And in recent times, and really post pandemic, you know, the work conditions have become important. As you know, the staffing levels have gone down and working hours have gone up. The pandemic, and the situation has led to burnout. And all the health care systems we’re working with are facing, you know, staffing issues. And so, they recognize that they need to make their benefit plans and their work life balance, resources more attractive to, to the professionals. And they’ll use benefits as a way to differentiate themselves. The idea is to make life as easy as possible for these medical professionals, so they’ll be comfortable and stay a long time with that particular employer and be as productive and as healthy as possible. So, student loan debt relief is a big component of the benefit package. And it’s a big piece of the holistic financial wellness for the medical community. I think it really does make a difference in attracting employees and retaining them over the long run.
Eric Sutton [00:08:51] Okay. Thank you for getting back to that. I wanted to get back to student loan benefits. Would you say that that hospital employees, you know, in 2024 and beyond, are now expecting some form of help with student loan debt, do you think?
Ted Kane [00:09:04] Absolutely. And I think the employers who don’t provide that type of benefit will find themselves with even greater staffing shortages. A survey that we saw recently from TIAA, which is a large retirement, vendor said that over half of employers, think they have a responsibility to help employees improve and maintain their financial wellness. So, in the healthcare community, you know, you have employees carrying some of the largest amounts of student debt. And so, it’s certainly expected. And that’s in this industry.
Eric Sutton [00:09:44] Right, I mean, that makes sense. So, could you expand Ted on trends you’re seeing in this area, or maybe even pinpoint specific benefits that you think hospitals should be offering to stay competitive?
Ted Kane [00:09:58] Yeah, I think there’s a whole spectrum of benefits that should be considered. Some will be employer paid. Some will be employee paid. Depends on the type of benefit. But the idea is to offer a broad spectrum of benefits,
First off, adequate health care and, life insurance, for instance, and then certain things in the financial realm like student loan repayment, financial counseling, voluntary benefits that help with unexpected losses, emergency savings, accounts, health care accounts, health savings accounts. So, some of those programs could be funded by the employer, some funded by the employee, or some in a combination. And across that spectrum, kind of the wider it is, the more personalization that’s going to come into play, which is extremely important when you’re putting together a benefit plan because there’s a diverse workforce in terms of life stage needs. You know, somebody who’s just starting out single has completely different needs and somebody who’s nearing retirement, they have different income levels, maybe different geography levels, different cultures. So, to put together a program that really feels customized, a personalized, a broad spectrum needs to be available to them, and they need to understand, you know, what benefits they can access and when and what it means to them.
We also find that this, helps with the recruitment and, the diversity, equity, and inclusion efforts that employers are striving to meet. Because the more benefits are available, the more kind of inclusive and, more goodwill that they’ll provide their employees. So overall, the spectrum of benefits will help them compete with their peers. The one other trend I just want to mention briefly is the expansion of benefits, the part time employees. So, we’ve all seen more flexibility, in work, particularly because of the pandemic, in terms of hours and, and locations. But in healthcare, obviously it’s an onsite type of job. But the burnout is a real thing. So, to attract, you know, the largest number of professionals that make sense for that operation, they may decide to change their part time benefit eligibility requirements, down from, say, 30 hours to 20 hours. So, in the past, you know, that that that segment of the population wouldn’t necessarily be eligible for benefits. But we’re finding more and more that, health care systems are lowering that to attract and retain more part time workers.
Eric Sutton [00:12:42] Yeah. That’s interesting. Yeah, I’m curious about that. How long have you been seeing the need to one increase personalization among benefits packages? And, and the, the need to offer benefits to part time workers and or, shift what part time workers might be eligible for benefits. Have you seen do you think that’s something that’s just a short term or temporary trend, or you think that’s here to stay?
Ted Kane [00:13:07] No. It’s been around for a while, but not necessarily out front and center. Both of those things. But the trend is accelerating. I think employers recognized that employees want benefits that feel personal to them and make sense. But and particularly if the employer is going to spend money on these benefits, they want to get the highest return of investment in terms of happy, healthy, productive employees. So, the personalization is accelerating big time. And then the part time work, I think the pandemic, has certainly exacerbated the need, or eliminated the need for, that type of flexibility.
Eric Sutton [00:13:47] Yeah, that stands to reason. All right. So, let’s flip the script. As I say. We talked about benefits in on trends, primarily from the employer’s point of view so far. So, I’d love to talk about what you’re hearing directly from employees. Do you have any data you might be able to share from an employee perspective?
Ted Kane [00:14:06] Yeah, I would say that the data is actually getting worse. Meeting the need is greater. And part of that is, you know, the, the inflationary environment that we’re hopefully coming out of now over the last couple of years and then certainly the pandemic before that.
So, 90% of employees surveyed, according to the MetLife 2022 survey, said that they have a lot of stress, because of rising costs. Only 55% of employees said they have control of their finances, and that’s down from 61% in 2022. So statistically, you know, it’s a six point, decrease. But, you know, it’s 10% worse when you look at 61% to 55. And 52% employees say they only have enough, savings for three months cushion, should they run into issues. And that’s down from 62% in 2022. So, the difference year over year is pretty dramatic. More so than we’ve seen in any other period in the past.
Eric Sutton [00:15:13] Well, that’s surprising and alarming that 90% of healthcare employees are talking about finances as a, as a significant source of stress. And, you know, you’ve got like almost half saying they’ve got a three-month savings cushion. So, you know, I guess living paycheck to paycheck is a challenge for many Americans. But it sounds like, you know, what you’re saying is that hospital employees are no strangers to this circumstance.
Ted Kane [00:15:41] No, no they’re not. I mean, financial stress affects all employees, regardless of their income level. I mean, probably the ones in the lower, income levels the most. But people tend to live to their means, meaning, you know, if they make a certain salary, they spend to a certain salary. So, the financial stress affects all income levels. And, you know, I think certainly hospitals with student loan debt, within their populations feel it very dramatically.
And with the student loan repayment, resumption October 1st of 2023 after almost a three-year hiatus, due to the pandemic, I think a lot of people got used to that money, that monthly money, inspectors over the last three years. So, when October 1st repayments resumed, I think it was a lot of pain, because that money wasn’t necessarily being budgeted. And so, it took away from whatever else they were spending on before. So that that’s painful. And I think employers and, and health care employers definitely included, you know, financial planning and some of the financial well-being benefits were more targeted towards the upper incomes and, and executives, and they kind of missed everybody else. But the pandemic and the inflation, environment have really eliminated the need to have these types of programs available to all employees. You know, in, in a way that they can access, and they can benefit from. So, we want to make sure we help employers put together programs. They’re going to help employees with their, again, short term expenses, their unexpected expenses and their long-term financial goals.
Eric Sutton [00:17:26] Absolutely. Okay. Well, I’m glad to hear that. Hospital workers are, you know, now getting more and more access to truly helpful benefits, including financial benefits that, as you’re saying, used to be available to executives only. Here’s hoping, you know, things continue in the right direction. So, Ted, we’re getting to the end of our time together. But before we go, could you tell us about some ways that you think health care employers can reach out to their employees and let them know that they have all these new personalized benefits that, you know, it could help them find real relief from financial stress.
Ted Kane [00:18:03] Yeah, absolutely. This is a critical component of any financial wellbeing strategy. And I hope and when I say this, I’m referring to communication. And as we talked about, hospitals have a diverse workforce. So, getting the word out really requires a differentiated and multifaceted engagement strategy. And it could be in print. It can be, you know, a webinar can be in person, can be online. But a combination of those types of avenues so that you can meet employees where they are and how they like to be communicated to is extremely important. I think hospitals really ought to think about making the communications personal and framing based on a goal or life stage. I mean, for instance, we see a lot of communications, particularly in health care, that are effective because, there are models that are presented, meaning people like, you know, a certain age, certain number of kids, certain income level. This type of benefit helps. And this is why, so kind of the anecdotal stories I think helps employees who don’t currently participate identify the opportunities to take advantage of it.
You also have to make sure that the communications stress that taking care of financial well-being is a priority. It’s easy to put off, financial, you know, remediation until tomorrow in many respects, because we’re trying to put out today’s fire. But I think they need to communicate the link between financial well-being and the overall wellness. And really hit it home during open enrollment when they’re making their benefit choices, but also reiterate and support it throughout the whole year with communications. And they can do that with personalized websites, video, financial calculators, and resources. Like I said, profile examples. People like me use this benefit and this is the outcome. The other key component about communication is a lot of the financial wellbeing solutions can be fragmented. Meaning that there are probably a lot already available to employees and they may not know about it. So, I think it’s a good idea for a hospital to take inventory of the benefits that they currently have. Uncover any value, add benefits to that that touch the financial wellbeing, issue within their existing vendors. There’s probably several if you look at your apps and your life carriers and your retirement carriers just but a lot of resources that are probably available that are on tap. So, look first for the no-cost benefits and then look to see what gaps exist. Put it all together in a way that employees understand what it is. Understand the relationship between some of these benefits, can access it, you know, easily and can get the coaching and support that they may need, whether it’s telephonic or in-person from an enrollment firm, or a counselor, to help them walk through the benefits and give them some advice.
Eric Sutton [00:21:24] All right, so it sounds like a very tailored communication strategy. In addition to a very tailored benefits package, is the recipe for success here if you’re taking notes out there. And last question for you to what sort of metrics do you look at to measure how well your benefits package is meeting the needs of employees? And, you know, and that your communication strategy is actually working?
Ted Kane [00:21:50] We kind of use a general benchmark. And it’s different depending on which benefit we’re talking about. But most of the financial well-being benefits, if we get 25–30% participation, meaning people are enrolled and actively engaged, that’s considered a successful strategy.
So, it may not be the same 25 or 30% in any given year. And that could be even better. Because you’re trying to help somebody along the road to financial wellness. So, I think, 25 to 30% is a pretty good number. The other metrics that we look at are the underlying financial health of employees. And that could be measured by, you know, if they’re taking out hardship withdrawals from their 401K, or loans, or they’re not participating in their 401K – those are all kind of indications, of, of the financial health of the employees.
Eric Sutton [00:22:45] Yeah. That’s really helpful benchmarking information. So at least a 25, 30% participation rate is what we should be aiming for. And obviously, the lower the number of retirement account withdrawals or loans that are happening, the better. So that that all does make really good sense. Ted, thank you so much again for your time today. You’ve shared some invaluable insights with us. And again, I’m really grateful that you could be here to help our listeners get a better understanding of how hospitals can help employees meet their financial needs. So, thank you again for joining us today.
Ted Kane [00:23:19] Thank you.
Eric Sutton [00:23:19] And thank you out there for listening. For more information on student loan forgiveness and repayment options, visit laurelroad.com and follow us on Facebook, Instagram, and LinkedIn. And stay tuned for the next episode of Financing Ambition.
Only the U.S. Department of Education is able to make a final determination of whether a borrower’s payment history is compliant with federal repayment programs. See student archives for more details. This podcast is produced for information purposes only and is not an offer or solicitation of any product, any views, opinions, findings and conclusions expressed in this podcast are solely those of the participants and do not necessarily reflect the views of Laurel Road or its affiliates. Laurel Road, KeyBank and its affiliates are not providing any financial, economic, legal accounting or tax advice or recommendations in this podcast. The information contained in this recording may not be current, and Laurel Road has no obligation to provide any updates or changes. Neither Laurel Road nor any of its affiliates makes any representation or warranty of any kind as to the accuracy or completeness of the information in this podcast, and expressly disclaims any and all liability around such. Our guests may receive compensation for promoting Laurel Road. Unauthorized use or reproduction of this podcast is expressly prohibited. Loan approval is subject to credit approval and program guidelines. Programs, rates, terms and products vary and are subject to change at any time without notice. Student loans, mortgages, personal loans, and credit cards are not FDIC insured or guaranteed. For more information and disclosures, go to Laurel Road AECOM. Laurel Road is a brand of KeyBank member FDIC.
This podcast is produced for information purposes only and is not an offer or solicitation of any product. Any views, opinions, findings and conclusions expressed in this podcast are solely those of the participants and do not necessarily reflect the views of Laurel Road or its affiliates. Laurel Road, KeyBank and its affiliates are not providing any financial, economic, legal, accounting or tax advice or recommendations in this podcast. The information contained in this recording may not be current, and Laurel Road has no obligation to provide any updates or changes. Neither Laurel Road nor any of its affiliates makes any representation or warranty, of any kind, as to the accuracy or completeness of the information in this podcast and expressly disclaims any and all liabilities around such.
Our guest(s) have received compensation for promoting Laurel Road. For more information and full disclosures, go to [Laurel Road-dot-com]. Loan approval is subject to credit approval and program guidelines. Programs, rates, terms and products vary and are subject to change at any time without notice. Unauthorized use or reproduction of this podcast is expressly prohibited. Student loans, mortgages, personal loans, and credit cards ARE NOT FDIC INSURED OR GUARANTEED. Laurel Road is a brand of KeyBank, Member FDIC, Equal Housing Lender and NMLS number 399797.
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