Dental insurers circle the ancillary benefits market and consider a modular platform approach
Disruption isn’t easily focused, shaped, or stopped. The same destabilizing factors that are impacting other insurance markets, such as digital transformation, the consumerization of healthcare, and regulatory change, are starting to find their way into the dental market.
The independence of being a standalone offering, and the security of being courted by employee benefits teams, has buoyed the dental insurance market through the maelstrom affecting others; until now.
Weighing an Ancillary Market Expansion
Ultimately, what standalone carriers need to do in these disruptive market conditions is create value. Offering a single product—even a specialized one—leaves them ripe to be scooped up or pushed out by someone larger and more agile.
The embedding of dental benefits into medical plans is already taking place. But the integration of medical benefits is not the only choice dental insurers have to stay afloat.
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. Products like vision coverage, short and long-term disability, critical illness, and even life insurance are all offerings that can set standalone carriers apart. These products can make them attractive to consumers and employers and can open up brand new markets for expansion.
Put Innovation into Action
The difference between a stagnant organization and an innovative one is often difficult to see from an outside perspective. However, it is made clear in practice. The stagnant organization is 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, products, and services to stay up to date on (or even ahead of) market trends.
Nevertheless, complete overhauls and piecemeal product add-are often wasteful and inefficient. Rather than converting a current platform, carriers have the option to adopt a modular platform that can be stood up next to the legacy (but still efficient) dental systems.
You can launch new voluntary product capabilities and maintain the dental system simultaneously. Later, you can convert the dental onto the new platform once all of the new voluntary products have been launched and the change has been absorbed into the organization. This allows an expanding carrier to utilize a platform specifically designed to be modular and scalable while also delivering the prerequisite 360-degree experience to customers.
Whether ancillary products are added all at once or individually, in a modular fashion, your new system does need to be able to handle the distinct differences and requirements for each type of product.
An Innovation Path Around Obstacles
There are obvious roadblocks. 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 claims. 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.
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. It is important to continue developing your existing book of business without disrupting any of the processes that support your profitability. In time, however, your new platform can scale to support your existing book.
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 or adding your own ancillary services, maintaining the same high level of customer satisfaction through patient portals, web pages, and apps is of utmost 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 that 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 on your core book of business.
Innovate or Stagnate
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. It is time to innovate and find your own way and having the right platform with the right capabilities is going to make all the difference.
Tony Grosso is vice president of Product and Industry Marketing at EIS and can be reached at firstname.lastname@example.org.