These empowered consumers want better products, higher quality service and a better overall experience with healthcare payers. In fact, they want a level of value, service and experience that matches what they receive from the best online retailers. That's what we call consumerism.
Embracing consumerism is especially vital to the health insurance industry for several reasons:
Its business model is shifting from group sales to a highly competitive retail market focused on individual sales.
Participating in health insurance exchanges opens new customer channels but also exposes payers to competing on price and the perceived value of their plan benefits and services.
Employers expect to shift more healthcare costs to their employees.1 More companies may give lump sums or defined benefits contributions, to employees to buy plans on private and public exchanges. Thus individuals are expected to have a greater interest in staying well and/or managing health conditions to minimize their health spending.
New retail competition can arise from new care delivery and reimbursement models, such direct contracts between large employers and healthcare systems or Accountable Care Organizations (ACOs) that may not always include traditional payer participants.
Not only is the business climate challenging and competitive, but many of the consumers now shopping for individual health insurance policies have been "trained" by online retailers to have high expectations for other retail transactions. Most payers are not equipped to meet these demands because their systems, processes and personnel training all have been optimized for a B2B world—and now must make an abrupt switch to serving a very different and demanding market.
Payers nonetheless are health insurance experts. We have identified a three-step approach they can take to use that expertise to generate new value from the shift to heathcare consumerism. The steps are:
Step 1: Understand. Payers must fully appreciate the forces behind consumerism as well as how their customers define it. This step is critical to appreciating what customers want and how their demands directly affect payer processes and products.
Step 2: Assess. Payers need to understand where and how their products, processes and even people are falling short of consumer demands. This requires assessing performance—from a customer's perspective—across six key dimensions: front office; member acquisition and sales; the contact center; the back office; member retention and analysis; and product modularization capabilities. For more insight, read Part 3 of this series.
Step 3: Transform. Payers can take immediate steps to address their shortcomings in six key operating dimensions. In a relatively short time, their services can reach consumers' minimal performance expectations. These actions set the stage for transforming processes, products and people and delivering industry-leading service.
Read on to learn more about Step One.
For insights about who is shaping health consumer expectations and how, read our white paper about how analytics can be used to create personalized customer experiences and build loyalty. Read A Vision for U.S. Healthcare's Radical Makeover to understand more about the forces reshaping healthcare. Or visit Cognizant's Healthcare practice for more insight.
1Aon Hewitt Research: Employers Will Continue Sponsoring Health Benefits for Employees and Retirees, but Deliver Those Benefits in New Ways, http://ir.aon.com/about-aon/investor-relations/investor-news/news-release-details/2014/Aon-Hewitt-Research-Employers-Will-Continue-Sponsoring-Health-Benefits-for-Employees-and-Retirees-but-Deliver-Those-Benefits-in-New-Ways/default.aspx, accessed 08/11/14