As the countdown to January 2014 quickens, health insurance providers are looking for new consumer engagement approaches to comply with the Affordable Care Actand position them for B2C success. For many, this will involve competing in private marketplaces.
The primary benefit of creating a private marketplace is its flexibility, as it can be customized to address the needs of any employer group. As uncovered in a recent private marketplace assessment by our healthcare consultants, private exchanges can create tiers of benefits —specific to employer divisions with vast multichannel employee decision support— and bundle these benefits with diversified product offerings. On the other hand, public exchanges are targeted to individuals and small groups, and are designed to commoditize your offerings.
When surveyed by Strategy&, nearly 80 percent of employers would prefer to purchase insurance from a private exchange than from a public exchange. Relying on public exchanges to showcase your products can be risky, because you'll have little control over the messaging and marketing of your offerings.
As a health insurance provider, there are several key steps you can take to determine if a private healthcare marketplace will benefit your organization and help expand your market presence.
- Analyze brokers’ and employers’ business drivers to understand what a private marketplace solution must do to meet their needs. You should focus particularly on how brokers assist employers when selecting a healthcare provider and products, and interview multiple employers to understand their decision-making process.
- Assess employees’ key drivers in choosing a healthcare product to understand what a private marketplace should provide to meet their needs. Recent market studies are a good starting point for baseline information, and should be followed up with surveys to supplement and confirm findings. In parallel, market assessments are crucial to identifying how similar solutions have been brought to market in other industries.
- Identify what functionality the online marketplace solution should provide, mainly: the technical challenges it must overcome, systems it must integrate with and the business processes it must work within. This will involve conducting interviews across your organization, from executives and department heads to day-to-day operations and IT staff. Documenting these various vantage points will ensure the proposed solution can be operationalized in alignment with the executive vision, while meeting the diverse needs of all the stakeholders.
If you are considering a private marketplace solution, you can start by evaluating these three areas. The information you uncover will likely provide a clear picture on whether a private exchange will benefit your company, or not.