This blog was first published in Becker’s Hospital Review on July 1, 2016.
PSPs are becoming the new “darling” in the health insurance industry. Recently 26 new provider-sponsored plans (PSPs) were added and PSP enrollment increased 10 percent from 2014 to 2015, according to the 2016 AIS Directory of Plans. Setting up a PSP is one thing; making it financially successful is another.
To ensure success, PSPs need to overcome several challenges, including acquiring new members, influencing member behavior and tightly integrating with the health system. Private exchanges, which are health insurance e-commerce platforms, are particularly well suited to help PSPs address these needs and thrive in this new environment.
Let’s look more closely at the three core challenges and how a private exchange can help a PSP achieve its goals.
Priority #1: Acquiring Members
Attracting new membership is priority one for PSPs. Just like traditional insurers, PSPs must diversify their book of business. According to the latest AIS data, PSPs are increasingly offering both group and individual plans to help them scale. In 2014, 43 percent of PSPs with more than 10,000 members had both group and individual business, growing to 53 percent in 2015. PSPs looking to acquire new members need an e-commerce solution that supports both lines of business.
A modern shopping capability through an insurer’s private exchange enables PSPs to offer a broad line of health and voluntary insurance products. An e-commerce platform makes it easy to add the products consumers want, whether it is disability, critical illness, health savings accounts or pet insurance. PSPs can differentiate themselves with a unique e-commerce experience that millennials and baby boomers alike can appreciate. Lastly, an e-commerce platform enables PSPs to fully control their marketing channels across all lines of business (group, individual, retiree and others). Owning the channel, and the data that comes with it, makes it easier to target and personalize marketing efforts, which is key to acquiring new members.
A Focus on Wellness: Influencing Member Behavior
Traditionally, there has been a fundamental paradox between the goals of the hospital system and those of the health plan. Providers are primarily focused on care delivery, while the attention of the health insurer is on cost. With a PSP, the health system assumes financial responsibility for insured members’ health, therefore, they are financially incentivized to keep their members healthy. The PSP arrangement makes it easier for hospital systems to provide the best care at the lowest cost.
One of the key advantages of an e-commerce private exchange platform is that it allows employers and insurers to activate wellness and care management programs at the time of enrollment. These types of programs, when implemented correctly, can be very effective in educating members and providing them with information to keep healthy or proactively manage a chronic health problem. In a recent AIS webinar, Jim Parker, president and CEO of Indiana University Health Plan, talked about the programs his PSP has in place to help patients manage their care. As a result of these programs, inpatient admissions have decreased by up to 10 percent.
Seamless Patient Experience: Integrating with the Health System
Another key to PSPs’ success is full integration with the health system. The member’s experience should be seamless whether he or she is interacting with the payer or provider side of the house. Through a private exchange, the PSP can personalize the shopping experience for each member based on clinical data collected from the health system. The member, the health system and the insurer all benefit when insurance is tailored to each individual’s specific needs. For example, someone with a chronic condition who is the parent of several children will need different insurance coverage than a single, healthy, young adult. This type of personalization – which allows consumers to evaluate plans based on payment preferences, utilization expectations, and provider and formulary preferences – is where e-commerce platforms shine. They are designed to offer consumers the choices that make sense for them and to educate them on their various options.
Healthcare consumers are most satisfied with their care and experience when the network of healthcare and health insurance organizations are integrated. According to a recent JD Power survey, integrated plans have an average overall satisfaction score of 746, which is 63 points higher than that for non-integrated plans. And since consumers are more likely to trust their medical provider than their health insurer, the strong trust factor can extend to the PSP. This logic was a major reason that Bluegrass Family Health, the insurance arm of Baptist Health system, was rebranded as the Baptist Health Plan in 2015.
As PSPs explore which technology solutions make sense for them to invest in, a private exchange e-commerce platform should be an option that they seriously consider. These platforms are proven to play a critical role helping PSPs meet the challenges of providing cost-effective care, while maintaining high levels of consumer satisfaction and, ultimately, healthier patients.