Where's the buzz going to come from in 2007? What hot trends will Wall Street and industry insiders be watching? How are top health plans positioning themselves for the future?
As strategies are developed and action plans implemented, here's a look at 10 watchwords that are going to shape the world of health insurance this coming year.
1. Technology. From cybercondriacs to genomics, health care technology will be a force to be reckoned with. Last year, 120 million people were online searching for health information. The customer has embraced technology. Advances in disease detection will continue to fuel the stem cell research debate. Innovations in treatment such as implantables, polypills and amazing bionics will continue to boggle the mind. And cutting-edge remote wireless technology will make monitoring care and compliance just a click away. For health plans, payment/benefit card technology promises a new era in administrative efficiency with full integration of member transactions–eligibility, account tracking, personal health record and member line of credit.
2. Differentiation. Going head-to-head with tough competitors will mean rising above the "sea of sameness." Health insurance products have become indistinguishable, and the overused customer service promise is getting tiresome. The ability to influence the marketplace through a unique selling proposition will separate winners from losers. It will take distinctive messaging that breaks through the clutter and becomes a rallying point for dominating a market. In an environment of product parity and commoditization, differentiation will come from a unique brand position that's both important to the customer and has competitive strength.
3. Boomers. With over 78 million baby boomers-8,000 turning 60 every day–there's a new customer base in town. This population segment is expected to live longer than any generation this country has ever seen. Boomers are educated, tech savvy, convenience-driven, and as consumers, smart cynics. And they control more than $8.5 trillion in investable assets. As a result, boomers represent an extraordinary opportunity for new health insurance products and services. Their health is their most important asset, with financial security a close second. Boomers retiring at 65 need enough money to support themselves for 20-25 years (as much as $2 million).
4. Consumerism. With health care cost containment still pinned on a meteoric rise of consumer directed health care, these plans will enter 2007 with less than 5% market share. "Proof-of-concept" will take center stage this coming year as health plans look to justify investments in product development and technology. Furthermore, the financial services sector will look to carve out their piece of the action. At the same time, employers expect to reap the premium savings being promised to them. To hold up their end, employers will be working to change the behavior of an employee population suffering HDHP deductible shock and benefit intimidation as they take on new roles of health care budget manager and benefit decision-maker.
5. Distribution. Availability of detailed customer information is making single-source distribution obsolete. Traditional profiling (i.e., age, sex, income, education, geography) is now enhanced with psycho-demographic data and predictive modeling that not only identifies potential buyers/nonbuyers, but also assesses financial and health risk. The opportunity to act on these informational gems takes multiple sales channels. Agent-driven outlets such as captive, career or MGAs are limited. They need to be complemented with direct-to-consumer selling that encourages immediate consumer interaction. Using a multimedia toolkit, this approach can accelerate product awareness and establish a one-on-one customer relationship that you control. When done correctly, business acquisition costs are lowered, retention is higher and profitability escalates.
