Southeast Health Plans
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Southeast Health Plans is entering its first year of business. The interest for its services has been higher than expected with many different companies excited about doing business with Southeast Health. Marketing will be critical for generating customers and visibility for Southeast Health. The basic market need is a health plan administrative service company for self insured employees. Southeast Health meets this market need with a quality and cost advantage for health plan administration while offering valuable consulting services for employers.
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Southeast Health possess good information about the market they wish to enter and have collected significant amounts of information regarding the common attributes of the ideal customers. This information will be used to continually research the specific needs of the customers and determine how they can be better served and communicated with.
Southeast Health is providing its customers with health plan administration services, offered in a flexible manner to meet the customer's specific needs. Southeast Health will fulfill the following benefits that are important to its customers.
The health care market has undergone significant changes over the last ten years. The industry as a whole has seen significant consolidation. The consolidation has occurred primarily as a way for companies to remain profitable despite significant increases in health care costs.
Another way that the industry has dealt with rising costs has been increased adoption of the managed care. Managed care was specifically designed as a way to offer a foundation of base of health care while keeping costs within reason.
Regardless how the industry has changed and tried to adopt to the significant increases in costs, more and more American's are without health insurance. Many of the American's that do have coverage have seen their plan coverage shrink. Southeast Health's flexible services will allow companies to offer the different health benefits that their individual employees desire.
The market for Third Party Administrators (TPA) who offer flexible heath insurance plans has seen above average growth. This can be explained by the fact that the large national insurance companies and the HMO's have largely ignored the market for self insured employers who are looking for flexible plans. The larger firms tend to offer standard options. For many companies this is fine, but there are a growing number of companies that value flexible options.
The following SWOT analysis captures the key strengths and weaknesses within the company and describes the opportunities and threats facing Southeast Health.
Health plans for businesses and their employees comprise a multi-billion dollar industry that is highly competitive. Well-known national insurance companies like Prudential, Cigna, Aetna/US Healthcare, and the regional Blue Cross and Blue Shield companies seek the employer's dollar. A plenitude of HMOs, both regional and national, also compete. Many companies are already self-insured. Some of these companies use TPAs for outside claims processing while others use insurers or attempt to self-administer. Certain claims processors are also gravitating toward benefits management services.
Southeast Health Plans believes that a niche exists that is both too small for concentrated coverage by large national companies and that is not well served with broad enough quality services by other TPAs. Most TPAs are still evolving toward the service mix that small and mid-size companies are demanding. By providing those quality services now, at a fair price, Southeast Health believes a competitive sales advantage exists that will permit attainment of the market shares sought.
Insurance carriers provide economic protection only. Such protection is at a high cost. Deductibles are increasing and the employer's ability to handle the cost burden of medical insurance coverage is diminishing. Compromises must be made in the extent of coverage, the size of the deductible, the medical services included, or often the employee is required to cover an ever-increasing percentage of the cost of his/her own plan as a payroll deduction. These are all unattractive options both for the employer and the individual client. The spiraling cost of health care is the culprit.
HMOs have gained substantial and significant market share over the past two decades. Their cumulative share of covered insured employees now exceeds the national commercial insurance carriers by a wide margin. However, these plans have been ruled primarily by cost containment strictures. Freedom of choice is severely limited - there is a perception that the quality of care is at an all-time low. Liability issues are beginning to surface based on compromised or neglected care due to cost parameters. Many service costs are not adequately covered under these plans and the provider base of physicians are extremely dissatisfied with compensation allowances. Many physicians complain that the freedom of decision is diminishing constantly from time and cost constraints that are imposed upon them. The ultimate client, the individual patient, is equally dissatisfied. Thus, the employer becomes dissatisfied as well.
The market niche for the quality TPA is ripe for picking. However, services must be of high quality. Many small TPAs are promising high levels of service but often don't deliver as promised because of the expense of building the internal resources required to compete effectively. Southeast Health Plans, by virtue of its alliance with Blair Mill Administrators, already has the necessary resources in place.
As health care in the United States has been changing rapidly over the past two decades, so has the way health care has been provided and how it is billed and paid. Large insurance companies and private physicians have given way to HMOs and managed care plans and the TPA has been prospering. A TPA (like Blair Mill) exists to administer all the health care functions for a company that would have been handled by an insurance company. HMOs primarily contract for services based upon price, then re-sell those services to groups. Often, service and choice are less than satisfactory. But, most importantly, cost-effective concerns predominate. Employers are seeking to provide health care for employees at an affordable cost. A backlash has been the increase in self-insured programs administered by TPAs.
In short, a business now demands much more in the way of service and analysis than traditional support institutions have been providing to their clients. The claims processor is a case in point. Merely processing claims does nothing to help a business analyze and control its health benefits plan and to control the costs associated with the plan. And there has not traditionally been a measure for the "quality" of health care service.
Southeast Health has compiled, through its own proprietary systems and an alliance of external providers, a service mix that includes Network Administration Services, Network Contracting Services, Policy Formation and Quality Assurance, and Marketing Services.
Health benefits are a fact of life for any business. The small and mid-size business is concerned with cost control and administration, just as in any other department of their business operations, except they are ill-equipped in personnel, know-how, and in systems, to administer health care internally.
Thus a full array of TPA self-insured services would include:
The keys to success in this business are:
Southeast Health is still in the speculative stages as a start-up organization. The critical issues that it faces are:
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