Marketplace Revenue Enhancement Analysis

In-depth review of health plan sales channels and development of recommendations to enhance your success in the new world of ACA.

October 2013:

The Federal Marketplace and State Exchanges are upon us, and there is still a wide level of unpreparedness for what’s beginning to happen. Just like the early days of Part-D in 2005, payers have entered the Annual Enrollment Period (AEP) with many unanswered questions about the Marketplace sales process in which they find themselves.

Where once you may have had separate sales organizations for Medicare, individual, group, and even self-funded business, those lines are now blurred by the Affordable Care Act (ACA) and the Marketplace dynamic.  The rules have all changed.  Even as the AEP is underway, payers are asking themselves:  What lessons can be learned from this year’s experience that will make 2014 and beyond more successful? What represents the best approach for sales:  Agents, telesales, online sales, or something else?  How do we manage our agent network?  How do we best optimize our participation across the confusing mix of Federal and State marketplaces, while maintaining our own identity?

Down the road, you may be wondering what happens after December 31:  How do today’s (and next year’s) sales decisions impact the longer-term impact the longer-terms effects of ACA, from duplicative administrative costs (and Medical Loss Ratio requirements) to Risk Adjustment?   How do we deal with different kinds of enrollment, different kinds of prospects and members, and different kinds of risk distribution, on a state-by-state basis?

I have an extensive background in sales channel optimization and regulatory-driven products, as Director of the nation’s first SHOP Exchange, part of the initial leadership of DestinationRx (the company that powered many aspects of medicare.gov and established most online carrier sales portals in the early days of Part-D), and a thirty-year veteran of the payer and vendor space, in a variety of capacities.  For Marketplace Revenue Enhancement Analysis I am working with Toby Rogers, co-founder of DestinationRx and a recognized leader in online sales and Exchange dynamics.  Together, through NetCare Health, we lead a team who can review your current sales channel approach, and make recommendations for how to optimize your future success, using industry best practices and decades of experience.

A typical project will:

• Review current sales channel strategy, and determine where and how resources are being spent today.
• Analyze the kind of business these channels have been delivering, and how they will affect future positioning in Risk Adjustment.
• Examine lessons learned to make changes for the coming year ahead.
• Develop actionable recommendations that support the projected sales opportunities, such as:
  • Changes in resource allocation between channels to improve results;
  • Enhancing existing online presence with Marketplace connectivity;
  • Where to find the right kinds of new membership.

Projects are tailored for each client situation with the initial analysis performed either after AEP, or during this AEP (to capitalize on real-time phenomena).  In either case, we will provide timely and actionable information that you can use to optimize your sales results, and your organization’s ability to succeed in ACA, at greater levels than ever before.

Availability is limited, so contact us as soon as possible for more information.

Mike Bush

As I wrote here last year for Milliman, the “narrow network” concept, in which health plans offer coverage through smaller networks (at a lower premium), in exchange for increased traffic to the network providers and (hopefully) a better risk profile, has existed for decades.  The idea was extensively tested during the integrated delivery system years of the 1980s and 1990s, and while it did produce cost savings, it eventually faded from use for a variety of reasons, notably the insistence of members to continue seeing their existing providers.

However, the idea is currently experiencing new life because of the Affordable Care Act (ACA) and its renewed emphasis on price competition (thanks to the Exchange /FFM environment), as well as alternative reimbursement models and the emergence of risk adjustment.  In short:  Narrow Networks are back, despite having proven unworkable in earlier iterations, and are likely to play an increasing role in the years to come.

Even more important will be the re-emergence of quality measures as a method of determining provider reimbursements.  Payers and providers utilizing the Narrow Network concept have always experimented with a variety of methods for determining which providers would constitute the networks.  Besides the obvious one (lower fees to providers in exchange for the promise of higher volume of members from health plans), various outcome/quality measurements have been employed in an attempt to ascertain the most “efficient” providers.  Payers used these measures to create “tiered networks,” in which visiting the “best” providers (as judged by the quality measures) would result in better benefits for the members, such as lower copays.  While this approach often caused challenges from providers on methodology (resulting in the often-heard claim that “my patients are sicker”), the idea of quality measures (or “provider profiling” as it was sometimes disparagingly called) remained an ideal for both payers and providers to consider, and is more important now than ever:  Reimbursements will increasingly be based on quality measures, and and the concept of efficiency (or “value”) in healthcare – efficacy versus cost – will only increase as scarce resources are continually reduced.  Quality measures are here to stay.

But what is “quality?”  As philosopher Robert Pirsig famously notes in “Zen and the Art of Motorcycle Maintenance,” “quality” is an extremely difficult thing to define.  In healthcare, entire industries have sprung up around the idea of measuring quality (usually against some predefined benchmark), from episodes of care to case-mix adjustment and much more.  So what is the answer?

Many argue that using benchmarks to make resource allocation decisions is the solution (giving rise to the infamous “death panel” accusations), but the underlying issue remains:  There is no agreement on the cultural, ethical and moral factors that would go into such a decision.  For example:  Treatment in the last 30 days of a patient’s life, which accounts for a large percentage of healthcare spending, is obviously “inefficient.”  Who decides whether that makes it indefensible?

And, what constitutes “efficient” care?  Most approaches have traditionally used patient outcomes, but in addition to not automatically taking case-mix adjustment into account, such methods do not measure how efficiently the care was actually performed.  In other words, just because a patient recovers nicely, does not mean that the care he/she received could not have been performed for less money.  In the “new world” of the compliance-driven ACA, such issues will become increasingly critical.

What if the comparative cost efficiency of, say, two different providers, assuming similar quality outcomes, could result from the differences in the approaches each provider used?  In other words, given similar results, it stands to reason that one provider’s approach would be more cost-effective and efficient than another’s.  Again, entire sub-industries have emerged to provide ideal guidelines for care, but even these do not take into account the proclivity of a particular provider to use a particular approach, even if it’s more costly.  The provider may have good reasons to use that approach, even though it’s more expensive and produces the same results as another.  But sometimes, the result might just be inefficient care, and lower value.

Here’s a personal example:  My wife Christy suffers from a lifelong condition in which chronic ear infections (the kind for which kids get “tubes in their ears”) produce scar tissue that blocks her ear canals, diminishing her hearing.  As young marrieds in the 1980s, we visited many specialists who proposed (and performed) many different procedures, none of which were effective.

But one specialist stands out in our memories.  He insisted that nasal septum repair was the answer – he argued that, by addressing her nasal passages, the scar tissue in her ear canals would be addressed.  The result was an expensive, painful procedure, that had no impact on my wife’s condition.

It was only after the surgery that we realized that this particular specialist performed scores of nasal septum repair procedures each year.  His proclivity was to perform that procedure, regardless of whether it was the best one for my wife’s condition.  To be fair, determining the “right” procedure was elusive (as is often the case).  But the fact remains that this doctor was inclined to perform this procedure, and knowing about this would have been useful – for us as patients, for his provider organization, and for the payer.  The knowledge would have been beneficial, not just to affect cost or quality (although it would have helped with both.).  The knowledge would help to improve the value of the entire engagement, for all the parties.

How often does proclivity play a role in the cost of care?  The first step in managing the phenomenon is to measure it.  This information will help to truly improve quality, while lowering cost.  MDBushCo has developed innovative ways to measure proclivity, and and powerful ways with which to take action on the results.  Contact me for more information.

Mike Bush

We are pleased that you have discovered our website, and encourage you to take a look around, check back often, and contact us for more information.

The leadership and consultants at MDBushCo represent decades of experience and innovation in the business of healthcare. We specialize in ACA and Medicare channel strategies, and a look at our backgrounds will demonstrate our instrumental roles in developing new payer sales approaches. We are also subject matter experts in many other areas resulting from ACA.

In addition, we have assembled a consulting team that is uniquely positioned to help payers address the myriad aspects of the ACA’s effect on payers. MDBushCo’s objective is leverage our expertise and relationships to quickly uncover needs… and respond with solutions that address the problems.

We find ourselves at a transformational moment in the history of the US healthcare system. Due to the Affordable Care Act, all of the customary ways in which stakeholders in the system conduct their activities – payers, providers, consumers, employers, and government, as well as vendors of products and services serving all of their needs – will change…and continue to change before a “new normal” is attained.

The decisions that stakeholders make will be critical – in areas ranging from matters of public policy to success on both the revenue and operational sides of businesses, and even to the health and well-being of individuals and families.

Through it all, one thing will be consistent: Government services will now encompass a much wider stage, and regulatory compliance will play a dramatically increasing role in every part of healthcare. In the long term, the successful payers will be those who can see beyond political squabbling, and offer new approaches that provide meaningful steps toward the real goals of health reform: Improved access, better quality, and lower cost.

Most of our payer friends are facing a barrage of new demands as a result of ACA, and our team can be of assistance in many of them. The bottom line is to identify actionable solutions, provide them if we are the right fit, or at very least identify where you can find them.

We’d like to see if we might be of service to you and your team. What business issues are of concern to you for which we might be able to help?

– Michael D. Bush