Under a mantra of "consumer centricity," the nation's largest Blue Cross company is taking a long-view on America's changing demographics and insurance access points.
Anthem is two years into a five year company plan, developed not long after Joseph Swedish took its helm after a decade leading the Catholic hospital giant Trinity Health. The company was still called WellPoint at the time, even as its health plans in 14 states all were named in some form of Anthem Blue Cross and Blue Shield, and recovering from the tumult of Angela Braly's short tenure.
Now WellPoint is Anthem, and Wall Street seems more comfortable with the white-haired, 62-year-old Swedish, its stock price having increased more than 130 percent since Braly left. For the full year 2014, Anthem's adjusted net income is projected to be as high as $8.85 per share, or on the order of $2.3 billion.
But as Anthem reintroduces itself to existing and prospective members in a national advertising campaign, it's working toward business goals and new markets with what Swedish calls a "strategy to become a consumer-oriented company."
Over the next five years, "our ambition is to emerge as the health plan with the leading and distinctive consumer experience," Swedish said at a presentation at the JP Morgan Healthcare Conference. "This is an evolution required to attract and retain members, and ensure our long-term financial success, given that so much of our growth will come from consumer choice segments."
According to Forrester Research, consumers have ranked health insurers last among 13 different industries every year since 2007. And at the same time, many middle class Americans are paying more out-of-pocket for healthcare. Benchmarking against the likes of Amazon's "24/7 frictionless experiences," Swedish said that U.S. "healthcare has just simply not kept pace with our expectations, and therefore frustration is preeminent and growing."
While the business visions of other insurers also pay homage to the America's dysfunctional healthcare experience and the need to improve it, Anthem's dive into "consumer centricity" will have to be deep if it is going to retain its position as the nation's second largest insurer, as it migrates away from its historic customer base of employer-sponsored insurance.
Under Swedish, the company has been on a quest to improve its customer experience and enter new markets that are driven by individual choice and, increasingly, subsidized by the government.
"In 2008, you could have characterized us as big, blue and commercial, and you would have been largely correct, with 72 percent of of our operating revenue from that business sector," Swedish said. "Today our business is much more diversified, as roughly 46 percent of operating revenues now come from government business and we do expect the government contribution to soon be over 50 percent."
In the coming years, he said, as much as 70 percent of Anthem's growth could come from "consumer choice markets" -- Affordable Care Act insurance exchanges, Medicaid managed care, Medicare Advantage and Medicare-Medicaid dual eligibles. Already, Anthem's Amerigroup Medicaid-focused subsidiary is running managed care plans in 19 states, and that business is poised to expand with the acquisition of Simply Healthcare in Florida.
In many of Anthem's regions and especially its largest market, California, the populations are very diverse and in flux, Swedish said, highlighting the rise of baby boomers, millennials, and Hispanic-Latino Americans.
As a group, baby boomers are likely to be active, mobile, or have chronic conditions, while many millennials are budget-conscious and inclined toward digital interactions, and many Latino-Americans may be using health insurance for the first time. All are reasons why Anthem, and other insurers for that matter, need to improve the customer experience -- from explanations of benefits, networks and formularies to customer help.
"We need to focus on fundamentals, providing consistent and quick basic services with extraordinary support," as well as "actionable and personalized communications with a focus on potential value-added interactions," Swedish said.
One the other end of the insurance business, Anthem is trying to at once expand and refine value-based contracting.
In 2014, the company signed 42 new ACO contracts, and now has about 118 arrangements.
Among the more ambitious of those is a sort of "managed care 2.0" venture in California called Vivity, a health plan featuring seven greater Los Angeles hospital systems and their physician groups that's designed to compete with the integrated delivery network of Kaiser Permanente. Members of the Vivity plan will be responsible for just a co-pay -- no deductibles.
Anthem is also dipping its feet, if not diving, into comparative effectiveness in a collaboration with Eli Lilly, the giant drug maker also based in Indianapolis.
"We're serving as a protagonist to drive greater healthcare affordability and access for a variety of constituents," Swedish said.