Specialist background
- Around seven years’ experience within the Medicare Advantage Space responsible for the care delivery process
- Well-placed to discuss Medicare Advantage and Commercial, including market trends in terms of enrolment and regulations
- Familiar with the major players in the space such as Aetna, United Health, Humana, Anthem, Florida Blue, Cigna and Devoted Health
- Knowledgeable on how they differ in terms of plan offerings, network strength and customer experience
Questions
1.
The first topic is just on the MA market very broadly, and in particular, how Humana fits into it. Based on our work and it's all publicly disclosed data, it looks like Humana has maintained market share pretty steadily over the last four or five years in non-dual HMO products and they have lost share in non-dual PPO products, and that's obviously an area where, if you just look at number of plans, plan growths in PPO products, it's expanded pretty materially over the last three, four, five years or wherever. Just curious if you have any opinions why Humana lost market share with PPO products over the last few years. What dynamic or are there interesting dynamics going on in the market place for the last few that are worth hitting on and what's happening, if you have any thoughts?
2.
First, where was the incremental competition over the last few years coming from? Was it more of these smaller guys coming out with low-premium plans that maybe are unsustainable? Was it some of the national guys who might have been entering the market in a more aggressive way? Was it United? Was it all of the above? Where do you think (talking over each other) competition?
3.
Is that a good idea? If someone sets up shop next to you in south Florida, you have, I don't know, make the numbers up, 500,000 members, someone builds a 100,000-member business, is it a good idea, strategically and financially, to buy that 100,000-member business?
4.
If we just think about the next couple of years within MA, even before that, you mentioned the bigger competition was coming from the bigger players, the bigger impact on a Humana, for instance, would be the bigger competitors. Is that the Centenes and Molinas and CVSs of the world, or who particularly do you think that is?
5.
In general, who leads that tit-for-tat? Is Humana generally leading and United copies or is United leading and Humana copies? Or is there a bit of both?
6.
United is the one driving the tit-for-tat, is that what you're saying?
7.
There are a few changes going on within the MA market for the next few years. Into '24, we've got star ratings changes, in particular for a bunch of players who… their star ratings were suspended for the pandemic, star rating changes were suspended and now they're not. You've got some big moves there. You've got rate environment that's a lot less favourable than it was over the last few years. You've got risk coding changes that are trying to normalise things. The environment is getting a little bit less favourable. Do you think that makes the competitive intensity change at all for '24 and '25?
8.
On that, how much more difficult is it? I'm trying to just think whether or not this is very material, slightly material or whatnot. Is it becoming very, very meaningfully more difficult for these smaller guys to continue or to improve their star ratings or is it just slightly more difficult and maybe they'll struggle a little but it's not hugely impactful and so forth? Just trying to think through the impact of this practically, if it's very material or just medium or a small?
9.
The first thought that comes to mind for me is that those guys who have the most either vertical integration or just relationships with VDC players who are taking downside risk, if you have a third or a quarter or a half of your patients already there, you're much farther ahead of everybody else and you'll have the provider access that other people won't have. It just increases the strategic value of those relationships or that vertical integration. Do you think that's right, in my thought process there, or not?
10.
If you're not vertically integrated but let's say you just have more members in an Oak Street or any of the value-based clinics organisations that take downside risk. You have a greater percentage of your population enrolled in an arrangement that takes downside risk, you would think that gives you an advantage just because those providers should be more interested in seeing the patients after the seven-day hospitalisations, that they get impacted by it too. Do you think that's a positive for those guys?
11.
I'm just trying to think, over the next few years, where do you think these smaller and regional guys end up? If you look at just margins and profitability, there are a few large guys who are reasonably profitable and then there's been large chunks of the market, like the non-public of the world, who collectively, and for the last couple of years, have negative margins. Do you think some of those guys start to leave the market or become a little less aggressive or pull back?
12.
Have you seen anything like that? Have you heard anything or read anything, where you've said, "That small guy I saw in North Carolina, those guys are shuttering or moving on from the MA market"? Just curious if you've seen any evidence yet about that.
13.
The environment though, in '24, is a little bit less favourable from a risk coding and rate adjustment perspective. The market will grow next year, for sure, would you expect people to be a little more conservative on benefit design and supplementals, just to make sure they don't have massively negative profitability or not?
14.
I think this really speaks to the competitive advantages, I suppose, that United and Humana have within the MA market, which result in their better stars ratings, better risk coding, better profitability, ability to gain market share, but it's the subject matter and expertise thing, the people and the technologies, I think, that really drive the results there. I'd just love for you to say, "The three, four things you really need to focus on this, this and this, and Humana and United are A-plus on this one, B-minus on this one and everybody else is a C or a D. You can see because they just have more resources to invest or whatever, and that's why they're successful there." I'd love to walk through that with you, if you could.
15.
Is there anywhere else that we didn't talk about, where the smaller or the regional guys are at more of a disadvantage? We talked about a few things, technology, primary care physicians, integration. Are there any other areas where the smaller guys are at a disadvantage, than what we talked about? If not, that's fine, it's just trying to think through the entire competitive advantages and disadvantages everybody has.
16.
The group MA business, not individual MA, that, as a segment of the MA market, has been growing a lot slower over the last few years than the individual MA market and I just was curious if you had any thoughts as to why that was and whether that would continue. If not, it's go big deal.
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