Tufts Health Plan of Rhode Island, with just 24,000 Rhode Islanders enrolled in its commercial health insurance plans, has its eyes on the prize of building a larger market share, seeking to chip away at both Blue Cross & Blue Shield of Rhode Island, with more than 600,000 members, and UnitedHealthcare of New England, with about 210,000 members.
Its recent filing for a rate increase for 2012, at 4.8 percent, stands in stark contrast to the 10.5 percent proposed rate increase requested by Blue Cross and the 18 and 20 percent rate hikes asked by UnitedHealthcare.
The strategic message, according to Brian P. Pagliaro, senior vice president of sales, marketing and client services at Tufts, is to seek out small-business groups with a rationally priced product and an emphasis on quality.
Providence Business News asked Pagliaro to detail Tufts’ marketing strategy to expand its share in the Rhode Island market.
PBN: What is your growth strategy for Rhode Island? What do you see as the potential for Tufts Health Plan?
PAGLIARO: When we first entered the market, we did an assessment and decided that the market in Rhode Island was ripe for increased competition. The political leaders and business leaders wanted it. The timing was right for a new insurer to come into the market, bringing both quality and experience. We are ranked number-one in quality in Rhode Island, and we offer rational pricing.
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PBN: What is your pitch when you talk to potential customers?
PAGLIARO: Our pitch is really quite simple. When we talk to distribution partners, insurance brokers or talking directly to an employer, we talk about pricing. It is the No. 1 decision-making point for an employer. Our trends are the lowest in the market. Our recent filing [asking for a 4.8 percent increase in rates] indicates that we are the lowest-priced product.
We also talk about our operational excellence; our customers are serviced in a way that is appropriate. We ensure that when they need to get their phone calls answered quickly, to get their questions answered quickly, we do it. Employers and employees want to do business with quality
PBN: Aside from pricing, what else sets you apart from your competitors?
PAGLIARO: We offer an integrated health management approach, with the focus on wellness – how are we going to help people to get healthy. Wellness is of increasing importance to employers. We offer a range of programs throughout the health continuum. We’re very focused on keeping people healthy and helping people to get healthier.
PBN: What are the numbers for Tufts in Rhode Island? Are you making money?
PAGLIARO: We have a controlled growth strategy, with rational pricing, not to lose money, not to make money. We expect to have zero profit making for three years in Rhode Island. We are adhering to out controlled growth strategy.
In terms of numbers, we have 24,000 members; 9,000 live in Rhode Island but work in Massachusetts.
PBN: Massachusetts, with its statewide insurance plan, is less than 2 percent of its population without health insurance. Rhode Island, by contrast, has about 14 percent, with 140,000 uninsured. How does Tufts view this segment of the market?
PAGLIARO: The future of health care reform – and health care delivery – is about a collaborative approach with providers, businesses, community leaders and political leaders [working together]. We plan on being out in front. We are currently part of the ongoing effort to develop a health insurance exchange in Rhode Island.
We support the move or transition from fee-for-service arrangements to pay-for-value arrangements. We have been a leader in Massachusetts [supporting this]; we expect to be a leader in that transition in Rhode Island.
The health insurance Connector [program] in Massachusetts has reduced the uninsured rate to less than 2 percent. In Rhode Island, one would hope that the results [of a health insurance exchange] would be the same. The goal is to provide affordable health insurance at the highest quality level.
In Massachusetts, we designed a product for the health reform [market], a limited network product with lower costs, with 12-15 percent savings off a traditional product. It’s a more tiered product. You will have to see alternative products in the exchange, like they did in Massachusetts, in order to meet the objective of high quality, low-cost care.
