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MCOs and Millennials

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MCOs and Millennials

  1. 1. Prepared by: Jay Chang June 11, 2011 The “Millennial Effect” on Boomers & MCOs *Millenials are the children of Boomers
  2. 2. Executive Summary MCO’s need to partner with Millennials as the Boomers move through a virtualized healthcare system Key Impact Change Function MCO’s need to defend itself from Millennials Legal & Regulatory Millennials are working to virtualize services Provider Contracting E-Services for Millennials will facilitate decision making for Boomers Member Services MCO’s need to demonstrate value to Boomers & Millennials Sales & Marketing Boomers will be influenced by Millennials to weigh cost vs. choice Healthcare Consumerism
  3. 3. Healthcare Consumerism Wealth Choice MA Private FFS 3% MA HMO 17% 1 1 Less affluent Boomers will move toward MA HMO and sacrifice choice of providers ~ 87% < $50k annual income at retirement Cannot rely on Millenials for financial support. Higher debt generation ~ $23k vs. $333 avg college debt 2 Affluent Boomers will move toward FFS w/Medigap or MA Private FFS to maintain choice Boomers currently prefer choice: 21% HMO vs. 58% PPO Medicare FFS 75% MA PPO 5% 2 2 Sources: NY Times Boomers will be influenced by Millennials to weigh cost vs. choice
  4. 4. Value of Choice & Care Education <ul><li>Future Trends </li></ul><ul><li>Payers will market and price their products based on outcomes </li></ul><ul><li>Evidence </li></ul><ul><li>Subtle difference between HMO & PPO regarding “Getting the care they need” </li></ul><ul><li>Future Trends </li></ul><ul><li>Channel 1: Payers will ramp up websites to target Millenials </li></ul><ul><li>Channel 2: Payers will create more large print brochures </li></ul><ul><li>Evidence </li></ul><ul><li>64% of Boomers know “little or nothing” about Medicare </li></ul><ul><li>32% of Boomers use the internet for health information </li></ul><ul><li>85% of Millennials use the internet for health information </li></ul>Sources: California Healthcare Foundation Sales & Marketing MCO’s need to demonstrate value with a two-channel approach 87% 82% Aetna 87% 78% Anthem 86% 84% CIGNA 82% 83% Health Net PPO HMO Payer
  5. 5. Member Services 75% of Millennial women enter the workforce Pressure on MCO’s Email for their parents Text messages for urgent notifications Portals to view lab and test results Benefits & eligibility to estimate costs MCO’s need e-services to partner with Millennials & Boomers for care Prescription mail ordering 60% of Millennials expected to coordinate care for Boomers 51% of Millennials live greater than 30 miles away from parents decision making
  6. 6. Provider Contracting MCO’s will help re-define or define new reimbursable services developed by Millennials Source: Gartner, CBS News, AMA Pressure to Virtualize for Boomers <ul><li>Over 65 population to double by 2030 </li></ul><ul><li>Projected shortage of 130,000 specialists, 60,000 PCPs and 220,000 nurses </li></ul><ul><li>Access to specialist services in rural areas & reduced travel </li></ul><ul><li>Closer patient monitoring </li></ul><ul><li>On-going need to lower healthcare costs </li></ul><ul><li>New revenue sources for providers </li></ul>secure messaging self-diagnosis & robotic surgeries home devices, etc.
  7. 7. Legal & Regulatory MCO’s need to increase utilization management & tighten compliance against Millennials Source: U.S. Government Accountability Office Utilization Management Compliance <ul><li>CA appeal success rate = 54% </li></ul><ul><li>Increased burden for legal staff </li></ul><ul><li>Increased scrutiny for physician reviewers </li></ul><ul><li>Increased confidentiality concerns (e.g., PHI) </li></ul><ul><li>Increased workforce compliance needs (e.g., SOX) </li></ul><ul><li>Tighter IT security demands </li></ul>
  8. 8. Questions? Thank you!

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