Seizing opportunities that the American Rescue Plan creates for health plans

We outlined in the first part of this series how the American Rescue Plan’s goal of expanding coverage for commercial and state Medicaid plans will pose unique challenges for health plans across the entire enterprise, both strategically and tactically. They must now meet the needs of a drastically reshaped beneficiary population—with new members comprised largely of younger, tech-savvy individuals, as well as those previously priced out of commercial plans with undermanaged chronic conditions. What’s more, they must do so in a way that departs from thinking of Medicaid lines of business as monolithic (i.e., one member is very much like another) and moves toward treating Medicaid lives like commercial lives. 

For all its challenges, however, the new demographics—alongside record-breaking Medicaid enrollment numbers amid COVID-19—present exciting opportunities for health plans to re-envision how they engage with and deliver care to their members. 

Ultimately, success is going to be a matter of rethinking member engagement and experience in ways that challenge the core of current business models. Attention to these domains—though certainly not only these—will be paramount in that regard. 

Consumerism  

Nearly a decade after the Affordable Care Act exchanges went live, the composition of consumers shopping for healthcare has fundamentally changed. Yet despite differences in age, race, geography and socio-economic status, what these consumers share is a desire for a more personalized, digitally-driven healthcare experience.  

According to a 2020 survey, 61% of patients said they would visit their healthcare provider more often if the communication experience felt more personalized. Another report found that 49% wish their digital healthcare experience was smoother and more intuitive, and that 28% of consumers have stopped or switched providers during COVID-19 due to a poor digital experience. This is especially true for the younger members the American Rescue Plan aims to help cover. 

Today’s payers have an opportunity here to transform from a traditional healthcare company to a digital organization of trusted advisors and caregivers. To make this a reality, however, they must reimagine who their plan beneficiaries are and find new ways to engage them. They can do this by:  

• Revisiting vision and objectives. The arrival of a new beneficiary population is the perfect time for health plans to refresh their vision and refine objectives. What digital tools, technologies, and approaches are available now to help contain costs and drive better experiences that didn’t exist five, ten, twenty years ago? What does it mean to be a “digital” health plan and how does it change the ways an organization engages members and providers? 

• Learning more about prospective beneficiaries. Payer can’t afford to play guessing games when it comes to learning who their new members are and what they want. That’s why it’s best to leverage existing market research when possible and procure market research if there’s a dearth of information in a particular region or locality. One area to assess, of course, is communication preferences given the increased diversity of the beneficiary population.

• Aligning on an enterprise-wide definition of constituent experience. This involves ascertaining members’ perception of their interactions with a healthcare organization – and can help drive the business discipline associated with the design and management of these interactions. 

• Shifting to a consumer-centric mindset. During important medical moments – e.g., prescription adherence, ER care, end-of-life care – today’s members need consumer-centric support. Too often, healthcare companies do not realize how difficult it can be to navigate different specialists, health groups, urgent care clinics and various practices. Siloed, fragmented, and transaction-focused care should shift to a holistic experience, in which all parts of the consumer journey flow together.  

Technology enablement 

Technology is central to translating this focus on consumerism into engaging, desirable consumer experiences. Technology enablement is about understanding what scale does to the business model and making the right decisions to thrive.  

As the beneficiary composition changes, payers must make necessary investments in updating obsolescent technology and streamlining consumer-oriented solutions. Only then can they turn inconsistent, uncoordinated and transactional experiences into a purposefully designed, well-orchestrated, and customer-focused one. 

Some key actions include:  

• Be digital. When it comes to digital, there are two complimentary paths for payers to consider as they seek to anticipate members’ growing needs: the digital customer experience and predictive analytics (which can quickly identify vulnerable populations and assist with creating actionable plans that include insights derived from the analysis of social determinants of health). A strong digital business case is essential here, as it will keep initiatives connected and focused.

• Consumer-first design. Digitization of traditional processes will be crucial in delivering a convenient and holistic digital experience for millennials, gig workers, and those who fall in the Medicare “donut hole” coverage gap. For instance, younger demographics are not only tech-savvy; they have grown up with the expectation of convenience and instantaneous access to information. 

• Rationalize. Redundant applications and arcane processes are bound to exist in healthcare, especially amid widespread consolidation. Payers should take time to identify which applications should be kept, replaced, retired or consolidated. 

• Revisit the enterprise architecture blueprint. Organizations that have actionable, outcome-focused technology blueprints and roadmaps can identify and accelerate the required technology investments to bring these business capabilities to market and gain a competitive advantage. 

• Automate. Automation can help provide enrollees a journey-based experience while saving payers time and money. For instance, provider credentialing often takes months to complete. Systems like Robotic Process Automation (RPA) can streamline the collection of data in this area. 

• Be data-driven and analytics-driven. How is the analytics structure set up? How is self-reported data being leveraged and analyzed? Can community data sources be effectively triangulated to help provide a fuller picture of the member? These questions and more are essential to expanding beyond traditional data sets to engage new members in innovative ways, and to the learning and iterating that will enable leading organizations to respond, adapt, and improve.   

Digital procurement capabilities  

Being strategic about procurement is important, especially for organizations that haven’t really explored the Medicaid space, or who have yet to embrace a fully digital procurement process. Being a formidable player in this space—one that can justify the necessary technology investments and capitalize on its approach to consumerism—entails having solid answers to questions like: What business do you want to go after? How do you break into your first state? How do you grow beyond your home state? What do you need to know in order to successfully bid on—and win—Medicaid managed care business? Do you have the right technology capabilities and partners, can they scale to support the additional business? 

Managed care organizations (MCOs) are already doing big business – enrollment more than doubled between 2010 and 2018 – but they are about to get even bigger as a result of the ARP. Managed care contracts are on the rise, with Medicaid agencies in 40 states contracted with MCOs to administer benefits. In 2017, these agencies paid more than $232 billion to MCOs. Even in less populated states, a procurement opportunity can be worth billions. 

Placing a successful bid requires special preparation, timing, and savvy. Each state has its own laws and processes that govern how Medicaid Managed Care contracts are structured and awarded. A typical contract takes 12 months to plan for, even if it only covers three to five years.  

In other words, these contracts are a big deal, but they don’t come around often. Alongside preparations in technology and consumerism, payers must bolster their procurement capabilities to stay competitive. Here’s what they need to keep top-of-mind:  

• Get to know the state’s Medicaid program. Assessing the makeup of national, regional and provider-based players – and researching the contracts it typically awards (comprehensive, risk-based, carved out, etc.) – will allow payers to position themselves effectively for bids. Bidders should also be mindful of the state’s political landscape, as legislators can have an impact on these contracts. 

• Determine readiness to enter the market. Before starting to outline a bid, bidders should determine whether their technology platforms have the capabilities required and whether their processes can adapt and sufficiently administer the influx of new Medicaid business. To accelerate addressing any gaps in technology and processes and to minimize up front investments, organizations should consider leveraging managed services partners (outsourcing) as a temporary or permanent solution. In this respect, establishing relationships with women and minority-owned businesses can help strengthen bids. 

• Manage the digital procurement process. Payers should determine where it best serves them to bid on a project by evaluating their outlined visions and goals. They also should evaluate state requirements against their current system and capabilities, identify gaps, and address them accordingly. By conducting advanced planning for managed care contract cycles, organizations will be better prepared to put together a proposal. Reusable content can also serve as the basis for proposals, so teams can spend more time creating assignments around content development, review, approval, and sign-off.  

• When the contract is awarded, deliver a plan. Upon winning a bid, payers should be ready with a comprehensive implementation plan. And finally, to start accepting enrollments, every Medicaid plan must complete a comprehensive joint CMS/state readiness review. That means focusing on assessment processes, care coordination, provider network development, technology readiness and staff training to ensure consumers will receive the necessary continuity of care. 

Seizing the opportunity  

The American Rescue Plan aims to transform the landscape for health plans, creating unique challenges for payers engaging with new beneficiary populations. Payers also have a unique chance to reimagine how to successfully engage members, provide better digital experiences, and develop effective procurement capabilities.  

Focus on the above domains – consumerism, technology enablement and digital procurement capabilities – and their business model implications, from the strategic to the tactical, should allow payers to thoughtfully position themselves for immediate wins and long-term growth in the healthcare marketplace of the future.