I came across this post on one of the auto glass industry web sites and I want to pass it along. Since the identity of the person who posted this is for all intents and purposes unknown, I cannot give credit to the person who wrote this piece. The post deals with many of the relevant issues in the auto glass industry.
LESS PROFIT PER JOB = FASTER/SLOPPIER WORK TO INCREASE VOLUME IN AN EFFORT TO REMAIN PROFITABLE. This is what many in this industry have chosen to do, fast, sloppy, and potentially dangerous work. Yet, others have fought for every penny to do the job correctly, safely, and profitably. The insurers have attempted to control reimbursement rates in all facets of insurance NOT JUST AUTO GLASS! And they have done a very good job of it! They have also cleverly pushed the liability burden onto others while they eroded reimbursement rates! However, service providers (not just auto glass) all across this great country have had enough! We have tried to play their game for over 10 years now. Played largely by the insurer's rules. But we now understand just how deeply their rules were in their favor, not ours, and certainly not the policyholder's. We also now understand just how deeply we have been snookered into this dangerous game some call fraud or in the least not giving policyholders the same value for their dollar. And sadly, most of us are knee deep in it right along with the insurers. Pricing, specifically the NAGS re balance, may oddly enough have been one of the greatest things to ever happen in this industry. It created the reason for glass manufacturers to create their own list prices. It created the need for many of us to check and price each and every job to make sure we are remaining profitable, and by doing so, many of us have realized much much more than we could have ever imagined. From pricing, to laws, to insurer's "rules", to TPA's and their practices. It has created the reason to OPEN OUR EYES and those of us that have are quickly becoming VERY WISE and fighting for our real customers again. That is why safety is a greater issue than ever before, because we know now that the only concern we should have is for the safety of our customers. NO ONE else does or will. Not the insurers, not the TPA, and certainly not the government!
IT IS UP TO US, the auto glass professionals, to keep our customers and their families as safe as possible with quality, integrity, honesty, and safety.
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As you have read, the person who posted this is concerned about the quality of work being performed and also that the lack of quality is linked to what the insurance companies and or the TPA (Third Party Administrators) are willing to pay. (By the way, a third party administrator is a company who sublets glass replacements and then bills the insurance company for the work that is performed as well as a fee for processing the claim.) A really sweet deal!
So as a TPA, you control the work given out to your glass shops who are on a list, you set the price, and you make some money on the back end as a claims processor.
As a local small business owner with a very good reputation for doing high quality work, I am in the position of having to "take it or leave it"so to speak. There have been instances where the TPA rates are paying me less than what it costs me to buy the glass! We have had to hold our ground in these cases because we feel that we are entitled to make a profit!
How does this make sense?
Business 101: You should be entitled to make a profit on the goods you sell....right?
In today's automotive glass replacement industry your reputation for quality is not the highest priority to the TPA's or even the consumer: It's the price! The price is what you agree to in order to be on the "list". What a regrettable situation. Even though we are listed as an approved shop, we continue to fight the issue of price daily. Needless to say the "big players" in the industry have a huge advantage because they can buy much better than the local independent. They also subscribe to the Wal-Mart / Home Depot business model that has eliminated so many other small businesses because they can't compete with the chains. The bigger question is: "What is your reputation worth?" Quite simply when it comes to safety and quality, the big boys don't even come close! So, you do get what you pay for...and yes, we do sleep well at night!
Safety a Gimmick?
Someone said that safety is apparently of greater concern currently only because pricing has eroded. It does seem that way! But I would argue it is of greater concern precisely BECAUSE pricing has eroded and partly because modern windshields are becoming more and more integral to the vehicle and the safety systems in the vehicle today, increasing liability for the service providers.Some take it that "safety concerns" are simply a ploy by some in the industry to argue for higher prices? It may be to some degree, but I would argue it has more to do with RETURNING to the profitability of days gone by. I have been installing windshields for nearly 20 years now and each and every year insurance reimbursement rates have gone DOWN since at least 1995 with very few exceptions. At the same time I have seen worse work each year, greater volumes of it each year, and lately just down right "hacking" of windshields. The two are linked, safety and profitability. LESS PROFIT PER JOB = FASTER/SLOPPIER WORK TO INCREASE VOLUME IN AN EFFORT TO REMAIN PROFITABLE. This is what many in this industry have chosen to do, fast, sloppy, and potentially dangerous work. Yet, others have fought for every penny to do the job correctly, safely, and profitably. The insurers have attempted to control reimbursement rates in all facets of insurance NOT JUST AUTO GLASS! And they have done a very good job of it! They have also cleverly pushed the liability burden onto others while they eroded reimbursement rates! However, service providers (not just auto glass) all across this great country have had enough! We have tried to play their game for over 10 years now. Played largely by the insurer's rules. But we now understand just how deeply their rules were in their favor, not ours, and certainly not the policyholder's. We also now understand just how deeply we have been snookered into this dangerous game some call fraud or in the least not giving policyholders the same value for their dollar. And sadly, most of us are knee deep in it right along with the insurers. Pricing, specifically the NAGS re balance, may oddly enough have been one of the greatest things to ever happen in this industry. It created the reason for glass manufacturers to create their own list prices. It created the need for many of us to check and price each and every job to make sure we are remaining profitable, and by doing so, many of us have realized much much more than we could have ever imagined. From pricing, to laws, to insurer's "rules", to TPA's and their practices. It has created the reason to OPEN OUR EYES and those of us that have are quickly becoming VERY WISE and fighting for our real customers again. That is why safety is a greater issue than ever before, because we know now that the only concern we should have is for the safety of our customers. NO ONE else does or will. Not the insurers, not the TPA, and certainly not the government!
IT IS UP TO US, the auto glass professionals, to keep our customers and their families as safe as possible with quality, integrity, honesty, and safety.
<><><><><><><><><><><><><><><><><><><><><><><>
As you have read, the person who posted this is concerned about the quality of work being performed and also that the lack of quality is linked to what the insurance companies and or the TPA (Third Party Administrators) are willing to pay. (By the way, a third party administrator is a company who sublets glass replacements and then bills the insurance company for the work that is performed as well as a fee for processing the claim.) A really sweet deal!
So as a TPA, you control the work given out to your glass shops who are on a list, you set the price, and you make some money on the back end as a claims processor.
As a local small business owner with a very good reputation for doing high quality work, I am in the position of having to "take it or leave it"so to speak. There have been instances where the TPA rates are paying me less than what it costs me to buy the glass! We have had to hold our ground in these cases because we feel that we are entitled to make a profit!
How does this make sense?
Business 101: You should be entitled to make a profit on the goods you sell....right?
In today's automotive glass replacement industry your reputation for quality is not the highest priority to the TPA's or even the consumer: It's the price! The price is what you agree to in order to be on the "list". What a regrettable situation. Even though we are listed as an approved shop, we continue to fight the issue of price daily. Needless to say the "big players" in the industry have a huge advantage because they can buy much better than the local independent. They also subscribe to the Wal-Mart / Home Depot business model that has eliminated so many other small businesses because they can't compete with the chains. The bigger question is: "What is your reputation worth?" Quite simply when it comes to safety and quality, the big boys don't even come close! So, you do get what you pay for...and yes, we do sleep well at night!
