Resnick Unplugged

Medicare Survival Guide: Value Chain Analysis

Many moons ago (1985 to be exact) Michael Porter’s bestselling book, Competitive Advantage: Creating and Sustaining Superior Performance, introduced the concept of value chain analysis - the chain of activities within an organization that each adds value to the final product or service. Fast-forward to 2009. Never has the value chain been more important to a Medicare plan than today.

 

Regulatory pressure, competitive positioning, shifting consumer priorities, and sustainable profitable growth make a successful Medicare Advantage plan a dicey venture these days. In a recent posting, “Strategic Stimulus: Setting-Up For Opportunity,” I encouraged companies to take an introspective look at their strategic vision and tactical approach to the markets they serve. 

 

This time, I’m advocating a similar “self assessment” for Medicare plans plotting a course for the future. Six areas of focus deserve attention —

Following is a mini-self review for a Medicare plan’s
value chain:

 

1. Regulatory Compliance – Tracking, managing and reporting on the never-ending stream of CMS rules and regulations has never been easy for Medicare contractors. Costs associated with a Corrective Action Plan or marketing suspension are extensive in terms of financial penalties, brand deterioration, and staff distraction. Most recently, CMS has raised the bar with a set of reporting requirements for Parts C and D that incorporates hundreds of new, complex data points.

- Does your plan have a real-time mechanism able to provide managers a “dashboard” view of critical compliance reporting across key operations or, does your compliance officer have to go “hunting and gathering” each month like a blind squirrel hunting for nuts?

- Is your plan able to withstand the scrutiny of a CMS audit (or even a mock CMS audit) in areas such as routine documentation, policies & procedures, appeals & grievances, and fraud/waste/abuse?

 

2. Revenue Management – Medicare Advantage payment rates are dead center in the Obama administration’s target for cost reduction—within the next five years MA and FFS will be on a level playing field. With the pressure of shrinking payment rates survival depends on aggressive revenue management and flawless enrollment operations.

- Does your plan have expert tools in-place to make sure you’re maximizing reimbursement through Hierarchical Condition Category (HCC) and Part C/D reconciliations on a timely and up-to-date basis?

- What metrics are used to manage and measure your Plan’s enrollment operations to make them an integrated member management function (vs. fragmented collection of data entry staff)?

3. Medical Management – With 80% of seniors having at least one chronic health condition, the knock on Medicare Advantage has been an inability to demonstrate value of care management and improved beneficiary health outcomes. And now, with reduced reimbursement rates, there is renewed demand on plans to improve medical loss ratios to maintain profitability.

- Is your plan linking its complex and chronic care management efforts to its HCC management?

- Are care management tactics such as personal health assessments, medical home, and evidence-based practice guidelines part of your 2010 medical management plan?

 

4. Customer Service – Competitive rivalry means your customers are another MA plan’s prospects. Customer retention now takes a mindset that combines proactive customer service with continuous “after-sale sale” tactics.

- Is there a formal member retention program to protect your customers from competitor “switcher” campaigns, build long-term, and track retention costs…as carefully as you track acquisition costs?

- Are operations and marketing working together to communicate with customers in a way that blends benefit education with ongoing selling of your plan’s value (i.e., an after-sale sale)?

5. Marketing Mix – Data, Data, Data…it’s at the core of every successful MA plan’s marketing mix. Customer and prospect data mining, modeling and profiling deliver tremendous competitive advantages to MA plans, from diversifying product portfolios to customer segmented messaging to new media strategies.

- Does your plan have ready access to accurate intelligence on your competitors’ MA, MA-PD and PDP plans, including detailed plan-by-plan benefit and enrollment information in your service areas?

- Have you segmented your existing customers and prospects using demographic indicators combined with psychographic profiles such as lifestyle priorities, buying habits, and advertising preferences (including Internet usage)?

 

6. Distribution Capacity – Inappropriate marketing and sales practices are by far the biggest problem for MA plans. And, CMS is taking a hard-line approach – secret shoppers, onerous penalties for non-compliance, shutting down sales, and issuance of a glut of new rules. At the same time, organic membership growth gets tougher and tougher. The ability for a plan to deploy multiple distribution channels is separating winners from losers.

- Are your field sales agents (in-house and outside brokers) fully trained, credentialed, certified, and monitored to make absolutely certain you’re limiting exposure to CMS marketing and sales rule violations?

- Have you moved away from a single source distribution strategy to maximize a multi-outlet sales approach: complementary field agent channels, telesales and Web?

 

This self review is a quick start to figuring out if your plan is where it needs to be in today’s tumultuous Medicare marketplace. If answers are hard to come by or, if there’s little internal agreement, it’s an important sign—don’t wait. Your plan needs a deeper dive into those areas that are coming up short. Organize a dedicated effort to attack problem areas, utilize outside experts well-versed in the “ins & outs” of Medicare Advantage, and take corrective action. Most importantly, do it sooner rather than later.

Medical Home: Consumerism Delivered

Consumer Directed Healthcare can be defined as health benefit plans that put consumers and their providers at the center of health care decision-making, giving them greater discretion and power over benefit dollars and medical care choices. These plans often include increased cost-sharing wrapped around an HSA, decision support tools to evaluate choices, “health coaches” to encourage care management, and incentives to promote healthy lifestyles. Rather than shielding consumers, CDH plans engage them directly.

CDH is based on “patient centeredness” which, as defined by the Institute of Medicine, refers to health care that establishes a partnership among practitioners, patients and their families to ensure that decisions respect patients’ wants, needs and preferences; and ensure they have access to education and support to make decisions and participate in their own care.

Consumer Directed Healthcare and patient centeredness has given rise to the next “hot trend” in healthcare – the medical home. A medical home is not a house, clinic or hospital, but rather an approach to providing comprehensive primary care. A medical home is defined as primary care that is accessible, continuous, comprehensive, family-centric, compassionate, and culturally effective.

A “whole person” orientation to healthcare delivery is at the core of the medical home. A personal physician is responsible for providing all the patient’s healthcare needs. Care is coordinated across all components of the patient’s healthcare community – hospitals, specialty physicians, pharmacists, social services, home health, nursing homes, and ancillary providers. And, it includes a vision of care for all stages of life, acute and chronic, wellness and prevention, and end-of-life.

The medical home was introduced in 1967 by the American Academy of Pediatrics. Most recently, several professional medical organizations joined the AAP to redefine the basic tenets of the Patient Centered Medical Home:

Personal Relationship: Each patient has an ongoing relationship with a personal physician trained to provide first contact, continuous and comprehensive care.

Team Approach: The personal physician leads a team of individuals at the practice level who collectively take responsibility for the ongoing patient care.

Comprehensive: The personal physician is responsible for providing for all the patient’s health care needs at all stages of life or taking responsibility for appropriately arranging care with other qualified professionals.

Coordination: Care is coordinated and integrated across all domains of the health care system, facilitated by registries, information technology, and health information exchange to assure that patients get the indicated care when and where they want it (see “Personal Health Records: The Hot Consumerism Tool” at http://www.lindsayresnick.com/healthcare_strategy/2008/07/personal-health.html).

Quality and Safety: This includes using electronic medical records and technology to provide decision-support for evidence-based treatments.

Expanded Access: Enhanced access to care available through systems such as open scheduling, expanded hours and new options for communication between patients and  physicians.

Added Value: Payment that appropriately recognizes the added value provided to patients who have a Patient-Centered Medical Home.

The medical home is the next step toward true healthcare consumerism. With 45% of the U. S. population having a chronic medical condition accounting for $3 out of every $4 spent on healthcare, coordinated care delivery supported by a team-oriented medical management plan-of-action is a direction worth pursuing.

To learn more about the medical home, I recommend a White Paper prepared by the Deloitte Center for Health Solutions entitled “The Medical Home: Disruptive Innovation for a New Primary Care Model” (http://www.deloitte.com/dtt/cda/doc/content/us_chs_MedicalHome_w.pdf).

Personal Health Records: The Hot Consumerism Tool

Consumer Directed Healthcare (CDH) is past the tipping point.  Employers, employees, payers and providers have embraced these free market style health benefit plans that put consumers in the center of deciding where, when, and from whom they receive care---the customer now has more skin in the game (see May 2008. Consumer Directed Healthcare: A High Stakes Game; http://www.lindsayresnick.com/healthcare_strategy/2008/05/index.html).

CDH success means changing the way people think about and deal with their healthcare choices. It takes practical decision support tools, credible information and increased connectivity throughout the healthcare system. Now, the newest consumer trend is allowing individuals and families to maintain their own online health records.

Personal Health Records (PHRs) enable consumers to have easy access to their health history and clinical make-up in order to manage benefit and medical decisions. It gives consumers more knowledge and control over their health information. In essence, it creates a smarter, better informed healthcare customer.

PHRs allow an individual to enter and record personal medical information such as medical history, prescriptions, examination results, office visit tracking and, lab and diagnostic test results. Based on PHR functionality, consumers can input or scan images, charts, graphs, and print reports.

The result is a PHR that provides an accurate, up-to-date summary of a person’s health status and medical history. The information is secured online and only accessible by the individual or, medical professionals with approved authorization, at the PHR owner’s discretion. In addition to a standalone, consumer-driven PHR, other models are emerging that take a more integrated approach allowing information to be input through other, secure sources such as physicians, pharmacists, home care and even linked-in claims data.

In a predominately paper-driven medical record world, online PHRs bring the portability and connectivity that make reliable information available, quickly. The result can be lifesaving in emergency situations, help avoid harmful medication interactions, reduce unnecessary tests and properly prepare consumers with the context to ask the “right” questions. Most importantly, PHRs give consumers the control they need to make informed, confident decisions.

Internet-based Personal Health Records are rapidly emerging. In a State of the Union address, the President called for every American to have one in ten years. This year, Microsoft launched HealthVault and, Google Health is testing its own PHR. It is estimated that there are more than 200 PHR products available in the market with a wide range of functionality, level of integration and “cool” features. To put these PHR products in context, here’s a brief video describing one company’s approach – https://www.activehealthphr.net/dtc/DTCSiteTour.aspx.

With consumers well on the way to being the centerpiece in the future of healthcare benefit and medical decision-making, PHRs will continue to grow in popularity and acceptance. A recent Markle Foundation survey shows that almost 80% of the public believes PHRs would provide significant benefits to individuals in managing their health, although many (57%) express concern over privacy and security of their information. PHRs are here to stay. They represent another step in healthcare’s technological movement built around content, community, commerce and connectivity.

Election '08: The Health Care Debate

We’re in an economy where the Dow, NASDAQ and S&P500 are spiraling downward, and unemployment, foreclosures and the price of oil are soaring. More than 48 million Americans are without health insurance. Hospitals are seeing record levels of uncompensated care and bad debt. Health insurer competitive rivalry is compressing margins and health plans are reporting very little membership growth. There’s no doubt that health care is a leading domestic policy issue for the upcoming presidential campaign.

In an already politically divisive landscape, get ready for a sharp debate over the next five months. In order to set the stage, following is a high-level recap of the candidates’ health care positions to date –

Obama
Barack Obama, a Democrat, has served as a Senator from Illinois since 2004. He served in the Illinois State Senate from 1997 to 2004. Obama says:

“We now face an opportunity – and an obligation – to turn the page on the failed politics of yesterday’s health care debates.... My plan begins by covering every American. If you already have health insurance, the only thing that will change for you under this plan is the amount of money you will spend on premiums. That will be less. If you are one of the Americans who don’t have health insurance, you will have it after this plan becomes law. No one will be turned away because of a preexisting condition or illness.”

Obama’s plan has the following features:

Guaranteed Eligibility No American will be turned away from any insurance plan because of illness or pre-existing conditions.

Comprehensive Benefits The benefit package will be similar to that offered through Federal Employees Health Benefits Program (FEHBP), the plan members of Congress have. The plan will cover all essential medical services, including preventive, maternity and mental health care under a plan with affordable premiums, co-pays and deductibles.

National Health Insurance Exchange Provide help to individuals who wish to purchase a private insurance plan by establishing an Exchange to act as a watchdog group. This Exchange will facilitate the reform of the private insurance market by creating rules and standards for participating insurance plans. It will ensure fairness and make individual coverage more accessible.

Employer Contribution Employers that do not offer insurance, or make a meaningful contribution to the cost of coverage for their employees, will be required to contribute a percentage of payroll toward the costs of the national plan.

Subsidies Individuals and families who do not qualify for Medicaid or SCHIP but still need financial assistance will receive an income-related federal subsidy to buy into the new public plan or purchase a private health care plan.

Mandatory Coverage of Children Require all children have health care coverage. The goal is to expand the number of options for young adults to get coverage; including allowing young people up to age 25 to continue coverage through their parents’ plans.

McCain
John McCain, a Republican, has served as a Senator from Arizona since 1986. Previously he served as the Representative from  Arizona's 1st Congressional District.  McCain Says:

“The key to health care reform is to restore control to the patients themselves. We want a system of health care in which everyone can afford and acquire the treatment and preventative care they need. Health care should be available to all and not limited by where you work or how much you make. Families should be in charge of their health care dollars and have more control over care.”

McCain’s plan has the following features:

Make it easier for individuals and families to obtain insurance. An important part of a plan is to use competition to improve the quality of private health insurance with greater variety to match people's needs, lower prices, and portability.

Change the tax code. While still having the option of employer-based coverage, every family will receive a direct refundable tax credit - effectively cash - of $2,500 for individuals and $5,000 for families to offset the cost of insurance. Families will be able to choose the insurance provider that suits them best and the money would be sent directly to the insurance provider.

Making insurance more portable. Give Americans insurance that follows them from job to job. Provide insurance that is still there if they retire early and does not change if they take a few years off to raise the kids.

Expand Health Savings Accounts (HSAs). When families are informed about medical choices, they are more capable of making their own decisions and often decide against unnecessary options. Health Savings Accounts take an important step in the direction of putting families in charge of what they pay for.

Care for the traditionally uninsurable. Make coverage accessible for those without prior group coverage and those with pre-existing conditions who have the most difficulty on the individual market.

Establish guaranteed state run access plans. Develop a state-run model - Guaranteed Access Plan or GAP - to ensure high risk patients have access to health coverage. One approach would establish a nonprofit corporation to contract with insurers to cover patients who have been denied insurance.

To drill-down into the details of each candidate’s health care position, the following Kaiser Family Foundation website provides a side-by-side comparison of each candidate’s health care platform – http://www.health08.org/sidebyside.cfm.

Stay tuned. There will be flip flops, promises and finger-pointing as the candidates jawbone over one of the most pressing issues facing Americans – our health

Consumer Directed Healthcare: A High Stakes Game

Consumer Directed Healthcare (CDH) promotes increased awareness and consciousness about choice, cost and quality of health care. Rather than isolating consumers from the costs of healthcare, CDH plans engage consumers directly. The customer takes the lead in deciding where, when, how and from whom they receive care and use their benefits.

There are many players in the health care consumerism game these days, and they have a lot at stake. So what is it going to take to succeed?

Employers Winning at the CDH game means changing the way people think about health care and their insurance. The ability to educate a diverse employee population and help them navigate CDH benefits is critical. Education starts with easy-to-understand product guidance and is supported with ongoing communication. Missteps in a CDH rollout can derail the most well-intentioned efforts. Plans won’t deliver the long-term premium savings employers are counting on if employees are not prepared.

Employees The consumer’s new responsibility is to deal with their day-to-day health care expenses. Don’t sell consumers short about managing a health care budget and comparison shopping. The blindfold is coming off as CDH plans facilitate confident decisions, easy-to-read plan guides, real-time account tracking, provider price and quality comparisons, wellness incentives and vast libraries of clinical content. Sophisticated, customer-friendly care management support and personal health records add increased consumer independence.

Health Plans Proof-of-concept is going to make or break CDH over the next 18 months. Tough questions from smart CFOs and concerned benefit managers need answers:

• Can CDH deliver sustained savings once the “low hanging fruit” of young and healthy enrollees is harvested?

• Are assumptions around CDH product pricing realistic, given the years of consumer insulation by $20 co-pays and an entitlement mindset?
• Will CDH patients forgo needed medical care when it comes to dipping into their own wallet and increase costs at the back-end?

Brokers As today’s consumers become tomorrow’s payers, brokers need to move from benefit salesperson to consultative financial counselor—integrate health benefit options into long-term asset protection and evaluate the tax implications of HSA plan designs. It takes disciplined training and detailed, yet practical, product presentations to close a CDH sale. Brokers must demonstrate bottom-line value, and show benefit managers and consumers how to transition to a CDH plan.

Providers CDH often means open access to local provider cost and quality information. This changing competitive dynamic market is encouraging physicians and hospitals to demonstrate value and, change their approach to patient management. CDH reinvents the connection between he provider and patient. As doctors and hospitals adapt to CDH rules, they are beginning to understand what’s in it for them—increased loyalty and improved patient satisfaction. Over time, location of medical services, price transparency and care management will further transform medical delivery.

Consumerism will continue to influence employers and their individual health benefit purchasing decisions. We will see an increased emphasis on employee behavior modification, CDH benefit ROI and medical care delivery. Well-crafted CDH introduction strategies and customer communications will increase product uptake. By removing the intimidation and confusion that usually greets healthcare consumers, CDH can achieve educated buy-in and boost consumer confidence in their healthcare decisions. Ultimately however, only a track record of bottom-line financial impact and customer satisfaction will determine winners in this high stakes game.

 

Health 3.0: Meet Your New Customers

"You better start swimmin, or you'll sink like a stone; for the times they are a-changin"

-Bob Dylan

Managed care got us through the ’90s. Then, Consumer Driven Health Plans emerged to engage employees directly by empowering them through new benefit designs to take a decisive role in where, when, and from whom they receive care. Now, in 2008 we’re seeing the evolution of a next generation health care model – Health 3.0.

Are you ready for:

• patients able to store their personal health record in an online “safe deposit box”
• local physicians and hospitals managing integrated care systems designed around inter-generational, multi-site (even global) services
• customers using Internet social networks to collaborate on a cancer treatment vetted by fellow patients, or collaborating with complete strangers on rating physicians in their community
• innovations crisscrossing genomics, proteomics, nanotechnology, cosmeceuticals and nutraceuticals

Health 3.0 is a term coined by Jeff Gruen, MD, Senior Advisor at Revolution Health, one of the leading Health 3.0 companies. It describes the newest wave in health care structural change. Three areas of innovation characterize Health 3.0—information technology grounded in sweeping web-based connectivity, personalized health care delivered in clinically relevant settings, and insurance financing mechanisms embracing consumer-centric business models.

Digital Customers
Consumers have long been using the internet to shop for an array of products, from books and music to TVs and clothing. Over the last few years, consumers routinely turn to the Web to research and buy health insurance products on websites called Tonik, Insurance Store, Vimo and eHealthInsurance.

Over 150 million people used the web last year to gather information and make purchase decisions involving their health care. They’re turning to websites, both commercial and social networking, to manage their medical and financial decisions:

• prepare for doctor’s visits
• investigate diagnoses and treatments
• sign-on to wellness “frequent flyer-type” healthy reward programs
• explore medical tourism care alternatives
• manage Health Savings Account budgeting
• comparison shop for vaccinations, medications and medical equipment
• evaluate and coordinate in-home caregiver options

And if that’s not proof enough, check-out the new buzz words starting to show-up in health care glossaries – googlediagnosing, personal health simulation, cyberchondria, body hacking, biocitizens, boomer future proofing and theragnostics.

The vast wealth of health care intelligence is turning the digital consumer into a new type of customer—one which many organizations are not prepared to serve. Companies are not yet equipped to effectively manage these enlightened and empowered customers. In order to adapt and survive in this changing technological landscape, health companies (insurers and providers alike), need to find ways to maximize web tools, video content and mobile technology to communicate with, and service digital customers.

In a recent article I addressed the marketing and sales challenges of this changing world. One in which the consumer’s healthcare comfort zone is being squeezed and “new media” is quickly becoming status quo - http://www.lindsayresnick.com/Articles/Marketing2008.pdf.

Health 3.0 is the convergence of innovative medical delivery models, a retail-based health insurance purchasing landscape, value-based financing schemes and most importantly, the digital customer—an activated consumer with any time / any place / any device connectivity accessing an almost bottomless information reservoir, with the confidence and savvy to put it to use.

 

 

Medicare's Open Enrollment Big Question: What's In It For Me?

Medicare Open Enrollment’s Big Question: What’s In It For Me?

 
Medicare open enrollment is upon us. Whether first-time buyers or switchers from one plan to another, seniors will be shopping. From regional health plans to national mega-players, competition has never been greater—over 650 plan sponsors competing for enrollments. And, the range of benefit plan options is equally as robust:

•  Medicare Supplement (Medigap)
• Medicare Advantage (MA and MA-PD)
• Prescription Drug Plans (PDP)
• Private Fee For Service (PFFS)
• Medicare Preferred Provider Plans (MPPO)
• Medicare Savings Accounts (MSA)
• Special Needs Plans (SNP)

In a marketplace characterized by intense competition and a wide range of product/price options, it is critical to embrace basic tenets of senior selling. It’s time to sharpen your approach to Medicare marketing by finding a balance between education and selling.

Communicating with Medicare prospects about product features, benefit structure and premiums is crucial. Setting expectations about a Medicare plan’s value and anticipating questions in advance will go a long way toward creating informed, comfortable consumers.

The proper balance between education and selling can help shape a successful Medicare marketing strategy.

Education: Focus on plan features and benefits along with all the rules that go with it; but keep it simple. Medicare collateral or Web content needs to be easy-to-read and informative. Consumer education creates an understanding of a plan’s structure and how it works—basics such as deductible, copays and coinsurance; and complicating features like formularies, plan gaps and benefit extras. And, don’t forget to explain key administrative components such as billing and customer service. It’s a tough balance to achieve—not providing enough information could mean no decision; too much information could result in overload and decision shut down.

Selling: This is where a Medicare plan’s value proposition is communicated and sold. It’s your company’s “why us” and needs to comes through loud and clear—all within a framework of the benefit design you want to promote. Marketing communications need to be persuasive as well as actionable, always driving a prospect into the sales cycle. Most importantly is your ability to answer the big consumer question–what’s in it for me? This may include a range of value-based factors such as premium savings, enhanced benefits, greater freedom of provider choice, comprehensive drug formulary and, your company’s brand value.

Like all direct-to-consumer marketing success, yours will come from connecting with your senior customers logically and emotionally. Integrate senior demographics and psychographics into a marketing and sales strategy. It allows you to understand what’s important to them, what concerns them, and what they want from their health insurance. Market intelligence also helps to know where to find them and how to get their attention (what they read, watch and listen to; what motivates them to respond). Develop customer profiles and use these to target product offerings and match marketing messages. Seniors are not a one size fits all market segment.

Finally, deploying a few indispensable senior communication principles will go a long way toward improving Medicare plan sales. Throw away the jargon and industry acronyms. Use practical explanations, pictures and larger typeface to assure usability and readability…not to mention clickability given rapid adoption of the Internet by seniors. Provide plenty of opportunities to compare plans and display additional sources of information. If its fine print – call it fine print; if there’s a benefit gap, identify it, don’t hide it. Let customers know what’s covered and what’s not. Finally, before you go public, give your communications a test—share your sales presentation, collateral or enrollment materials with seniors, your ultimate buying audience!

Medicare, like most insurance products can be intimidating, frustrating and bureaucratic. There are complex benefits, tricky rules and a lot of options to choose among. Given open enrollment’s condensed timeframe, there’s bound to be confusion. Medicare marketing success hinges on educating seniors, defining value and creating motivated buyers. This is a customer segment that wants to understand, upfront, what they are purchasing, how benefits work, and how your plan fits into their financial and lifestyle situation. And, don’t forget to answer seniors’ number one question—what’s in it for me?

Health Squeeze

Health Squeeze™ – What’s a boomer to do?

 

Seventy-eight million baby boomers are expected to live longer than any generation this country has ever seen. Every day 8,000 turn 60 years old.

Boomers are educated, tech savvy and convenience driven. They control more than $8.5 trillion in investable assets. And as consumers, they’re smart cynics. Health is their most important asset, with financial security a close second. Boomers retiring at 65 need enough money and protection to support themselves for 20-25 years (upwards of $2 million).

Today, boomers are facing tough health care decisions. And, it’s going to get a lot more complex…quickly.

Health insurance benefits are changing as well as the “where, when and how” medical care is delivered. A quick scan of personal health care and financial choices boomers are facing is leaving a big unanswered question – what do I do?

It’s a health squeeze.

Consider the array of decisions boomers are facing:

Concierge Medicine – Your primary care physician sent you a letter asking for a $2000 per patient annual practice “membership fee” and, it will be your responsibility to deal with your insurance company going forward. Otherwise you’ll have to find a new doctor.

Medical Tourism – You need a hip replacement but between gaps in coverage, high deductibles and coinsurance you can’t afford it in the U.S. An overseas provider has been suggested…in India (it’s one quarter the cost).

Health Insurance –

•  You’ve taken early retirement. COBRA is expensive and only lasts 18-months; it will be six years before you’re eligible for Medicare.
• Your recent college graduate no longer is eligible under your group health policy. Between job searches and waiting periods she’s not likely to have employer coverage for 3 to 6 months.
• Your divorce is final next month and your spouse gets custody of the family health insurance.
• Your employer has announced a new set of health plans for the next open enrollment. Instead of a $500 deductible you’re moving to a Consumer Directed Health Plan with a $3500 deductible with an account-based arrangement, an HSA or HRA (you already have an IRA and FSA). And, you have Web-based tools to evaluate doctor and hospital prices and quality of services before receiving care.
• Your sixty-fifth birthday is a few months away and you’ve already received more than 25 solicitations for Medicare plans you’ve never heard of – MA, MA-PD, PFFS, Medigap, PDP – some even say they are “zero premium.”

Lifestyle & Wellness – You’re a little overweight, sneak a few cigarettes, don’t have a regular exercise regime and you keep telling yourself that last cholesterol test was borderline. Now, your employer is requiring all employees to take a Health Risk Assessment as part of a new healthy rewards program that provides incentives for good health habits and, penalties if your next assessment isn’t improved.

Hospice Care – A close relative has a terminal diagnosis. It’s agreed that final months at home, surrounded by family is the preferred “end-of-life” course of action. The choices – budgetary, logistical, and quality of care – are mind-boggling.

Home Health – Your dad has early onset Alzheimer’s and is juggling 12 prescriptions. He needs a 24-hour caregiver and you live across the country. Friends and family are sharing horror stories of incompetence and unreliability, even petty theft. Now you must select the “right” caregiver and, figure out how to mange long distance.

Retail Clinics – Your teenager needs a sports physical; you just turned 55 and haven’t had a bone density test, and; your mother-in-law needs your help checking her diabetes. It’s a month to get an appointment at your doctor’s office and the $130 office visit charge comes out of your pocket. A new clinic recently opened-up inside your local pharmacy where all visits are $49.

Long Term Care – Everyone around you is talking about retirement planning. Long term care insurance comes-up in every conversation. But, there are as many questions as answers – in twenty-five years when you may need LTC will the company still be around? Will benefits keep-up with rising costs? Are you better off setting-up your own savings plan?

Pharmaceuticals – You have a couple of prescriptions today to deal with restless leg syndrome, trouble falling asleep, moodiness, cholesterol, or maybe you’ve succumbed to all those email solicitations and are giving an ED “lifestyle enhancer” a shot (even if the risk is an erection lasting over four hours). But what about tomorrow. There are over 240 new drugs being studied for Alzheimer’s, Parkinson’s, diabetes and depression. There are another 450 in R&D for cancer, heart disease and stroke. Cosmecueticals and nutraceuticals are becoming popular. A lot of choices lie ahead.

The complexity is endless, and answers won’t come easy. Clearly, the Web is positioned as an important source of answers – 160 million Americans use the Web for medical information. Some people are already being labeled Cyberchondriacs. New websites are popping-up every day claiming to be “THE” resource you need. Some are populated with well-sourced, expert clinical content. Others are vehicles promoting a particular a product or service (e.g., drug, insurance, medical device), relying on Web advertising or membership fees for revenue. And, many others are rooted in a particular clinical specialty or positioned as tools to navigate the health care system.

Another rapidly emerging Web-based resource are health care social networks—online communities of people who share interests in a specific health condition or concern such as disease treatment options, rating physicians and insurers, alternative therapies or quality outcomes measures.

Is the Web the only answer? Independent consumer information gathering is important, as are support tools that help answer important medical, financial and social questions. But given the life-changing weight of many of the decisions that lie ahead, people will need real-time help from real people with real knowledge.

A health squeeze is upon us and it promises to get tighter and tighter.

© 2008 Lindsay Resnick

Health Insurance Buzz '07

Health Insurance Buzz ‘07

What’s going to drive change in 2007? How are health plans positioning for the future? Here’s a look at the trends shaping health insurance this coming year.

Technology From cybercondriacs to genomics, healthcare technology will be a huge force. With over 120 million people online searching for health information, the customer has embraced technology! For health plans, integrated benefit card technology promises a new era of administrative efficiency.

Differentiation Health insurance products have become indistinguishable. Going head-to-head with competitors means rising above this “sea of sameness”. Differentiation will come from unique brand positioning that connects with customers and has competitive muscle.

Boomers America’s 78 million baby boomers are expected to live longer than any generation this country has ever seen. They are educated, tech savvy and convenience driven. From empty nesters to Medicare, boomers are a growing opportunity for health insurers.

Consumerism “Proof-of-concept” will take center stage in 2007 as health plans justify Consumer Driven Healthcare investments. Employers are expecting premium savings and at the same time employees are suffering deductible shock and benefit intimidation.

Distribution Detailed customer profiles, psych-demographic data and predictive modeling are making multiple sales channels a competitive necessity. The result is improved product awareness and a one-on-one customer relationship that turns into sales growth.

Lifestyle Half of Americans now believe it is fair for people with unhealthy lifestyles to pay higher insurance premiums, deductibles and co-pays. New and innovative lifestyle management programs are embracing wellness and prevention and rewarding members to get healthy.

Individuals As employer-based health insurance shrinks and the uninsured population grows, the individual health insurance market is booming. Products need to be tailored to unique purchaser needs, striking the right balance between benefits, affordability and insurability.

Convergence Health insurers own banks and banks have healthcare business units. Financial planners are integrating benefits into long-term asset protection, and health brokers are weighing tax implications of HSAs. Today’s healthcare consumers are tomorrow’s payers.

Communication Customers are demanding information in user-friendly, readily accessible formats. Communications need to reflect demographic segmentation. It will take a new mix of strategies to ensure that companies are reaching their target customer.

Healthcare Concierge medicine, hospitalists, retail clinics and medical tourism are changing health care delivery. Spending on prescription drugs will surge and employers will continue to cut back on sponsoring health benefits.

This coming year promises to be challenging. Smart health plan executives will set themselves up to anticipate market change, refine strategic vision and capture new market opportunities.

NOTE: For a complete copy of the recently released Executive Briefing—“Top Ten Trends Shaping Health Insurance in 2007,” please email your request to lresnick@finelight.com.

© Lindsay Resnick

Healthcare

Consumer Directed...or Consumer Dejected

In today’s healthcare marketplace, consumerism is a dominant force. America is witnessing the emergence of a generation of price sensitive healthcare buyers. Cost shifting by employers has led to higher deductibles and increased out-of-pocket expenses for employees. Plan designs are exposing consumers to price and quality differences among providers. The result is a healthcare consumer equipped with information, empowered with choice and motivated by accountability.

Consumer Directed Healthcare (CDH) promotes increased awareness and consciousness about choice, cost and quality of care. Rather than shielding consumers from the actual costs of healthcare services, these plans involve consumers directly. The customer takes the lead in deciding where, when, and from whom they receive care. CDH has arrived, nationally and locally.

Over the years managed care helped stem the increase in healthcare costs. But dependence on rules-based cost controls is no longer effective. Nagging double-digit premium increases demand a new approach. And, with most HMO and PPO plan designs problems are exacerbated by dependence on a payment system grounded in co-pays that isolate consumers from the actual cost of care. Low co-payments for office visits, tests and medical procedures have given people a false impression of how much healthcare really costs.

Health insurance customers are clamoring for more choice, lower rates and less intervention in personal healthcare decisions. Employers are looking for health insurance options that deliver quality care to their employees while reducing premium inflation. The result is healthcare consumerism — benefit plans and support tools that put consumers and their physician at the hub of healthcare decision-making, giving them greater discretion and control over their benefit dollars and medical care choices.

Consumer Directed Healthcare plans introduce incentives to increase member involvement in the healthcare decision-making process. Plans meld prevention, wellness and major medical coverage with a savings or spending account feature while providing access to negotiated rates from physicians, hospitals and other providers.

It appears CDH has reached the tipping point as the future direction of employer-sponsored health insurance. Three persuasive business drivers are fueling its growth:

1. Alternative to managed care
2. Return control and choice to the customer and their providers
3. Employer premium stability and price predictability

Patients are the new healthcare consumer. They want to know what they are buying and why it costs what it does. Every healthcare company reaching-out to today’s consumer has to communicate value – including quality measures – in meaningful terms. In the end, don’t underestimate a patient’s willingness to comparison shop when it means saving money out of their pocketbook.

NOTE For more information see the article CDH Success: What's it going to take?

© Lindsay Resnick