With the U.S. presidential election now squarely in the rearview mirror, the focus shifts to the implementation of key facets of the Patient Protection and Affordable Care Act (PPACA). No portion of the law will be under greater scrutiny than the introduction of government-sponsored health insurance exchanges, scheduled to begin accepting open enrollment in October 2013, with an implementation date of January 1, 2014.
For payers, this is a once in a lifetime opportunity to attract what experts predict will be tens of millions of new customers entering the marketplace. While it would be tempting for payers to wait and see how this marketplace evolves and learn from the mistakes of competitors, in this case such inaction is simply not a viable strategy. Even with the continued uncertainty surrounding these exchanges and the myriad complexities in each state, there are several steps payers can take today to effectively compete for new customers, streamline operations, manage risk and achieve sustainable business performance.
1. Take a new approach to acquiring customers in a consumer oriented marketplace as the industry shifts from a Business to Business to a Business to Consumer model
Insurers long accustomed to having the human resources department of a large organization as their customers must now adapt to a marketplace where the individual is the consumer. To do so, payers will need to align their particular value propositions with individual consumer needs and buying patterns to show they both understand these needs and are equipped to meet them. In states where exchanges are already operational, some payers have already found social and digital media marketing approaches to be effective in recruiting new customers, along with improving the aesthetics and functionality of the web portals on which these exchanges are operating. Furthermore, installing intelligence tools and feedback mechanisms to align with new consumer engagement approaches and new sales channels will allow payers to measure their return on investment.
2. Optimize acquisition investment and strengthen ability to retain new customers
As with any company-consumer dynamic, it is crucial that payers figure out how best to please the new customers in order to promote a worthwhile experience and validate their decision to sign up with the particular insurer. “Experience maps” can help to relate to and attract new buyers, while measuring customer touch points and outcomes can track ROI for these newly acquired customers. For some organizations, there may be a need to redesign their customer service operations to align with emerging technologies that better equip consumers to take on a more active role in self-managing their health care. Other retention tools that payers may find useful include enhanced consumer loyalty programs that are aligned with health and wellness initiatives. Additionally, an enhanced privacy and security strategy will be essential as new technologies and distribution mechanisms, such as social media, become commonplace.
3. Prepare to operate on the exchanges with scalable enrollment, billing, and fulfillment functions while reducing administrative costs
Achieving profitability in the age of health insurance exchanges will be easier said than done. In order to implement cost-effective and compliant risk management programs, payers must effectively manage technology and process integration between core administrative systems, electronic data interchange (EDI) platforms, and the exchanges themselves. Additionally, payers must redesign processes to better manage batch enrollment files and efficiently reconcile revenue, and enhance enterprise intelligence capabilities to help improve performance measurement.
Finally, as new regulatory requirements are put into place, payers will also need to proactively manage compliance with these requirements, and adopt cost-effective risk and controls to get ahead of any challenges that may results from any compliance failures.
4. Enhanced clinical capabilities are required to effectively manage populations and new risk pools
Effective population health management is a responsibility that will only increase among payers as health insurance exchanges begin coming online in greater numbers. In order to address these challenges, payers should focus on evaluating demand capacity of the primary care networks and establish sound relationships with “accountable care” providers. Payers should also aim to implement enhanced risk identification and stratification tools while improving medical management capabilities. Those that develop such a new health management model, and strengthen functional capabilities that emphasize evidence-based care management will create a potent differentiator. . By aligning health services operations and processes with innovative analytics and technologies, payers can also support a more productive payer-provider collaboration, which puts patients and their needs front and center.
By focusing their efforts within these four areas and developing strategies to directly confront challenges with the implementation of health insurance exchanges, payers will be optimally positioned to capitalize on the vast opportunities of the currently evolving health care system.
Bill Fera, MD, is a principal in Ernst & Young LLP’s Health Care Advisory Services practice. The views expressed herein are those of the author and do not necessarily reflect the views of Ernst & Young LLP.