Mark Springer, CR Phil Rosebrook, Jr. CR Pete Consigli RIA “Strictly TPA” Fall Conference Review and Discussion

Air Date: 12-8-2017|Episode 487                                                                                Listen|Download

This week on IAQ Radio we discuss a topic that gets blood pressure up among some in the restoration world. Third Party Administrators “TPA’s” are a fact of life today in many industries and RIA has been helping their members make the adjustments necessary. This week we welcome two widely respected restoration professionals to IAQ Radio. Mark Springer and Phill Rosebrook are both RIA members and were speakers at the recent RIA “Strictly TPA” Fall Conference. We look forward to having them join us along with frequent contributor Pete Consigli…

 

Full Description:

Mark Springer

If you know Mark Springer, you probably know when the platitude, “How are you doing?” comes up in conversation, his likely answer is, “Living the dream!” That’s because it’s true. Mark has been married to his high school sweetheart, Angie for 20 years and they have been blessed with five beautiful daughters who, fortunately for Mark, take after their mother. Living in Montana accentuates the dream as he is able to pursue doing things he loves like downhill skiing, bow hunting, competitive shooting, and the mountains in general. It’s not all hobbies though, Mark also gets to work all over the great state of Montana helping people who have experienced disasters, primarily from fires and floods. He is the President of Dayspring

Restoration, a company that specializes in disaster restoration. Dayspring has 6 locations and about 100 team members. Mark has become a mini, (emphasis on “mini”) celebrity in Montana due to several television advertising campaigns where he flooded and burned his house and then demonstrated to the community the restoration process, (these videos can be viewed at www.calldayspring.com). Giving back to his community and his industry has always been a priority for Mark as he serves on numerous non-profit and trade association committees and boards.

 

Phillip Rosebrook Jr., Cr.

Phillip is a graduate of the University of Oregon’s Lundquist School of Business. He worked his way through college in the family restoration business. He filled most all roles in the company including working on the cleaning crew, carpet cleaning, water damage emergency services, and other various restoration and construction related services. He ran the retail and wholesale carpet cleaning division managing several employees and coordinating the installation crews.

After college Phillip managed the water damage division and scheduled all company production crews. He managed the branch office in Coos Bay, Oregon and served the Southern Oregon Coast region. The office was in a very rural area of the state with a small population yet the office grew from $300,000 in annual sales to over $1,000,000 under his management. In managing this office he filled every role from Estimator to Marketing Manager. After training the new Manager Phillip returned to the main office with oversight of all branch offices. He served as the Education Committee representative for the Western Chapter of Disaster Kleenup International.

In 1997 when the company sold, Phillip moved to Fort Collins, Colorado to assist in opening a new office for Rocky Mountain Catastrophe. He was in charge of training the new manager, developing the marketing campaign, implementing systems and procedures and training the water damage and cleaning staff. The office quickly grew to over $300,000 in monthly sales.

Phillip joined his father as a Partner in Business Mentors in March of 1998. He specializes in implementing change in restoration companies. He works with the individual managers, key employees and sometimes even the field staff to implement new systems and procedures. He developed the Operations Manual and Personnel Manual that is utilized in all of Business Mentors’ consulting. He is a frequent presenter at industry conferences, contributing author to the WLI course book and has authored many articles in Cleaning and Restoration magazine. Phillip is the founding partner of ELC Training – a training resource for restoration companies. He is also a faculty member of the Restoration Leadership Institute.

Phillip is the father of four children and has been married to Deanna since 2000. He enjoys gardening, hiking, and cycling. Phil lives in Portland, Oregon.

http://www.businessmentors.net/phillip-rosebrook.html

Z-Man’s Blog:

“When you build it they will come!”
Today’s episode of IAQradio provided coverage of the RIA “Strictly TPA” event recently held in Nashville, TN. Third Party Administrators “TPAs” for short assist insurance carriers in claims handling. Today’s guests were:  Mark Springer, Phil Rosebrook, Jr. and Pete Consigli.
Mark Springer is President of Dayspring Restoration, a Montana based restoration firm with 6 offices and 100 team members. Mark is currently a VP at RIA.
Phil Rosebrook, Jr. worked his way through college in the family restoration business. In 1998 Phil joined his father as a partner in Business Mentors a firm that implements change in restoration companies.
Pete Consigli, RIA adviser and the Restoration Industry watchdog.
Nuggets mined from today’s episode:
Mark Springer- Historically RIA has held fall events. Today restoration contractors have more events competing for their attention. Being proactive about issues affecting RIA members is an important component of RIA’s strategic plan. After it became public that “Strictly TPAs” would be the title of the event, he received tremendous pushback because: some RIA members exclusively work for TPAs, others do none and still others perceived the event as an endorsement of TPAs. It was a juggling act to present helpful information not conclusions. 23 speakers represented both sides of the issue. The event also featured a Town Hall meeting at which all 6 of the major TPAs were present.
Phil Rosebrook, Jr- Feeling that Phil would be an honest broker, Mark Springer asked him to do the keynote. Phil started working in the family restoration business in 1988 spending his formative business years there. Starting in the trenches he worked his upward. Historically the restoration business goes back to the late 1960s. After selling the restoration business in the late 1990’s, Phil and his father became advisers to restoration firms. He admits to not having a dog in the TPA fight. Whether an advisory client opts in or out of TPA work, his perspective is to create successful restoration firms on both sides of the issue. He advises contractors to be proactive, to own it and to be successful. He advises against going all in on TPA work as you can lose control of your business. You need to be strategic, deliberate and clear about strategy.
In 1988, the restoration industry was fractured. The players were predominately independents. The business was based upon relationships. Industry pricing was inconsistent. Before Xactimate contractors needed construction knowledge & experience and had to figure out the job requirements and price them accordingly. There were radical pricing differences between markets. Creative estimators knew how to add value proposition and increase profits by wordsmithing their estimates. There was opportunistic pricing, inconsistent service delivery and most claims decisions were made locally. Restoration firms had marketing representatives who “doughnut-ted around” visiting adjusters and brokers. Contractors used pricing books such as: Bluebook, Means, Hometech as references. Both scope and pricing were issues on projects.
By standardizing pricing, Xactimate removed pricing as an issue. Advances in technology improved communications. Estimates could be uploaded and downloaded digitally across space and time.
Phil’s restoration firm hired DRI-EAZ to do an onsite staff training. Their business decided to embrace and be on the forefront of drying technology. He was excited about an insurance company’s new “drying only” program as he felt his firm was the frontrunner to attain the work. The bad news was that the insurance carrier selected a local franchise company to handle their water claims. Taking solace, and confident in his firm’s superior service he felt it would only be a matter of time until the carrier switched their water claims to his business. They sold their business 9 years later and never got the carrier’s water claims.
Insurance companies want predictable solutions. Berkshire Hathaway buys GEICO Insurance and figures out to make money on claims. Prior to this insurance companies lost money on underwriting and made money on investments.
Contractors’ have faulty assumptions. Competence is not the top influencer for contractor selection into TPA programs, rather it’s the relationship with the person doing the work. Some restoration firms do the right things, are value driven, operate fairly and honestly. The truth is that many are business scoundrels who put profit above doing the right thing and this causes problems.
Insurance companies want consistency and value. HMO’s have been around since the 1930s. Insurance companies understand auto glass and body repair and began using 3rd party claims management in the 1980s. Insurance companies want big solutions. They look at big numbers on graphs which trigger big decisions and standardization. The restoration business isn’t a swinging pendulum, the way things used to be isn’t coming back. The insurance industry is rapidly changing. INSURTEC and Lemonade are “Uberizing” insurance products. Crawford purchased WeGoLook, an on-demand workforce. Homeowners can now rent the same equipment used by restoration contractors at Home Depot. Plumbing companies, who had their interest piqued by restoration contractors willing to pay them for water damage leads are now providing water restoration services.
TPAs and Cat claims:
Contractors located in disaster prone areas get quickly overwhelmed with work during CATs Synergistically: the speed of loss verification, documentation, pushing claims to TPAs controls claim costs, provides improved customer service and lowers costs. Its probable that TPA involvement in CAT claims will grow and contractors enrolled in TPA programs follow TPAs into disaster areas. TPAs provide carriers and policyholders more and better claims response and contractors know they will get paid.. TPAs with their deliberate, streamlined processes, shorten the claim cycle, close claims quicker, fulfill policyholder moments of truth.
Be strategic and deliberate. Don’t base your decision whether or not to participate in TPA only on hearsay. Enroll, try 10 claims and then decide.
Don’t rely on any single business source for more than 20% of your business.
Customer focus is a winning strategy, be nimble, make customers cheerleaders.
Mark Springer- The biggest complaint is 3rd party not an expert on claim handling. Discussions aren’t tied to damage on the property. Rules, metrics, numbers drive TPA decisions. It’s tougher to make acceptable margins. Program costs, costs of administration, compliance , unwritten rules enforced by people remotely, oversight without technical experience and expertise. Variations of guidelines between programs. Different hot buttons.
TEXT QUESTION FROM AUDIENCE:
What is the TPA proposition?
Phil Rosebrook- “Equipment sitting on a shelf doesn’t make money,” Paul Gross. No marketing costs. Leverage marketing resources elsewhere. Added work volume without sales costs.
Phil Rosebrook- TPAs may be able to wrangle in south Florida, by establishing and enforcing strong ground rules on claims management.
TEXT QUESTION FROM AUDIENCE:
Does contractor participation in TPA program interfere with consumer protection laws?
Mark Springer- Unwritten rules of the program may violate consumer protection law. Contractors shouldn’t compromise the end result. Marty King said: “restore the property”.
A 22 year old kid, 500 miles away can’t speak to the technical issues of the claim. It’s a dynamic industry. The properties are different, the perils are different. You can’t apply boiler plate solutions.
Mark Springer-  The TPAs in attendance heard the message.
Mark Springer- TPAs handling fire claims is a rarity. In my markets in Montana, water damage claims $2500+ are red-flagged as abnormal. 3% of my business is attained through TPAs.
Phil Rosebrook-  TPAs core competencies are managing the process on high frequency low cost claims. Minimizing dates and times. There is less synergy with TPAs on more complex claims: fire losses, contents claims, ALE, structure.
Not setup for arbitrary decisions. Can go up the chain of command. Insurance carrier wants the client and property taken care of.
Franchisees perform work inconsistently.
Mark Springer-  TPA takeaways: the wedge is there has gotten deeper. The communication which began in Nashville is a good first step. The event attendees want TPAs to tackle the tough issues. TPAs understand that without good networks of service providers they don’t have an offering. All attending TPAs want to continue the dialog.
Hundreds of questions were submitted during the town hall.
Phil Rosebrook-   In your network are you finding more service holes (lost zip codes)? Yes
Are the existing contractors in your network adding zip codes or dropping zip codes? Dropping zip codes.
Mark Springer- TPA networks are rooted in restoration franchises. It’s a tough economic model for franchisee to be required to pay 10% fee to the franchisor plus an additional fee to the TPA (can add up to 20%).
Mark Springer- The dialog will continue in a Town Hall at the RIA Convention in
Phil Rosebrook- Someone I know spent $10K to send 2 people to attend the Strictly TPA event and considers the money well spent if the exploration into the subject goes further. Create a plan, be deliberate, responsible and accountable for your business.
Pete Consigli: 30% of attendees of the Strictly TPA event weren’t RIA members, for 25% of the attendees it was their first RIA event. Standardized pricing is illegal. Scope drives price. The costs of performing the same scope of work in New York City and Podunk will always be different. The 22 year old reading out of a playbook is a problem. Now that the insurance industry and TPAs have standardized the work, they don’t like the price. Some of us shop at Walmart and others at Nordstrom. We’ll take what we’ve gotten and continue to move the ball down the field.
Z-man signing off
Trivia Question:
Why is Mark David Chapman notorious?
Trivia Answer:

He shot and killed John Lennon on December 8, 1980.

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