Need to drive MA plan membership? Don’t ignore your Marketing and Sales strategy

By Ben Kline, Business Development and Joel Andersen, Vice President, Marketing - Lumeris, September 19, 2017

After considerable due diligence, your organization has decided to launch a Medicare Advantage (MA) plan. You evaluated the market and current MA enrollment. You examined market competitors, such as provider-sponsored organizations, regional insurance firms, and large national organizations. You gauged potential competitor responses, trying to figure out if launching a plan would disrupt current market dynamics.

At this point, many organizations begin to shift their attention to enrollment and financial projections. As with any business endeavor, your organization needs to capitalize on its investment and understand where the membership threshold to breakeven lies. The sooner you can reach that membership threshold, of course, the better. However, many organizations fail to realize that the longer you go with low membership, the harder it becomes to garner traction. Meaning, your approach prior to launch and over the first year becomes increasingly important. You only have one chance to enter the market, and when you do, you want to capture your audience—providers, health systems, brokers, and consumers.

Based on our experience, most organizations underestimate, and often ignore, the importance of the sales and marketing strategy for launching a Medicare Advantage (MA) plan. Why? Some organizations that already manage insurance products in other lines of business may believe that traditional sales tactics will be sufficient for an MA launch. Others might think insurance marketing is purely an actuarial exercise and rely on the price point to drive membership.

From our experience in Medicare Advantage, two items are essential for growing membership:

1. Sales and marketing must be involved, and part of, the strategic planning process. They should be involved in all critical strategic decisions regarding the product launch, including advising on the design of your benefit plans.
2. A disruptive sales and marketing strategy helps you generate enrollment to ultimately win in your market. Successful plans pinpoint an unmet market need or gap in the market and leverage it—but this requires a highly tailored strategy.

Let’s walk through a common pitfall. In quite a few markets, we see the majority of new MA plans fall into the “me too” trap. They design their plans with a similar benefit structure and provider network to an existing MA product within the market. Their plan may have a slightly lower member cost share, but to the naked eye it appears identical to incumbent plans. To drive plan switching behavior among beneficiaries, you must provide a compelling reason to switch and those reasons must be visible to the consumer.

Many new MA plans also fail to realize that they are not just marketing against other market MA plans, but also against Medicare fee-for-service, Medicare Supplement insurance (Medigap), and standalone Prescription Drug Plans. While identifying competing benefit points is important, addressing the shortfalls of these other coverage options including how your plan addresses those shortfalls is critical. Educating the market on how your MA plan is innovative and transformative (and better than the status quo) can go a long way.

From here, it is critical to design a selling strategy that aligns with your sales channels. The more time you spend with your channel partners, the better. Handing off your new MA product to a series of brokers is not going to be enough. You will likely need to spend time educating your sales channel on Medicare Advantage, and the unique attributes of your plan. Moreover, how you design your product will dictate how you want to sell it. For example, you may have designed your product around a carefully crafted narrow network of providers. Narrow network MA plans call for an entirely different approach, and employment of classic MA sales and marketing approaches will often yield mixed results.

Medicare Advantage provides an attractive opportunity to deliver better care to seniors. To create a competitive advantage, don’t underestimate the power of a disruptive marketing and sales strategy.

Thinking of Starting a Medicare Advantage Plan? 2019 Starts Now

By Peter Kinhan and Dan Juberg (Lumeris), February 10, 2017

Provider Sponsored Plans and Medicare Advantage are gaining traction as a critical strategy for profitable, value-based care. However, many underestimate the necessary lead time and effort required to move from consideration to activation. Planning for a 2019 launch needs to begin now starting with a detailed market and organizational feasibility study for standing up a health plan.

In recent years, due to increasing cost pressures and competition among providers, many organizations have expressed their ambitions to develop their own health plans, often referred to as provider-sponsored plans (PSPs). Medicare Advantage (MA) is often considered the entry point of choice due to government financial incentives and strong opportunities to drive improvements in both quality and total cost of care for an increasingly aging population.

However, because of competing priorities, many executives struggle to carve out the necessary time to truly evaluate the opportunity. The time is right to look at MA—in terms of the changing political landscape and the surprisingly lengthy lead times required to assess and apply. This means for those that consider an MA plan as part of their future strategy, that process should start today.

There is no doubt the changes in presidential leadership have created political uncertainty when it comes to the healthcare industry. There are more things unknown than known. That said, rising healthcare costs are still a major problem to be solved, but value-based care (VBC) has proven to be and will continue to be a critical part of the solution.

So what could change with this new administration and how could it affect your global Medicare strategy? Let’s take note of the significant changes to Medicare that have been gaining traction in the market to date

 
• MA enrollment continues to grow rapidly. In 2016 there were 17.6 million MA members, which is an increase of more than 200 percent from the number enrolled in 2005.
 
• MACRA and other CMS programs have deployed value based payment methods that are projected to impact up to 125,000 providers in the traditional Medicare market by 2018.

These two trends demonstrate an important shift to VBC, and if one takes Paul Ryan’s “A Better Way,” as an indication of what is to come from a Republican administration, then an assumption is the shift to value-based care will continue —if not accelerate. According to “A Better Way,” Medicare’s “overhaul” would include what Ryan terms “premium support;” a plan to increase competition among providers and allow beneficiaries the freedom to choose where to spend their healthcare dollars. Sometimes called a defined contribution or voucher system, the desired effect of this approach would be to push Medicare further away from its current largely fee-for-service setup by providing increased incentives for beneficiaries to be cost-conscious in their plan selection.

This would likely drive a considerable enrollment increase in the already-growing private MA market; a space that has long been a strong component of Republican plans. As Medicare grows and seeks to control costs, providers can expect a doubling down of population health and a need for health systems to capture a larger share of the premium dollar. MA has always been a critical aspect of organizations’ population health strategy, and with the political changes, that need and opportunity has presumably only strengthened.

Many organizations have been preparing for a migration up the Medicare food chain through the creation of their own health plan. According to Avalere, providers are leveraging their large integrated delivery networks to establish plans at an increasing pace, representing 58 percent of new MA plans entering the program in 2016. Many of these organizations have been developing the necessary competencies by establishing risk-bearing Accountable Care Organizations (ACOs) or accepting delegated risk. Many are confronted with familiar dilemmas. What are the next steps as these ACO agreement periods wind to a close? If launching an MA plan is a couple years down the road, when is the right time to start the “two years from now” process?

The MA application process differs greatly from the Medicare ACO application process and it starts roughly six months earlier. This is a significant undertaking with great opportunity, and large risk. It requires an in-depth analysis and planning and the necessary time to align organizational strategy.

The Notice of Intent to Apply for a 2019 Medicare Advantage contract opens in mid-November 2017. However the real work should begin much earlier than that. A candid evaluation of whether your organization is ready to run its own health plan takes time and thoughtful consideration. And the question isn’t simply just “Can we?” Of equal importance is “Should we? Will the market support it? Will we need partners or help? What kind of optionality should we be considering and planning for?”

Organizations legitimately contemplating starting an MA plan are taking a deep dive to assess their organizational and network readiness, scope out their competitive landscape and determine not only the overall opportunity present in the market but the viability of their organization being able to capitalize on it. Conducting a PSP feasibility study is a crucial first step to setting the wheels in motion for a successful and targeted health plan application and development process.

 
• Key deliverables of a PSP feasibility study should include:
 
• Market Assessment;
 
• Prospective Partner List;
 
• Network Adequacy Analysis;
 
• Go-To Market Product and Network Structure;
 
• Target Market Landscape and Competitive Positioning Strategy;
 
• Organizational Readiness; and
 
• Financial Pro Forma.

Armed with an honest assessment of the critical factors to successfully stand up and operate a health plan, organizations not only better understand their readiness but are also able to act immediately to implement any necessary improvements. Providers should be aware of specific opportunities available, and precisely what it will take for them to actualize them.

As a result of a PSP feasibility study, the executive team will be better informed for the ultimate decision as to whether they should pursue an MA contract. Should a “go” decision result, progressive organizations should then work to develop an implementation plan in tandem with the application process. While the development of a health plan has never been considered easy, this only underscores just how much preparation many successful organizations undergo.

With so many competing initiatives and so much uncertainty in healthcare right now, it can be easy to overlook or delay the analysis of your MA opportunity. However, we contend that with the political changes and continued demographic evolution, it has never been more important to assess this opportunity—and that process needs to start soon if organizations want options for 2019.