HHS-CMS Share Marketplace Projections and Nine Open Enrollment Strategies

By Clive Riddle, October 21, 2016

Earlier this Week, HHS Secretary Sylvia M. Burwell “announced that she expects 13.8 million individuals to sign up for coverage through the Marketplaces during the upcoming Open Enrollment.” In conjunction with her announcement, the HHS Office of the Assistant Secretary for Planning and Evaluation released a report detailing these 2017 enrollment projections for 2017, telling us:

• The projected enrollment of 13.8 million would represent an increase of 1.1 million from 12.7 million plan selections at the end of 2016’s Open Enrollment.
• They estimate this will net down to monthly effectuated enrollment averaging 11.4 million people during 2017.
• 10.7 million uninsured Americans are eligible for Marketplace coverage. Among them, 85% are potentially income eligible for financial assistance,  and 60% have incomes that would also qualify them for cost-sharing reductions in addition to tax credits
• 40% of the eligible uninsured are 18-34 years old
• 5.1 million eligible for the Marketplace currently purchase off-Marketplace coverage. Of this group, they estimates 2.5 million people could be eligible for financial assistance via Open Enrollment signups for Marketplace coverage

So how are they going to increase the open enrollment signups to 13.8 million? Last week, CMS shared their open enrollment marketing strategies, noting that “nearly half of uninsured adults are unaware of the financial assistance available to help pay for health insurance, even though about 85 percent of Marketplace-eligible uninsured Americans could qualify for financial help.” Their marketing plan includes:

1. Increasing direct mail pieces from 800,000 last year to 10 million this year, targeted to “people who were recently uninsured, recently lost coverage, or sought coverage in the past through HealthCare.gov or a state Medicaid program,” including “people who started to sign up at HealthCare.gov last year, but didn’t complete the process”; “consumers who lost eligibility for Medicaid or CHIP coverage last year, or who applied for Medicaid or CHIP but had incomes too high to qualify.”
2. The IRS “will conduct new outreach to uninsured people who paid the penalty or claimed an exemption, letting them know that tax credits are available for Marketplace coverage and providing information about their health coverage options.”
3. E-Mail marketing will be expanded, as “HealthCare.gov’s email list has grown by over 30 percent” to 20 million+ people
4. Healthcare.gov notes they “learned that simply reminding a consumer about their eligibility for financial assistance in an email increased enrollment rates by 17 percent compared to emails that did not include that information,” and that “emails informing returning consumers of increased costs in their current plan and encouraging them to review their options by shopping increased active renewal rates by 279 percent.”
5. Healthcare.gov also learned merely mentioning a deadline in an email increased enrollment by 14 percent compared to emails that did not mention deadlines.
6. HealthCare.gov will remind consumers about the a penalty for not having coverage, and cite a study in which “consumers who received an email with additional language referencing the penalty were 13 percent more likely to enroll,” and a test that “found that more prominently displaying penalty information with the deadline (for example, in the email subject line) produced a larger lift in enrollment, 97 percent,” and a “message that gave higher-income people information about the higher penalty levels likely to apply to them increased enrollment by 18 percent.”
7. Outreach is being expanded to mobile and streaming platforms, and gaming platforms in order to reach younger audiences. Healthcare.gov cites a partnership with gaming platform Twitch, and notes that they will run ads and sponsor content on YouTube, Instagram and Facebook
8. Healthcare.gov will emphasis optimized search efforts and cite that “CMS increased overall search conversion rates by 24 percent compared to the previous year.”
9. Healthcare.gov  will “double the number of impressions a consumer sees (“Gross Rating Points”) on TV in the week leading up to December 15th compared to the same week last year.”

Under the Influence

By Kim Bellard, March 18, 2016

A new analysis by ProPublica found that doctors who receive money from drug companies do, in fact, tend to prescribe more brand name drugs, and that the more money they got, the more brand name prescribing they did.

ProPublica looked at prescribing patterns from five specialties -- cardiovascular, family medicine, internal medicine, ophthalmology, and psychiatry -- with the restriction that individual physicians had to have had at least 1,000 Part D prescriptions in the study period (2014).  Overall, about three-fourths of physicians took some money from a drug company, although there was wide variation by specialty and geography -- e.g., nearly 9 of 10 cardiologists took payments, just as around 90% of physicians took such payments in Nevada, Kentucky, Alabama, and South Carolina. 

Conversely, in Minnesota and Vermont the percentage was closer to 25%.

The amount of the payments appeared to have an impact.  Internists who received no payments had brand-name prescribing rates of about 20%, while those getting more than $5,000 had rates of around 30%.

The defenses from physician organizations and the drug industry make for fun reading.  Dr. Richard Baron, the president and chief executive of the America Board of Internal Medicine, protested that doctors almost have to go out of their way to avoid taking these kinds of payments.

The president of the American College of Cardiology suggested the patterns were re-enforcing; the more they learn about a drug, the more they tend to use it, and the more they use it, the more drug companies pay them to be speakers and consultants.

Seriously, these are their defenses?

We've been learning a lot more about how pervasive industry payments -- not just pharmaceutical companies but also medical device and other health care suppliers -- are since the advent of the Open Payments initiative.  We're talking about over $6.5b in payments in 2014, made to over 600,000 physicians and 1100 hospitals.  I wrote about this last summer, and the new ProPublica analysis certainly should rattle any remaining doubts anyone might have had about the potential impact of such payments. 

True to form, last fall the AMA called for a ban on DTC advertising.   That's right, they don't seem disturbed about the $6.5b physicians are getting, but they think that the ads that we see are bad.  There's a certain logic to that; it has long been suspected that these ads help drive consumer demand.

Austin Frakt, of The New York Times, recently challenged this conventional wisdom.  For one thing, he notes that while drug ads do cause an increase in sales for the advertised drug, they also increase sales of other drugs in the same class, using Prozac as an example.  Seeing drug ads may help "normalize" the condition being treated, making getting treatment for it more acceptable, and may also help encourage patients to continue with existing prescriptions.  

Mr. Frakt points out that it is not only the drug companies who benefit from drug advertising, but also physicians.  Every $28 in drug advertising results in an additional doctor visit; someone has to do the prescribing, after all.  And, of course, the DTC spending is dwarfed by the direct-to-physician "promotions" -- Mr. Frakt estimates drug companies spend seven times more on these than on DTC advertising. 

So we're back to the ProPublica analysis. 

It simply is not plausible to maintain that these efforts are not influencing physicians' decisions, and that they may not always be in the best interests of patients.  As Bloomberg put it last summer: the payments "seek to convince doctors that second choice is OK."
 
Well, I don't know about you, but that is not OK with me. 

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

What’s In a Name?

By Clive Riddle, December 3, 2014

Wellpoint is now Anthem. The re-titling of the national health benefits company was publicly announced months ago, the new corporate website has been designated as www.antheminc.com, and the change from the New York Stock Exchange ticker from WLP to ANTM became effective today.  

WellPoint Health Networks and Anthem merged in 2004, with WellPoint assuming the corporate name of the merged company. Why the name change back to Anthem ten years later? It’s mostly about branding. Joseph Swedish, Anthem’s President and CEO tells us “the change to Anthem will help us better communicate our values and simplify the way we connect with our associates, consumers, investors, and the communities we call home.” Simply put, the company has lots of products around the nation branded as Anthem. They have none branded as WellPoint.

So why did they take the WellPoint name in the first place? Branding may have been less the issue at the time than negotiations between two large BBCBS for-profit corporations. The corporate headquarters went to Anthem’s Indianapolis, but with the WellPoint name. WellPoint’s Leonard Schaeffer got the title Chairman of the Board; Anthem’s Larry Glasscock took the title President and CEO. A telling sign of the shifts in competing corporate cultures and recognition of the branding issue would have been in 2009 when the flagship from the WellPoint camp, Blue Cross of California, assumed the trade name Anthem Blue Cross.

The era of corporate names that are independent of the subsidiary divisions and products seems to have faded as branding is deemed more essential.

As we dig around through the graveyard of bygone healthcare names, the branding issue is forever complicated by mergers, acquisitions, spinoffs and scandals. 

Humana once was a hospital company that developed a health plan division, back when corporate integration of healthcare was in vogue in the 1980’s, before falling out of favor in the 1990’s and re-discovered this decade. Humana’s hospital division was spun off as Galen Healthcare, which was acquired by Columbia, which merged with HCA to become Columbia/HCA, and finally just HCA (Hospital Corporation of America), partially to simplify branding, and perhaps more to re-brand away from the Columbia identity after a Medicare fraud scandal in 1997.

Tenet was once National Medical Enterprises, becoming Tenet in 1995 partly to re-brand after large acquisitions, but motivated to distance from the NME name after scandals with NME’s Psychiatric hospitals division.

In New York, Group Health Inc. and Health Insurance Plan of New York merged in 2006, under the corporate name EmblemHealth. Eventually, the corporate name became branded as a product name. Such strategies - to deploy the corporate name in branding - have become much more prevalent during this decade.

But then there is Regence, the Pacific Northwest BCBS company who in 2011 announced their new corporate name would be Cambia Health Solutions, while the health plan products are still branded Regence.  So what’s in a name – and in 2024 will Cambia pull a WellPoint and re-title themselves as Regence?

Get Ready…ACA Superbowl

By Lindsay Resnick, January 23, 2013

Bring your A-game to both sides of the ball, it’s time to play game winning offense and defense. As ACA’s October 2013 open enrollment gets closer, winning health plans are focused on honing their direct-to-consumer marketing skills around retaining and acquiring membership.  It means getting into the Affordable Care Act game by protecting your base with tough defense, and preparing to put points on the board (aka new members) with aggressive offense.

DEFENSE: Retain the members you already have. Prioritize those that are the most valuable and create customized engagement strategies to keep them. Take a data-driven approach to understanding your most vulnerable “at risk” population within your Individual and Small Group businesses that can soon make individual choices.

Core objectives for health plan retention:

1. Maximize retention of existing membership in both on and off Exchange products by minimizing the potential to lose Individual and Small Group customers to competitors.
2. Leverage membership data and third-party intelligence to improve understanding of current Individual and Small Group customers.
3. Communicate a timely and relevant message to existing membership, employers, and distributors to support retention by improving member engagement and building brand loyalty.
4. Emerge as a trusted source for information regarding what health care reform is and what is means to those most impacted…Who’s eligible for what? What’s in it for ME?

OFFENSE: Get your share of the open enrollment “land grab”. Understand needs and attributes of various segments of new market entrants to optimize acquisition campaigns. Create on/off Exchange strategies to generate new leads and sales from individuals most likely to enter the market as a result of ACA’s disruptive events. Switching will be at an all-time high... make sure they switch to you!

Core objectives health plan acquisition:

1. Increase sales opportunities to enroll a larger percentage of the individuals across all segments likely to purchase through public/private Exchanges and, small businesses SHOP Exchanges (e.g., uninsured, disenfranchised small group employees, subsidy eligibles, new Individual shoppers).
2. Optimize and increase the use of database management and segmentation tools to improve targeting capabilities and gain a better understanding of the marketplace than your competitors.
3. Work in tandem with your product development team to identify various product acquisition paths, mapping current portfolio to a post reform products. These product acquisition paths will be the basis for determining messaging and sales strategies.
4. Deploy a new business direct response marketing tactics that blends push-based education with pull-based entry into your selling cycle. 

The future of health insurance belongs to the prepared.To achieve and sustain profitable growth, marketing strategies need to look very different going forward. They need to move from product-centric…see who buys it; to consumer-centric…understand how they engage.

Tomorrow’s health insurance consumer needs to be at the center of everything marketers do throughout the customer lifecycle.  An engaged consumer means connecting early and often, nurturing them into the sales cycle, keeping them involved through purchase, and delivering a superior customer experience. A balanced approach to customer retention and acquisition, supported by data-based intelligence and strong consumer engagement, will determine ACA winners.

Healthcare Customer Service and Retention Concepts and Relevant Data Don’t Have to be Specific to Healthcare

By Clive Riddle, December 6, 2012

There can be a mindset within the healthcare industry that management of most core business functions need to be very healthcare specific in order to be relevant. Of course there is truth to that, but sometimes, those within the industry can use healthcare specificity as an excuse for performance levels that might not otherwise be acceptable in other service industries, or as blinders to ignore relevant knowledge and benchmarks that would undoubtedly prove beneficial to the healthcare organization. 

With this in mind, we call your attention to a study just conducted by Accenture, addressing customer service and marketing across ten service industries (including wireless phone, internet service, life insurance and retailers, but not including healthcare). The annual Accenture Global Consumer Survey  pulled together results from 12,000 consumers from 32 countries including the U.S. 

Here are some findings that should have applicability to healthcare, even if the data wasn’t healthcare specific:

• One in five consumers switched companies they buy from; 85% of consumers say the companies could have done something differently to prevent them from switching
• 67% pointed to having their customer service issue resolved during their first contact as a factor in switching
• 54% might have remained loyal if they had been rewarded for doing more business with their provider
• Broken promises are a top area of frustration for consumers, according to the survey: 63% indicate it’s extremely frustrating when a company delivers a different customer service experience from what it promised upfront
• 78% of consumers say they are likely to switch providers when they encounter such broken promises
• 65% are likely to switch when having to contact customer service multiple times for the same reason
• 65% are likely to switch when dealing with unfriendly customer service agents
• 61% are likely to switch when on hold for a long time when contacting customer service
• 48% say that, compared to 12 months ago, they have higher expectations of getting specialized treatment for being a “good” customer
• 50% say it is extremely important for customer service people to know their history so they don’t have to repeat themselves each time they call
• 31%  prefer companies that use information about them to make their experience more efficient from one step to the next; but only 24% said their service providers deliver tailored experiences 

Accenture found that, on average, consumers use various channels to learn about and select service providers, including:

1. Word of mouth, relied upon by 79% of consumers
2. Corporate websites, used by  71%
3. Online sources such as expert review sites, news sites and product comparison sites, used by 63% 

Robert Wollan, global managing director of Accenture Sales & Customer Services tells us “the sobering reality is that ‘tried and true’ strategies for customer acquisition, loyalty and retention are struggling to keep pace with consumers who are perpetually in motion, more technologically savvy than ever, and increasingly unpredictable. The news this year is that customers want to be loyal but customer service often fails to meet their expectations. In the digital marketplace, companies must improve social listening capabilities and apply predictive analytics designed to quickly identify and respond to potential customer issues before problems arise.”

Health Reform’s New Customer Journey

By Lindsay Resnick, October 9, 2012

Health reform makes 2014 an important milestone for every health plan: market leaders protecting their turf and opportunists setting up for a land grab. At the same time, a value-based consumer experience has never been more important as the center of power shifts into the hands of the health insurance customer. The retailization of healthcare means consumers are in control and taking a new healthcare journey: budgeting for their health benefits, navigating care delivery, and recommending preferred health plans.

It’s time to anticipate and prepare for this new journey by putting a plan together built around a series of sequenced, deliberate action steps:

• Know existing and prospective customers better than any of your competitors.
• Build an actionable roadmap to secure a differentiated, believable market position.
• Establish an arsenal of B2C marketing tools to reach, motivate and bond with consumers.
• Integrate & optimize sales outlets (broker, worksite, telesales, online, mobile, retail).
• Design a high engagement customer experience to drive retention and loyalty

A health plan’s ability to anticipate market shifts and prepare for strategic and tactical execution has reached a new level of urgency. Informed decision-making will separate winners from losers as companies manage through uncertainty. It calls for laser focus on two strategic imperatives:

1. Protect and retain existing customers. With public and private health benefit exchanges now in hyper-speed development as a new distribution channel, plans need to deepen relationships with existing customers across product-lines, market segments and distribution channels. This means identifying and profiling a Plan’s most valuable and most vulnerable customers.
2. Leverage “big data” to target growth opportunities. Across the country, the Affordable Care Act is expected to bring access to 30 million new customers; 24 million entering a new customer journey (aka Exchange), and possibly 16 million new Medicaid enrollees. Having a deep understanding of these prospective customers through demographic, attitudinal and behavioral data-driven segmentation is the only way to build an actionable, first-to-market sales and marketing plan.

In a retail healthcare marketplace it’s the consumer’s responsibility to deal with intimidating, complex benefit and health care decisions. Whether driven by reform or natural marketplace competitive pressures, if the cry for “personal responsibility” means asking consumers to step-up and take control of their healthcare destiny, they need to be educated in order to make smart, individualized choices. The burden falls on health plans to guide customers with a roadmap of relevant decision support.

To read more about preparing for health reform get KBM Group: Health Services’ newest Solutions Brief - Healthcare 2014: Leverage Opportunity Buffer Risk - Click Here

Fail to Prepare, Prepare to Fail

By Lindsay Resnick, March 27, 2012

For health plans looking at the period leading up to the Affordable Care Act’s 2014 big launch, it’s a critical time. We’re about to see the most jarring market reforms ever. Even with the uncertainty of the Supreme Court decision and 2012 election, can Plan’s really afford to sit on the sidelines and watch valuable time tick away? The retailization of healthcare is coming, and preparation is key.

Which of reform’s changes are going to stick…which will fade away? How will existing competitors react…which new ones will appear in your markets? Can you move from a B2B to B2C marketing culture?

Tough questions need to be asked (and answered) about legacy core competencies in tomorrow’s reformed marketplace. In other words, sustainability of your health plan’s value chain—the series of individual activities within your enterprise that when linked together, combine to add comparative value to a final products or services.

It’s time for a serious look at four critical areas of focus.  Here are some questions to spark internal debate and begin an ACA transformation assessment:

1. Brand Position What’s your unique selling proposition in a reformed marketplace likely to see increased competition and disintermediation the individual and small group markets by Exchanges?
2. Customer Segmentation Are you quantifying and profiling new customer segments that you’ll be serving in 2014: previously uninsured, pre-ex time-bombs, newly subsidized, abandon employees, Medicare boomers, etc. to be sure you have the right product mix?
3. Customer Acquisition Are marketing’s multi-channel lead generation tactics (e.g., traditional direct response, digital, social media, mobile) being optimized across all distribution outlets (e.g., field agents, telesales, online, mobile, retail)?
4. User Experience Is your health plan delivering a personalized customer experience driven by retention metrics and built around superior member engagement using a managed touchpoint discipline?

Retail healthcare, product standardization and price transparency levels the playing field. Health plans need to refresh their toolkit of customer acquisition and retention tactics. It means protecting and expanding relationships with their existing customer base across product-lines and market segments. And, to grow market share it means strengthening direct-to-consumer marketing tactics and bolstering sales distribution to facilitate (and influence) customer choice.

For a free copy of the Solutions Brief, "Healthcare Reform Readiness: A Transformation Toolkit", click here:  http://bit.ly/z3VLkE

Medicare Marketing’s Top Ten

By Lindsay Resnick, September 26, 2011

With compliance scrutiny at an all-time high, a selling-season that has been dramatically shortened, and bonus payments and year-round marketing directly tied to the CMS Star Rating system—managing Medicare Advantage aren’t getting any easier. Add to the mix a surge of baby boomers entering the Medicare marketplace at a rate of almost 10,000 every day and one thing is for sure…you better have your Medicare marketing house in order.

Below are our Medicare Marketing’s Top Ten success factors to help sharpen your approach and meet or exceed stakeholder expectations. 

1. Understand the impact of CMS COMPLIANCE – Today’s Medicare marketers must understand and respect the important role CMS compliance plays in the member acquisition process. This means making sure the link between marketing, sales and compliance is as strong as possible, always supporting the spirit of CMS consumer protections.
2. Be DATA DRIVEN to ensure a strong foundation – Always start with data. It needs to be sorted, cleaned, refined, and turned into actionable marketing intelligence. From building predictive models for most likely responders to variable direct response call-outs to optimize media buys, the goal is to bring a grow while continually lowering your cost per lead and cost per sale. 
3. Modernize your AGE-IN process – With thousands aging into Medicare every day, new approaches are needed to attract today’s boomer-seniors. “It’s not your Daddy’s Medicare.” It takes a combination of meaningful education, sequenced messaging, and innovative approaches to outreach to connect with newly eligible beneficiaries. 
4. RETAIN MEMBERS to increase ROI  – In a fiercely competitive Medicare market, aggressive “switcher” campaigns have become routine. The cost of acquiring a new member is 5X the cost of retaining an existing one. Loyalty-based member engagement plays a big role in a health plan’s long-term profitability under the label of member LifeTime Value. 
5. STAR RATINGS impact the bottom line – As CMS deploys its 5-Star Rating across Medicare plans, marketing’s role is critical to ensure member communications reinforce customer satisfaction. Engagement marketing goes a long way in a plan’s ability to achieve the highest possible Star Rating and the bonus payments that go with it.
6. CUSTOMER INTERACTION makes a key difference – Give beneficiaries a reason to engage and connect with a Medicare plan they trust. It’s all about them. It takes tested, personalized direct response marketing that create opportunities for one-on-one interaction to communicate value and answer a Medicare beneficiary’s most important question, “What’s in it for me?” 
7. Don’t ignore DIGITAL MEDICARE – As more and more Medicare shoppers use the Web as their primary research tool, it’s essential to have a Medicare online experience that’s user tested, compelling, and built for seniors. From ease-of-navigation to the images and words on your website, it needs to be tailored to your Medicare audience.
8. Consider MULTI-CHANNEL SALES that match customer preferences – Different Medicare customers require different doors of entry….some will call on the phone; others come in through a website; some prefer to respond via mail;  many like a discussion across their kitchen table; and, others may even desire a retail experience. A multi-channel sales distribution strategy is critical to success. 
9. Understand your DIFFERENTIATED VALUE – Being the health plan of choice for Medicare beneficiaries is achieved by building trust, credibility and relevancy around your value proposition. This means understanding drivers that motivate prospects to select your plan, and an ability to get the most differentiated and preferred product offerings in front of them. 
10. Measure MARKETING ROI to determine actual results – You can’t manage what you can’t measure! Combining sophisticated upfront data analytics, direct response discipline and flawless campaign execution can significantly lower member acquisition costs and increase retention. Tracking, analyzing and measuring results throughout the marketing cycle is a Medicare marketing must. 

Successful Medicare marketing hinges on educating seniors, defining value and creating motivated buyers. It takes learning as much as you can about your target market so you understand what’s important to them, what concerns them, and what they want from their Medicare plan. It will go a long way toward answering Medicare beneficiaries’ number one question—what’s in it for me?

Membercentricity Defines Medicare Member Retention

By Lindsay Resnick, February 8, 2010

Member-centric Medicare Advantage plans have loyal, trusting customers. It’s not easy to steal a loyal member. More importantly, loyalty equals customer LifeTime Value which translates into stable membership and sustained profitability. In the Medicare market, competitive rivalry is at an all-time high, with well-orchestrated “switcher” campaigns targeting YOUR members. And, at a time when beneficiaries are seeing big changes in benefits and rates, plans seeing even the slightest uptick in voluntary disenrollment are also feeling the threat to long-term profitability.

Retaining members by creating loyal, satisfied customers has never been more important; particularly when acquiring new members is as much as 5-times the cost of keeping existing ones. Successful member retention takes proactive, personal customer service built on an attitude of MEMBERCENTRICITY. Improving customer loyalty is one of the least expensive, most impactful ways to protect membership and improve margins. Successful retention programs are based on three core principles:

• Data Driven The more you know about your customers, who’s at risk and what’s important to them, the more members you will retain. Understanding your customer demographic and psychographic indicators helps build loyalty.

• Continuous Interaction Frequent, personalized member outreach has huge payoff by reinforcing plan value and reaffirming a consumer’s purchase— from welcome calls to an array of “after-sale sale” communications.

• Meaningful Messaging Create a dialogue with customers…not a monologue. Seniors are looking for guidance and interaction that’s meaningful to their situation throughout their membership lifecycle—part customer service, part sales, and part senior advocacy.

Across America, consumers have become much less forgiving of bad service. In a heartbeat, they will just take their wallet and loyalty somewhere else. A member-centric Medicare Advantage experience involves every interaction with a plan’s members?every telephone call, every email exchange, and every written communication. Make sure your plan embraces a high-touch, high-results philosophy. Retention is the ultimate measure of success in Medicare Advantage.

U.S. Uninsured Total Hits 180 Million (if you include dogs and cats)

by Clive Riddle, September 2, 2009

Who knew that September was North American Pet Health Insurance Awareness Month? Not I, until I visited the North American Pet Health Insurance Association web site and discovered their press release. The association informs us that “about 60% of U.S. households have at least one dog, cat, bird, or other companion animal. Many have more than one….. Projected 2009 pet expenditures for North America are over $45 billion, of which $25 billion will be spent on veterinary medicine.”

Now inspired that the calendar had indeed turned to September, and that there was only 29 days left of North American Pet Health Insurance Awareness Month,  I dug deeper. I came across the article Pet Insurance Shows Promising Market Growth, from InsuranceNewsNet, Inc., which informs us:

• “The U.S. pet insurance market recorded 107 percent increase in total growth from 2003 through 2007”
• “It is estimated that there are more than 70 million pet cats and 68 million pet dogs in the country but only 1 to 4 percent of pets are covered by health insurance.”
• “The cost of pet insurance also varies greatly. Accident-only coverage may cost as little as $9.50 while fuller benefits above $60 but typically the cost is about $30 to $50 a month.”

So doing the math, if there are 138 million pet cats and dogs, and we assume 3% are insured and 97% are uninsured, we have approximately 134 million uninsured Fidos and Tiggers. Add this to the 46 million two-legged uninsureds, and the health care reform debate is re-framed. What’s more, there is a huge market opportunity if anyone can get the owners of these 134 million pets to pony up and buy some insurance.

The plans represented by the North American Pet Health Insurance Association certainly think the opportunity exists. Participating plans include:

• Embrace Pet Insurance (www.embracepetinsurance.com)
• The Hartville Group, Inc. (www.hartvillepetinsurance.com)
• Trupanion (www.trupanionpetinsurance.com)
• Petsecure (www.petsecure.com)
• Vetinsurance (www.vetinsurance.com)

And now health insurance giant Aetna has been bitten by the pet insurance bug. Right on the Aetna Home Page, under the "Find the Right Plan" section, resides a link "For Pet Insurance" in which Aetna proclaims “We have offered insurance products to help our members for more than 150 years. Now we can help you with pet health coverage for your cat or dog, too.”

Aetna inked a deal at the end of last year to underwrite Pets Best. This July Aetna and Pets Best announced a program to “provide 50,000 local businesses and 79 working Chambers of Commerce in Connecticut and Western Massachusetts access to discounted rates on pet insurance plans.”

Gretchen Spann, Aetna’s very own Head of Pet Insurance tells us “in these difficult economic times, many people are having difficulty keeping up with the rising cost of veterinary services. Some people might find that the predictability of a monthly premium helps them budget for the care their dog or cat might need in the future.”

Lindsay Resnick on More Effective Medicare Marketing

by Clive Riddle, August 13, 2009

Lindsay Resnick, a fellow member of the MCOLBlog team this week provided an exclusive 34 minute podcast for MCOL on Reducing Medicare Marketing Costs ... While Boosting Enrollment which includes a companion follow-along presentation. I encourage you to check it out if Medicare Advantage is of interest to you.

Here’s some selected takeaways from his discussion:

· Medicare Advantage payments to plans will reduce to equal to Medicare FFS payments by 2014, and payments to plans in 2009 were cut by an average of 4.5%

· For 2010, member premium increases will range from $25 to $80, and on the chopping block for plans will be value-added benefits and zero premium products

· Regulatory scrutiny over the marketing and sale of Medicare products will intensify

· It takes 3 to 7 prospect touches—through a combination of media—to get a qualified Medicare lead

· 56% of Internet users who are age 64-72 make online purchases; 45% of all seniors age 70-75 are Internet users

· Post-sale for Medicare members:  4+ touches/year can yield over 90% retention

· Agent distribution- a key strategy in enhancing enrollment while reducing marketing costs, requires significant commitment in credentialing and monitoring agents

· Agent Credentialing: Gather demographic information about your agents and use it to verify their credentials. A credentialing program needs to include: –Agent portal for establishment of e-file for agents; –Verification of licensure; =–Check state regulatory actions; –Verify and store E&O; –Background checks; –Link documents to agent file on an ongoing basis; –Manage agents slow to submit required documentation; –Agent contracting

· Agent Monitoring: A Monitoring Program should be developed that can: -Accumulate agent data; -Track allegations by agent; -Manage disciplinary actions; -Audit-friendly print views; -Track investigations; -Offer Remedial training information; Provide Licensure confirmation. Agent oversight should address and incorporate: Complaints (Allegations); Credentialing; Training; Certification; State DOI Notifications of Terminated Representatives; Accurate & Timely Commission Payments; and Targeted Sales Audits.

Trendwatching: MarCom to MarSales

By Lindsay Resnick, July 20, 2009

Squeezed between an economy in disarray and the rapid rise of social media, let's face it, marketing has changed forever. Budgets have been slashed, customer priorities have shifted, and intense pressure on companies to grow organically is changing corporate cultures across the country.

MarCom has long been the abbreviation for "marketing communications"—interaction with customers and prospects through messaging and media to speak to the marketplace. Its tradition is in the printed word, usually categorized under advertising, public relations, branding or promotion. Of course recently, a surge of online activity has been added to the mix (if not taken over). MarCom's primary focus has always been around audience awareness. The conversation is usually a monologue.

That has changed. Now, we are seeing MarCom morph into MarSales—interaction with customers and prospects through messaging and media to sell the marketplace. MarSales takes a growth-oriented vantage point which is actively aligned with the sales process. And, it's all about quantifiable results.

This perspective elevates growth and profitability in the marketing hierarchy within the context of current business drivers: economic volatility, regulatory threats, competitive rivalry and customer dialogue. MarSales cuts across product-line and operational silos to reshape internal marketing-think and reengineer distribution channels. It improves marketing spend and, rallies your team around a mantra of "leverage value to turn growth into revenue."

Core principles of a MarSales strategy include:

• Refresh your brand position in light of any product or service changes, new consumer spending and buying habits, and competitor moves.
• Micro-segment your prospects for improved targeting and more efficient budget management.
• Redefine and shorten your sales cycle, from lead generation to retention.
• Synchronize your creative platform and media strategy with specific sales objectives.
• Deploy new outreach tactics moving from awareness-oriented marketing to an action-based sales relationship with your customers.
• Link marketing budgets and sales results to accurately measure return on investment and lifetime value of new customers.

MarCom has been built around the philosophy that good marketing grabs attention, creates awareness, and is driven by emotion. MarSales embraces these attributes, but recognizes that great marketing accomplishes all of this with one critical difference—great marketing sells.

The Challenge to Healthcare Marketing

By Lindsay Resnick. March 12, 2009

Political change, economic volatility and competitive rivalry will bring the
unexpected this year. Be prepared to aggressively track what's working (or
not) in terms of your business tactics and prepare to move quickly based on
emerging market indictors. Be agile.

Healthcare

It appears health reform is set to take off in 2009. The new administration
has made this their top domestic priority under a battle cry of "How can we
afford it.how can we afford not to" With America's aging demographic,
soaring unemployment, expanding uninsured population, and unprecedented
levels of uncompensated care, there's broad agreement on the need for major
health system overhaul. Of course, the devil's in the details.

Recessionary conditions also mean that healthcare companies that are able to
demonstrate an ability to lower costs will continue to thrive. Leading this
watch-list are those promoting medical travel, chronic care management,
limited benefit individual medical plans, and retail medicine. Personal
healthcare budgeting is shifting along with the number and complexity of
delivery choices. There's a healthcare squeeze on consumers and it will only
get tighter.

Expect to see the Health 3.0 movement continue to advance through web-based
consumer connectivity, personalized health care delivered in clinically
relevant settings, and financing mechanisms structured around
consumer-centric business models. The new digital customer will be an
activated consumer with any time-any place-any device connectivity,
supported by "information everywhere" tools. They will have the confidence
and smarts to be empowered healthcare purchasers. Be proactive.


Marketing

Making sure your business can turn it up in a downturn relies on a marketing
strategy built on data, dialogue and differentiation.

Customer segmentation allows companies to know your most profitable
customers. It enables smart marketers to define what messages and vehicles
are most effective in reaching your best prospects. Understanding
demographic, lifestyle and value-based attributes provides an important
competitive edge.

Search engines are defining brands, changing sales processes and influencing
just about everything in our lives. Newspapers, magazines, and traditional
television audiences are shrinking. They're being replaced by social
networks, wikis, blogging and online video content. It's a media insurgency,
and consumers have grabbed an important new role. They are now broadcasting
opinions, turning fads into trends, and getting information from customized
information outlets where monologues are turned into dialogues. Tomorrow's
marketers will quickly figure out how their efforts fit into the new media
revolution.

Healthcare is a price-driven, fragmented marketplace where differentiation
is king. A sustainable growth strategy takes targeted outreach, value
positioning and tactical savvy. Figure out how to articulate your value
proposition in a way that separates your company from healthcare's "sea of
sameness." Then, select in-market tactics (direct response, new media
advertising, grassroots PR, etc.) that will be most effective for getting in
front of the right people at the right time. Start a relationship with your
prospects and build a customer base of brand loyalists. Be memorable.

Everyone agrees 2009 will be a tough year. Companies will be hard pressed to
balance budget pressures with customer acquisition and retention
expectations. Competitors will work hard to steal your customers. But, where
there are challenges there's opportunity. Keep a sharp eye on trends that
impact your business, and keep a closer eye on your customers. Keep products
and services relevant so they can withstand economic pressures. And, keep
your marketing data driven, differentiated and built around a relationship
with your customers. Of course, a little luck will go a long way! Be
innovative.

“Personal” is more than a word

By Laure Gelb

In my last post, I speculated as to whether 2008 might be the year that disease management communication from MCOs finally got personal. The next one-page MCO piece I saw (an EOB insert) offered the following snippets:  

“We think getting personal is a healthy idea.”

“We know that nothing is more personal than your health.”

“Do you take a healthy interest in good health?”

This piece of paper attempts to induce enrollment in the personal health coach program. But where are the benefits offered for this proactive behavior?  

“If you qualify…one person to call for answers and advice. It’s confidential and it’s free.”

o      OK, so you want me to transfer the expectation that my physician will offer answers and advice, to a nurse whom I’ll never meet.

o      You want me to believe that it’s confidential, when I’m reading every week about health insurance data privacy breaches.

o      And you want me to celebrate that it’s “free,” when my premiums and copays have never been higher.

 Health coaching should ideally align with the patient’s medical home. Can we more strongly link that proposition to premiums and copays? Talking points could include:

 

• The relationship between OOP costs, medical errors and drug interactions
• The higher risk of unidentified ME/DI among patients with multiple conditions/polypharmacy
• The opportunities for improved outcomes that multiple conditions can obscure
• The importance of a “medical home” in reducing ME/DI
• What a health coach actually does, and indications that having a coach might help; how the coach and the medical home can support each other

 Although managed care has been “doing” disease management since the 80’s, a patient’s “buy-in” to disease management, with the time, effort and emotional costs it entails, will be short-lived unless it’s obtained through honest discussion of its potential benefits, rather than demanded or condescendingly waved in front of someone with many conflicting priorities. And I haven’t seen an EOB insert yet that addressed questions like:

 

• Why I am on two drugs that are supposedly “contraindicated” in combination?
• Does anyone at the MCO know or care about all that treatments I’ve had?
• Isn’t a health coach going to refer me to a doctor for the tough calls anyway?
• How will a stranger get me to do all the things I already know I should do?
• Why can’t the health plan just find me a better physician?

There’s a real shortage of health content in member communication, and it’s no wonder that members find it difficult to read, let alone remember (or act on) any of it. The next time you want to change a member’s mind or otherwise influence behavior, you might want to check your communiqué for a few basic points:

 

1. Is it clear what you are asking members to do?
2. Is a coherent value proposition for them to take this action presented and are potential objections addressed?
3. If members to whom your request is directed are not appropriate candidates, how will they know?
4. Is there a high ratio of important content to buzzwords like “personal,” “healthy” and “wellness”?

 All this is no more than Marketing 101, of course. When disease management diverges from marketing exchange theory (equal value achieved by all parties to a transaction), it is less likely that any transaction, change or improved outcome will result. And, at the end of the day, the evidence suggests that clinical outcomes are more durably and significantly improved by self-imposed than externally-imposed change. Yes, the MCO (and the physician, nurse, et.al.) can help present the rationale for change, a means for implementing it and incentives for doing so. But only the patient “pulls the switch” each and every day. Every day brings new health decisions (like self-dosing qd), challenges and opportunities. It takes more than a few clichés to frame and support optimal choices. And there has to be a balance between “happy talk” and the certain knowledge that some “good” decisions and intentions go horribly wrong.

Next month: domains, measures and thresholds -- the keys to behavioral change.

2008: Actionable Transformation

By Lindsay Resnick

Three important themes are influencing health care marketing in 2008–customer narrowcasting, Big Truth messaging and new media. Addressing these challenges will form the framework for successful marketing efforts. I’m forecasting this not only as it relates to healthcare, but in the context of a consumer marketplace undergoing massive transformation in the way people are approached, courted and led into the sales cycle.

Customer Narrowcasting

Alternatively known as market segmentation or niche marketing, customer narrowcasting takes a business’ focus to highly-defined, targeted customer segments. Whether formulating an annual marketing plan, reengineering product messaging or planning a media buy you can't do it without knowing your customer.

Market leaders are embracing a customer-centric philosophy that puts products and services into distinct market segments, each with narrow customer definitions. In this setting, the customer is viewed as the central asset. Products and services are tailored to unique needs of each customer group, relying on a range of segmentation profiles including demographic, psychographic and lifestyle.

The key to the customer-driven “black box” is data. Gathering, analyzing and interpreting information that allows you to understand variations among customer segments and develop a snapshot of your most desirable targets. It’s the practice of dividing people into groups or cohorts that are similar in specific ways relevant to key marketing indicators—age, gender, income, interests, attitudes and spending habits. The more you know about prospects needs and preferences, the more you’ll turn them into customers ( and the more customers you’ll turn into your brand promoters ).

Big Truth Messaging

In a marketplace characterized by more choice than most people can handle, marketing communication is at crossroads. The challenge is to fight through the incredible amount of apathy already lingering in the air. So whatever you're selling, unearth a Big Truth about it. What is the "single most important thought" that you want to communicate?

Big Truth messaging should start a meaningful one-to-one conversation with your target audience; lead them in a value-based direction, and begin to close the sale with a distinct call-to-action. Finding the delicate balance between education and selling goes a long way to creating a positive buying environment. Take a seat where your customer sits and always be answering the question “ What’s in it for me ?”

The best messaging is grounded in customer profiling. This allows companies to connect with customers logically and emotionally by demonstrating you understand what’s important to them, what concerns them, and what they want from your products. Articulates the most powerful features of a product or service and then directly link these features to benefits for your audience.

New Media

Digital convergence is advancing at an aggressive pace and smart marketers need to adapt to a convenience-driven, instant gratification customer culture. Traditional media outlets are being overtaken because of their inability to dial down and focus on niche markets or micro-verticals. Marketing is moving beyond a discipline of advertising and communication to one that focuses on building a relationship with the digital consumer.

Web-savvy amateurs are leveraging the power of information, even subverting the power of the corporate brand. Enter the blogosphere, social networking, podcasts, and viral marketing. Suddenly every customer has a news reel and megaphone to speak to minority interests and ultra-segmented consumers. These approaches bring an ability to pinpoint any debate—political, product or service. Momentum is shifting from institutions to individuals.

The fact is people are simply doing different things in different places at different times. Over 120 million people are going online for health and medical information (averaging seven visits per month). They are getting ready for, or drilling down after MD visits and researching drug information. They’re checking prices and looking for indicators about quality of care and clinical outcomes.

Actionable Transformation

Marketing is changing quickly. On a daily basis it’s moving in many new directions. It’s critical to think about these transforming influencers in the context of your business, but more importantly, put in place actionable strategies so you don’t get caught short in what promises to be a competitive, fast-moving marketing transformation.

Lindsay Resnick

312.419.1973

www.finelight.com

Individual Medical: Opportunity Is Now

The individual health insurance market has reached a defining moment. Demographic, economic and workforce trends point to a tremendous market opportunity. These powerful dynamics are creating favorable conditions for individual medical insurance:

§ Shifting work-force (self-employment, early retirement, small business formation)

§ Movement toward Consumer Directed Healthcare, High Deductible Health Plans and Health Savings Accounts

§ Decreasing employer-based coverage options with increased employee cost sharing

§ Favorable Federal tax environment

§ Growing numbers of “non-poor” working uninsured.

An estimated seventeen million people under age-65 are covered by an Individual Medical (IM) insurance policy. Thousands of new eligible policyholders continually enter the market every day. Almost 16% of the U.S. population is has no health insurance. Of these 47 million individuals it is estimated that 20 million could afford an individual policy with tax, employment or other purchasing incentives.

It’s Not Group

Historically, lackluster products, legacy technology, high-cost business acquisition and poor pricing characterized the individual medical market. Few carriers had the resolve to embrace new ways of doing business and learn from past mistakes.

What does it take for success in the Individual Medical market – get in synch with both customer needs and profitable risk management. IM insurance is a blocking and tackling business requiring intense data analysis, administrative efficiency, sales acumen and proactive customer service.

However, the most important factor for health plans considering Individual Medical is recognizing that it’s not group insurance. Time and time again, carriers substitute “group” experience in formulating and executing IM business strategy. They do not fully appreciate the essential differences between the two product-lines.

For example, when pricing an IM product, medical loss experience patterns are vastly different. Underwriting with the “accept/reject” rules has significant consequences on the long-term effect of risk selection and needs to be built into baseline pricing assumptions and performance benchmarks.

Selling is another critical difference. Prospecting and selling IM is a one-to-one venture, impacting both the number of sales agents needed and how they are supported. And, complementing traditional field distribution with telesales can make a significant difference in production volume. On the customer front, servicing individuals without the intermediation of a group’s human resource department takes different front-end customer service training and skills. Individual Medical isn’t group insurance!

Controlled Growth

Competition in the IM marketplace is at an all-time high as health plans seek growth opportunities outside the saturated group market. These plans know that they need to offer a market-segmented product matrix that includes serving the needs of individuals.

The individual health market has attractive fundamentals. There are favorable operating cash flow characteristics and, given current opportunities for strategic outsourcing, fixed cost overhead can be contained while deploying state of the art technology and operating processes.

A successful foray into the IM market requires disciplined accountability. Several areas of focus can be identified:

1) Financial Control

AAAAAAA At the financial core are solid risk management tools and premium adequacy --- a focus on pricing, underwriting guidelines and claims practices. Risk controls are targeted to properly designed products and various customer and distribution segments.

2) Operational Efficiency Competitive advantage will come from innovations in information technology and bandwidth that renders traditional health insurance backrooms obsolete. Alignment with the “right” partners (without yielding accountability) can leverage an investment in intellectual property to contain expenses and broaden a company’s reach.

3) Marketing Expertise Understanding your target customer, whether young invincibles, empty nesters or prime market self-employed, goes a long way to ensuring success. This means data-driven marketing and direct response skills able to deliver the most effective ways possible to connect with customers—capture attention and interest of target audience, answer the question “What’s in it for me?” and, a call-to-action that motivates prospects to start a relationship with your company.

4) Performance Benchmarks Business metrics need to be in place to measure performance across functions: underwriting and claim costs, staffing and productivity, sales production and risk management. These benchmarks need to be buttressed with a robust decision support capability to ensure mission critical information is available and actionable.

Profitable Diversification

If you’re already in the individual medical market, but not meeting expectations, the cost of delay far exceeds the cost of action. Given IM pricing and cost structure volatility, there is a very short timeframe for crucial decisions if growth and financial results are falling short. A “wait-and see” approach can mean trouble comes fast in the form of an “underwriting death spiral” where healthy lives go elsewhere and severe anti-selection causes unrecoverable losses. These companies must act quickly to implement corrective actions and improve performance.

For new market entrants, the advice is simple - - - do it right! Study and learn from others’ mistakes. Establish a business platform built on disciplined management. Recruit knowledgeable leadership and engage expert external resources – risk and care management, marketing and telesales. Bring a commitment to change the way the market thinks about the individual medical insurance in terms of premium adequacy, product design, customer segmentation and sales distribution. Demand profitable growth. And always remember, it’s not group insurance.

For questions and comments contact:

Lindsay R. Resnick
Chief Marketing Officer
Finelight
150 N Michigan Ave, Suite 2900
Chicago IL 60601
312.419.1973
BLOG: www.lindsayresnick.com

Brand Direct Marketing: Value Driven Action Lifts Topline

Brand Direct Marketing: Value Driven Action Lifts Topline

Branding and direct response have long been cornerstones of successful marketing campaigns.  On their own, each contributes an important piece of the marketing puzzle. Brand establishes position, generates awareness and builds preference for a company. Direct response is actionable. It gives people a reason to connect with your business and moves them into the sales cycle.

The wall between branding and direct response is coming down. It has to! The pace of marketplace change—technological advances, generational diversity and product commodization—demands an integrated, efficient approach that drives topline results. Effective marketing means opening up a dialogue with consumers and carefully tracking the conversation. Companies large and small are doing it and, they are seeing sales increase and their brand equity enhanced.

Brand direct is a way of combining the emotion evoked from brand advertising with the workhorse tools of direct response. A balanced approach means consistent communications that encourage interaction from prospects and promises a more meaningful customer experience. Here, direct response marketing tactics (data-driven segmentation and in-market learning supported by a strong call-to-action) take advantage of general advertising tactics. Using this model you get marketing for all media that is measurable and tied to specific sales goals—it’s where strategic thinking and persuasive creativity come together.

For brand direct marketing to achieve the best blend of branding and direct response, consider these three guiding principles:

All communications impact brand, so make sure your communications have brand impact. In other words, don’t think of brand or image campaigns as being separate and distinct from direct response. Awareness is only the first step. Every campaign should be designed to build your brand while eliciting a specific response from your target audience. The key is to educate prospective customers while pre-selling your product or service. Then, show them how to navigate the purchasing process to start a long-term relationship with your company.

Customers and prospects are always telling you something about themselves…listen. New tools and technologies are giving marketers access to an unprecedented amount of data about consumers. Turn this data into intelligence that helps you understand how and why your customers buy. Discover who are your biggest promoters…and most pesky detractors. Listening enables you to refine and replicate the purchasing process for prospective customers. By effectively profiling and segmenting your target audience you can deliver the right message at exactly the right time and in the right place.

Be ready for the next big opportunity. Today’s marketing environment is dynamic and fast-paced. It means your business is constantly evolving due to the constant flow of useful information—sales statistics, click streams, response analysis, competitive intelligence and more. You can use this knowledge to maximize your marketing performance, tweak messaging, adjust creative approaches and evaluate new media outlets. This allows for better opportunity analysis, plus newfound agility when it comes to:

•  Achieving product–price–promotion differentiation.
•  Addressing competitors head-on in sales situations.
•  Articulating customer preferences and perceptions.

Smart marketing can no longer depend on traditional silos. Brand direct marketing effectively leverages the value of your brand with proven direct response tactics. It enables a company to call for immediate action, initiate a customer relationship and then maintain an ongoing, one-on-one dialogue creating loyal followers. And, brand direct produces powerful, measurable results. 

Lindsay Resnick, Chief Marketing Officer, Finelight, lresnick@finelight.com