This is the second part of a discussion about how healthcare leaders should perceive the emerging Exchange marketplace and get ready to ensure survival and profitability in this fast changing domain.
Healthcare leaders shouldn’t think they need to drastically reform their business model to survive in the reformed market. The better approach is to perceive the situation as rebooting their operations, armed with better technologies and greater business intelligence. To ensure that their business is positioned for success, senior decision-makers across healthcare organizations need emphasize upon:
Competency in Predicting
The buying behavior is set to change significantly once the state exchanges arrive. It is important to prepare for new type of consumer engagement that the exchanges will bring. For instance, the potential migration from the group to individual market should be researched. Similar market shifts need to predicted, analyzed and the health plans need to prepare accordingly. Health plans need to review customer segmentation and take into account probable buying preferences and branding responsiveness. Here, tools like Healthcare Analytics can help. It is imperative to decode what the traditionally-uninsured will expect when they step out to purchase health insurance.
Relooking Profit Models
Operating costs need to be seriously reconsidered. Equipping the business with smarter, more cost-sensitive software solutions that reduce human input and eliminate errors might be the preferred solution. This might cause a ripple effect in the payer/broker relationship too. Payers might not be as comfortable with the current commission percentages. A lot of other questions need to be addressed that is best done by organizational leaders. For instance, when creating a private exchange, do payers offer a totally self-service model or provide comprehensive on-site and offsite assistance too? How can costs be determined that ensure compliance, profitability and optimum risk profile? Payers might need to think about selling some additional services to expand their revenue stream or consider earning commissions by selling plans of other carriers.
Reconfiguring Health Plan Portfolios
In state exchanges, every health plan will be rated and categorized across Bronze, Silver, Gold and Platinum levels. Decision-makers need to analyze which metal plan category will yield greater, long-term profits.
Every payer is not expected to launch a private exchange or participate in state exchanges while some might try to sell in and outside the exchanges. Considering this, healthcare leaders need to address how they want to brand themselves as a compelling message/promotion can potentially ensure a steady sales pipeline. Decisions need to be made about the sales channels apart from the state exchanges where visibility can make an impact on the consumer. Every payer needs to take a decision regarding its company image, which will lead the entire branding exercise. Some insurers might choose to be known as companies that play on the state exchanges only. This can create the impression of being a health reform conscious brand. Some payers might want to project themselves as being omnipresent, i.e. having a presence on the public and private exchanges. Some insurers might find greater safety in establishing an identity of being very affordable, irrespective of operating in the public or private domain.
Insurers have a broad spectrum of options to consider. They need to get organized and decide how they will approach the state exchanges. They can choose to wait and watch their competitors steal market share or enter the race themselves, take a few falls and correct themselves along the way. Being proactive makes more sense since the new market dynamics are going to challenge every health plan. Those who choose to be extra cautious might never get the opportunity to adapt profitably.