Posted by
Stephen Bruno
on
8/25/2010 at 6:05 AM
There has been much talk about the changes that the Patient Protection and Affordable Care Act (PPACA) will bring to the way health plans operate. In a previous blog post, we mentioned a few points that could influence decision-making and alter existing processes for health insurance organizations. Of these points, maintaining a medical loss ratio (MLR) of 80% for individual and small-group products seems to have taken a foremost role in restructuring the business processes of health plans.
MLR Measures Depend on Compensation Management
This article in the AIS's Health Business Daily points out how some health plans are already beginning to restructure the way they pay their brokers and agents in an effort to reduce the percentage of premium dollars that go toward commissions.
Conversations with a few of our clients have brought out similar stories on their plans to change commission structures, and how incentive compensation management technology will be an integral factor in allowing them to be responsive and move quickly on these necessary business decisions.
With compensation management technology, carriers can quickly restructure commissions and compensation plans, communicate these changes to their agents and update credentials and appointments, to quickly put new strategies into action.
CRM Is Essential to Compete in a Widening Market
Another PPACA mandate that insurers are bracing for is the large number of potential insureds that will be flooding the marketplace. As the potential customer base grows, competition for market share will be fierce. To succeed, carriers’ customer service must be top notch.
Advanced CRM technology helps carriers establish an enterprise-wide customer service orientation, improving service and sustaining market share. According to Adam Honig, President and CEO of Innoveer Solutions, “Insurers With the Best CRM Will Win”. He cites five main areas that carriers should focus on to improve customer service, including implementing “CRM systems that provide [insurers] with a complete view of a member as well as their requirements.”
In his own words, “Insurers that excel at member service will continue to attract more customers and build their bottom line, enabling them to make their services even better.”
With the right package of compensation management and CRM technologies, insurance carriers will be well-positioned to react with agility to the realities of reform and successfully contend with increased competition.
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Posted by
Joseph Westlake
on
6/8/2010 at 7:15 AM
Health insurers will be faced by challenges in the near future with the implementation of health care reform. Given the multitude of sanctions in the bill, there will be a big impact on the insurance business model. A few important points that could influence decision making are:
- Fixed Medical Loss Ratios
- Pre-existing Conditions and Removal of Lifetime Caps
- Universal Coverage
What actions should insurers take to best position themselves in the wake of this new and multifaceted law? We anticipate that things such as cost control and ultra-lean operations will be foremost on your minds.
Insurance organizations need to devise a strategy that will allow them to sync with the mandates in the reform bill and stabilize their internal operational structure. They will benefit most if they treat this time as an opportunity to rethink organizational systems and position themselves to adapt to the potential business growth and react quickly to changes. With the right systems in place, carriers will be able to effortlessly manage key operations like distribution. The distribution channel plays a significant role in penetrating the market with new products – an essential factor to stay above the competition.
This year’s AHIP Institute 2010 conference to be held at Caesar’s Palace, Las Vegas, provides a great opportunity for health care and health insurance organizations and executives to understand the big picture and devise the right strategies for the future. We are excited to showcase our solutions at AHIP and discuss how health plans can better support their distribution partners, giving them the insight they need to be smart and productive.
Carriers using a comprehensive commissions and incentive compensation management solution that can seamlessly integrate with multiple systems including CRM can lead the way, as proven by one of our recent customers, Insphere Insurance Solutions.
VUE Software is providing a free opportunity to AHIP attendees to register for a webcast presented by a Vice President of Insphere Insurance Solutions titled Customer Relationship Management for Distribution Success: Support Agents Throughout the Sales Cycle to Better Meet Client Needs.
Visit VUE Software at the Microsoft booth #523 for more details or click here to register online.
VUE Software delivers sales performance capabilities to carriers through VUE Incentive Point, which integrates its premier offering VUE Compensation Management with Microsoft Dynamics CRM. The solution is available in on-premise and on-demand (Software-as-a-Service) models, giving insurers even greater flexibility and lower cost of ownership.
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Posted by
Joseph Westlake
on
9/10/2009 at 11:45 AM
President Obama’s Health Care Address to Congress last night was a dense and succinct explanation of his proposed plan for health care reform, bookended by invocations of history, sentimental anecdotes, and a posit on the definition of American character. The president’s speech was received positively by the American public, with sixty-seven percent of speech watchers agreeing with his proposed plans (CNN).
I would be curious, however, to see what percentage of people who work at insurance companies would approve his plans. The president proposes many restrictions on health insurers that would fundamentally change the way private insurers do business, posing a unique challenge to the tens of thousands of American men and women who work for private insurance companies, some of whom we at VUE Software have the privilege to work with on a daily basis.
Mr. Obama stated that his plan would make it “against the law for insurance companies to deny coverage for preexisting conditions” or to “drop coverage when you get sick or water it down when you need it the most.” He also said that insurers would “no longer be able to place a cap on the amount of coverage you can receive.” Mr. Obama ingratiated himself by stating that people who work at insurance companies do not do these things because they are bad people, but because these actions can increase profits. Since the president maintains that his plan would also lower the cost of health care in general, it may become easier for insurers to offer more affordable premiums and stay profitable.
In addition to these changes, a more drastic proposition of Mr. Obama’s is a new “insurance exchange” that would allow Americans to shop amongst insurers’ options for competitive prices. Insurers would elect to participate in the insurance exchange, which would allow them to compete for the business of the millions of Americans who are currently uninsured. In order to participate, each of the private insurers would be required to provide a base package of benefits, as regulated by the government. Mr. Obama states that “As one big group, these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage.” He points to large employer groups as the basis for this claim.
This plan has all sorts of implications that Mr. Obama did not expand upon. We encourage you to share your thoughts on the issue of health care reform, and tell us how you think the president’s plans may affect your business.
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