How can insurers grow their membership and boost revenues? They should consider expanding into international markets, competing in the Medicaid marketplace, developing private exchanges producing technological applications, according to Mark Farrah Associates (MFA).
The consultant company reached those conclusions after reviewing enrollment and financial trends between 2012 and 2013 for seven insurers--Aetna, Cigna, Health Care Service Corporation (HCSC), Humana, Kaiser Permanente, UnitedHealth and WellPoint.
In a recent brief, MFA outlined the insurers' successful tactics. Here's a summary of four of the strategies:
1. Expand into international markets: Some experts predict the healthcare reform law will diminish commercial group business for insurers, so many of them are broadening their reach oversees to continue growing this segment. Cigna exemplifies this strategy, as it intends to become a truly global enterprise with partnerships in India and Turkey, among others. UnitedHealth, meanwhile, expanded into Brazil by acquiring its largest insurer Amil Participacoes last year. Aetna also is acquiring United Kingdom-based InterGlobal and expanded its partnership with Swiss Life in Southeast Asia. And Blue Cross Blue Shield insurers, including WellPoint, are collaborating with Bupa, the United Kingdom's largest private insurer, creating the world's biggest provider network for international consumers.
2. Compete in Medicaid markets: As more states incorporate private insurers into their Medicaid expansion plans, the market offers a huge potential for insurer growth. That awareness drove Aetna's buyout of Coventry and WellPoint's acquisition of Amerigroup. Cigna's purchase of HealthSpring in January 2012 positioned the company to increase Medicaid membership ahead of the curve, MFA noted.
3. Develop private exchanges: WellPoint, HCSC and Humana are participating in multiple public exchanges, while the rest of the major insurers are taking a wait-and-see approach to the marketplaces. But most insurers are joining private exchanges run by third parties, including Aon Hewitt, Towers Watson and Mercer. What's more, many insurers are either expanding or launching their own private exchanges to bring in even more membership and revenue. Indeed, private exchange enrollment is expected to outpace its public counterparts.
4. Produce heath IT applications: Insurers that succeed in a post-reform market will be the ones that launch technological applications that appeal to consumers, MFA said. For example, Cigna signed a multi-year agreement with Samsung Electronics to co-develop health and wellness features on Samsung smartphones. And Anthem Blue Cross is partnering with SoloHealth, which operates health screening kiosks, to access consumer information for targeted new member outreach campaigns.
To learn more:
- here's the MFA brief