- 2018 is a year in which payers are likely to implement strategies aimed at improving growth in Medicare Advantage markets, increasing the use of the social determinants of health to improve outcomes, and expanding member engagement with health plans.
Payer organizations may also have to adapt to the changes made to the ACA during 2017. Cuts to cost-sharing subsidies, the expansion of association health plans, and removal of the individual mandate are likely to influence payers that operate in individual health plan markets.
For 2018, payers are likely to expand their data-driven decision making capabilities to optimize customer relationships and deliver desirable health plan products at the lowest possible costs.
Increasing Medicare Advantage (MA) offerings and MA market entries
Medicare Advantage (MA) has increased in popularity throughout 2017 and is expected to be even more popular in 2018.
A recent PwC report found that enrollment in MA health plans is expected to reach 21 million individuals, a five percent increase from the previous year.
This is good news for payers offering MA plans. AM Best and the Kaiser Family Foundation found that the MA health plan premium revenues tripled from $69 billion in 2007 to $187 billion in 2016. The MA health plan market is growing at a relatively brisk pace even with traditionally high market concentrations among MA plans.
Payers are expected to secure their success in 2018 by enhancing their member engagement techniques. A J.D. Power survey found that only 11 percent of MA beneficiaries receive comprehensive communications about their health plan, which gives payers an opportunity to use positive messaging as a way to stand out in the market.
“Our data shows that the ability to deliver consistently strong customer satisfaction in the Medicare Advantage market is becoming a key differentiator for the leaders in this space and that satisfaction is achieved through a series of highly choreographed best practices,” said Valerie Monet, Senior Director of the Insurance Practice at J.D. Power.
The MA Value-Based Insurance Design model updates also create more opportunities for payers to participate in the MA health plan market. CMS added updates that extend participation into fifteen new states, allow for specialized benefit design, and allow Chronic Condition Special Needs plans to participate in the model.
Managing members within high-deductible health plans
Research from Alegeus found that offerings in high-deductible health plans (HDHPs) and related products are projected to grow by 11 percent per year. Nearly three-quarters of employers added that these plans will continue to play a significant role in their health benefits strategies.
Nine out of ten employers plan to offer employees a HDHP as part of their overall strategy to manage anticipated healthcare costs of $14,156 per employee per year.
HDHPs have several pros and cons. They offer flexible spending options for healthier beneficiaries with a low-premium, high deductible financing design. And while HDHPs could be problematic for older and sicker beneficiaries, they are a prime opportunity to attract members that want lower monthly costs who aren’t at obvious risk of a major expense.
Payers that want to provide these health plans should address known concerns associated with HDHP enrollees. HDHP enrollees tend to avoid necessary healthcare because they generally try to avoid spending. HDHP enrollees are also likely to require financial education to learn about cost-effective utilization.
Payers that try to attract HDHP enrollees throughout 2018 may also implement a health savings account (HSA) benefit that provides enrollees a “rainy day” savings account for unexpected healthcare costs.
Expanding the use of social determinants of health to improve outcomes
As value-based care continues to make it more important to manage patients holistically in order to get upstream of chronic diseases, payers are expected to make the social determinants of health (SDOHs) a higher priority.
The need for clinical analytics for payers, providers, and other healthcare stakeholders is growing by a compound annual growth rate of 12.5 percent per year, which indicates that payers and providers are looking for future technologies that assist in identifying the origin of healthcare costs. Payers that do more to identify potential costs can assist a growing field of providers that want to participate in value-based care agreements.
Payers are gradually developing programs and incentives to address socioeconomic issues, such as homelessness, food insecurity, lack of transportation, and patient health literacy.
Community engagement leaders among leading payer organizations such as Aetna, Humana, and UnitedHealthCare have contributed significant financial investments to fund community programs that improve healthy behaviors and access to services that improve health outside of a care setting.
And payer organizations in California have created housing programs that manage housing-related healthcare cost concerns.
Eventually, payers may take more of a member’s social determinants of health into account when calculating value-based payments. But getting access to the right data - and creating equitable programs for reimbursement based on variables largely outside a provider’s control - is a challenging proposition.
“For the payer, there is the question of how to collect data considered sufficiently reliable in order to modify payments based on it,” said Arlene Ash of UMass Medical, who developed a payment formula to begin the process.
“And for the provider organization, the problem is identifying what data is important in the first place - and how to translate that data into knowledge for their own decision-making.”
As social determinant data becomes more widely available, however, payers will have more opportunities to take socioeconomic circumstances into account when engaging with members and their providers.
Improving member engagement capabilities
Payers are actively investing in member engagement resources to capture the attention of new beneficiaries and retain current beneficiaries. These investments are likely to continue into 2018.
A Change Healthcare survey found that 80 percent of payers have planned future investments in member engagement and customer satisfaction capabilities. Payers in the survey indicated they are increasing staffing in their customer services departments, are buying and using more technology to improve customer service, and are using data collection to identify why members like or dislike health plan customer services.
“Payers and providers have opportunities to capitalize on their investments, tailor experiences to what consumers want, promote adoption of these innovative services, and solicit feedback—and that goes double for the largest part of the population, older patients,” Carolyn J. Wukitch, Senior Vice President & General Manager, Network and Financial Management at Change Healthcare said. “Engagement requires more than tools alone."
Payers have a broad set of consumer engagement strategies available, but 2018 should be the year that payers overhaul their engagement capabilities. These strategies include customizing communications to the needs of beneficiaries, using demographic data-driven marketing to target new beneficiaries, and creating user-friendly retail experiences that make it easier to purchase health plans.
David Biel, the US Leader for Health Plans consulting at Deloitte, believes that new consumer demands for connected health plan engagement will shift consumer engagement investments into mobile device interactivity that appeal to younger healthcare consumers.
“The healthcare system has the opportunity to evolve the two aspects together — to try to leverage the next gen technologies with this new set of beneficiaries to find new and better ways to coordinate care through connected devices and next-gen technologies to try to move the care model and change the care model and drive it more in the home, not in the hospital,” Biel said.