We all have significant deadlines in our lives marked by a date on a calendar. Deadlines that come to mind for me this year include: annual tax submissions, sending a child off to college, year-end sales targets, and putting a home on the market. I usually launch into these larger life-event deadlines by starting with the end date in mind, then counting backwards until the present day, adding in milestone goals to digest the large “deliverable” into consumable pieces. And in some of these cases, the milestones require the help of others to achieve success, on occasion, even the smallest team members, the pets must change their routine and comforts for the end goal to be achieved.
Health plans are no different, they face numerous financial, sales and marketing deadlines every year, so what is different about now? Now health plans are also facing the deadlines for the new “medical consumerism or retail health care market” created by market forces and legislation. The changes health plans must incorporate into their existing business model are not just “beefing-up” or opening an individual retail market branch- it is MUCH more extensive than that. What we are asking health plans, and the US healthcare ecosystem in totality to do, is:
- decrease cost-of-care,
- increase access to coverage,
- improve patient outcomes, and
- enhance the customer experience.
And for health plans, all while maximizing membership growth and maintaining financial stability. Those are monumental tasks, even if long overdue, to be accomplished in a relatively short period of time.
Is it happening? Are we witnessing health plan leaders transforming their organization? Yes, albeit the transformation goals and the appropriate change management focus vary across the country.
Why should health plans accomplish this dramatic transformation?
Booz & Company offered a few reasons in their article, Healthcare after the Ruling Let the Work Continue. …“Consumers’ ability to vote with their feet in a world of guaranteed issue and renewal will raise the bar on service and delivery across the board. Providers and payors will need to understand healthcare consumers and cater to their specific needs in a simple, empathetic manner to engender lifetime loyalty.” …
How is the transformation occurring?
Most health plans are requiring new skills and capabilities from their employees and consultants, redesigning the organizational structure, refreshing the culture and of course, infusing capital. Many are crafting new business processes to design, manage and optimize their portfolio performance. The changes are a struggle for some in the organization, and meet opposition or skeptics; without proper change management focus, the new processes can be derailed. In the end, the market will define the look, feel and core capabilities of a successful health plan.
Some health plans are looking outside the industry and learning the consumer retail market nuances from other industries; adopting their best practices to drive health plan innovation. They may be utilizing non-traditional health plan methodologies AND imbedding new processes across the organization for consistency and transparency. One “borrowed” best practice is the use of advanced analytics and non-traditional data sources to gain deeper market insights. As in other industries, successful plans will likely segment their members, individual and group, to develop better products for them. Yet more than just understanding member preferences, advanced analytics can be utilized to better predict market risk in new ways and get to know their customers as individuals. Knowing members more intimately can drive better medical management by providing personalized services, products, and programs.
More specifically, the advanced analytical platform, as in other retail markets, may further enhance the health plan competencies to:
- Design a portfolio of products and services to achieve a specific revenue target
- Make informed decisions for each book of business by understanding consumers/ members
- Evaluate scenarios with new or enhanced product/service combinations and membership sizing
- Budget for membership acquisition and on-going engagement
- Optimize market offers
- Maximize the commission structure
- Better predict cost to more accurately price individuals and groups
- Better target for care management programs
- Deploy resources to higher value activities
- Centralize a base for business decisions across divisions
What will be a few US healthcare medical consumerism transformation outcomes?
Products will be developed and priced according to individual preference and perceived value
Health plans currently use medical and pharmacy claims along with member demographic information to understand financial risk and underwrite groups and members. With the changing health care landscape traditional models can be utilized with new information to provide insights to health plans for strategically addressing product design, marketing initiatives, and financial implications in the new healthcare marketplace. Through adding consumer behaviors and lifestyle information to health trends, a health plan can evaluate current member tendencies and predict new population preferences and valuation criteria.
Health plans will work with the health care continuum to improve population health
Health plans will continue working with large employer groups, developing wellness and incentive programs to improve health specific to their employees, and measuring the program for a positive ROI. For the individual/fully-insured members, health plans must gain insights into the motivations and incentives that drive member behaviors for improving health. Finally, health plans may partner with providers and others to surround the member with the health care message.
Will the market meet the deadline?
Most health plans will meet the deadlines and roll out new retail offerings, and some plans will be more successful than others. The definition of success likely varies across the health plan continuum as much as the level of effort, capital and change management the health plan leadership allocated to this new market. In the end, the market will decide who got it right, with some second guessing their choices made during this critical transition period.