Perfecting The Member Experience: The Uberization Of Healthcare

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Perfecting The Member Experience: The Uberization Of Healthcare

by Elise Smith

In the recent blog titled “Creating Memorable Member Experiences,” we explored the idea that a customer’s experience with a company is oftentimes a make-or-break interaction. This is especially true in a consumerist society. Reviews about customer experience on websites such as Amazon, Yelp, Glassdoor, and Google are increasingly driving decision-making. In fact, 88 percent of consumers say they trust such online reviews as much as personal recommendations, and 81 percent of customers are willing to pay for a superior customer experience. Industry experts have estimated that failure to provide a satisfactory customer experience can amount to as much as a 20 percent annual revenue loss for poor performing businesses.

Until recently, the healthcare industry was immune to poor member experience and feedback. The combination of healthcare being an inelastic good and the lack of competition in the health insurance marketplace created an environment in which the members’ experiences, reviews, and voices often had little to no impact on the way insurers continued to conduct business—until today. In this blog, we explore the impact of the Affordable Care Act (ACA) on the rapidly evolving healthcare industry and outline what Optimity Advisors has identified as the Four Guiding Principles for a successful member experience, highlighting industry examples.

With the second annual open enrollment for State and Federal Exchanges, the healthcare industry is starting to see a tremendous change in the way providers, payers, and members interact. While the ACA’s first year was met with tactical shortcomings across the industry, newly released data has shown a decrease in both average premiums and the percentage of the uninsured, along with a historically low increase in healthcare spending. The ACA has helped align competing health plans by introducing the individual mandate and essential health benefits, capping an insurance company’s non-medical expenses, and scrutinizing annual premium rate increases. This level of regulatory oversight has pushed health insurers to compete beyond the traditional factors of affordability and benefit design. Today, the market has shifted to a new paradigm with new influencers to consumer healthcare purchasing such as access, engagement, personalization, and ease of doing business. The same characteristics that have driven consumers towards Amazon for bulk goods, Instacart for groceries, and Uber for cabs, have made their way to healthcare. By giving people the ability to easily shop for and change plans annually, the ACA has created an imperative for insurers to compete in a new way.

Many have referred to this movement as the “uberization of healthcare”. This movement is emerging from a shift in the relationship between consumers and companies, facilitated by technology and data. Just as the Uber application transformed the outdated taxicab model by shifting the focus towards the rider and away from the driver through increased competition and technological innovation, the ACA is driving similar dynamics in the healthcare industry. According to the J.D. Power 2015 Member Health Plan Study, health plan administrators are responding by taking a consumer-centric approach to build greater member trust and loyalty. As a result, the Voice of the Member is becoming more important than ever, both to improve the member experience and lower costs.

In our work with and research on successful member experiences in the healthcare industry, Optimity Advisors has identified the Four Guiding Principles that successful health plans emphasize in their member experience strategy. These include:

Create a Member-Centric Culture – An organization’s culture is centered on shared goals that empower employees to create the best member experience at every touch point.
Value the “Voice of the Member” – Key to developing the Voice of the Member is using member data, qualitative and quantitative research, and claims data to fully create member personas that lead to a personalized experience. Organizations that develop their strategies based on feedback from their members will create an experience that benefits both the members and the organization.
Be a Trusted Advisor – A health plan should deliver relevant, easy-to-access, accurate, and timely information to members across all channels to build a strong and dependable relationship with its members.
Measure What Matters – Relevant and consistent measures or Key Performance Indicators (KPIs) that are used to drive behaviors across the operation.

Create a Member-Centric Culture

While it is important for health plans to emphasize the importance of the member experience in all member-facing capacities, true success in creating a positive experience starts with the internal organization. Blue Cross Blue Shield (BCBS) Michigan recognized this imperative and developed Total Health Engagement—a philosophy that focuses on innovative health insurance plan design, better ways of providing care, and dedicated health support. In 2013, Forrester Research awarded BCBS Michigan for innovation and customer understanding for creating the Customer Experience Room. The Customer Experience Room provided a learning environment that helped nearly 7,000 employees understand and empathize with customer pain points about health insurance. By highlighting the importance of a member-centric environment within the organization, BCBS Michigan’s employees are able to better serve their members, which has enabled higher retention, with 65 percent of members reporting improved health.

Value the “Voice of the Member”

The ACA also emphasized the evolving member-centric culture by creating provisions around a new kind of health insurance company—a Consumer Operated and Oriented Plan, or CO-OP. CO-OPs are member-led with at least 51 percent of their Board of Directors controlled by members who play an active role in representing the “Voice of the Member.” In Arizona, Meritus is the state’s only CO-OP, with a unique mission to design its operations and strategies around the member. By emphasizing a member voice at the board level, all strategic decisions are influenced by people that would be directly impacted those decisions. By introducing a member-led board to healthcare, members can drive innovation, comprehensive plan designs, widespread provider access, and a financially sustainable yet affordable price point. As a result, Meritus drastically decreased its rates this year and offers some of the most affordable plans in the market, to which the market responded positively. By mid-January, the plan saw enrollment numbers reach 36,0000 new members. As Meritus continues to grow, its member voice and experience continues to be at the forefront of its strategy, and the market continues to positively respond.

Be a Trusted Advisor

One of the key findings from the J.D. Power 2015 Member Health Plan Study was that members are more likely to remain loyal with their health plans if they view the health plan as a trusted advisor. Accordingly, in the most direct representation of the “Uberization,” health plans are launching iPhone and Android applications that allow members to access all of their health plan information at the touch of a screen. In 2011, Humana’s MyHumana application won the Appy’s Award for “Best Medical App”. At the time of its award, the application became the single source of truth for Humana’s members in a revolutionary way, providing members with fast, reliable, and up-to-date information. In 2014 Humana released updates to the application based on member feedback, making it an even more seamless, integrated and personalized experience. Jody Bliney, the Chief Consumer Officer of Humana speaks to the application’s benefits: “With the launch of our new mobile app, we look forward to helping members better understand and leverage their health plans to enable more positive, lasting health outcomes.”

Measure What Matters

When Humana saw its costs increasing drastically (about 20 percent in one year) due to ACA regulations and high-priced drugs related to chronic conditions, the health plan responded by developing more member-focused programs such as cooking classes, exercise programs, and launching HumanaVitality, a wellness program with monetary rewards. Because most of its costs come from claims payouts, Humana addressed the rising costs by engaging members in their own health—not only save money for the member, but also for the insurance company. The insurer’s approach was centered on the idea of not just treating the symptom, but treating the individual as a whole. This approach was aimed at not only decreasing claims costs, but also improving the overall health of its membership population.

While the ACA still hasn’t solved all the problems it was created to resolve just yet, the healthcare industry has seen significant changes in only a year since its enactment. It has caused a tremendous shift in the healthcare industry by introducing and facilitating a new way health plans, providers, and members interact. Uberization has arrived in the healthcare industry, as insurers are finally forced to compete on their ability to engage its members. As a result, successful plans are using the Four Guiding Principles to help shape their strategy to align with the evolving expectations and needs of members.