Answered: What are the strengths and weaknesses…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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What are the strengths and weaknesses of the company and relevant stakeholders (where relevant) and their relevance

Transcribed Image Text:and specialists throughout the United States, coinciding with the company's primary locations. 3. The insurance carrier would guarantee a high level of quality care to be provided to Polson's employees. 4. Unlike other health maintenance organization (HMO) plans, under the new Polson Plan employees would be able to switch from managed care to a traditional indemnity plan at will, but they would pay extra for exercising this option. "We sought to change the way health care was delivered to our employees," says Al Gesler, corporate director of HR for Polson. "The net result was a hybrid program, taking into account the best features of HMOS and indemnity plans and combining that with a partnership arrangement between Whiteffish, Polson and its employees." Whitefish was chosen because it was a large and experienced insurance carrier and had a health-care network in place across the United States that pretty well coincided with major locations where Polson had operations. In March 2003, Polson signed a three-year agreement with Whitefish for a managed-care program that was called "The Health Care Connection." This plan covered medical, dental, vision, and hearing care, as well as prescription medications. It also included a well-care program covering such items as an annual physical exam and prenatal care. An important feature of the plan was that Whitefish guaranteed annual premium increases of less than 10 percent during each of the three contract years on the managed-care side of the program. No similar guarantee was provided on the indemnity side. The actual figure would depend on the number of employees using the indemnity portion of the program. "We wanted a very strong gatekeeper system," says McGee. "For our employees to take advantage of the extremely comprehensive benefits found on the in-network side of The Health-Care Connection program, as well as the modest $20 copayment feature, they had to agree to choose a primary-care physician from within the closed panel and visit specialists in hospitals only when referred by their primary-care physicians. That was the trade-off." Where employees stayed in the network, the costs were very modest: a $20 copayment per office visit and $20 per prescription (generic drug) and 35 percent of the cost of a brand-name drug. If employees chose to go outside the network, they could switch to the indemnity side of the plan at any time for any particular illness or injury with no restrictions. Those who did, however, paid an annual deductible equal to 1 percent of their annual salaries and then were subject to an 80/20 copayment split (in other words, employees paid 20 percent of the medical care costs after the deductible was met). "The basic concept behind managed care is just that, managing it," says McGee. "By staying in the network, everyone saves money. We felt this was a major effort aimed at limiting unnecessary care." For its part, Whitefish is responsible for guaranteeing the quality of the managed-care side of the network. It is responsible for using its buying power to ensure that hospitals in the plan attract an adequate supply of high-quality physicians. It also means continual monitoring of employee usage of different types of medical care through utilization studies.