Seniors
The Seniors market is undergoing dramatic change, presenting payers and service providers with a host of unprecedented challenges and opportunities in their Medicare business. While government reform and cost-cutting pressure present a transformational marketplace, Medicare also enjoys one of the fastest expanding health benefits segments, with Seniors offering both membership stability and growth.
In the new Medicare landscape, Oliver Wyman believes payers have some powerful options. In the immediate term, insurers must focus on preserving earnings in the face of MA rate reductions. Medicare executives can take immediate steps to offset pricing declines through traditional levers (e.g., benefit design, geographic focus, administrative efficiency) as well as leveraging Medicare products and services that align with the reform agenda.
Longer-term opportunities cannot be overlooked given the breadth of white space that will be created in the new Medicare marketplace. Insurers can position themselves for growth in a number of ways.
1) Addressing total seniors needs that are unmet as the Medicare Trust Fund gap grows and employers disengage from the provision of retiree benefits, creating the prospect of a breadth of new products and services
2) Providing solutions for the pre-retiree segment that needs a “bridge” to Medicare and faces unique challenges related to planning and saving for their health expenses
3) Leveraging managed care expertise that will be called upon as the government embarks on next-generation fee for service and other healthcare reforms
Ultimately, future success requires staying in front of the Medicare market and broader health reform initiatives. The first step should involve assessing the financial impact of rate reform scenarios on the insurer’s specific product and geographic footprint to gauge sustainability and ways to respond. This evaluation then presents a range of short- and long-term strategic choices, including:
- Earnings preservation
- Operational improvement
- Product and market portfolio mix optimization
- Improved top-line effectiveness
- New growth platforms
- Full-scale Seniors strategy
Oliver Wyman’s experience enables us to support these strategic choices. For example, recent engagements include:
- Conducted health reform scenario planning process:
- Identifying market-based opportunities and risks related to Medicare reform
- Recommending a range of strategic choices, each with associated economic impact considerations
- Devised Seniors go-to-market plan for local health plan with a focus on:
- Maximizing the opportunities of transitional seniors before they become Medicare eligible
- Hedging investments within the Medicare product portfolio given regulatory and legislative uncertainty
- Investing to grow among distinct segments, counties, and channels
- Developed integrated health management strategy for health delivery system focused on the Senior segment
- Devised approach to address the highest-need, most complex member
- Invested heavily in high-touch member engagement
- Designed benefit and service offerings to meet the needs of targeted Seniors populations
- Improved care delivery and consumer experience by serving condition-specific needs of the frail
- Leveraged technology to incent healthy behavior, monitor clinical outcomes, and facilitate care coordination across the continuum
- Assessed the risks and opportunities of the Seniors marketplace though a detailed assessment of the competitive landscape, regulations, customer needs, key trends, value drivers, economics, and growth outlook
Experts
Howard Lapsley, Mark Luck Olson, Mike Weissel
