Market Disruption

Health plans have long been the stakeholders at the table calling for a more affordable healthcare system. Under the Affordable Care Act, plans are also the stakeholders doing the most retooling to adjust to the large-scale market disruption.

“The insurance market has never been more chaotic than it is now, fueled especially by the almost meltdown of the exchanges at both the federal level and the state level,” says David Nash, MD, dean of the Jefferson School of Population Health.

Dr. Nash says the biggest market alteration for insurers is more of a creative disruption that has driven managed care organizations to move from their traditional business-to-business marketing model to a business-to-consumer model.

“The retailization of health insurance is inevitable as we try to absorb 30 million to 50 million new customers into some kind of insurance coverage,” he says. “I see large for-profit plans and national Blues plans all competing at the retail level for the first time ever in selling their products-from products for a young person through Medicare Advantage.”

Part of health plans’ retail roadmap for 2014 must encompass an improved patient engagement strategy, which might include anything from gamification and mobile apps, to affordability, to value based on quality. Engaging with members one-to-one opens up the opportunity for innovation while also challenging plans to find best practices. 2014 will likely produce pilot projects to test engagement.

But member education also must include navigation through the healthcare system itself. Few members understand, for example, what “coinsurance” means.

“That seems to be where the Obama administration really dropped the ball: inadequate and ineffective patient education about basic tenets of what insurance is, why we need it, and why it’s such an important public good,” Dr. Nash says. “The big challenge for 2014 is in patient education, beyond just the knuckleheaded health insurance exchange-which is a sideshow that will be fixed-the bigger issue is patient education.”

Plans will be challenged to address:

• The retailization of the market;

• Floors on medical loss ratios (MLRs) and fees/taxes that are eating into net profits;

• Lower enrollment numbers; and

• The age-old problem of health plans’ collective reputations in the public eye.

Continue reading this series:

ACA provisions cut into profit margins

Plans must capitalize on opportunity to polish reputation

Retailization has plans retooling

Retailization has plans retooling ACA provisions cut into profit margins ACA provisions cut into profit margins ACA provisions cut into profit margins ACA provisions cut into profit margins ACA provisions cut into profit margins