New Executive Survey Finds Convergence of Health and Dental Insurance Plans is Happening
CHICAGO (PRWEB) January 04, 2018 -- A new executive survey published by West Monroe Partners today found that 96 percent of insurance executives believe the embedding of dental benefits into medical plans is already happening, or will happen. Today, 99 percent of commercial dental insurance plans are purchased through standalone dental insurers.
Competitive margins and profitability, relative benefit simplicity, customer retention, and the increasing proof of correlation between oral health and overall health are driving more health insurers to experiment and invest in adding dental benefits to their plans. Convergence opportunities exist between health and dental insurers, especially as both face significant technical investments necessary to modernize core platforms and address consumer demands. As such, standalone dental insurance plans are attractive targets for health plans – either for acquisition or partnership. In fact, 100 percent of surveyed health plan executives whose companies don’t already offer dental benefits plan to do so in the near future.
The survey results point toward a gap between market realities and leadership action on the dental side of the industry. Nearly half of dental insurance executives (47 percent) feel convergence is a threat to their business, while 38 percent believe it is both a threat and an opportunity, and 13 percent say it would be “positive” for their business. However, 24 percent plan to proceed with “business as usual,” even while 60 percent of all respondents (both dental and health) think the percentage of standalone dental plans will significantly decrease in the next three to five years
The report, titled “Turning Point: The Fate of Standalone Dental,” examines several scenarios for the future of standalone dental plans:
- Dental is absorbed into overall health insurance (one product, one shared premium)
- Dental plans are brought on as partners to health insurance (two products, shared or separate premiums)
- Dental plans diversify, expanding into other ancillary coverage such as life and short-term disability, to remain standalone
“For standalone dental plans, winter is here,” said Will Hinde, managing director of West Monroe’s Healthcare & Life Sciences practice and co-author of the report. “It’s absolutely essential that dental plans prepare to be attractive partners, and understand that standing still, or alone, is no longer an option for plans that want to thrive in the future.”
The survey polled 125 executives at dental plans and health plans across the country. Highlights include:
- Dental plan and health plan executives agree that health plans have a clear or significant advantage over standalone dental insurers in a bundled scenario – 82 percent of dental plan execs said so, and 80 percent of health plan execs said so
- The three biggest factors that will drive the embedding of dental insurance into health insurance, according to respondents, rank as follows:
1. Better technology/systems that facilitate a holistic view of covered lives
2. Government actions (e.g. changes to Medicaid/Medicare)
3. The convergence of overall health and oral health
- Sixty percent of respondents think the percentage of standalone dental plans will significantly decrease in the next three to five years
- Forty-three percent of dental plans plan to explore offering ancillary products like vision, hearing, life and disability
About West Monroe Partners
West Monroe is a progressive business and technology consulting firm that partners with dynamic organizations to reimagine, build, and operate their businesses at peak performance. Our team of more than 950 professionals is comprised of an uncommon blend of business consultants and deep technologists. This unique combination of expertise enables us to design, develop, implement, and run strategic business and technology solutions that yield a dramatic commercial impact on our clients’ profitability and performance. For more information, visit http://www.westmonroepartners.com.
About West Monroe Partners’ Healthcare & Life Sciences Practice
Healthcare transformation is full-steam ahead, with regulation and consumer expectations driving the industry to invest in solutions and forge strategies that deliver improved outcomes. Helping the marketplace adapt to this dynamic landscape—and optimize for the future—is where West Monroe excels.
Every day, we help payers, health systems, pharmaceutical, and medical technology firms evaluate strategic opportunities that differentiate their businesses, implement better business models, and execute on clear plans to unlock value. For more information, visit wmp.com/healthcare.
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