Private exchanges offer five critical capabilities for health insurers

Health insurers value the data private exchanges deliver for the consumer e-commerce experience according to 2016 Health Check Survey.

The fourth annual Health Check Survey, released July 26, shows how the insurer-led private exchange market has matured. Respondents overwhelmingly – nearly 80 percent – stated that it’s important for a private exchange platform to support all lines of business, including individual, group and retiree. Moreover, the highest-ranked capability for three years in a row is a consumer-focused shopping and enrollment experience. It appears that insurers are making a consumer-centric experience a priority, which is important to gaining market share and building member-for-life relationships as members move between group and individual and eventually to retiree coverage.

The second-ranked capability, which jumped from last place two years ago to second place this year, is generating data needed for sales and product development. This also ties in closely with the consumer’s e-commerce experience as insurers embrace the importance of data and analytics as a prerequisite for successful e-commerce.

A private exchange can gather and aggregate a wide range of data that can be used in many ways. For instance, with a private exchange, insurers can bring together consumer data from shopping and enrollment activity with data from other systems, such as claims. By layering traditional e-commerce and health insurance-specific data together, the insurer can personalize the consumer experience and quickly offer relevant products. As an example, with information on provider preferences and prescription history, the insurer can offer products that include the providers in their network and drugs in the products formulary. More than ever, insurers view their members not as members of groups or individual policyholders, but as consumers who need to be matched to the right products to meet their needs at a particular point in their life.

The survey also showed a consensus among insurers that three additional capabilities are nearly equal in importance: Integration with existing employer and insurer systems; enabling multiple funding models, including defined contribution and defined benefit; and offering a comprehensive set of ancillary products. Fierce Healthcare recently published a summary of the survey findings.