Using Ancillary Benefits to Battle Margin Compression

In a recent post, we examined some of the key drivers of margin compression in this new era of health care reform:

• Increased taxes
• Minimum loss ratio
• Increased competition
• Greater price transparency
• Standard benefit requirements

These factors, combined with the substantial costs associated with member churn, are driving a business truism within the health care industry: to effectively battle margin compression, health plans must strive to be present in multiple markets, and they should consider how ancillary benefits can be used to maintain and grow their business.

Of course, our industry is not the first to face game-changing legislation similar to the ACA. Following the attacks of September 11, 2001, airlines grappled both with stricter regulations that were costly to implement and shrinking demand as travelers responded to the tragedy.

Around the same time, websites like Expedia and Orbitz emerged as one of the primary sources to purchase airline tickets. These sites facilitated greater price comparison and increased price transparency, much like we are seeing today within the health care marketplace.  Clearly, this kind of comparative shopping can significantly impact consumer behavior and choice.

The airlines that most successfully navigated these challenges attracted consumers with competitive base pricing and used optional amenity costs - such as added leg room, luggage fees, and food upcharges- to bring in additional revenue. Following a similar model, health plans can use ancillary benefits that appeal to consumers who are interested in purchasing supplemental care, thus preserving a significant portion of their customer base and the associated revenue stream.

Expanding into multiple markets to offset the effects of member churn can be similarly powerful in the fight against margin compression. Offloading members is costly and the movement of members between Medicaid and health exchanges can threaten the overall stability of a health plan by compromising its ability to predict its financial risk. Health plans that have a presence in multiple markets can preempt the negative impact of member churn and better preserve and protect their bottom line.

As is often the case with landmark legislation that impacts such a fundamental part of our daily lives, the Affordable Care Act has brought vast improvements and interesting challenges to the healthcare industry. Health plans have a unique opportunity during this watershed time to explore how ancillary benefits and market expansion can grow and protect their business and membership base.  

Learn more. DentaQuest is hosting a webinar discussing how health plans can use ancillary benefits like dental to grow their market share and control medical costs. Please join me, along with Dr. John Luther, DentaQuest's Chief Dental Officer, and Dr. Justin Cramer, Chief Medical Officer of Missouri Care, who will speak about Missouri's first-hand experience with medical integration.

On the Frontlines of Medical-Dental Integration
Wednesday, January 28
1:30 p.m. CT

Register at www.dentaquest.com/medical-dental-integration/webinar.

Join our Webinar: “On the Frontlines of Medical -Dental Integration”

By Steve Pollock, Chief Operating Officer, DentaQuest

There is increasing evidence demonstrating the relationship between oral and overall health, yet many in the industry don’t realize that in addition to improved health for members, medical and dental collaboration also allows for better care management and thus reduced costs. 

On Wednesday, January 28, 2015 at 1:30 PM CT, I am hosting a webinar to discuss how health plans can use ancillary benefits like dental to grow their market share and control medical costs. I will be joined by Dr. John Luther, Chief Dental Officer for DentaQuest, who will speak about the scientific evidence to illustrate the centrality of good dental health to overall health and Dr. Justin Cramer, Chief Medical Officer at MissouriCare, who will speak about MissouriCare’s first-hand experience with medical dental integration.

The webinar will explore the unique opportunities that exist for health plans seeking to grow their market share by integrating dental benefits into health plan offerings and the healthcare insurance industry’s changing market dynamics.   Through this first-hand account of the challenges and benefits of medical dental integration, attendees will learn strategies to successfully implement the concept.

I encourage you to join us to gain more insight into what I consider to be one of the most important areas of growth for our industry. You can also learn about the benefits of medical dental integration by following this blog series on Oral Health Matters, “Why This Matters to Me.”

Please click the following link to register at no charge: www.dentaquest.com/medical-dental-integration/webinar.