Competitive Advantage

5 Things You Need to Know Right Now if Interviewing in Health Insurance

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(c) Elvert Barnes photography

1. Today’s largest health insurance companies insure nearly half of the US population.

They are: United Healthcare, Anthem, CIGNA, Aetna, and Humana. These players own strong negation positions relative to price across the industry.

Why it matters to you:

Referencing these companies will show that you have a general sense of the largest influencers in the health insurance market.


2. The Industry is experiencing dramatic consolidation by major players

In July of 2015, Aetna agreed to buy Humana for $37B and Anthem enter into agreement to explore a merger with CIGNA for $54B. Consolidation is happening among smaller players, too – Centene agreed to acquire HealthNet for $6.8B.

Why it matters to you:

The industry is undergoing unprecedated change. If you’re interviewing with an health insurer, you need to know about the dynamics of the environment in which its operating.


3. The jury is still out regarding the Affordable Care Act (ACA)

It is generally accepted that the ACA has helped to reduce the number of uninsured consumers in the United States. This was one of the major goals of the legislation.

Many health insurers, however, have had difficulty achieving profitable results among ACA products. After waiting on the sidelines to enter the ACA market, United announced that it will be exiting the market due to profitability issues. And, since their introduction in 2014, more than half of co-ops that launched as new insurers due to the ACA are out of the marketplace altogether.

Why it matters to you:

As participants in a heavily regulated industry, showing that you have familiarity with the external stakeholders that can influence business (e.g. governmental, politicians, insurance agencies, etc) shows interviewers that you have a grasp of the breadth of influencers on insurers’ bottom lines.


4. Oscar Buzz

Many experts have begun to voice that the health insurance space is ripe for disruption. New entrants are making splashes with dynamic approaches to customer service, marketing, and enrollment. Oscar is just one example that has received a lot of attention. Discussing its approach as a foil to traditional health insurance companies could be helpful in showing that you understand different dynamics at play across the way companies go to market.

Why it matters to you:

Whether its Uber, Lyft, Theranos or Tesla, disruptors present opportunities and challenges to any industry. Knowing that disruptors are part of the insurance industry shows that you’ve done your homework in terms of connecting the dots about their implications. It’s an opportunity in the sense that disruptors can push traditional thinkers to re-evaluate existing approaches and maybe find better ways of doing business. It’s a challenge in the sense that these smaller disruptors could pose significant short-term impacts on the typical ways of going to market.


5. Kaiser is a unique industry player

While Kaiser falls just outside the tier of largest insurers by Membership, it insures nearly 10M members. Unlike traditional health insurers, Kaiser owns an integrated model of care – meaning that it owns the insurance business, along with the doctors, clinics, hospitals and other care elements. (Typically, health insurers negotiate rates and network access with clinics and doctors that are independent of the insurer itself). Kaiser’s business is more akin to a traditional HMO model of care – which it has touted as providing greater access to care at lower cost with a suite of caregivers that can develop a treatment plan based on a network of doctors that all have access to health history, etc.

Why it matters to you:

Different companies have different go-to-market models. While traditional players negotiate with independent stakeholders, models like Kaiser’s provide a very different strategy. Speaking to these differences shows that you understand that there are significant influencers that operate differently and allows you to compare and contrast these models when answering questions in the boardroom.