From Dr. Tom's Desk

The worm has most certainly turned.
 
The 2018 Medicare Handbook just came out, and it’s the most favorable to Medicare Advantage that I’ve ever seen---and that’s a big opportunity for you.
 
The handbook is delivered to all Medicare beneficiaries and those who will soon be eligible. It is the Federal Government’s official communication about the program and as such it is the single most influential marketing tool there is---bar none.
 
When I first contracted with Medicare Advantage back in 1995, it was a niche product, beneath most people’s notice, it was barely mentioned in the government’s educational materials. Then as it grew, it became the bogeyman for all that was wrong for privatizing government healthcare and the educational information had a decidedly negative slant.
 
This created quite a headwind for patient recruitment.
 
Even as recently as 2015, the verbiage was neutral at best.
 
But this latest one? 
 
Wow.
 
It’s a full-throated endorsement. So much so that consumer advocates have complained that the information regarding Medicare Advantage is downright misleading.
 
That’s when you know the game has changed.
 
I try to save this space to only relate truly impactful events. This is one.
 
This is a game changer.
 
Get as many copies of this as you can.  Put it in your waiting rooms, your exam rooms, on your website. Do so without comment, without endorsement. The piece will speak for itself.
 
The headwinds have turned to tailwinds, use this report to fill your sails.
 
You have no idea how far you can go.

A recently released regional analysis of Medicare Advantage growth is giving an early look at what happens to Medicare Advantage enrollment when markets become saturated and mature.
 
The western US was an early adopter of Medicare Advantage coverage and their enrollment rates have now consistently levelled out at around 40%. The other regions of the US aren’t at the 40% plateau yet and are still enjoying exponential growth, but if the west region data is any guide, their rate of growth will level off in the net three years.
 
When that happens, it won’t be market share that drives growth, it’ll be cost-control. If experience is any guide, this shift will be rapid and catch most providers by surprise.
 
The investors fueling the growth in Medicare Advantage are not looking for revenue, they’re looking for accelerating revenue growth (ARG).  Once enrollment levels off, once each additional covered life becomes more expensive to enroll, the “Great Premium Grab” will be over and the ARG will flatline. In search of the next opportunity, capital will flee, Medicare Advantage Organizations will be sold or shut down---and healthcare organizations who truly want to care for patients will be left holding the bag.
 
That’s the opportunity of a lifetime for you.
 
Abandoned by their former insurers, millions of patients are going to come to you seeking good care.  If you can deliver it cost-effectively and with innovation, the bag you’ll be left holding will be overflowing with revenue.
 
Looking at the charts, this is going to begin happening by 2022. Now is the time to take steps to improve the systems that you use to control costs so you can be ready.
 
First, make sure your primes have skin in the game.  Nothing else will be as effective as sharing risk and educating them about how their contracts work.
 
Then allow them to innovate cost controls. Since the feedback loop for their efforts will go right to their bottom line, it’ll focus their minds wonderfully on continuous improvement.
 
And when “peak Medicare Advantage” is reached you’ll be one of the few who’ll prosper.

 Are you ready to excel? Grab a copy of my book!

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Copyright © 2018 Tom Davis Consulting, All rights reserved.


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