Case Study: Medica, Carrot Take ‘Precision’ AEP Approach

With new insurance startups popping up around the U.S. and the biggest Medicare Advantage players making the biggest enrollment gains, mid-sized and regional health plans marketing during the coming Annual Election Period (AEP) will need to rely on local knowledge combined with “smarter” data about consumers in their market, according to Carrot Health, Inc., a technology firm that uses predictive analytics to help clients deliver targeted marketing strategies.

For Medica, a Minneapolis-based insurer that is entering its third Medicare AEP working with Carrot, there’s the added challenge of bouncing back from a major membership loss in Minnesota and taking on a first-time expansion of its MA portfolio.

Dana Woods, director of marketing strategy and communications for consumer markets, tells AIS Health that when she first joined Medica in 2016, she was tasked with building out a direct-to-consumer marketing capability for the insurer’s individual and Medicare markets. And while data is at the root of any such strategy, Medica at the time did not have “good, robust data analytics in place to help us understand our current book of business [and] to help us understand prospects we might be successful with,” she says.

As a result, Woods conducted a request for proposals from vendors that could assist in building out that strategy and says she selected Carrot Health for its deep understanding of the health insurance industry and its responsiveness. “They were still very much in a startup mode and wanting to partner with health plans to build out these capabilities, so we ended up co-creating a lot of the capabilities that my team depends on today,” she says. Although Medica has brought some of that work in house, it is still “very much in a strategic partnership” with Carrot, she adds.

“One of the core assets that we’ve built over the five or so years that we’ve been doing this is health care’s largest collection of consumer data at the individual level,” asserts Steve Sigmond, chief financial officer and vice president of marketing at Minneapolis-based Carrot, which he co-founded in 2014. This means not just using consumer intelligence based on ZIP codes but drilling down into environmental risk factors like lead levels and consumer preferences such as voting patterns, he explains in an interview with AIS Health.

In total, Carrot has about 5,000 different pieces of information about every adult over the age of 18 in the U.S., and that is derived from more than 100 unique sources, including data that is compiled in Carrot’s work with insurer clients like Medica and provider-owned Health Alliance in Illinois. And that “gives us the ability to uncover all sorts of predictive insights about consumer health behaviors, consumer risk factors and social determinants of health,” he says.

Carrot’s insights to clients are delivered via the cloud-based Carrot MarketView digital platform, which contains a module specific to the AEP but also helps inform plan design, star ratings, identification of at-risk patients and member engagement. With all of these modules, the underlying data is the same, but behind each is a customer solutions team that works closely with clients to help them understand and optimize the data, says Sigmond.

For the AEP, that means providing the client with some baseline values on metropolitan statistical areas and then building predictive models onto that “to deliver granular segmentation of how that market looks.” This provides a “view they’ve never seen before,” as opposed to what they might get from the standard “qualified leads” marketing agency approach, he contends. And it helps plans prioritize their limited AEP budgets by identifying health plan customers they want to target, such as the “in-it-together couple segment” that may be underserved by one plan when it’s a highly penetrated market for competitors, and then segment their marketing strategy, he explains.

Getting started with Medica meant appending the insurer’s member database and conducting extensive segmentation studies in all of its market groups to understand their book of business in terms of enhanced demographic information, media preferences, etc., as well as the types of consumers being served by their competitors. “As a health plan you’ve got claims but that doesn’t necessarily help you understand how to market to prospects or how to retain,” says Woods. That research then informed Medica’s product strategy and its “go-to-market” strategy for the Medicare AEP, the open enrollment period for individual and family plans and year-round marketing for Medicare-Medicaid enrollees served by its Minnesota Senior Health Options plan for dual eligibles.

That segmentation also helped Medica prepare for the “complete market fruit basket upset” created by CMS’s elimination of Medicare Cost plans in counties with two or more established MA options in 2019, which impacted all 67 counties in Minnesota. As a result, HealthPartners, Medica and BlueCross BlueShield of Minnesota all lost large chunks of membership after the last AEP.

“We used their predictive analytics capabilities to try to understand our current members: Would they be likely to want to select a Medicare Advantage plan or a Medicare Supplement in a world without a Cost plan being offered anymore? Where is the market going to go?” recalls Woods. “So we used that to develop strategies for our own current book of business but also for prospecting the broad market.” That meant diversifying its Medicare portfolio to include both a MedSupp product and an MA plan.

Medicare now has nearly 80,000 Medicare enrollees in Cost plans in four states, about 26,000 members in its Minnesota MA plan and more than 16,000 lives in its MedSupp plan. For 2020, Medica will launch MA plans in Nebraska and a few counties in Iowa and expand its Cost plan in those states. Its segmenting work with Carrot helped inform Medica’s launch strategy in Omaha, for example, to understand the available market and the types of products consumers there might flock to and then “to drill into some micro strategies in terms of media selection and messaging,” she adds.

As for Minnesota, Woods says she believes there will be a lot of shopping there this AEP and the market will eventually stabilize. Meanwhile, Medica is working with Carrot to develop its new-to-Medicare strategy and cultivate relationships with the 60- to 64-year-olds and those about to turn 65. “That in my mind is the most important campaign that we run, because that’s where you’re going to get the majority of your new business,” she adds.
Carrot serves other types of payers as well as providers, but the bulk of its client base is MA plans, including some very large ones. And now that the firm has more experience under its belt, it has results to share with prospective plan partners. These include 3,200 sales out of a targeted 183,000 for one AEP campaign, or a 1.41% conversion rate, which is significant in terms of sales figures, asserts the company.

Carrot also monitors and adjusts AEP campaigns in real time, which Medica appreciates. “We’re relying upon Carrot to help us understand from all these [angles], what’s working, and in some cases, we may need to pivot…because the AEP is so compressed,” says Woods. Marketing for the 2020 AEP, which runs from Oct. 15 through Dec. 7, begins on Oct. 1.

Adapted from the 9/19/19 issue of AIS’s Radar on Medicare Advantage