Humana's low-cost Medicare drug plan is a way to lure seniors into its managed care - Essay Example

Business Ethics: Analysis of the Article Plan A: Hook Them with Part D; Humana's low-cost Medicare drug plan is a way to lure seniors into its managed care by Howard Gleckman In his recently published article the Business Week writer Howard Gleckman gives an overview of the up-to-date marketing plan developed by the medical insurance company Humana Inc. Lately approved 2003 Medicare Part D drug law is being seen by the company's management as a great opportunity to strengthen its position in the health-care insurance market.

The middle-size market player, in terms of customer base lagging well behind the industry giants UnitedHealth Group Inc. and WellPoint Inc., considers current situation to be a good chance to lure more customers and, in the long run, to generate more revenues. Humana Inc. with its new plan targets the seniors market, including low-income segment. The crux of the new strategy is the extremely low pricing for the drug-only policies. Proposed rates which are almost twice below the average, coupled with marketing agreement with the Wal-Mart stores, government subsidies and legislative support, should attract millions of new senior customers.

This opportunity seems even more attractive given the projected decline in the market growth and increasing competition.Of course, simply lowering all the rates will decrease significantly company's margins. Therefore, the next stage of the marketing plan considers deploying the enroll-and-migrate strategy'' and putting emphasize on switching the attention of the newly acquired drug-only programs customers to the managed care programs. Sales personnel's effort would be directed at the promotion of these programs, which have higher rates and are much more lucrative for the Humana Inc.

The author gives a brief dispassionate description of the Humana's management plans and provides the readers with corresponding figures where appropriate. However, the article contains several hints of the attitude expressed towards the plan. The heading contains the word "hook" with regard to the new low-price policy and the text develops the idea further. The means and ends of the upcoming measures are summarized in two brief sentences: "Their idea: offer dirt-cheap drug plans to grab millions of seniors.

Then use the benefit as a stepping stone to a potentially richer market". Undoubtedly, the article may attract some of the customers by informing them about the low-priced offering they might find appealing. However, the general effect on the audience would be rather negative as the customers would become aware of rather unethical base of the new policies and would not be attracted by the marketing "bait" proposed by Humana Inc.Nowadays being ethical to the customers, partners, and employers is increasingly seen as a key success factor for the company.

It is true for all the industries as well as for both small and large enterprises. Nevertheless, for the companies operating in the health care and medical insurance sector the business ethics factor is of even greater importance than for any other industry imaginable. Humana Inc. offers not the steel pipes or high-volume components but the services that have direct influence on its customers' health and well-being. It can not allow itself slightest unethical moves such as new plan under consideration.

Offering affordable rates is a good move if it is caused by the improved efficiency of the company's operations and not when it is a temporary marketing "hook".