Health Plans: The Other Challenges

"There is an opportunity to reduce costs through competitive bidding between two health systems. However, when you talk to health plan executives about that, they dismiss it out of hand," says Paduda.

Challenge: Lack of branding and measurement.
If companies like Nike can transform their sneakers and clothing into a lifestyle, Paduda doesn't understand why a health plan isn't able to brand itself better. Health insurance—and the security and benefits of it—should be easy to market, he says.

"If you can't brand health insurance effectively, then you're a terrible business," he says.

Paduda says the problem is likely that health plan executives don't understand the importance of branding. They are more concerned about marketing as a line item expense rather than understanding how better branding can lead to member retention.

To keep members, regardless of the type of plan (whether through an employer, individual, or Medicare Advantage) insurers should promote themselves as the health plan that keeps individuals healthy and helps employers maintain fully functional employees.

They can do this by performing employee productivity analysis. Health plan executives and employers, who are usually financial-minded people, often seek a definite return on investment—and brand loyalty and employee wellness are often difficult to gauge. That's why it's up to health insurers to develop those ROI tools and provide hard numbers to businesses.

"[Employers] should be considering it as a productivity driver," Paduda says, adding health plans need to provide data on how their wellness can improve employee health and how that improves productivity and can reduce health costs.

—Les Masterson