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Shift to retail business model to attract members

Consumers are quickly becoming key players in the health insurance industry. Because of the health reform law's insurance mandate, they will be entering the market in droves--some experts estimate up to 35 million new customers--and consequently changing much about how health plans conduct their business.

New research conducted by Stonegate Advisors, including interviews with 40 key executives across 15 national and regional health plans, reveals that shifting from a wholesale to a retail business model is now a critical focus area for health plans.

Consumers already have begun to play a far more active role in the healthcare decision-making process. Reform will only accelerate the movement to retail as the individual market explodes. To be successful in this new environment, health plans must be able to connect with members in a way that drives value for the individual, rather than for the group purchaser.

However, the health insurance industry has not traditionally focused on individuals, so health plans must now take steps to alter their concentration. This won't be easy, as it requires a major paradigm shift, but one thing they can do, according to Stonegate, is begin integrating and augmenting their existing member data to gather a more comprehensive and robust view of their individual members. By better understanding their existing members, they can learn what individuals need, better craft specific plans and then successfully market them.

Insurers also should consider linking traditional claims data with other forms of consumer data, potentially including data from third-party sources. Stonegate suggests using census data, Nielsen, Simmons and other market research data, which could help health plans gain a more well-rounded concept of their consumers.

In this new retail health insurance market, consumers will not be satisfied with limited service interactions and mediocre and confusing access to benefit information, Stonegate says. They will expect interactions and service levels similar to what they experience with other service industries, such as mobile service providers and online retailers. To successfully transform their business to a direct-to-consumer model, health plans must fully embrace the philosophy that understanding member preferences and behavior and engaging members at every possible touch point is a new base requirement of doing business.

To achieve this level of integration, Stonegate recommendsinsurers use platforms to consolidate their internal data, including claims, enrollment, providers, benefits, medical management and call centers. They should also integrate these platforms with providers' clinical data, such as EHRs, and even provider practice management solutions.         

I think Stonegate offers some good recommendations in its whitepaper. I hope that insurers are able to open their minds and business models to successfully adapt to the times. - Dina

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