Seniors Segment Strategies, Trends, Competitors, and Other External Factors Thursday, October 3,...
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Transcript of Seniors Segment Strategies, Trends, Competitors, and Other External Factors Thursday, October 3,...
Seniors SegmentStrategies, Trends, Competitors, and Other External
Factors
Thursday, October 3, 2013
- 2 -Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 CIGNA
Senior Segment - Agenda
Overview
Core Strategies
Value Proposition
Recent Driver Performance
Us vs. Them
SWOT Analysis
Stakeholder View
Vision
Direct Customer Perspective
- 3 -Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 CIGNA
Senior Segment - Overview
Primary Products and Customers
Products:• Medicare and Medicare Advantage• STAR+PLUS is a Texas Medicaid
• Service Coordination • Long–Term Services and Support • Transportation
Customer• 65 older• Baby boomers• Disabled under 65
Geographic Locations• Florida• Texas• Tennessee
Distribution Channels
Website• Instant access to relevant
information and user friendly nature of the website are the key factors driving effectiveness of this marketing channel
Email• Low cost and instant delivery
Social Channels• Insurers can position themselves
differently through the use of customized applications and build a strong relationship with the association members
- 4 -Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 CIGNA
Senior Segment – Core StrategiesIntegrate and
OptimizeShort Term
Realize short term synergies
Establish Foundation for
strategic growth
Measure: Realize enterprise
synergies of $270M+ through
2016
Grow Products and Markets
Long Term
Diversify and balance portfolio
Go deep & expand in targeted
geographies
Improve customer retention
Measure: Achieve 15-16% revenue
CAGR over next 5 years & Enter 10+
new markets
Develop Next Generation Insights
& ResearchLong Term
Deploy next generation retail
& service capabilities
Tailor Customer Engagement
Enhanced patient-provider
engagement
Measure: Improve retention, Increase
earnings per customer, Achieve
5-star ratings
Advance the Value Based Delivery
Model Long Term
Enhance clinical decision-making
Adapt delivery model and
commercialize Medicare service
operations
Measure: Deploy alternate value-based model in new markets,
Expanded MSO capabilities &
earnings
Enablers – People & Technology
- 5 -Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 CIGNA
Senior Segment – Value Proposition
HealthSpring is the leading health service company that develops value-based delivery systems to help seniors live better through personalized solutions that are simple, affordable and easy to use.
How to Create Value
Enable deep, personalized patient-physician relationships through innovative clinical and consumer engagement, care coordination and clinical analyticsCreate value for customers with products and services that fit their needs and improve well-beingAlign customer and provider incentives to drive improved outcomes and promote healthier living
Focus
Customer Engagement
Physician Engagement Incentives Information
TechnologyCare
Extenders
- 6 -Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 CIGNA
Senior Segment – Recent Driver Performance
Cash Profit
People
Assets
Growth
-2012 Acquisition of Health Spring-Additional growth may be achieved through a mix of organic seeding and inorganic accelerants-Achieve 15-16% revenue CAGR (compound annual growth rate) over next 5 years-Enter 10+ new markets
-Dramatic increase in customers and caregivers
HealthSpring, combined with legacy Senior Segment, is forecasted to grow to 2.5 M members and $1.2B in earnings across MA-PD, PDP, and Medicaid by 2017
-Unlike competitors using cash to execute growth strategy
-Medicare plans, HealthSpring operations, Health Spring Clinics
- 7 -Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 CIGNA
Senior Segment – Us vs. Them
Cigna
HS integration
Opportunity for growth within existing markets.
Large built-in network of users
Humana
53.7% of total revenues
25 years in senior segment
Available in all 50 states
High trust in users across portfolio
Higher exposure to potential Medicare changes.
Aetna
12% of total revenues
14% growth year over year
1.1M targeted for this year
Benefit ratio over 80%
Much smaller built-in network
Mergers & Acquisitions
- 8 -Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 CIGNA
Senior Segment – SWOT Analysis
Strengths
• Mature market segment almost 50 years old
• HealthSpring integrated / vertical delivery model improves Cigna’s value proposition (consultative selling & customer focus)
Weaknesses
• Cigna relatively new to Seniors segment pre-HealthSpring
• Volatility in eligibility MA vs. PDP
Opportunities
• More Baby Boomers entering eligibility 60% of generation 65+ by 2020
• Rx Medicare Part D & Standalone
• Lower customer acquisition costs / expenses enhanced retail capabilities
Threats
• Catamaran PBM / BPO could disrupt current Catamaran / HealthSpring relationship, could negatively impact Medicare & Medicare Advantage / Plus claims
• Competitors actively pursuing similar vertical integration through acquisitions / partnerships expanding portfolios to offer more products & diverse plan offerings
• Medicare Program Regulations MLR floor(s) / closing the donut hole, PPACA
- 9 -Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 CIGNA
Senior Segment – Stakeholder View - Vision
• By 2020 over 55m of the total population of the US will be 55+
• Customer needs have been and will continue to be more intensive in lower income and chronic regions.
• Elderly buying behaviors and needs will remain a key factor with employer subsidized customers.
• Entering this growing market was key to Cigna’s overall growth strategy. (Share Holders and Board key directive)
- 10 -Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 CIGNA
Senior Segment – Stakeholder View – Direct Customer Perspective
“Tomorrow’s seniors will be looking for product and technology solutions that enable them to live their lives through financial security and improved health”Plan
Values
Technology
Health Care and the Web
Personal Values
Freedom and Security
Hesitant
Possibly Research and Purchase
Aid From Others to Manage My Health
Financial Security and Doctor Access
Engaged
Health and Health Plan Independence
Today’s Customer
Tomorrow’s
Customer