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Five ways to ensure a consumer-centric health plan 

By Sarah Rittman

The US health insurance industry is in the early stages of a dramatic transformation.

Fueled by the continued escalation of medical expense and use, as well as the pressures of legislative reform, most health plans have recognized that their traditional wholesale business model will not allow them to succeed in the coming years. To manage medical expenses more effectively, appeal to the new individual market, and attract and retain the right portfolio of business risk, health plans must put much more focus on delivering value to the individual – the health-care consumer.

As the health-insurance industry starts down this transformational path and begins to comprehend the enormity of the work ahead, plans would be well served to model themselves after the characteristics and capabilities exhibited by industries and companies that have already mastered the art and science of consumer engagement.

Some of these industries have practiced consumer-centric models for years; others have transformed themselves in much the same way the health insurance sector will attempt in the coming years.
Regardless, companies that are best at consumer engagement demonstrate five major characteristics. Each could prove useful for health plans as they make operational, organizational and technology decisions.

Commit and stand firm
First, there is unwavering commitment to a common consumer-centric business model at all levels of the organization. 

“Unwavering commitment” means that top management understands why consumer engagement is so important and evangelizes the concept at every opportunity. 

It also means that management at all levels adheres to a specific consumer-centric strategy and aligns operating model choices to support that strategy. Cross-functional sponsors believe in the cause, understand their role in achieving success, and are actively involved; and enterprise goals and divisional and individual incentives and compensation align with desired behaviors and outcomes.

While “commitment” may sound like a basic concept, it may be one of the most challenging components of the transformation for health plans to tackle.  For example, within any health plan today there are likely significant disagreements around who, exactly, is the customer. Is the customer an employer group?  A consultant? A broker? Or the end health care consumer?

In order to move forward with an effective consumer-centric strategy, it is absolutely critical to agree and commit to a single definition of the customer and a single customer-centric strategy. This agreement and commitment will serve as a solid foundation on which to build strategy and capabilities required to move forward.

Trust the facts
Companies that have become experts at consumer engagement are confident in and capable of using data derived from customer interaction to fuel business decisions and activities across the entire enterprise.   

Again, theoretically this sounds like a no-brainer: Consumer-centric companies trust their data, and they use information to drive business strategy and decisions. It shouldn’t be that hard, right?  Well, unfortunately, in an industry that has often made decisions for consumers based on what’s been requested by an employer or a consultant – not by the consumer himself – insights about customer preference and value don’t exist the way they do in other industries. 

Since the insights don't exist, it is impossible for business leaders to trust information to guide their decisions. Over the next 12 to 18 months, plans must be able to build products, programs and service strategies based on the value they deliver to an individual consumer, not a group or consultant. To enable this competency, trust in fact-based decision making is a critical competency that plans must develop.

To get started, many organizations established frameworks that actually encouraged fast failure – as long as the failure was driven by information-driven decisions. When decision makers become comfortable taking risks and using data to fuel decisions, the act of “failure” takes on a completely different meaning:  It becomes “learning.”
So, how does that paradigm begin to shift? Consumer-centric organization have a deep understanding of what types of consumer information are most valuable to decision makers  and where within the organization that information can drive customer and company value. 

These organizations achieve “information trust” by pushing insights to all areas of the enterprise – and not restricting access to data and insights to analysts or technical people.  For a health plan, that could mean scoring individuals for risk, propensity to respond, behavioral and attitudinal attributes, and preference – and keeping those scores at the fingertips of all business decision-makers.

Read from the same page
Most companies that excel at consumer engagement have highly integrated and well-governed consumer engagement functions and capabilities.

At the highest level, these functions and capabilities are broken into two categories: analytics and engagement. In most consumer-centric companies, relevant business capabilities around analytics and engagement methodologies are standardized and centrally managed, at least initially.  Almost without exception, critical skillsets are leveraged across all business functions that manage elements of customer engagement.

To enable optimized use of these skillsets and resources, there is clear alignment around objectives and outcomes; and a willingness to say "no" to good ideas if they're not relevant for success.

From an operational perspective, feedback from all consumer communication touch points is captured and fed into a single repository to make sure the most effective modality, frequency and messages are utilized and all relevant outbound customer interactions are included in a centralized sequencing and prioritization methodology.
Achieving this level of integration and enterprise governance will probably be a significant struggle for many health plans, as oftentimes marketing, informatics, customer service and underwriting/actuarial functions have each developed their own competency centers focused on achieving their specific business objectives.

Companies tend to follow a predictable path to initiate integration and create their governance model. In fact, there are literally hundreds of case studies illustrating what they do.

In most cases, the approach involves some sort of analytics and consumer engagement center of excellence (COE). The COE will almost always have accountability for generating and managing customer insights as well as defining and governing business rules around customer engagement activities. Sometimes the COE will even have responsibility for executing the engagements themselves.

Keep the lines open and active
Best-in-class consumer engagement companies are adept at deploying complex, automated multi-channel outbound interactions, and they evaluate the effectiveness and impact of all interactions in near real-time.

In consumer-centric companies, a wide variety of approaches to communication and engagement are deployed simultaneously in an effort to measure outcomes and adapt strategies as quickly as possible.  The concept of “fail fast” is widely embraced in these types of organizations. Additionally, engagement methods are developed on a fact-based understanding of what consumers want, not what the organization “thinks” they want.

To enable this type of decision-making, automated feedback mechanisms are mandatory, and results of interactions must be incorporated almost immediately into consumer data and predictive models.
Health plans will face a number of challenges as they attempt to develop these capabilities.  First, many plans do not have much experience with data-driven marketing efforts, which are, in essence, what fuel consumer engagement.

Consumer-directed marketing has typically been limited to initiatives driving acquisition and program engagement and has focused on just a few methods of outreach (primarily direct mail, telephone and e-mail).

In very few instances have the efficacy of these methods and the messaging they contain been truly tested and adapted based on outcomes.
Second, the typical health plan business model is not built around what consumers want and what they are willing to pay for – instead, it has traditionally been structured around what employers and consultants think is best.

A significant re-engineering effort will be required to enable plans to start building products, programs, services and engagement strategies based on what the evidence tells them their customers want.

An even greater re-engineering task lies ahead for organizations that want to achieve "best in class" status and use customer interactions and outcomes to continually adapt their products, programs and services to meet emerging needs.

Be sophisticated - and insatiable
The best consumer engagement companies are extremely sophisticated in their use of data and advanced analytics, particularly as it relates to predictive modeling, evaluation and adaptation. 

These companies typically have an analytics team that is insatiable when it comes to searching for new, non-traditional data sources to power unique and previously uncovered insights.

They are not afraid to explore any and all new sources and are held accountable by their leadership for constantly improving data integration and quality.

One of the most significant differentiators between companies that do consumer engagement well and those that are truly brilliant is that the latter base their analytics strategies on behavioral, preference and attitudinal attributes versus traditional segmentation attributes.

As a result, these companies typically have better insight into – and agreement on – root cause; not just what is or isn't working, but the underlying causes. This foundation allows for much more sophisticated predictive analytics to take shape and to be fine-tuned over time.

Fueling their predictive analytics capabilities is often a single source of truth, at the individual customer level, that allows for rapid messaging, sequencing and modality adaptation of virtually all customer touch points.

In companies that do this well, every relevant business process is designed to mine and retain customer-level insights to fuel their efforts, and the learning loop is closed fast.

Of all the characteristics mentioned here, this one may be the most challenging for health plans to embrace and successfully achieve. It requires a fundamental shift in the perspective of individual level data.

It requires that plans begin to shift the way they look at individuals: from observed behavior based on clinical use to projected behavior based on attitudes and preference; from expected behavior based on reliable previous experience to projected behavior based on a combination of much less concrete (yet equally predictive) models built on a wide variety of third-party data and "propensity" scores.

Moving toward a consumer-centric model will be hard for most health plans; yet it will also be incredibly rewarding for those that do it well.

It's not necessary to reinvent the wheel. A number of industries and hundreds of companies have already made this fundamental transformation.

Although they each face unique business objectives and confront different challenges, successful consumer-engagement companies share a common commitment to applying information, facts and analytics to the complex decisions they must make every day.

Sarah Rittman is a senior industry analyst in the SAS® Center for Health Analytics and Insights.

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