I’m Good, You Need Me:
Provide Irreplaceable Services to Insurances
Reading Time - 4 min
Why you should spend 4 minutes reading this:
increasing your value to payors can result in improved contracts rates, a direct impact of 5-10%+ to your bottom line
Whether you love it or hate it, your primary customer ends up being insurance companies.
They directly nudge patients to you or away from you.
The primary goals for insurance companies are:
Increase enrollment (increase revenue)
Payout less / life (variable cost) than premiums collected / life (variable revenue)
Variable vs. Fixed:
Variable costs for insurance companies are the costs associated with having an incremental life. Variable revenues are the revenues associated with having an incremental life. Buildings and other costs/revenues that don't change with enrollment are considered fixed.
If you take a customer-centric view, these become your goals as well.
In order to hash out exactly what your insurances need, you should have meetings with them to understand their challenges and solve them.
You can’t solve everything, keep in mind Cost of Loss and try to the find common challenges across all your insurances that have. These common challenges are the ones that you should try to solve.
Keep the impact/lift matrix in mind as you prioritize payor facing projects:
The more problems you solve for your insurances, the more they will need you. From here you can:
Increase your reimbursement rates
Decrease the likelihood (or risk) that an insurance drops you.
An important thing to keep in mind here is building solutions where you control the value created. Basically, if the insurance drops you, they should not be able to benefit from these solutions.
More on controlling value can be found here: Controlling Value, Controlling Integration
Also, keep in mind, the other strategy to increase your rates: Grow | In size and density
High-level actions you can take based on this article:
1. Review current contract management processes
2. Update them to incorporate the takeaways in this article
3. Capture your value to payors in contracted rates
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