How to not loose

money in Health

IIC

26 September 2014

How to make Health profitable? Excellence across all parts of the value chain is needed

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Some examples of supporting elements to make Health profitable

Distribution2

Product Design1 Introduce copayments Bundling of products can allow to enhance the value proposition while

controlling the frequency

Develop intuitive and easy to use front screens Have a specialised Direct Sales Force Control the weight of your ‘bleeders’ Ensure an end to end sales process that takes less than 10 minutes

Underwriting3 Have more than 95% automatically approved Fraud detection Pricing including some non-clinical risk factors like:

Income Job Area of residence Leisure activities

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Some examples of supporting elements to make Health profitable

Network Mgt5

Claims Handling4

Utilisation managementEg insurer determines which surgeries to be done on a day-case

Case Management

Need scale for negotiation power Smart negotiation process (eg more proactive follow-up of peer providers) Contracting set-up; from fee per service towards package fees or capitation

IT & Infrastructure6

Automated Integrated with medical providers

Service7 Managed Care

Consistent good performance on all levers is required

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Consistenly scoring high on all levers will allow to build a product and offer it at a price that would never have been possible before

Example of successful Health operation in Portugal: Medis

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UNDERWRITING

UTILIZATION REVIEW AND CASE MANAGEMENT

CLINICAL CARE ASSISTANCE

PROVIDER NETWORK

SYSTEMS

DESCRIPTION OF SKILLS

Ability to develop actuarially based prices and underwriting standards

Ability to develop a telephone customer service unit that provides primary care advice and channeling

Ability to design a high quality cost effective provider network Ability to negotiate with local providers including extensive local contacts, knowledge of relative quality levels of providers and an understanding of provider needs

Ability to develop standards for controlling medical costs while maintaining or improving quality of care givenAbility to set medical care standards that are locally acceptable

Ability to set up a specialized IT system to support healthcare line of businessAbility to design an integrated systems network

Medis – Key Figures

Claims ratio decreasing since 2009 and significantly below market averageLower claims ratios are achieved through: Higher prices due to higher level of service provided to Medis

customers Quality of the Medis Operations Medis Provider Network Control

Profit before taxes (million EUR)

Gross Written Premiums Claims Ratio

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