New Data for Group Health Insurance Procurement Category Market Research Report from IBISWorld
Los Angeles, CA (PRWEB) April 28, 2015 -- The buyer power score for group health insurance is 2.9 out of 5, indicating a medium level of buyer power in the market. Moderate buyer power means buyers and suppliers have equal power during negotiations. One factor helping buyer power is the availability of substitutes. Rather than purchasing a health insurance policy from an insurance carrier (such as Aetna, UnitedHealth Group, Cigna Corporation or Humana), buyers can choose to self-fund their own policy or forgo insurance altogether. The availability of substitutes erodes the price of health insurance, which benefits buyers.
“Low demand driver volatility further underscores buyer power, because it indicates that demand for health insurance is relatively stable, which reduces the probability of price spikes or drops. As a result, buyers are better able to accurately budget for their health insurance expenses,” according to IBISWorld business research analyst Kayley Freshman-Caffrey.
However, a variety of market attributes hurt buyer power, including the recent price trend and forecast, product specialization and vendor risk. None of these factors in particular are detrimental to buyer power, but each has a slight dampening effect. First, the recent price trend and forecast reflect a period of significant price increases and moderate price fluctuations, both of which have reduced buyer power. Secondly, the services health insurance carriers provide are moderately specialized, which limits the number of suppliers buyers can choose from to buy the plan they desire. Lastly, moderate vendor risk raises the probability that a supplier will go bankrupt and disrupt the fulfillment of client claims and customer service, so buyers will want to research potential suppliers carefully before purchasing from them.
“The market characteristics hurting buyer power outnumber those that help buyer power. However, the values of the positive factors are more extreme, which boosts their influence on the market,” Freshman-Caffrey says. For this reason, the positive effects of the high availability of substitutes and low demand driver volatility balance out the negative impacts of the other market attributes, resulting in a moderate level of power for buyers. For more information, visit IBISWorld’s Group Health Insurance procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of group health insurance. Insurance involves the transfer of risk from an individual to an insurance carrier. Health insurance involves this transfer of risk specifically for healthcare expenses, while group health insurance provides companies a way to provide coverage for collections of employees. Offered plans specify a percentage of an individual’s medical and surgical expenses for which the insurer will pay the cost, which reduces the liability of the covered individual for medical expenses incurred in the case of a sudden illness or injury. This report does not include life insurance, disability insurance or dental insurance.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
Gavin Smith, IBISWorld Inc., +1 (310) 866-5042, [email protected]
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