Strategic Revenue Management – How Local Health Plans Are Beating National Carriers

At the recent Medicarians conference in Las Vegas, Brendan McLoughlin, e123 President, spoke about “Strategic Revenue Management – How Local Health Plans are Beating National Carriers.” Brendan laid out a step-by-step guide on exactly how local carriers with small overall market share can beat larger competitors.

His session started with an aspirational quote from an insurance industry executive.

“I imagine a future where our business isn’t just growing, it’s thriving with loyal engaged members and predictable and profitable sales growth.”

Predictable and profitable growth is the goal of Strategic Revenue Management versus the current state of many carriers which is more of a “land grab” and trying to sign up whatever members they can.

Using a hypothetical scenario of a small local carrier in Oklahoma, A-OK insurance, Brendan shared a six-step process on how A-OK can actually win in the marketplace and beat the bigger players.

At the heart of the six-step methodology is data

With 25 years of experience being a technology partner to carriers and FMOs within health insurance, e123 advises its clients on how to leverage  data and insights to accelerate their distribution. Real-time access to comprehensive data about members, agents, products, and FMOs, and the insights from that data are the essence of Strategic Revenue Management. But beyond access to data, local carriers need to leverage the data in the right way to compete with larger carriers.

The first step is to assess performance. Healthcare is a local business and local carriers aren’t going to beat national carriers on a large scale, but they can (and are) in specific markets. For most local carriers, trying to win at the state level is probably unrealistic as a starting goal. Winning in a specific market, however, is absolutely doable if you pick the right counties and zip codes. That’s where access to data and a strategic revenue mindset come into play.

After the assessment is complete, the Strategic Revenue Management approach includes:

• Plan strategically: Select the products, markets, and brokers and agents that will enable you to win market share
• Generate “push” marketing: The strongest agents are motivated by more than commissions; find them and motivate them to sell your products 
• Invest in “pull” marketing: All marketing spend is not created equal—invest your marketing and advertising dollars in the places where they will have the biggest impact
• Assess and optimize: With real-time data, you can adjust strategies and tactics daily or weekly (don’t wait until open enrollment is over)
• Repeat!

By targeting certain markets and investing time and resources wisely, carriers can lower customer acquisition costs, win the majority of share in those markets, and then expand.

Watch the  presentation below and download the white paper for guidance on how to execute a Strategic Revenue Management plan.