Summary
Accountability, intelligent indexing and implementation! Several ingredients necessary to create the opportunity to outperform competitors, “eat their lunch” and create value for both the good and the very best clients in their portfolio. However, will this ultimately be a profitable choice when the beans are accurately counted? Hopefully, UnitedHealthcare has done sufficient due diligence, including intelligent client stratification modeling and materially accurate, activity based costing models.
Analysis
Accountability, intelligent indexing and implementation! Several ingredients necessary to create the opportunity to outperform competitors, “eat their lunch” and create value for both the good and the very best clients in their portfolio. Congratulations UnitedHealthcare!
Nonetheless, it will be fascinating to closely observe the success of this initiative. In my consulting practice, fresh ideas are of tremendous financial value to clients. However, the “not as sexy” implementation and intelligent adaptation of the systems aligned with a holistic integration into a performance culture is where the success will need to be measured. Often, this is where the “organizational stress” occurs, resulting in a compromised approach and the resulting non-optimized profit curve.
UnitedHealthcare appears to have taken a very positive path toward social acceptance of this, likely to be, controversial plan, by offering “more” for the same price rather than providing discounts. Unfortunately, for those clients who do not earn the more attractive benefits, and choose to not be accountable for there “portfolio risk” of employees, it may be unfairly construed as “higher premiums” by some clients.
Sometimes, particularly on some high revenue (but possibly low margin accounts) it can be an uncomfortable challenge for the Sales and Service teams to ask or explain to clients why they should be happy about paying more (or getting less benefit) due to, in this case, lifestyle choices.
Hopefully, UnitedHealthcare has done sufficient due diligence, including intelligent client stratification modeling and materially accurate, activity based costing models.
