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Three key strategies for small to mid-sized healthcare payers in the Medicare Advantage market

With benefits that go beyond traditional Medicare (e.g., vision, dental, hearing, drug coverage) and an aging “boomer” population, Medicare Advantage programs are seeing record enrollment growth. 

Today more than 28 million people are enrolled in a Medicare Advantage plan — nearly half the eligible Medicare population.1

The MA market has been dominated by a handful of large healthcare plans, but as demand for these plans grows, more and more regional plans and startups are seeing opportunities to enter the market.

What can smaller health plans do to ensure they’re part of the mix competing for the Medicare-aged population?

Here are three key strategies small to mid-sized health plans can use to forge a successful path in today’s flourishing MA market.

1. Identify in-house limitations 

The ability to offer a first-rate MA program and successfully compete for MA business starts with knowing what your organization can and can’t deliver. 

Top challenges faced by small- to mid-sized health plans include:

  • Scalability – MA programs need nimbleness to quickly ramp up or down with changes in demand.
  • Legacy systems – Technology that limits process efficiency or interoperability can impede the ability to efficiently support the needs of the program enrollees.
  • Costs to compete – Keeping up with technology advancements, hiring/training, and related capital expenditures to stay current and competitive is expensive.
  • Regulatory requirements – As more plans enter the market, federal scrutiny of MA programs has increased, underscoring the need for plans to stay on top of current regulations — such as the updated federal rules for Medicare Advantage.
  • Ease of market entry – Factors influencing this include claims processing capabilities, operational capacity and existing provider contracts — all of which can be hurdles to new market entry.
  • Staffing and labor market dynamics – Hiring and training of a workforce in a tumultuous labor market; ability to seamlessly ramp up/down with seasonal demand shifts; standardizing processes, policies and procedures — are definitive challenges.

Take an honest look at your operations and evaluate what you can realistically achieve through your internal resources and where it may make sense to leverage external expertise and capabilities to achieve your objectives.

2. Determine the right program delivery approach

For health plans evaluating how best to set up their MA program for success, there are four main delivery models. Carefully weighing the pros and cons of each will help determine the best route forward:

In-house/fully owned – Internally built, dedicated in-house resources for people, process and technology.

  • Pros – Greater control of outcomes/environment and standardization across the organization
  • Cons – Higher costs, more obstacles to overcome, difficult to scale and integrate

Software as-a Service (SaaS) – Subscription-based technology owned and hosted by a third party and made accessible as a cloud- or premises-based platform.

  • Pros – Cost-efficient, modernized technology, experienced software support
  • Cons – Limited to technology; lack of people and process-specific expertise/support; knowledge gap of broader organization

Business process outsourcing (BPO) – One or more resource or technology-intensive processes managed by a third party.

  • Pros – Process efficiencies (speed/cost), experienced staff/team, measurable performance metrics
  • Cons – Less control over process components

Business Process as-a-Service (BPaaS) – Combines SaaS and BPO handling end-to-end needs encompassing technology, people and processes through a core platform and bundled services. 

  • Pros – Fast-track to a scope of resources, advanced technology and high-efficiency operations at a lower cost
  • Cons – Solution owned by provider (but delivered under your brand and you reap the business benefits)


BPaaS is emerging as a preferred business model for small to mid-sized health plans looking to compete in Medicare Advantage. Top reasons for this include:

  • Quick route to modernization and market entry
  • “Total package” solution spanning technology, people and processes
  • Lower costs / higher revenue versus in-house
  • Fewer capital investments and HR/training requirements
  • Stringent contract adherence / SLA-based
  • Industry shift to value-based care
  • Access to expertise and skilled workforce
  • Manual processes replaced with automated workflows
  • Scalable / agile / efficient operations
  • Internal resources freed to focus on core business strategy and member experience


3. Proactively prepare early-on to be fully ready for enrollment season

Preparing to compete in (or re-enter) the Medicare Advantage market should happen early in the year, well before open enrollment season. Proactive, preparative steps should include:

  • Strategic due diligence to assess market gaps and opportunities. 
  • Deepening your insights about what MA shoppers are seeking and what benefits are most attractive.
  • A strong go-to-market strategy that specifies where and how you will enter the market and how you will differentiate your program to attract interest.
  • Putting everything in place across the spectrum of your program needs to ensure you are ready to go.

As several trend watchers have noted, the Medicare Advantage market is booming and poised for steady growth over the coming years. Small to mid-sized plans who follow the steps above will strengthen their ability to offer a high-quality program, attract new business and prosper in this expanding market.

About Conduent Healthcare Payer Solutions
As a partner to the entire healthcare ecosystem, Conduent helps increase access to care, optimize the cost of care, and improve health outcomes. We work with 17 of the 20 largest health plans serving over 25 million members — driven by our HSP Payer Suite technology supporting core administration and member engagement. Learn more on our website about Conduent’s BPaaS Solution for Medicare Advantage.


1. Kaiser Family Foundation (KFF), Medicare Advantage in 2022: Enrollment Update and Key Trends, Aug. ‘22

About the Author

Jeff Hickerson is a senior executive at Conduent with over 25 years in the healthcare industry. His experience spans multiple facets of the healthcare ecosystem including payer services, care management, hospital revenue cycle management and BPO. His roles have included overseeing product management, account management, strategic planning, project management and more. Jeff can be reached at

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