There's no time like the present for health insurance companies to get into the private exchange business.
That's the opinion of many industry experts, and even payers, who believe the private exchange industry is poised for "extreme growth," Matt Graham, a director at Leavitt Partners, tells Managed Healthcare Executive.
Private exchanges promote a certain level of innovation that enables a better flow of information into various markets, Graham points out.
Understanding the growing demand for private exchange enrollment, Highmark launched its exchange in 2010, initially focusing on employer groups of 100 or fewer--in 2013, it expanded its platform to groups of all sizes.
The insurer created two separate platforms: One for commercial groups with active employees and one for retirees. And while Highmark first only considered defined contribution, the model now includes a defined benefit and integrated self-funding for smaller groups, Bill Brown, manager of digital distribution who focuses on private exchange offerings, tells Managed Healthcare Executive.
Insurers often push the private exchange option because it offers benefits in a more controlled environment, as opposed to a Small Business Health Options Program exchange, which may offer consumers similarly priced options but in a more overwhelming fashion, notes the article.
Wellpoint, for example, decided to tap into the private exchange trend and bought into platform companies with the intent to help employers transition from group coverage to a defined-contribution model.
For insurers looking to get into the game, one step is to collaborate with providers to form private exchange networks that promote clinical integration with unique access to certain delivery systems, FierceHealthPayer previously reported. And perhaps most importantly, plans must "have their own exchange technology," Jon Kingsdale, Ph.D., former executive at Tufts Health Plan, tells Managed Healthcare Executive.
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