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AIS's Health Business Daily
Featured Story August 13, 2008 Communication, Retention Become Critical for Health Plans as Commercial Enrollment Erodes Reprinted from HEALTH PLAN WEEK, the industry's leading source of business, financial and regulatory news of health plans, PPOs and POS plans. For health plans, retaining premium revenue is taking on increasing importance at a time when membership growth is sluggish and acquiring a new member can be six times more expensive than retaining an existing one. Conventional wisdom holds that satisfied members translate into retained members. But experience shows that this isn't necessarily the case. The key, according to George Van Antwerp, a vice president of health care marketing firm Silverlink Communications Inc., is moving as many existing members as possible into the "top box," where members are not just satisfied but also loyal. According to J.D. Power and Associates — a consumer satisfaction measurement firm - 81% of these members are most likely to renew given their experiences with a health plan. But it's not just any experience, says Van Antwerp. Creating satisfied and loyal customers in an over-communicated, diverse and competitive marketplace requires a new approach to customer communications: personalized messaging and touch-point experiences that exceed a member's expectations. Health plans historically have fallen short when it comes to member communications. Deloitte LLP's 2008 Survey of Health Care Consumers found that only 8% of those polled understood their health insurance completely. This is a critical finding because, according to Van Antwerp, members switch health plans in many cases without realizing that their current plan offers identical products and services to those that lured them to a new plan. "Poor communication is symptomatic of the health [insurance] industry, which is ironic because it's a service industry," Ross Goldberg, president of Kevin/Ross Public Relations, tells HPW. "My relationship with my health plan is far more personal than my relationship with an airline," he says. But while his health insurer knows about his health status, it sends only periodic generic messages. The airline he flies, by contrast, regularly uses data about his preferences to personalize each of its interactions with him. Generic Messaging Said to Have Little Effect Other industries learned years ago that generic, one-size-fits-all messaging is no longer effective at reaching and influencing a diverse customer base. And health plans can learn from these industries. "Every communication with a health plan member should be a personalized one-on-one encounter rather than an average experience," says Van Antwerp, adding that to be effective, a message must be highly targeted and personalized. "You have to deliver the right message to the right person at the right time." There are no typical consumers, typical families or typical demographics, he says. Customers must be micro-segmented into subgroups. Several plans are now following the lead of merchandisers and political campaigns by micro-segmenting their members according to demographics, geographics, attitudes and behaviors (health status also plays a role). It's the "soccer moms" micro-trending strategy that helped Bill Clinton win a second presidential term. To micro-segment members, health plans crunch internal plan data and external data from call centers and other sources to determine what matters most to members in each identified micro-segment. Messages and interactions are then personalized — not just by content but also by when and how the message is delivered, including Web, e-mail, regular mail, phone and even text messaging. Micro-segmenting also is used to market products to specific subgroups and, once captured, retain members. WellPoint, Inc.'s suite of Tonik health plans, for example, was designed to reduce attrition among individual and small-group members. The plan's Web site (www.tonikplans.com) and collateral materials are designed to create an experience that appeals to recent graduates and young adults micro-segmented into "thrill seekers," "part-time daredevils" and "calculated risk takers." WellPoint says that the Tonik experience has improved retention rates by 20%. Micro-Segmenting Requires Meeting Challenges But micro-segmenting isn't easy. "You have to 'boil the ocean' to try to figure out what people need and will respond to according to where they fit within a particular segment," says Van Antwerp. One challenge: The large numbers of variables that can be used to create micro-segments. Health care is highly localized and demographically influenced, and if these and other considerations unique to health care are not factored in, resulting micro-segments can be misleading. Some, for example, question Deloitte's use of six broad segments to categorize the health care consumer market, noting that the segments are not based on demographics. Another challenge: Consumers' lives and situations change, often quickly, as they move through expected and unexpected transitions, including health status, making it an evolutionary rather than a static process. Silverlink's quarterly HealthComm Behavior Index surveys commercially insured adults to collect demographic and health status data and measure their responses to personalized health care communications. Van Antwerp notes that insurers can use these kinds of data to test what they consider to be successful communications strategies. He advises plans to continually run new "challengers" against their "champions" to achieve better outcomes. Challengers could evaluate what factors work best at achieving behavior change, such as the wording of a message, call patterns, an individual's income indicators, geography and health status. "You try different messages to see what people respond to and how they react." Finally, the goal is an outcome, not a process. "It's not how many messages you send out or whether people open the letter," says Van Antwerp. "Rather, it's how many people took the desired action you were trying to achieve based on the message." Moving people into the top box also means identifying key customer "touch points," those moments that matter most to a plan member. These touch points, or what one health plan executive calls golden moments, can be leveraged to create exceptional experiences that exceed what the customer already expects from the plan. Providing this "above and beyond" experience, Van Antwerp says, will help turn satisfied customers into loyal customers that will stay with the plan. Van Antwerp himself had an "above and beyond" experience when Sprint, his cellular carrier, called and told him that based on his monthly usage, they were recommending that he switch to a lower-cost but equally effective package. "That clearly exceeded my expectations and made a lasting impression." Call Centers: Touch Points and Data Sources Lance Shipp, chief operating officer of The Beryl Companies, an operator of call-center outsourcing services for health plans and hospitals, tells HPW that a call center is both a critical touch point and a source of data for creating personalized customer experiences. "You have the opportunity to build a strong positive relationship that will make the caller want to continue to do business with you." For Shipp, the call-center process begins with empathy and compassion for the person on the phone. "Unlike computers and appliances, heath care is a very personal and intimate issue. People want to be treated as individuals and with empathy," Shipp says. "If you do this, the experience will make the caller want to come back again." Van Antwerp agrees, noting that many plans have their call centers focus on average seconds to answer (ASA) metrics, although research suggests that many callers don't pay attention to this. Rather, the call center should give the impression that the plan is there to help the member and that the plan views the member as a valued partner and not a cost center, he says. Shipp says that
advances in customer relationship management (CRM) technology make it
possible for a call center to collect information about preferences,
experiences and other information from each inbound caller that can
be used by the health plan to micro-segment and personalize its outbound
communications. |
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