As HMOs continue to expand their presence and market share, several new tools have popped up in the industry that will prove to be helpful in strategic planning and product development.
It has become necessary for HMOs to develop unconventional products or find new ways of delivering and marketing existing products, said Alan Vitberg, president of the Crestwood Group, a Rochester, N.Y.-based consulting firm.
"For example, HMOs should try to re-package sets of benefits for niche markets or try to define who and where their customers are," he suggested.
Shuffling your product mix and offering a variety of employee benefits products will allow you to offer one-stop shopping to your clients and open new opportunities in markets that were previously closed. Here are some new product that have recently hit the market:
Test Your Marketing Strategies
The Crestwood Group has recently introduced a customized, interactive software tool for managed care organizations. Called Product Launcher, the software allows any HMO design and test market strategies by creating and analyzing thousands of new products.
Each software program is customized for each client's market and takes into consideration who the competitors are and gives you a snapshot of the community to whom you are marketing.
Some of the highlights of the software include: letting marketers create new HMO products by varying costs, benefit and access; and forecasting market share for a company and their competitors by overall product mix or separately.
The latter allows for market segmentation strategies by letting marketers create products for different demographics or psychographics.
The software also forecasts medical delivery system needs and composition and assesses impacts of new competitive products upon your product mix and individual products.
The statistical engine behind the Product Launcher is conjoint analysis, a technique that determines how a potential buyer of services values its aspects or features and whether it fits into their price range.
"This product allows you to know which product will be most attractive to which potential customer," said Vitberg.
The service, which varies in price according to market from $25,000 to $40,000, is licensable for a year. HMOs are allowed a maximum of 10 counties and training is included in the service.
Keeping Tabs on the Managed Care Industry
InterStudy Publications Inc., a Minneapolis-based industry information company, recently launched a product called Competitive Edge, which details information about HMOs that ranges from individual HMOs' key personnel and service lines to patterns of HMO development in various markets.
The company provides research and reports on market-driven healthcare, said the company's director, Richard Hamer. "We aspire to have our reports contain a high degree of forecasting and advisory material that sets us apart from the run of the mill."
The three-part Competitive Edge database set includes an updated directory of the nation's HMOs, a report on industry patterns and a market analysis that's broken down into nine geographic regions.
Using data as of July 1, 1995, the latest version of the directory profiles 593 HMOs. The industry report analyzes patterns of enrollment growth and plan characteristics associated with growth. It also examines methods of reimbursement and use of information systems among HMOs.
The company's other product, the InterStudy Value Report, analyzes, forecasts and recommends emerging strategies for measuring and managing health system performance. The reports look at how value is added to the marketplace for purchasers and consumers because, Hamer said, managed care has evolved to the point where there's a demand for health plans to demonstrate value and be accountable for the dollars spent.
Value management will be the next wave in managed care, Hamer said. One trend that Hamer predicts will emerge in the next couple of years is a greater investment by HMOs in information systems to support clinical and physician services.
InterStudy's clients include health care consultants Milliman & Robertson Inc. and the Sachs Group Inc., insurers Cigna and New York Life, and pharmaceutical manufacturers Pfizer and Merck.
The three-part Competitive Edge database set costs $2,500. The Interstudy Value Report costs $350 a year. (Crestwood Group, 716/223-6930; InterStudy Publications, 612/858-9291)