Health Plans Respond to Customer Changes

B2C Shift Necessitates Customer Experience Focus.

The customer shift from B2B to B2C is impacting health plans by disrupting familiar business models, reshaping communication channels and spurring innovation. Faced with marketplace trends including the increasing influence of consumerism, the demand for transparency, an influx of new customers and accelerating costs, health plans are reacting by embracing customer experience initiatives.

“In order to attract new members and retain existing ones, health plan organizations must think like B2C organizations and transform their business models to improve the overall customer experience,” asserts healthcare marketing expert Kate Tuttle. How are these trends manifesting for health plans? We’ve identified five areas that highlight health plans’ response to the changing landscape.

Seismic Shift in Customer Mix
Today, a growing number of health plan customers come from the individual retail markets or government sponsored programs administered by private plans. ACA-enabled exchanges have helped create markets where more consumers are directly involved in choosing their own healthcare products. Employer groups are moving towards benefit designs where consumers share a higher financial stake in their own cost of care and may be pushing their business into private exchanges. These shifts result in higher levels of direct touch with the end-consumer of the health plan’s product, in turn leading to higher expectations and an opportunity for payers to differentiate based on customer experience.

The emergence of government-sponsored exchanges and Medicaid program expansions has opened up coverage to more lives than ever before, increasing the pool of newly enrolled patients. This group is potentially unfamiliar with the healthcare landscape marked with in- and out-of- network covered services, tiered benefit structures, and wellness and care coordination services, increasing the risk of an information gap. As BlueCross BlueShield points out in a recent report on the newly enrolled, “It is important that newly insured consumers understand their benefits and are able to access preventive services in the right care setting, at the right time, to improve their health and avoid unnecessary emergency room visits.”

“Health plans must engineer a positive member experience to fully benefit from fee-for- value initiatives.”

Additionally, as the ratio of customer accounts shifts from groups to individuals, health plans must transition their communication focus from their historical audience of brokers and human resource representatives to the end-consumer. Unlike the brokers or the HR reps focused on negotiating group healthcare contracts, who have a baseline of technical healthcare knowledge, many of these new patients may not have ever directly evaluated the broad range of insurance choices available. In the case of new market channels, they may have been previously uninsured and, therefore they may lack even an average understanding of healthcare insurance. Clearly this new audience requires a different approach.

Group Business Impacted by Private Exchange
The rise of private exchanges has shifted focus with group markets, moving the individual decision to the employee level. In a traditional sale, selling to a single company, all employees are enrolled in the product(s) sold. When an employer changes this pattern, allowing individual employees to choose among competing insurers from a private exchange, each employee is making an individual health plan and product decision. While the employees who select each plan will ultimately be rolled into a bulk buy between the employer and the plan, the health plans must convince each individual separately to select their product. Health plans need to refocus their customer experience to align with this new B2C reality, developing what the AHIP describes as “tools to help consumers better understand and manage their healthcare, and healthcare-related expenses.”

From Fee-for- Service to Fee-for- Value
As the industry focuses on bending the cost curve, many health plans are rolling out fee-for- value programs. These collaborative partnerships between health plans and their provider networks include new delivery models and reimbursement mechanisms that drive cost reduction and quality improvement. To harvest the value within these arrangements, health plans must nurture long-term relationships to reduce member turnover.

The design of population health programs incentivizes provider-driven improvements in outcome, quality and cost via coordination of care for individuals over multiple years. By reducing member turnover and therefore stabilizing patient participation in population health programs, health plans and providers have the ability to impact substantive decreases in total cost of care while improving quality and transparency of care. A strategic focus on customer experience can help support retention. From the communication strategies required to foster longstanding relationships to robust tools to help patients manage chronic conditions or navigate complicated pay structures, health plans must engineer a positive experience to fully benefit from fee-for-value initiatives.

Newly Delegated Functions Can Confuse Consumers
As health plans and their provider partners change the rules around the financial risk that each will take, some of the responsibilities traditionally attributed to health plans are being delegated into the provider network. For example, care management, traditionally within the health plan’s purview, involves the identification of a specific care model based on a patient’s existing or probable conditions. This process is increasingly being delegated down the provider path.

This shift may cause confusion for the consumer, who’s left wondering which entity is responsible for what. With multiple parties involved in a complicated end-to-end care management process, it’s even more important that health plans focus on customers’ expectations about interactions with their health plan and with the providers that are serving them.

Complicated Product and Benefit Design
Health plans focused on the development of narrow and tiered network products create financial incentives to help consumers decide where to go to get different types of care. By directing patients towards the most appropriate benefit level, these products can help to optimize quality of care and cost. Since these options are more complicated than traditional products they require increased customer education to improve customer experience.

As health plans refocus their sales efforts on engaging members versus a benefits manager, they must emphasize marketing and education on the product. When running a member experience program, the health plan should consider its new benefit designs and product launches as drivers within the program, not as an addendum. By addressing the complexities created by new products and remaining purposeful in all other communications, health plans can offset the potential for confusion.

As the consumer-based customer reality pushes traditional strategies towards obsolescence, health plans that are most adept at adaptation will end up on top. Need help navigating the new B2C healthcare landscape? Contact Baker Tilly to harness our expertise for your success.