Healthcare: Sales challenges to finding and keeping members

How healthcare payer sales models impact revenue growth

By Alex Tolmasoff, Director, KPMG Sales Transformation and HCLS Lead

Prior to COVID-19, health insurance carriers faced a challenging market with new entrants, new products, and high patient and provider expectations. COVID-19 only increased the pressure to maintain revenue growth and margins while offering new services where members engage virtually and digitally. Through all of this, legacy sales model issues did not go away or get easier – if anything, the needs of sales leaders and their teams got more complex and challenging. Sales leaders today need to re-examine their sales models and strategy to ensure they are keeping up with employer, broker, and consultant expectations so they can gain and accelerate access to new members.

What’s so difficult? A member is a member, right?

Wrong. Not all members are created equal, and not all have the same desire or ability to consume high growth or high margin offerings. Without good customer intelligence and aligned sales enablement, such as analytics, revamped sales processes, new training and coaching, and updated incentives, leaders are likely to see:

  • Missed opportunities to grow revenue and margin through expansion of ancillaries (e.g., dental, wellness), that have high margin potential and offer new routes to members
  • Over-focus on employers that will only consume lower margin offerings, such as narrow networks and self-funded business
  • Increased sales costs and decreasing productivity per seller relative to more nimble and digitally enabled customers

The five “big rocks” to climb to improve access to new members

1. With more government spending, sales models need to adapt their strategy and composition

  • CARES Act and PPA stimulus in 2020-2021, though temporary, boosted patients’ ability to consume care and accelerated ACA adoption, resulting in the largest enrollment ever in 2021 1
  • Implication: Many sales models are not well-adapted to high volume, digitally driven motions required to access and serve this market

2. Increasing payer and healthcare service consolidation puts pressure on sales leaders to act more nimbly and strategically

  • Many organizations are increasing economies of scope rather than scale (e.g., buying up complementary services, ancillary offerings, and sites of care) to diversify their portfolio, capture more of the value chain, and improve data capture on outcomes
  • As a result, traditional large health insurance carriers now generate significant revenue and margin based on non-insurance products and services
  • Implication: Smaller payers will face increasing competition, from vertical integration and well-funded competitors, and need to relook at where and how they will win

3. Rising acceptance of telehealth by providers and patients requires new digital sales motions and new expertise

  • COVID-19 accelerated the use of virtual technology by patients and providers, making them more comfortable with these technologies, and employers are increasingly offering this as a standard benefit
  • Centers for Medicare & Medicaid Services (CMS) changes in 2020 and 2021 opened doors for comprehensive telehealth coverage and virtual clinic models, making these platforms and approaches financially feasible for providers and payers
  • In 2021, < 25% of clinicians said they will go back to "business as usual," and anticipate making telehealth a normal part of patient service
  • Implication: Increased comfort by providers, employers, and members with telehealth means that sellers can expect to both offer new tech-focused products as well as change how they sell to accommodate new buyer preferences

4. Rise of behavioral health intervention apps (both home grown and stand-alone) require new business models and sales models to be successful

  • Wellness and behavior-change applications and their supporting service offerings are high margin and have high potential for growth
  • Several large national health insurance carriers have created "home grown" behavioral health solutions with varying success as they compete with these digital-native and well-funded health tech companies
  • Implication: Selling these products requires a new B2B2C model that requires sellers sell differently, to work with new business partners, and to work closely with patient success teams that drive adoption (which operate with a much higher touch than standard health insurance patient care teams)

5. New market entrants with deep pockets will challenge legacy sales models

  • Relaxed Blue monopoly regulation is allowing large and new carriers to play in previously protected markets
  • Well-resourced and focused health insurance offerings and partnerships are continuing to grow from non-traditional tech and retail players such as Amazon and Walmart, which are focused on growth
  • Implication: Sales leaders need to both assess their markets and segments for competitive threats, while working with product, finance, and actuary to prepare for creative pricing and contracting

 

As a result of these challenges, payers must contend these issues:


Direct to consumer and broker-led selling is sub-optimized as they fall outside commercial employer models


Small payers will need to be more nimble to counteract larger portfolios. Large payers will need to coordinate across disparate offerings and teams


Traditional selling teams will need to adapt how they bring offerings to market or risk getting flanked by more nimble digital-native competitors


Value props for internally created offerings will need to be well-articulated, inexpensive and demonstrate results. If they are not, payers will want to quickly find partners and platforms to co-selling


New market entrants will have to compete for sales talent with high salaries


They must carve out customer niches that were once well protected


As a result of these “big rocks”, sales leaders must gain ground—and member access.  Healthcare payers must shift to a new way of thinking and adopt a holistic sales approach.

KPMG can help you improve the ROI on your sales investments. We’ll help you manage winning sales strategies, processes, and talent with connected insights. 

See the next blog in our series on the issues payer sales leaders can face using traditional sales models.
 

Footnotes

  1. Source: HHS.gov, “New HHS Data Show More Americans than Ever Have Health Coverage through the Affordable Care Act” (2020)
  2. Source: KPMG Provider Research Study (2022)

Contact us

Alex Tolmasoff

Alex Tolmasoff

Director Advisory, C&O Commercial, KPMG US

+1 415-963-5100
Walt Becker

Walt Becker

Principal, Advisory, Customer Solutions, KPMG US

+1 267-256-7000