It’s certainly no secret that the Affordable Care Act (ACA) has its share of passionate supporters and equally impassioned opponents; however, regardless of where you stand on this pivotal issue, it’s a good time to consider what insights can be drawn from this initial phase of the ACA now that the first round of Open Enrollment is closed. These early data points may help to illuminate implications of the ACA for pharmaceutical marketers, as well as the broader healthcare system.
Catching the First Wave
In May, the HHS released initial data from the March 31, 2014 end of the ACA Open Enrollment period. Shortly thereafter, Cadient Group launched ACAEnrollment2014.com, providing a visualization of open enrollment statistics at a state-by-state level. This approach offers a more user-friendly translation of an otherwise difficult-to-decipher labyrinth of government statistics. It sheds light on the fact that when it comes to healthcare and the motivations behind ACA enrollment, the populace is (figuratively and literally) all over the map!
Two states (Maryland and California) had more than 70% of their eligible populations enroll ahead of the initial deadline. Connecticut and Rhode Island were both above 60%. Of note, all four of these states share the political profile of having a Democratic governor and the same party controlling both the state Senate and House branches. Yet Idaho, which ranked sixth highest in the percentage of eligible citizens enrolled, is completely Republican-controlled.
The two states with lowest levels of open enrollment participation (Kentucky and Minnesota) have Democratic governors. So adoption of the ACA goes beyond political leanings, reflecting diverse perspectives and needs around health insurance.
Furthermore, those two same low-enrollment states of Kentucky and Minnesota actually had the most enrollees selecting the Platinum Plan. Apparently, those who bought in also traded up. On the other hand, Hawaii, Colorado and Washington were clustered at the top of the ranking in terms of the percentage of ACA enrollees who opted for the basic Bronze Plan.
The ages of enrollees in the ACA during the open enrollment period also varied by region, with Plains states such as North Dakota, Idaho and Nebraska drawing more than 40% of their enrollees from citizens younger than 35, similar to Western states such as Arizona, New Mexico and Utah. In fact, more than one in five ACA enrollees in Arizona was under the age of 18.
What Is the New Reality?
What did the research, development and launch of this microsite help us to better understand about the new healthcare landscape being reshaped by the ACA?
1. Healthcare is increasingly a personal choice: Patients form expectations about healthcare from other aspects of their consumer lives. As marketers and customer experience builders, it definitely tells us that the days of a “one size fits all” messaging and content approach are numbered. It is time to truly focus upon customer preferences and tailoring experiences based upon customer needs, expectations and behaviors.
2. Visualization increases understanding: This process also helps to reinforce what we already believe about the power of visual storytelling. More data doesn’t necessarily mean greater insight: Visualizing data into meaningful, easily accessible and interactive formats changes the way we perceive and use information. Similarly, this principle applies to busy healthcare professionals, overwhelmed patients and results-oriented payers.
3. The ripple effect will make waves: The post-Open Enrollment landscape signals a new age of managed influence. Healthcare professionals will be adapting to new influences upon their prescribing decisions every day (and an influx of newly insured patients within their practices). Knowing what this cascade of changes means to your brand is more important than ever.
The Tide is High…
As numerous analysts point out, the ACA has the potential to provide a lift for pharmaceutical industry. It’s estimated that the ACA will generate an additional 2.9% boost in prescription drug spending in 2014 alone, bringing projected total growth this year to 5.2%. According to the Centers for Medicare & Medicaid Services, this elevated demand is driven by “increases in use of prescription drugs among people who are newly insured or those who move to more generous insurance plans as a result of the premium and cost-sharing subsidies offered by the Affordable Care Act.” CMS also calculates a prolonged positive effect through 2022, projecting higher average annual growth in prescription drug spending than experienced in the (rather stagnant) years immediately preceding the ACA.
…But Not All Boats Will Rise
Still, a recent Forbes feature underscores that overall projected growth is actually marked by significant differences, depending on how particular product portfolios are positioned. For instance, the article cites Lilly CEO John Lechleiter, who maintains that “expanded access (to medicines) is a double-edged sword. Greater access is inherently good for our industry, in general. The question, however, is ‘what is the upside to this access?’ I don’t think any of us have been able to say that this will lift all boats. It may be good for company A or company B, but the verdict is still out.” Among variables cited by Forbes is the type of coverage selected by enrollees, which could significantly impact drug benefits and, as such, actual access to specific drug therapies.
Charting a New Course for Pharma Marketing Success
Just as there was a heated debate during the rollout of the ACA, there is now a flood of data for us to interpret its impact. Some in our industry may choose to seek higher ground and hope for the best, but these changes are likely just the beginning of a far-reaching transformation of the healthcare ecosystem. The fundamental business model makeover undertaken by insurers over the past two years—through adoption of technology, partnerships and member-focused initiatives—should serve as a harbinger of what’s required to adapt. In order to realize the potential growth opportunities resulting from the ACA, pharmaceutical marketers would be wise to survey the horizon, chart their course and set sail for the adventure ahead.