News and Insights
3 Strategies for Changing the Health Insurance Business Model
In the face of a market-wide demand for lower costs, many of the players in the healthcare space have defined their strategic response as doing what they’ve always done–but for less. After decades of financial success, it’s difficult to think about meaningfully changing the business model.
For their part, insurers have gotten tougher in negotiations with employers and providers. Every calendar year is an exercise in explaining to financially strapped employees why they have to pay an even larger share of ever more expensive insurance. The mega-mergers among payers can be properly interpreted as one side of an arms race with providers to improve negotiating leverage through scale.
With all of the focus on price, private health insurance is increasingly becoming a commoditized business. When that happens, it becomes very difficult to sustain margins, let alone improve them. Payers understand that they are vulnerable to market changes, but they aren’t sure how to prepare for–or lead the way to–what comes next.Read More
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