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Product Design Service Delivers a 1-2 Punch for Health Insurers Looking at New Medicare Supplemental Benefits
by Richard Hamer


Stressed businessman looking at arrows drawn on a wall 

Product Design Service Delivers a 1-2 Punch for Health Insurers Looking at New Medicare Supplemental Benefits

In response to the new opportunities developing across many lines of the health insurance business, Deft Research has re-tooled its Product Design Service. 

For Medicare, Individual and Family, and Employer Group health plans, the priorities of 2019 are going to be wellness, engagement, and delivering the supplemental benefits consumers want. 

These themes have emerged across health insurance lines of business despite different market environments:

  • Medicare: CMS has changed the rules giving Medicare Advantage plans more flexibility in designing benefits. 
  • Individual and Family Market: Prices are stabilizing and attracting a sustainable market share has become the goal for many insurers.
  • Employers: Employers are looking for benefit programs that provide more than just medical benefits.

For each business, seizing opportunities is accompanied by uncertainty and financial risk.  In the coming months, the benefit design decisions insurers make will depend on how they perceive these business risks and what they do to reduce them.


Understanding how customers react to new product designs before launch helps reduce health plans' financial risk and allows for bolder management decisions.

Reducing risk in a decision can mean many things.  For example, if because they developed consumer insights, a health plan has more confidence in the appeal of a new service, a special benefit might now be possible when it was not before.  Reduced uncertainty could also mean a health plan makes changes to more effectively meet the needs of a particular population -- an example of a population whose needs are often poorly understood: the dual eligibles of a service area. 

The accumulation of consumer value through better insights into unmet needs can mean that some health plans develop better brand equity.  They are perceived as more trustworthy because they recognize consumer needs.

Fortunately, there is a way to develop some foresight into consumer responses to product design.  Across industries, designers agree that Conjoint Analysis is the best way to measure consumer value and anticipate consumer uptake of new offers.  Deft Research has produced dozens of conjoint analysis studies for health plans and our customers have shown us that conjoint studies can be used in many ways.

 Conjoint Analysis is Used to:

  • Estimate the share of consumers likely to choose different insurance packages.
  • Identify where consumer value is greater than actuarial value.
  • Understand new product reception when introduced into a field of competing products.
  • Determine the brand’s equity and its own optimal product configurations.
  • Identify market segments that value particular product designs.
  • Provide the rationale for recommendations to upper management.
  • Facilitate discussions between marketing and financial teams.

 A Research Response

For health insurers, three lines of business – Medicare, Individual and Family, and Employer Group – have the opportunity to attract and engage more members by presenting attractive supplemental and ancillary benefits.  In order to support better decisions, Deft Research has developed a two-part research approach to address the problem of uncertainty and financial risk.

 1. The standard conjoint survey asks respondents to make choices from sets of insurance packages.  We recommend that this choice-based conjoint study be used to establish the relative value of the standard benefits -- premiums, brand, cost sharing, network policies, drug coverage, and ancillary benefits.

2.  We also recommend a separate, simpler type of choice-based activity to capture the value of additional benefits health plans are considering. This simpler activity is formally called Best-Worst Scaling, but is often referred to as “Max-Diff.”  Max-diff is the gold standard for measuring ranked preferences from a single list of features.

Deft Research's two-part approach solves a research problem.  If we were to put the standard and supplemental benefits into a single survey activity, consumers would focus on the familiar and important standard benefits.  The result would be that the standard benefits get all the attention and all new supplementals would register undifferentiated low values.

The 1-2 Punch solves this problem.  It offers a perfect solution for assessing how consumers value additional new benefits and whether those benefits will draw consumers to a new plan.  This approach will reveal distinct and meaningful differences that will more usefully guide decision-makers.

 Learn more about Conjoint Analysis and its value to your health plan, schedule a Discovery Call and tap into our resources.

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