Running Head: BUSINESS ENVIRONMENTAL ANALYSIS

21

BUSINESS ENVIRONMENTAL ANALYSIS

Business Environmental Analysis

I. Market Domain

A: Historical Significance

The choice of industry on this front will be the healthcare industry specifically the medical healthcare insurance plans. In seeking to evaluate an unmet need in the health insurance realm, it would be prudent to first offer a concise definition of health insurance. In basic terms, health insurance could be defined as a contract that requires a health insurer to pay some or all of [an insured persons] health care costs in exchange for a premium (HealthCare.gov, 2020). Towards this end, some of the things covered by health insurance include, but they are not limited to, some hospital as well as doctor visits, medical devices, prescription drugs, etc. It therefore follows that to a large extent, health insurance may not necessarily provide cover for medical technologies considered brand-new, drug use that is essentially off-label, complementary alternative medicine, cosmetic and elective surgery, etc. However, in my opinion, this is where most opportunities lie for players in the industry. This is more so the case given that failure to avail coverage in this case means that some key market needs remain unmet.

Complementary and alternative medicine happens to be rather popular in the U.S. For instance, in a study seeking to assess the prevalence of herbal medicine utilization among adults in the country, more than a third of participants pointed out that they had regularly used herbal supplements (Rashrash, Schommer, and Brown 2017). In the words of the authors, older age and higher education were associated with a higher use of herbal supplements (Rashrash, Schommer, and Brown 2017, p. 109). Herbal medicines happen to be part and parcel of complementary alternative medicine (CAM). The findings of the authors in this case are collaborated by Ventola (2010) who points out that approximately 40% of U.S. adults have at some point utilized CAM. It is therefore clear that a significant proportion of the population already embraces CAM. CAM, according to Ventola (2010), could be perceived as a group of diverse medical and health care systems, practices, and products that are not presently considered to be part of conventional medicine. One of the areas that has seen widespread utilization of CAM is cancer treatment. According to Halter (2018), in as far as the treatment of cancer is concerned, some of the treatment approaches that have been indicated to have a high efficacy rate are radiation and chemotherapy. However, this has not kept most Americans from pursuing CAM in attempts to beat cancer. In the words of the author, nearly 40 percent of Americans believe alternative medicine alone can stop the disease in its tracks (Halter, 2018).

To a large extent, most CAM are not covered by health insurers. This leaves a significant portion of CAM embraced by Americans without much health insurance coverage. According to Patricia and Coulter (2016), most CAM practitioners have legal backing as professionals. Indeed, as the authors point out, there are those that are permitted to avail primary care. However, Patricia and Coulter (2016) point out that the said practitioners are yet to be fully embraced by Medicare and private insurers. This is more so the case given that they are largely considered outsiders to the mainstream healthcare system. In the words of Patricia and Coulter (2016), CAM practitioners cannot seek reimbursement from insurers for many services they are trained to perform and so cannot practice to the full extent of their capabilities, which for chiropractors might include giving full physical examinations or writing prescriptions. It should be noted that today, some health insurance plans do not have a problem…

Running Head: BUSINESS ENVIRONMENTAL ANALYSIS

21

BUSINESS ENVIRONMENTAL ANALYSIS

Business Environmental Analysis

I. Market Domain

A: Historical Significance

The choice of industry on this front will be the healthcare industry specifically the medical healthcare insurance plans. In seeking to evaluate an unmet need in the health insurance realm, it would be prudent to first offer a concise definition of health insurance. In basic terms, health insurance could be defined as a contract that requires a health insurer to pay some or all of [an insured persons] health care costs in exchange for a premium (HealthCare.gov, 2020). Towards this end, some of the things covered by health insurance include, but they are not limited to, some hospital as well as doctor visits, medical devices, prescription drugs, etc. It therefore follows that to a large extent, health insurance may not necessarily provide cover for medical technologies considered brand-new, drug use that is essentially off-label, complementary alternative medicine, cosmetic and elective surgery, etc. However, in my opinion, this is where most opportunities lie for players in the industry. This is more so the case given that failure to avail coverage in this case means that some key market needs remain unmet.

Complementary and alternative medicine happens to be rather popular in the U.S. For instance, in a study seeking to assess the prevalence of herbal medicine utilization among adults in the country, more than a third of participants pointed out that they had regularly used herbal supplements (Rashrash, Schommer, and Brown 2017). In the words of the authors, older age and higher education were associated with a higher use of herbal supplements (Rashrash, Schommer, and Brown 2017, p. 109). Herbal medicines happen to be part and parcel of complementary alternative medicine (CAM). The findings of the authors in this case are collaborated by Ventola (2010) who points out that approximately…

Running Head: BUSINESS ENVIRONMENTAL ANALYSIS

21

BUSINESS ENVIRONMENTAL ANALYSIS

Business Environmental Analysis

I. Market Domain

A: Historical Significance

The choice of industry on this front will be the healthcare industry specifically the medical healthcare insurance plans. In seeking to evaluate an unmet need in the health insurance realm, it would be prudent to first offer a concise definition of health insurance. In basic terms, health insurance could be defined as a contrac that requires a health insurer to pay some or all of [an insured persons] health care costs in exchange for a premium (HealthCare.gov, 2020). Towards this end, some of the things covered by health insurance include, but they are not limited to, some hospital as well as doctor visits, medical devices, prescription drugs, etc. It therefore follows that to a large extent, health insurance may not necessarily provide cover for medical technologies considered brand-new, drug use that is essentially off-label, complementary alternative medicine, cosmetic and elective surgery, etc. However, in my opinion, this is where most opportunities lie for players in the industry. This is more so the case given that failure to avail coverage in this case means that some key market needs remain unmet.

Complementary and alternative medicine happens to be rather popular in the U.S. For instance, in a study seeking to assess the prevalence of herbal medicine utilization among adults in the country, more than a third of participants pointed out that they had regularly used herbal supplements (Rashrash, Schommer, and Brown 2017). In the words of the authors, older age and higher education were associated with a higher use of herbal supplements (Rashrash, Schommer, and Brown 2017, p. 109). Herbal medicines happen to be part and parcel of complementary alternative medicine (CAM). The findings of the authors in this case are collaborated by Ventola (2010) who points out that approximately 40% of U.S. adults have at some point utilized CAM. It is therefore clear that a significant proportion of the population already embraces CAM. CAM, according to Ventola (2010), could be perceived as a group of diverse medical and health care systems, practices, and products that are not presently considered to be part of conventional medicine. One of the areas that has seen widespread utilization of CAM is cancer treatment. According to Halter (2018), in as far as the treatment of cancer is concerned, some of the treatment approaches that have been indicated to have a high efficacy rate are radiation and chemotherapy. However, this has not kept most Americans from pursuing CAM in attempts to beat cancer. In the words of the author, nearly 40 percent of Americans believe alternative medicine alone can stop the disease in its tracks (Halter, 2018).

To a large extent, most CAM are not covered by health insurers. This leaves a significant portion of CAM embraced by Americans without much health insurance coverage. According to Patricia and Coulter (2016), most CAM practitioners have legal backing as professionals....

Indeed, as the authors point out, there are those that are permitted to avail primary care. However, Patricia and Coulter (2016) point out that the said practitioners are yet to be fully embraced by Medicare and private insurers. This is more so the case given that they are largely considered outsiders to the mainstream healthcare system. In the words of Patricia and Coulter (2016), CAM practitioners cannot seek reimbursement from insurers for many services they are trained to perform and so cannot practice to the full extent of their capabilities, which for chiropractors might include giving full physical examinations or writing prescriptions. It should be noted that today, some health insurance plans do not have a problem covering some CAM services and procedures such as chiropractic and acupunct.......other conditions. It should however be noted that even with these being paid for by some plans, there are some significant restrictions that apply, i.e. with regard to the frequency of visits.

As per the above discussion, there is a clear need that is yet to be fully addressed by the insurance industry. There is need for health insurance plans to cover a wider range of alternative care services. Suggestions on this front include, but they are not limited to, dietary supplements, naturopathy, homeopathy, etc. This is more so the case given that various studies have indicated that a significant portion of the adult population in the US actively makes use of CAM. In this case, insurance companies could come up with clear guidelines to streamline medical coverage on this front. For instance, coverage could be extended to methods and/or approaches that have sufficient backing in as far as their effectiveness in the alleviation of symptoms and/or illnesses is concerned. In the final analysis, there is sound basis for alternative medicine to be considered alongside traditional healthcare when it comes to healthcare insurance.

B: Factors

Complementary or alternative medicine (CAM) continues to be embraced by most persons across the U.S. and indeed in most parts of the world. Indeed, according to Ventola (2010), a significant percentage of American adults have in the past admitted to using CAM. It should, however, be noted that insurance coverage for alternative medicine happens to be rather limited with some insurance companies expressly refusing coverage and others covering only a select CAM procedures/services such as acupuncture and chiropractic care. It would, thus, be prudent to assess some of the factors that have made health insurance companies be weary of this particular market domain.

To begin with, it is important to note that in the year 2000, the White House Commission on Complementary and Alternative Medicine Policy (WHCCAMP) was established with an intention to assess some of the concerns beleaguering not only the delivery, but also the access to CAM across the nation, amongst other things (National Institutes of Health, 2020). Various consultative meetings were held by WHCCAMP with various stakeholders giving their perspectives on the steps that needed to be undertaken to ensure that consumers derived maximum benefits from CAM therapies. In one of its findings, the commission pointed out that one of the key reasons as to why most insurance companies gave CAM therapies a wide berth was lack of a sufficient basis as to the effectiveness of the said therapies (National Institutes of Health, 2020). This is to say that most companies were concerned over the lack of authoritative evidence in support of the medical effectiveness of CAM. Towards this end, players in the health insurance industry, as the report points out, were concerned that their limited dollars be spent on care that has been shown to be safe and effective (National Institutes of Health, 2020).

It is also important to note that despite research on the effectiveness of CAM having gathered steam in recent times, one other problem that players in this realm have had to confront is safety of CAM. Insurance companies have shied off from being engaged in an undertaking deemed to be inherently high risk in as far as the health and wellbeing of patients is concerned. At present, unlike is the case with conventional medicine, we do not have a well-founded framework for the assessment and evaluation of the safety of CAM drugs and treatment approaches. This brings to the fore other considerations, i.e. the ethical aspect of propping up approaches that could have a net negative outcome on the wellbeing of patients.

Yet anoher factor that has made health insurance companies ignore this particular market domain is the lack of criteria to assess the medical viability or necessity of CAM therapies (Synovitz and Larson, 2013). This is more so the case given that in conventional medicine, there are well-developed methodologies of making a determination as to the relevance of processes and procedures a factor that is of great relevance to health insurance risk management. In conventional medicine, there is an established framework of necessity assessment comprising of professional organizations, medical institutions, medical schools, etc.

However, as it has been pointed out elsewhere in this text, there are still some health insurance companies that cover alternative and complimentary therapies. One significant enabling factor is patient demand. Indeed, in the words of Herman and Courter (2015), the American Hospital Association survey of hospitals found that 49 percent of respondents indicated that patient demand was the primary motivation for offering CAM services (74). This could have sent some companies back to the drawing board, with their strategic teams assessing the most appropriate ways to incorporate CAM therapies into plans.

Next, it should also be noted that most healthcare institutions have embraced integrated care. This is more so the case given that although the country, and pretty much the rest of the world, has largely been dominated by the biomedical conceptual framework, there are indications that all this could be slowly changing. As a matter of fact, Herman and Courter (2015) are categorical that at present, there is evidence that other therapeutic modalities, with different conceptual frameworks, are beginning to compete with this dominant model (102). Insurance companies are cognizant of the fact that going forward, CAM will claim a bigger share of western medicine.

C: Impact of Factors

The factors highlighted above have had a major influence on opportunities for both innovation and change in the CAM insurance realm. To begin with, they have slowed down the integration of conventional medicine with CAM. This is more so the case given that players in the healthcare industry do not have sufficient motivation and incentives to pursue this course of action. If health insurance plans were to actively cover CAM, the said players would be keen on finding ways of integrating conventional therapies with CAM therapies.

The highlighted factors could, however, have inadvertently spurred research on the effectiveness of CAM therapies. This is more so the case given that as Hu, Li, Duan, and Arao (2013) point out, for policy makers, practitioners, patients, and health care system managers to make informed decisions about the use of CAM therapies, they must have both access to and a means of evaluating the results of research on the topic. It is out of this need that systematic reviews on the medical significance CAM therapies are increasingly being pursued. For instance, according to Hu, Li, Duan, and Arao (2013), there is increased activity in research efforts seeking to determine how effective CAM are amongst hypertension patients.

Further, and perhaps rather obviously, it would also be prudent to note that the factors highlighted in this discussion have had an impact on the prevalence of CAM. Although CAM happens to be rather popular as has been indicated elsewhere in this text, lack of consensus on whether insurance companies should formulate health insurance plans in this regard has kept a significant proportion of the population from CAM. For instance, for the most part, CAM does not feature in group health insurance policies or health insurance policies provided by employers. It therefore follows that for the millions of employees in the country with access to group health insurance policies, CAM therapies are simply not an option.

II. Competitive Readiness

A: SWOT Analysis

Cigna Corporation is a global health services company that offers insured and self-funded prescription drug benefit, vision, behavioral health, dental, and medical benefit plans to indiv