I need a 5 page essay (APA format) about Blue Cross Blue Shield of North Carolina

Unit 4 case analysis

Read the OPENING EXAMPLE Blue Cross Blue Shield of North Carolina Successfully Launches A New Individual Health Care Insurance Product.

Write a 3 to 5 page paper (1000 to 1500 words) in APA format in response to the questions:

Blue Cross Blue Shield of North Carolina Successfully Launches A New Individual Health Care Insurance Product

In 1996, Blue Cross Blue Shield of North Carolina (BCBSNC) launched a new individual health care insurance product called ‘‘Blue Advantage.’’ This offering, an extension of the nationally licensed Blue Cross Blue Shield brand, introduced new product features and successfully leveraged the brand. Compared to the group insurance, the market for individual health insurance has traditionally been much riskier for insurers. Despite underwriting, pools of individuals have always generated higher overall levels of medical costs and insurance claims compared with large groups that had less risk and medical cost variability. Two reasons for this disparity are that (1) individuals have more and better information about their own health status than insurance companies do, and (2) the sickest individuals will seek insurance products with the best benefits. Because of this high insurance risk, many companies in the individual market exclude preexisting conditions from coverage. BCBSNC product research showed that existing individual insurance products differed from those of large groups by having (1) fewer benefits, (2) lower lifetime maximum cov- erage amounts, (3) higher deductibles, and (4) higher out-of-pocket maximum amounts. It was no surprise, then, when their research indicated that individual insurance customers were dissatisfied with these product characteristics; they preferred to have the richer benefits common among group insurance products. BCBSNC decided to stimulate sales of its renamed individual product, Blue Advantage, by changing three features. First, the plan replaced a high deductible with a $30 co-payment for doctor visits. Consumers benefited from this innovation because the cost to visit a physician was now predictable. Also, both patients and BCBSNC benefited because plan members were now more likely to seek medical care before an illness or injury became more serious and required more costly care. The second innovation was a waiver for preexisting conditions. Because medical problems can be wide-ranging, consumers are never really confident that a specific problem will be covered; the insurer could potentially decide that this problem was somehow related to an excluded preexisting condition and deny payment. Blue Advantage eliminated this risk. Finally, BCBSNC used a different technique to reach prospective Blue Advantage customers. By using television ads, direct mail, and the BCBSNC website, which consumers could use to obtain a policy quote, the plan lowered its administrative costs by 80 percent compared with the traditional broker channel. Consumers also benefited from this approach. By their applying for coverage on-line, the average individual policy underwriting time was reduced from an average of forty days to just thirteen days. Thirty-eight percent of applicants applying on-line were approved for coverage instantly.

The results of this campaign were striking. The plan’s percentage of business-to- consumer revenue increased from 20 percent to 45 percent. Cost savings were passed along to consumers through lower premiums. Eventually, three of the major BCBSNC competitors marketing individual insurance products were forced to withdraw from the market because of falling market shares. By conducting appropriate marketing research, this health plan was able to enter a market segment that was previously ill-served and overpriced. It not only used its marketing information to penetrate this sector, but relied on its strong brand (Blue Cross Blue Shield) to quickly dominate it.

Blue Advantage., an extension of Blue Cross Blue Shield brand, introduced new product features and successfully leveraged the brand. the market for individual health insurance has traditionally been much riskier for insurers

BCBSNC product research showed that existing individual insurance products differed from those of large groups by having (1) fewer benefits, (2) lower lifetime maximum coverage amounts, (3) higher deductibles, and (4) higher out-of-pocket maximum amounts.

that individual insurance customers were dissatisfied with these product characteristics; they preferred to have the richer benefits common among group insurance products.

BCBSNC decided to stimulate sales of its renamed individual product, Blue Advantage, by changing three features:

a high deductible with a $30 co-payment for doctor visits. Consumers benefited from this innovation because the cost to visit a physician was now predictable. Also, both patients and BCBSNC benefited because plan members were now more likely to seek medical care before an illness or injury became more serious and required more costly care.
The second innovation was a waiver for preexisting conditions. Because medical problems can be wide-ranging, consumers are never really confident that a specific problem will be covered; the insurer could potentially decide that this problem was somehow related to an excluded preexisting condition and deny payment. Blue Advantage eliminated this risk.
using television ads, direct mail, and the BCBSNC website, which consumers could use to obtain a policy quote, the plan lowered its administrative costs by 80 percent compared with the traditional broker channel.
Consumers also benefited from this approach. By their applying for coverage on-line, the average individual policy underwriting time was reduced from an average of forty days to just thirteen days
of business-to- consumer revenue increased from 20 percent to 45 percent. Cost savings were passed along to consumers through lower premiums
The major BCBSNC competitors marketing individual insurance products were forced to withdraw
conducting appropriate marketing research, this health plan was able to enter a market segment that was previously ill-served and overpriced. It not only used its marketing information to penetrate this sector, but relied on its strong brand (Blue Cross Blue Shield) to quickly dominate it.

Introduction

Health expenditures in the United States neared $2.6 trillion in 2010, over ten times the $256 billion spent in 1980. [1]Healthcare is still expected to grow faster than national income in the future. Health insurance began rising rapidly back in the 70s. In the 1990s, health costs rose at rate that was twice the rate of inflation. Expansion of managed care helps to moderate increases in health care costs.

(Conlon, 1997). a world of increased competitions and changing consumer expectations, one of the keys to a fiscally sound health plan is having a dynamic marketing strategy that takes into account the shifting attitudes of consumers as managed care markets mature. The primary goal of any health plan marketing strategy should be the acquisition and retention of members. Providing cost-efficient and convenient service for enrollees, offering low or no deductibles, having convenient office locations, and minimizing paperwork are important elements of such a marketing strategy. The relative importance of these consumer satisfaction criteria change as a managed care market evolves and matures.

People without health insurance have limited and reduced access to services of preventive care
Moreover, the benefits of expanding coverage outweigh the costs for added services. Hospitals and clinics provide a safety-net temporary type of care, which is not sufficient for long term or obn-going health care. The advantages of having health insurance is preventative health and the protection against high medical costs. Research has shown that people with health insurance are more likely to receive appropriate health car and are less likely to have severe complications from chronic illnesses.

Thesis statement:

Purpose of paper

Overview

Explain why Blue Cross Blue Shields of North Carolina developed a new health

care product in spite of the risks?

Blue Cross and Blue Shield of North Caarolina developed a new product in 1996 named Blue Advantage as a response to dissatisfied customers with the rest of the health care plans.

Other health plans overlooked In spite of the risks that other health plans refused nsurances reThe risks were worth the reward --an impressive number of individuals who have gone out on their own, risked a great deal, and succeeded as entrepreneurs

(Conlon, 1997). Providing cost-efficient and convenient service for enrollees offering low or no deductibles, having convenient office locations, and minimizing paper work are important elements of such a marketing strategy. Factors such as brand awareness and the perceived image of a health plan also are important considerations in acquiring and retaining market share

(Conlon, 1997).Some possible explanations for declining satisfaction in stage four markets include aggressive competition and low managed care plan fees. Therefore, because it costs much less to participate in a managed care plan, fee-for-service options become less attractive

If they are dissatisfied, they will not hesitate to find another plan that offers better features and benefits. Thus, health plans must look for the extra edge that can make their members "repurchasers" and "recommenders."

These Medicare Part C plans are increasingly popular because they not only provide the traditional inpatient and outpatient services of Medicare parts A and B, respectively, but they also may offer, in a cost-effective manner, such additional benefits as preventive, vision, dental, and prescription services. (Russell, 2011)

- A FREE SilverSneakers® fitness membership*
- AirMed transportation service**
- 24-Hour Nurse Hotline
- Routine Eye Exams administered by Vision Service Plan (VSP) or Blue Cross Blue Shield Alabama Providers
- Routine Hearing Exams and Hearing Aid Services/Discounts administered by TruHearing providers

b. Did Blue Cross Blue Shields of North Carolina effectively build a strong brand

around its offering; why or why not?

(Conlon, 1997). Yes. Increasing competition and shifting consumer expectations represent significant challenges to health plans trying to balance expenses with revenues. The financial success of a managed care plan often hinges on developing targeted planning and marketing strategies that effectively address the changing attitudes of consumers. A "one-size-fits-all" approach to acquiring and retaining members is not a viable solution

c. Give suggestions on how they could prolong the life cycle of the product.

(Conlon, 1997). Managed care, like most products, has a life cycle that evolves along a predictable path (see Exhibit 1). The market evolution model developed by University HealthSystem Consortium classifies markets into four stages based on factors such as HMO penetration, number of providers and health plans, and levels of consolidation

References

Conlon, M. K. (1997). Effective managed care marketing strategies for evolving markets. Healthcare Financial Management, 51(11), 47-8, 50-2. Retrieved from https://search.proquest.com/docview/196373748?accountid=143980

Russell, G. L. (2011, October). Advantageous counsel: what you should know about Medicare

Part C health plans. PT in Motion, 3(9), 45+. Retrieved from

http://go.galegroup.com.ezp-

02.lirn.net/ps/i.do?p=AONE&sw=w&u=lirn68662&v=2.1&it=r&id=GALE%7CA27004

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Unit Four Mini Project

4/2017

UNIT FOUR ASSIGNMENTS

Instructions: Reference as a running case for the course the case on case 3.1 on page 46, “A

Tour Through Alternative and Complementary Medicine.” At the end of each

Unit, prepare a report that answers the pertinent questions regarding the Unit

content as it pertains to this Case. The questions applying to this Unit are:

a. Suggests ways to Brand Alternative Medicine products.

b. Discuss the role pricing plays in a successful marketing plan for Alternative

Medicine products.

c. Define the appropriate marketing channel system for these products.