Health plan leaders should ask themselves why everyone is pulling out on one side of the market while there is so much growth and success on the other side, suggests the head of a prescription drug discount firm.
Struggling health plans should learn from the experiences of those who are doing well under the Affordable Care Act, says Keith Jacobs, president of RefillWise, a prescription drug discount company that primarily serves the uninsured.
The financial struggles of health plans under the ACA are surprising, he says, especially since other players in the healthcare industry are prospering.
"How can the government hold a gun to the head of American consumers to force them to buy a product and the makers of that product still not succeed? Any other business would die for that, and yet somehow they can't figure out how to sell and make it work," Jacobs says.
"They're not reaching the consumers and managing to break even with their offerings on the exchanges. All of the non-payer businesses are somehow managing to fill this gap, so it's not like it's impossible to reach consumers and remain profitable."
Health plan leaders should ask themselves why everyone is pulling out on one side of the market while there is so much growth and success on the other side, Jacobs suggests. RefillWise is one of the success stories under Obamacare and Jacobs says that is largely because his and other prospering companies are focused on price.
"That's instead of trying to build a big brand that is memorable in everyone's mind, like Blue Cross/Blue Shield, or Aetna, or Humana. If you look at their marketing campaigns, it's a big billboard with a family splashing in the pool and suggesting you're going to be healthy and happy with that insurer," Jacobs says.
"For us, the story of consumer healthcare in America in 2016 is lowering the price, trying to bring capitalism to this non-capitalist market."
For Consumers, Cost is King
Health plans have gone far astray from actual consumer concerns, he says. As premiums and deductibles continue rising, American consumers are less interested in esoteric feel-good marketing campaigns from insurers, Jacobs says. Instead, they're interested in cold, hard cash.
RefillWise, for instance, has seen success with a loyalty card program that includes $5 cash back on the first prescription and again after each 10th prescription. Jacobs also cites the price lookup tool offered by a competitor, GoodRx, that he says responds directly to consumer concerns.
"Payers are just now following suit with a lot of me-too products where they are launching price lookups of their own, and it's a lot easier for them than for a company like ours. We have to find everyone's prices and they're just providing their own prices," Jacobs says.
"It would be as if Taco Bell had a lot of trouble telling customers what a taco costs, yet we have health plans struggling to make these things transparent because either it's not in their nature, or they have some benefit from not doing that."
Nevertheless, Jacobs expects more transparency from health plans in the future simply because consumers are embracing what little exists today and will expect more.
"I think if the insurers realize they can't pivot because they're just too big to make that change, they may begin acquiring the companies that do offer that kind of transparency to consumers so they can use them to change from within," Jacobs says. "Or they'll just squash them and eliminate the competition."
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Gregory A. Freeman is a contributing writer for HealthLeaders.