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Exchanges Mean Insurers Must Market Directly To Consumers To Compete

Posted by Aaron Groffman on Wed, Jul 18, 2012

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The recent SCOTUS decision makes it necessary for health insurers to rethink their business models.  This is shaping up to be the most competitive era in healthcare’s history. The ability to recognize and adapt to change is key to survival.  Charles Fine from the Sloane School of Management points out, “thinking cannot be outsourced," and lots of thinking needs to be done right now.

To capitalize on the opportunity presented by ACA, the majority of insurers plan to participate in state health insurance exchanges.  Suddenly, consumers become a crucial vast market which adds a whole new dimension to how insurance companies view their business. PwC estimates health policies sold through exchanges could be worth nearly $60 billion in premium revenue by 2014 and grow to nearly $200 billion by 2019.  Marketing to consumers will change from the current employer-based B2B model to an exchange-based B2C model.

Insurers won’t find much help about how to compete looking within their own industry.  Instead they should be thinking about what companies like Amazon and Zappos and other online retailers did right to get where they are.  They must walk the tightrope between control and speed.  How will insurers reach this crucial market, what will their message strategy be to differentiate themselves from other insurers, and how will they be sure their infrastructure is in place to deliver on marketing promises made?

According to the following article from Employee Benefit Adviser, the insurers surveyed expect it will take approximately 15 months on average to get their businesses ready for exchange certification by the federal government, with 60% expecting it to take 18 months or longer.  How do you think these new challenges will affect insurers?

Providers will need to shift toward consumer-focused model post-reform - Articles - Employee Benefit Adviser.

Tags: Healthcare, Healthcare, Economy, Medical, Medical, Vision, dental

Employers reaching out directly to providers to build networks.

Posted by Aaron Groffman on Thu, Jul 12, 2012

I just read Emily Berry’s recent article in amednews about some employers attempting to manage their own provider networks. Just imagine the redundancies and inefficiencies if all employers decided to contract directly with healthcare providers.  Not to mention the time providers would spend time dealing directly with employers regarding contracts rather than treating patients.

Building and maintaining provider networks is not and will never be a core-competency for employers, and therefore should be delegated to those who do it all the time.  It would be a better use of an employer’s leverage to insist on better contracts and narrow, high-performance networks that the carrier could turn around and market to others, rather than having a “single-use” network built for an individual employer.

There is no official count of how many employers are contracting directly with providers, but industry insiders say there is certainly growing interest.  Am I wrong about this, or does this sound like an idea that may have merit in certain limited situations, but is clearly not scalable?  What are your thoughts?

Tags: Healthcare, Healthcare, Economy, Medical, Medical, Vision, dental

With a few tweaks, ObamaCare might actually work.

Posted by Aaron Groffman on Fri, Jul 06, 2012

While it received most of the attention due to the SCOTUS decision, the individual mandate is not the main problem with ObamaCare.  In fact, from an insurance perspective, having (almost) everyone in the pool is better.  The problem is when you combine the individual mandate with a required minimum benefit that's often too expensive for the new entrants.  The result is too many people opting out and paying the tax, leaving them uncovered for serious illness or injury, and keeping the rest of us on the hook to foot the bill. This clearly defeats the purpose and intention of the mandate.

I agree with Holman Jenkins' assertion in his WSJ piece "ObamaCare—Upheld and Doomed" that a reasonable tweak to make ObamaCare more successful at covering more people without bankrupting the system is to "modify the Affordable Care Act so buying any health policy authorized by the new charter, no matter how minimalist, satisfies the employer and individual mandate." Read the article and let me know if you agree.

Tags: Healthcare, Healthcare, Economy, Medical, Medical, Vision, dental

No end in sight for rising costs.

Posted by NetMinder -Ignition Group on Sat, Jun 30, 2012

 

Georgetown University Center on Education and the Workforce just came out with a comprehensive report on the state of healthcare and its impact on the healthcare workforce by 2020.  Bottom line, in spite of new legislation, there is no end in sight for rising costs. While costs are expected to increase at a slightly slower pace over the next decade, they are still predicted to amount to 20% of GDP by 2020. Because of this rapid growth, the healthcare industry has the p0tential to create 5.6 million jobs between 2010 and 2020.

Our industry clearly has many challenges. They say that every big problem is solved with small steps. Which ones should we be taking to address these predictions of costs that exceed anyplace else in the world?

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Tags: Healthcare, Healthcare, Economy, Medical, Medical, Vision, dental

This is what happens when the government manages healthcare...

Posted by Aaron Groffman on Wed, Feb 08, 2012

Cracking Down On $70 Billion Worth Of Medicare Fraud | Fast Company

We would have to be crazy to turn over more of our healthcare programs to the US Government.  Don't you agree?

Tags: Healthcare, Healthcare, Economy, Medical, Medical, Vision, dental

CIGNA Dental announces that they now contract with 100,000 unique dentists nationwide.

Posted by NetMinder -Ignition Group on Wed, Nov 16, 2011

The bar for dental PPO networks has been raised again. CIGNA Dental announced in a November 10th press release that they now contract with 100,000 dentists

The reference to 100,000 dentists under contract is a combination of CIGNA's Radius network along with their DNSP network. DNSP is essentially an out-of-network, smaller discount overlay to their Radius network delivered primarily through a relationship with Coalition America.

With an available universe of over 180,000 unique dentists nationwide, network penetration is still less than 60%, and there appears there is still room for growth. At what point will the dental PPO market be saturated?

Tags: Healthcare, Healthcare, Economy, Medical, Medical, Vision, dental

I'm a big fan of pricing transparency, and this seems like a step in the right direction.

Posted by NetMinder -Ignition Group on Thu, May 05, 2011

Everyone in the food business knows that restaurants make most of their money on side orders. Now it appears that brokers are catching on. describe the image

Read on for insight into how brokers are thinking these days.

How to capitalize on ancillary benefits - Articles - Employee Benefit Adviser.

Tags: Healthcare, Healthcare, Economy, Medical, Medical, Vision, dental

Will new database for out-of-network claims give more pricing leverage to providers? How about consumers?

Posted by NetMinder -Ignition Group on Wed, May 04, 2011

 

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I'm a big fan of pricing transparency, and this seem like a step in the right direction.  I've taken a look at the dental interface and it's very nice.  As a dental consumer, I can get an idea of what dentists charge for particular procedures.  However, as an uninsured dental consumer, I'm still guessing at what they'd be willing to accept as payment in full. 

http://www.ama-assn.org/amednews/2011/01/24/bisd0124.htm

Tags: Healthcare, Healthcare, Economy, Medical, Medical, Vision, dental

Some interesting insights about vision benefits

Posted by NetMinder -Ignition Group on Tue, Jan 18, 2011

In a presentation last year by Vision Monday/Jobson Optical Group, I gained the followingdescribe the image insights about the vision benefits market: 

  • 3 out of 4 American adults use some form of vision correction product
  • 65% of those buying eyeglass frames used their vision insurance
  • 14% used the web to shop, and of those 31% compared prices and 22% actually purchased glasses

Bottom line...lots of people need "glasses", use their insurance, and like everything else, the traditional purchasing avenues are being threatened by the Internet.  So what else is new.

Tags: Healthcare, Healthcare, Economy, Medical, Medical, Vision, dental

Insurers Alter Their Sales Commission Structure, Partly to Help Meet Medical Loss Ratio Rules

Posted by NetMinder -Ignition Group on Tue, Jan 18, 2011

This seems like a creative solution to the MLR challenges associated with Health Care Reform regulations.

http://www.aishealth.com/Bnow/hbd011111.html

Tags: Healthcare, Healthcare, Economy, Medical, Medical, Vision, dental

 

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