If insurers want to design and launch their own private health insurance exchange to compete with the publicly administered marketplaces, they must focus on three essential aspects--market strategy, product offerings and integrated data, according to a white paper from Array Health.
Insurers have much to gain when they launch private exchanges, particularly since more companies say they're considering using private exchanges to provide health coverage for their employees in the coming years, FierceHealthPayer previously reported.
What's more, insurers can use private exchanges to generate new revenue, retain existing groups while recruiting new ones, increase product participation rates, boost consumer loyalty, improve member satisfaction and increase operational efficiencies.
With those goals in mind, follow three steps, suggested by Array Health, while developing private exchanges:
1. Develop a market strategy: One of the first steps insurers should take is to develop a market strategy that determines which market segment to target and how. When defining the target market for private exchanges, insurers must prioritize segments because each has different needs, the white paper noted.
2. Identify product offerings: Insurers also must determine which products they will sell. Array Health suggests insurers begin with core product offerings that include several cost levels, flexible networks and coverage tailored to group needs and consumer demographics. For example, some small groups using the private exchange might be offering insurance to its employees for the first time, so the products should allow for flexibility so the companies can evolve their products over time.
3. Integrate data: Private exchanges need to integrate data between the insurers and employers. They must share enrollment information, member activity and billing data. Integration points include census files sent from the employer to the exchange to pre-load groups and member activity data sent from the exchange to the insurer to verify member data accuracy. Plus, exchanges must allow consumers to search for and find information about in-network providers and product data.
To learn more:
- read the Array Health white paper (.pdf)