How to Consumer: How Will the Consumer of 2014 Shop for Health Insurance

How Will the Consumer of 2014 Shop for Health Insurance?

by Mark Stryker, Chief Financial and Business Development Officer, GuideWell Connect.

Have you noticed how the health insurance industry has evolved to being very similar to the retail environment in terms of seasonality? With the overlapping open enrollment periods for the IU65 and Medicare markets, as well as for many employer groups, the fourth quarter of the year has become incredibly important for the health insurance segment.

The media talks often about the health industry moving towards a consumer model. The question that often follows this is “What does a ‘consumer model’ mean for the industry, or for the company, or for me?” There is good news and bad news here.

First the good news – you already know a lot about consumers because you are one! One of the easiest ways to think about what consumers want – how they buy, how they think about the companies they buy from – is to make it personal. When was the last time that you were bowled over by working with or buying from a company? It doesn’t happen that often, so the key is in understanding what made it an amazing experience? Most likely it was some combination of giving you exactly what you wanted, right when you needed it, and then going above and beyond in some way that was important to you.

The bad news is that there sure are a lot of us consumers out there – millions upon millions – who want different things, at different times, and in a multitude of different ways. So finding ways to have valuable conversations with the vast amount of different people trying to do different things out there can be a daunting and incredibly expensive endeavor.

To make this retail dynamic even more interesting, throw in the ways that the health business is different from the typical consumer retail business. In the health industry all of the work we do for the fourth quarter of the year is not to generate profit for this year. Instead, it is the cornerstone of our business performance for next year! We work a year in advance to prepare for the period between October 1 and February 15^th. We spend countless hours looking at risk adjustment, data modeling, defining health insurance consumer and member segments and preparing plans to connect the right product with the right customer at the right time. In October it’s GO TIME and all of our planning and efforts get put into action. How well we’ve planned and understood the market determines our success for the next year.

The shifting health insurance landscape also creates a pool of new decision makers in health care consumers who are now charged with having complete control of their health purchase decisions – often for the first time in their lives. Over time these new health consumers will have more and more impact on our industry – from the way they shop, the products they buy, how they feel about the quality and relationships in the services they receive from hospitals and other providers, and how they finance their health expenses.

GuideWell Connect has spent years perfecting a methodology of understanding and selling to the empowered consumer in the individual under 65 and Medicare health insurance markets with proven results. The 800 data points we have for every consumer in the markets we serve power our proprietary predictive models, that then help us understand, by each unique consumer segment, how people’s needs line up with the products available. After that, it is up to great technology and great people to engage with consumers in a meaningful way to help them uncover and understand their specific needs, and make decisions, while at the same time building a strong relationship that helps us partner with the consumer long into the future.

Through understanding the consumer, engaging them with the right offer at the right time with meaningful solutions, we are able to help health plans capitalize on the evolving insurance industry.

So how will health care consumers shop and what will be on the top of their minds as the 2014/2015 open enrollment periods get underway?

1) Use it or Lose Them
If an existing customer used their health plan in 2014, they will more than likely see value in it and will be more inclined to stay with the health insurance company that they are currently enrolled with. If they haven’t used the plan, they will perceive it to be just another commodity and are more likely to shop for a better deal.

2) Cost is King
While consumers that use their health plan benefits are more likely to understand the plan’s value and stay with an insurance company, cost is still the largest determinate on what and if consumers buy a health insurance plan. Following cost, the insurance company’s reputation and ability to provide good benefits were the next two factors influencing a consumer’s decision.

3) Education or Non-Education is a Factor in Satisfaction
Let’s face it. Even to those of us in the industry, health insurance is a confusing topic and a very personal decision. Educating consumers on what they are buying and how it works is integral to building customer loyalty and retention for the future. The problem is… health insurance is not sexy. And many consumers don’t have the time or interest to understand the ins and outs of a plan until they are in a situation where they have to use it. However, without fully understanding the cost structure of a plan and how the associated network works, many consumers will be in for unhappy surprises when they do use their plan.

4) Experience is Table Stakes
Consumers live in a very service-driven world. In the health care space, pharmacies and retail clinics have set the bar for what consumers expect from a service perspective. However, in reality – most consumers are comparing their health insurance service experiences to the experience they have with retailers like Best Buy and Amazon. Here we are again – back to the retail analogy.

While consumers expect excellence, in many regards, the insurance industry hasn’t caught up to other industries in terms of being able to deliver the type of proactive service their customers expect where, when and how they prefer which can leave many of them frustrated.

At GuideWell Connect, our expertise lies in helping health plans make the most of data, customer insights and emerging technologies to sell health plans, engage new and existing members, maximize revenue and build loyalty. We are focused on delivering Actionable Customer Insights, Database Marketing, Consumer Engagement, Channel Development & Management, Health Care Transparency Tools and Marketing & Video Services to our clients. Follow this blog series “How to Consumer” to learn more about our methodology and proven results.

Our proprietary models and consumer segments help us make the most out of every marketing dollar in acquiring new members, and then help us personalize communications to new members to continue to build great relationships, and also help members get the most out of their plans. We’ve worked with numerous health plans on product design as well as implementing truly integrated brand marketing programs to create brand preference and affinity in the market, and to engage and educate consumers before, during and after the point of purchase. The people manning our telemarketing and retail centers are a great example of bringing the resources that consumers need, at the time they need them. These teams are integral to helping members understand everything from the benefits in their plans to the best ways to save money on their medications, to helping them start a relationship with a provider in their area.
If you are interested in learning more about GuideWell Connect, please connect with me on LinkedIn, Twitter or submit your information here.

This is the first post in a blog series on health care consumerism or “How to Consumer” written by Mark Stryker, Chief Financial and Business Development Officer, GuideWell Connect