Related Expertise: Плательщики и поставщики медицинских услуг
Winning in the Medicare Advantage (MA) market is not easy for health care providers. But for provider-sponsored plans that execute effectively, the upside can be enormous. Priority Health, a provider-led health plan in western Michigan, is one such example.
Over the past five years, Priority Health has been one of the most successful MA plans in the market. During that time, it has achieved star ratings that are consistently the highest in its market while also boasting administrative- and medical-loss ratios—the percentage of premiums that a plan spends on claims and expenses—that are well below national averages. Perhaps most impressively, Priority Health has built this track record while increasing its membership organically by 15% per year, faster than any medium or large health plan in the mainland US.
BCG Partner Ozgur Adigozel sat down with Joan Budden, Priority Health president and CEO, to find out why the company has been so successful and learn what advice she would offer other provider-sponsored plans.
Our work started six years ago. At the time, we had about 40,000 members, but we were growing slowly. We had also just turned over $9 million to CMS [Centers for Medicare & Medicaid Services] as a penalty associated with risk adjustment errors that were due to our inexperience with the risk-adjustment process and lack of process controls. And we were barely making money. Our operating margin was less than 1%. So we focused on those three things: growing faster not only through attracting new members but by satisfying and retaining our existing members, implementing process rigor around risk adjustment to ensure we were accurately assessing the risk of our membership, and identifying ways to increase our operating margin to allow us to invest in our business and our members. And by executing exceptionally in all three of those areas, we have been able to drive dramatic improvement in results.
We take a multistep approach that starts with using analytics to identify the members who are actually shopping in the market and understand the reasons they’re shopping and their needs. Then we develop targeting plans and products that align with those beneficiaries’ needs. And then we deliver the best possible experience so that we satisfy and retain our members. The last part is probably the biggest one for us. We happen to be in a market with one of the largest Blue Cross and Blue Shield providers in the country, as well as several national players. But we've been able to outgrow all of these players by cost effectively delivering an easy, convenient, and satisfying experience. Once a member chooses us, they stay with us; our retention rate over the last six years has been at 96%.
Well, of course, a big part of it is how we approach customer service. We put a high priority on making things as easy as possible for members. That means, for example, that they don't get triaged through three different departments to get their prescriptions filled. We've actually had major consulting firms come in and tell us that we should shorten our average talk time to meet industry benchmarks. But we looked at our own data and we looked at data from other leading plans, and we found that the amount of time your representatives spend on the phone is a lot less important than the quality of those interactions. We still manage costs aggressively, including investing in making sure we're routing questions effectively. But our focus is on the member experience and accurately responding to member questions and concerns the first time they contact us, and I think our results validate that approach.
It’s in our DNA. We have established strong and effective partnerships with systems and providers across our network. But being a provider-owned plan allows us to better understand our provider partners, to develop and test programs internally before expanding to our broader network, and to build deeper provider relationships, which are so critical to the delivery of affordable, high-quality outcomes for our members. For example, we have very low hospital readmission rates for our members—8% to 9%—and a big part of that comes from the learning and programs we’ve developed with our parent, Spectrum Health. Spectrum’s hospitals, physicians, and care managers work very closely with our on-staff clinicians and care managers to develop appropriate and effective transition plans when those members leave the hospital and that results in better outcomes. And we have taken those learnings and apply them across our entire network.
Unlike some businesses, you can't be really good at just one thing. In MA, you need to master the full set of capabilities or you won't be successful. You need to be excellent at risk adjustment, excellent at quality, excellent at the back end, excellent at medical management, excellent at product design and pricing. And you need to do all of this on time while meeting CMS compliance standards. Unfortunately, it's not one thing. If it was one thing, it wouldn't be so tough—and it wouldn’t be so rewarding. And there wouldn't be so many plans coming in to the market and losing money.
There are two approaches: go alone or find a partner. If you go alone, it's critical to be confident you can execute across the entire value chain. Because you can lose a lot of money if you don't get things right in the first couple years. If you choose to partner, it's critical to make sure you choose the right partner. To me that means a proven track record in MA and a strong cultural fit. There will be challenges along the way, so you want to partner with someone who's consistently demonstrated their understanding of MA and consistently demonstrated high performance. And you want to choose a partner that is as focused on members as margin. If you relentlessly focus on doing the right thing for plan members, achieving margin targets will happen, too.