By 2030, 20 percent of the US population will be over 65 years old. With more aging Boomers buying Medicare Advantage, they represent the biggest, most lucrative growth segment.
In this episode of the Oliver Wyman Health Podcast, Martin Graf, a Partner in Oliver Wyman's Health & Life Sciences division, chats with John Kao, Alignment Healthcare's Chief Executive Officer, Julie Smith, Former President of Government Business, Anthem and Blue Cross Blue Shield of Michigan, and a Senior Adviser at Oliver Wyman, and Vivek Garipalli, Clover Health's Co-Founder and Chief Executive Officer, to discuss Stars, Risk Adjustment, and more.
“There are different perspectives on how to win in Medicare Advantage. Our perspectives, the collective group of us with differing views, is a good way to start to frame what that next generation of strategy might look like," said Martin. Below, hear our full podcast conversation, recorded from this year's Oliver Wyman Health Innovation Summit in Chicago.
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Memorable Moments From This Episode:
- Martin: "If we look at many of the national players' financial picture of the world, they're often winning on lowest admin cost per member per month. And often, with that, a lot of strong hand on the provider community, either through delegation or incentive models. Maybe the models will be under pressure in the future. The question for those larger plans is they get there to a large extent on benefits and low admin. I don't know that they get there on better medical costs historically."
- Julie: "Broad network plans have been very focused on Stars. They've been very responsive to CMS [The Centers for Medicare and Medicaid Services] requirements around Stars. Early, when Stars were introduced, a lot of the larger plans evaluated their networks, looked at who the high performers were, and engaged with those performers so that their members were served as well. [Regarding] where they go and how they compete long-term, it's going to require discipline across a lot of different dimensions of the business to maintain the scale value they have today."
- Vivek: "Stars is not a big secret among large incumbents. You've got to pick the right geography. Stars is not done on a local comparison basis. It's done on a national comparison basis. Plans aren't really driving the value historically in Stars. It's provider groups. Now, if you look at very recent data, whether it's the most recent story about to come out or last year's, you're starting to see large incumbent plans that haven't been able to move lives around. They're getting huge drops on Star ratings in harder markets because they haven't been able to kind of ride off of the other markets. Is that arbitrage going to be a business model in five years? I don't know how much is or isn't, but it's going to be less important in five years."
- John: "I think that if you're able to address and repeat the ability to care for that chronic frail membership, it's going to start bending the cost curve. And then I think the ability to 'productize' that care delivery and that technology in creating value for the end consumer through, I would say [you need] three things very specifically: You've got to have very good benefits. You've got to be 'Number 1' or 'Number 2' in the marketplace. And the price the consumer has to pay is getting lower and lower and there's a lot of zero premium plans and products out there, so the ability to manage that care quality at a lower price point is going to get more and more important."