Healthcare payers must reconcile established business practices with continuous legislative and regulatory change, while at the same time transforming digitally and developing innovative products to attract and retain members.
Medicare is on target to grow for the next seven years, making it an attractive market for payers. This is a huge opportunity to capture members from a growing pool of qualified Americans and major healthcare payers are taking notice. Both Humana and Anthem reported significant growth in the second quarter of 2018, due in large part to increased enrollment in Medicare Advantage plans. Both payers plan to increase focus on this segment of the market going forward.
Although Medicare Advantage plans have been profitable for many payers, federally-governed product lines can be a burden in terms of administration and oversight. To capitalize on the Medicare market within the confines of tight budgets, regulations, and deadlines, payers must iterate their existing Medicare Advantage and Part D products to quickly develop and refine plans for specific micro-segments of the eligible pool of plan members.
At the outset of ACA compliance legislation, many payers chose to outsource complex plan materials to avoid penalties and sanctions. Over time, however, many of these same organizations have realized that dependence on external agencies presents its own risks and challenges and are bringing plan materials back in-house to have full visibility of the product lifecycle, develop internal expertise, and govern data and processes.
As internal teams have gained experience gathering requirements for external agencies and managing change, review, and approval cycles, many of the incentives for outsourcing plan materials have become irrelevant. At this point, payers are more familiar with their organizations than external vendors and more motivated to manage plan materials internally.
There are plenty of reasons to reconsider external dependencies, including cost, growth and learning, control and visibility, speed to value, and risk management. In addition, change happens fast and is unpredictable. Payers must adapt quickly and put focus on product innovation to grow.
Materials like the ANOC and EOC are intimately connected with plan development, and cross-functional teams must understand the entire product lifecycle for developmental agility. After all, an insurance product is nothing if not a recorded set of definitions, terms, and agreements, making materials like the ANOC and EOC competitive differentiators.
Point of Fact
The latest round of CMS changes highlights the advantages of preparing plan materials in-house.
- Beginning in 2019, the ANOC and EOC can be mailed separately, and the deadline for mailing the EOC has been extended by two weeks.
- Health plans will also be able to deliver the EOC through digital channels, like email.
Payers that rely on external agencies will not be able to take full advantage of new and relaxed delivery requirements. In fact, separation of these two materials may well mean another cycle for review and approval.
Those that generate their own ANOC and EOC materials, on the other hand, can immediately reap benefits from these new requirements.
- Reduce Production and Postal/Delivery Costs - Email digital copies of the EOC to members who agree to receive digital communications.
- Increase Digital Traffic – Use the opportunity to get more members to opt in to receive emails and other digital communications.
- Transform to Digital Channels – Use this opportunity to create a process and new channels for delivery.
- Build Digital Momentum - Test and measure benefits and savings for the organization.
- Innovate – Experiment with new technologies, like Blockchain, for identity management and validation.
For payers currently reevaluating external dependencies, the ability to manage plan materials with a scalable, agile in-house solution may provide all the incentive they need to take control of their member communications.