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As digital transformation, the consumerization of health care, and regulatory change have continued to keep health insurers in an uneasy state of flux, being in the business of dental insurance has been smart, safe, and profitable. The independence of being a standalone offering, the security of being courted by employee benefits teams, and the confidence from a 66 percent market share combine to provide that view: smart, safe, and profitable.
Unfortunately, disruption isn’t easily focused, shaped, or stopped. Those same destabilizing factors impacting other insurance markets are starting to find their way into the dental market. This post will look at two options dental carriers have to avoid being left behind.
Integration for Market Expansion
The findings of a recent West Monroe Partners’ survey are revelatory. Interviewing 125 dental and health plan executives in the United States, West Monroe found broad support for the status quo—that is, for keeping dental and medical benefits separate. Paradoxically, though, they also found a very strong majority (96 percent of respondents) believe that the embedding of dental benefits into medical plans will happen in the very near future, or is already happening now. But is integration with medical benefits the only choice dental insurers have to stay afloat?
Not at all. Ultimately, what standalone carriers need to do is create value. Offering a single product—even a specialized one—leaves them in a very small market, ripe to be scooped up or pushed out by someone larger and more agile. Expansion into other product markets has become the key differentiator between those carriers that stay viable and those that are left behind.
While big-name health plans compete over the same client base with virtually equal offerings, dental carriers are able to take aim at the “we-don’t-cover-that” segment of the market share. Ancillary product offerings that health plans leave untouched are in high demand, and in some cases are critical. Products like vision coverage, short and long-term disability, critical illness, and even life insurance are all offerings that can set standalone carriers apart, that can make them attractive to consumers and employers, and can open up brand new markets for expansion.
There’s an obvious roadblock, of course. Vision claims process differently than disability claims, which are also handled differently than critical illness claims or life insurance claims or accident claims. Legacy dental plan platforms aren’t equipped to handle any of these. They’re structured around efficiency for dental claims whereby by the huge majority of claims are auto-adjudicated. By contrast, a term life claim may require medical reports and a good measure of human intervention. Does that mean that carriers have to overhaul their systems?
Innovation for Diversification
The difference between a stagnant organization and an innovative one is sometimes hard to see from outside. It’s made clear in practice, however. The stagnant organization is the one that refuses to change despite the pressures and shift in markets and changes in the world around it. The innovative organization is the one that seems resolute, but internally is adjusting its workflows, operations, and services to stay up-to-date on (or even ahead of) market trends.
The diversification of offerings that can, and should, be pursued makes innovation critically important. Complete overhauls and piecemeal product add-ons are often wasteful and inefficient. Rather than converting a current platform, carriers have the option to adopt a modular platform that can integrate legacy and new product capabilities simultaneously. A better option is to utilize a platform specifically designed to be scalable as your company expands and integrates.
Whether ancillary products are added all at once or individually, your system needs to be able to handle the distinct differences and requirements for each type of product. While a complete overhaul might be the best option for integrating with health plans, using a module-focused approach as you add offerings may be the better option for many. Such an approach would certainly prevent any sharp drop in the all-important claim processing rate for your dental service while still letting you add in new products incrementally.
Customer Experience Is Key
Having the right platform and processes is critical to your customers as patients receiving the care they need. So, too, is their satisfaction with the service they receive from you. Never before has such an emphasis been placed on direct customer experience down to the way they interact with you. Whether you find yourself integrating with health plans or adding your own ancillary services, maintaining the same high level of customer satisfaction through patient portals, web pages, and apps is of upmost importance.
To get it right, insurers need to consider a wholly new technology: a digital experience framework. A framework like this manages the flow of data and transactions via APIs between transactional systems and user interfaces. For example, the framework will enable rich omnichannel experiences by managing and adapting communications to suit any interaction channel (e.g., mobile vs. web).
But most significantly for the transformation we are discussing in this blog, it isolates the user experience from the underlying core components. In this way it integrates legacy and newer product modules while migration or expansion of those products is carried out without disrupting your users’ experience.
A Risk You Can Take
Most insurers are big believers in risk-mitigated approaches and a modular strategy is just that. By enabling existing legacy systems to live alongside new product modules, you’re able to test the waters of transformational approach, see it in action, and then make the final call. You can also use the modules to gradually build your replacement system until you’re ready for the big switch from legacy to current.
Integrate, Innovate or Stagnate
It’s an unavoidable reality that change is here to stay. The disruption to the dental market is irreversible at this point. To resist change or fail to adapt means to lose out on market share, profits, and risk obsolescence. But whether you choose to integrate with health plans or innovate and find your own way, having the right platform with the right capabilities is going to make all the difference. Fortunately, you can make that difference.