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By Damandeep Kochhar
Healthcare reform is altering the U.S. healthcare industry. American health plans, long operating on a wholesale model, must now adjust to a new, tightly-regulated retail market where consumer choice will rule. In fact, in 2014, an estimated 12 million consumers will select health insurers in this new marketplace. As such, healthcare payers must become more customer-centric if they are to outcompete in this new world and claim their share of the $200 billion market.
This new market will be critical to payer growth and profitability, as it will assume between 20 and 25 percent of the total health premiums over the next five to seven years. A recent survey by the National Business Group on Health shows that with healthcare benefits rising at twice the rate of inflation, many employers plan to ask workers to share more of the cost. Up to 50 percent of companies may even drop employee coverage altogether, causing nearly 24 million individuals to search for health plans via exchanges. With premium and cost-sharing subsidies available to consumers under the reform mandates, retail products, such as individual insurance policies and health-related financial services, are expected to expand rapidly to accommodate this segment.
Customers will be looking for a good price, but fair coverage and simplified claims handling procedures will play a large part in the selection process as well. Establishing a more customer-centric business model to meet these needs will require organizations to make a shift in current operations. Payers will have to differentiate themselves with new products that drive value, increase transparency and create opportunities for collaboration with providers and other healthcare stakeholders. Flexible enterprise systems that can be configured to respond to changing needs and a wide variety of new opportunities will be essential.
Some health plans are taking intelligent steps to get ahead of the curve in the new market. For example, looking to provide a stronger connection with potential customers and current plan members, Highmark began establishing direct retail stores in March 2009, offering self-service kiosks and machines to take simple health measures, as well as convertible classrooms and areas where consumers can work with staff on coverage or billing problems. Providing direct, face-to-face contact allows new consumers to more quickly select the right coverage and implement their chosen plan, while current members have a personal avenue to more smoothly resolve claims difficulties or get answers to questions.
Making further progress toward superior customer care, Cigna simplified its Explanation of Benefits form and trained its entire U.S. workforce to avoid industry jargon when dealing with plan members, making it easier for existing customers to understand their coverage. Simple measures such as these not only reduced incoming customer service call volumes but improved member understanding of their plan benefits, increasing the likelihood that they will want to retain their existing coverage should other choice options become available in the future.
Establishing the personal connection is at the heart of reforms at many healthcare companies. The Health Alliance Plan is launching a new branding initiative applying innovative market research to pinpoint customer’s emotional connections. By utilizing expanding marketing channels, such as social media, insurers can establish a better understanding of the products and services most crucial to current and future customers as well as the aspects of customer care that make a difference in plan selection.
The bottom line is that the paradigm shift from B2B to B2C is profound. However, it offers stunning opportunities for health plans who are willing to embrace the new technologies and management methodologies required to transform into the consumer-centric health insurer of the future.
Damandeep Kochhar is a senior vice president at Genpact, where he leads a global team to implement innovative and intelligent solutions for healthcare clients. He can be reached at Damandeep.email@example.com