Industry Voices—How an insights-driven health plan can compete in the MA market

Medicare Advantage
A look at how regional payers can harness data-driven insights to compete in the Medicare Advantage market (Getty/designer491)

Data shared across an organization create a common language that informs decisions and supports organizational goals.

This builds alignment across business activities, catalyzes collaboration and enhances agility in response to competition and changing market dynamics—making the organization smarter, more innovative and more purposeful in its approach.

For health plans, these capabilities are particularly important in increasingly competitive Medicare Advantage (MA) markets, where consumers choose their insurance providers like they choose their medical providers. Add the move toward value-based reimbursement, and it becomes clear that the future belongs to organizations that power decisions with data-driven insights.

Midsize regional health plans in particular face aggressive competition from large national players. According to analyses of Centers for Medicare & Medicaid Services enrollment data, the “Big Five” health plans hold a significant majority of MA enrollment nationwide, and their clout is growing. Between 2015 and 2018, they accounted for 86% of all net enrollment growth; between 2017 and 2018, they added almost 1.4 million net new members. The rest of the industry combined added just 61,600.

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Market intelligence

National players bring formidable technology capabilities, resources and marketing muscle to bear. Since regional plans can’t outspend the Big Five, they must outsmart them using data and analytics to identify and act upon opportunities by answering some fundamental strategic questions about their markets.

  • What is your competitive position? To participate in many different markets against multiple competitors while offering a variety of products, health plans must understand market trends and competitive and consumer dynamics.
  • Which markets should you target for entry or expansion? Growing in an intelligent, sustainable way requires thinking about factors beyond pure volume. Long-term stability is driven by securing members who are a good fit for the plan offering, which requires alignment between plan and provider network design, marketing messaging and acquisition targeting.
  • Which new products should you offer? Achieving market-specific financial and quality goals requires determining the most effective and appealing products to offer based on the types of products customers want and how specific offerings impact enrollment. Provider impact should also be considered.  

A precise understanding of what customers want and how well the health plan can deliver on those demands reduces financial risk, improves marketing effectiveness and enhances engagement and satisfaction.

An engaged organization

Today, information is so pervasive, and markets are evolving so quickly that the benefits of knowledge hoarding have diminished. Instead, competitive advantage accrues to organizations that evolve and adapt quickly by generating knowledge flows.

In knowledge-based organizations, data are collected automatically and centralized to serve as a single source of truth. Analysts’ work shifts from data mining to insight generation that informs decisions across the enterprise. 

RELATED: Number of MA plans offering supplemental benefits on the rise, but hurdles remain, report finds

For health plans, challenges like growth, quality and profitability are interwoven. To make the best decisions, different departments need ready access to the knowledge of the organization. Marketing must understand the thinking of product developers. Plan designers need to understand the revenue goals of finance.

This level of knowledge sharing creates alignment around strategy, encourages collaboration, generates deeper insights into market needs and drives innovation that distinguishes the organization from competitors. By achieving these optimal levels of performance, midsize plans can “punch above their weight.” More importantly, they can engage and retain members while improving the health of the populations they serve.

Stephen Sigmond, co-founder, chief financial officer and vice president of marketing for Carrot Health, is an entrepreneur who has worked with emerging technology companies for more than 25 years.

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