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Health Plans Betting on HIX to Bring in Business

 |  By jfellows@healthleadersmedia.com  
   November 14, 2012

Despite the lingering resistance many states have to setting up their own health insurance exchanges, some health plans are moving forward to prepare for the influx of consumers looking for health insurance products.

The exchanges are due to come online in 2014, and with the election results making certain the remaining components of the Affordable Care Act are here to stay, reality is setting in.

Florida's Republican Governor Rick Scott reportedly has softened his opposition to setting up an exchange. If other states follow Florida's lead (I'm looking at you Texas, Alabama, Missouri, and Kansas), the federal government will wait.

The Department of Health and Human Services announced last week that it would delay the deadline for states to decide whether the exchanges would be run by the state or the federal government.

But that's politics, not business. At Florida Blue, that state's largest health plan with seven million members, the company is preparing for what it believes the exchanges will bring: more consumers to the marketplace.

"There will be a lot more focus on the retail end of the healthcare transaction. More, B-to-C  [business-to-consumer] than B-to-B, [business-to-business] and even where you have a B-to-B transaction, the employers are doing more cost-sharing with their employees, and so individuals are being much more involved in the decisions they have to make on their healthcare choices," says Pat Geraghty, President and CEO of Florida Blue.

Healthcare consumerism has already been playing out with the onslaught of retail clinics, online comparison tools, and various hospital ranking guides. But Florida Blue is taking it to a whole new level.

Setting up shop
In 2007, Florida Blue opened its first retail center initially aimed at selling only its health insurance products. There are now 11 Florida Blue retail centers across the state, and, Geraghty says, the centers have evolved to be a sort of all-in-one insurance information center.

"You can walk in with your claim, your EOB, and we will walk you through it, line–by-line so you fully understand what the transaction was. We have customer service folks who can teach you to use online tools. We also have clinicians. We have nurses who will do a health risk assessment and then tailor that health and wellness fitness program for that particular member," says Geraghty.

If you're thinking Florida Blue's focus on building a physical presence is counterintuitive compared to what online tools can offer for the cost, Geraghty says you're not alone.

"I was challenged in one of these center openings when someone said, ‘Why would you spend money on bricks and mortar?' And my very simple response back was, "Why did Apple open Apple stores? They can sell everything they do online."

It really is about the experience. And we know, our product and healthcare is much more complex and much more personal, and we think there are a lot of reasons to create that connection to the customer."

One of the biggest reasons, of course, is Florida's five million seniors. These retail centers are tailor-made for selling Medicare Advantage policies, and the data seems to bear that out.

"The last annual open enrollment period that finalized for 1/1/12, we added 30,000 Medicare Advantage members, which is the largest year we've ever had. Now can you attribute all of that [to the retail centers]? We certainly know there's been an impact," says Geraghty.

It's not like selling a toaster
Without a retail model for health insurers in place, Geraghty says Florida Blue looked at the how banks and investment firms operate retail store fronts and he says they looked at other states.

"One of the things we did was study what was happening in Massachusetts, and what was happening there was very few people finalized the transaction while they were online. They would go, they would look, they'd see their options and then they would go talk to somebody—either a broker, a physician, a family member, somebody... because the choice is complex, it's not like selling a toaster," says Geraghty.

No, buying health insurance is certainly not like buying a toaster. First of all, consumers, for the most part, have been pretty laid-back about buying health insurance because the complicated part of the decision—which company will cover costs—has been left to the employer or the federal government.

The increase in cost-sharing from employers along with the rise of health savings accounts and high deductible plans have given consumers more choices, but some would argue that's translated into a more confused consumer, instead of a more informed one.

HIX as a catalyst for change
Geraghty says the retail centers have also helped prime the marketplace for the industry shift in reimbursement.

"We're in discussions all over the state for ACOs [Accountable Care Organizations], and when I sit down with a hospital and talk with them about changing the reimbursement model into one that pays for value versus volume, they like the notion that I've got a center near their facility and that I'm reaching out to my population to keep it healthy in the first place," he says.

Two of the retail centers that opened this year also take a cue from coordinated care and include primary care physicians.

"We had to really talk to the delivery system in the area about what we were doing and how we could be a collaborative partner with an on the ground delivery system. We're watching those pilots as well to see what the data will tell us," says Geraghty.

Some of the data that Florida Blue already has from its retail store fronts includes:

  • 15-20% of individual product sales (under 65 and Medicare Advantage) take place at centers
  • Approximately 50% of consumers who visit the Florida Blue centers do so to discuss purchasing health care coverage; the others come for health & wellness offerings and for customer service

Geraghty does not have on rose-colored glasses when it comes to healthcare reform. But, he says,  Florida Blue is betting on a side effect of the law which gives individuals more choices and is meeting them in a space where they already buy products—online and in a traditional store. In fact, the company is expecting to at least double its sales of individual products because of the health insurance mandate.

"We've made a very distinct play to not be just an online service. We believe healthcare is local, is personal, and that is a very important place for us not to ignore," Geraghty says.

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Jacqueline Fellows is a contributing writer at HealthLeaders Media.

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