We are in the “age of the customer,” in which technology has put consumers in control of their interactions with businesses, according to Forrester. Consumers today can send and receive cash by smart phone, order laundry detergent and paper towels by voice-based personal assistant, and hail transportation in nearly any major city in the world by app. This new degree of empowerment and ease that’s in the hands of customers is redefining the ways in which businesses can interact with their customers. Yet, as tech-savvy startups have become industry titans – think AirBnB, Amazon, and Uber – people today continue to interact with the healthcare industry in a non-digital parallel universe. Don’t just take my word for it. Forrester surveyed over 120,000 consumers, asking them to assess their experience interacting with 300+ companies. Health insurance ranked among the poorest across 21 industries.1 This leaves health insurance incumbents vulnerable to disruption.
Health plans seem to be in a parallel universe
While the rest of the modern economy has been disrupted by digital innovation and embraced consumer-centric strategies, patients and providers experience health insurance as if it is still the 1990s.
Providers seek prior authorization by phone instead of focusing on delivering high quality care to their patients
Caregivers, overwhelmed by uncertainty while caring for their loved ones, are asked to send medical records between doctors and hospitals by fax
Patients, amid lives disrupted by illness and injury, are asked to navigate their treatment, pharmaceuticals, and appointments with pen and paper
While other industries provide easy access to information and digital tools that give their customers peace of mind and an experience they love, health plans seem stuck in the past – creating unneeded frustration for all involved.
There’s untapped potential with digitally savvy seniors
As the economy continues to embrace digital innovation and consumer-centric strategies, the number of individuals that expect a digital consumer experience continues to grow among every age demographic.
The fastest growing age group in the United States is Americans who are 65 and older, a population expected to nearly double over the next 30 years to over 80 million.2 These people, who today are in their 30s, 40s and 50s, are connected to one another and to nearly every industry by digital technology. While close to 60% of this group uses tablets and over 80% of them use smartphones in their daily lives, are we expecting them to utilize the healthcare system by fax, phone, pen, and paper in their aging years?3 The data suggest not. The Baby Boomers today and every generation that comes after them will be accustomed to heart-rate tracking wearables, app-based personal data health insights, and personalized attention from professionals and services in minutes – not hours or days.
Amid this growth of the digitally sophisticated 65 and older population is the growth of Medicare Advantage. In the past seven years, Medicare Advantage enrollment has grown 70%, and today 1 in 3 Medicare beneficiaries is enrolled in Medicare Advantage.4 In the next ten years, enrollment in Medicare Advantage is projected to grow to 41% of all Medicare beneficiaries.5 With this growth in the Medicare Advantage market comes an opportunity for health plans to acquire members among the growing 65 and older population – the same population who has come to expect a digitally mediated consumer experience in addition to every generation that will follow.
How can health plans attract the loyalty of tech-savvy members and deliver on the promises of digital innovation to patients, providers, caregivers, and other stakeholders in the healthcare ecosystem?
Investing for transformation
Health plans that seek to transform themselves into digital innovators must invest in consumer-centric experiences. Health plans must make investments in technology that provide greater data access to their members, improve touchpoints between payers and providers, and guide their members’ experiences through the continuum of care. Health plans must also connect patients to caretakers, social workers, transportation services, and the growing number of stakeholders that are part of a more integrated and holistic care and wellness ecosystem.
To achieve this, a digitally transformative strategy must include investments in:
- Self-service enrollment and billing modules
- Portals and mobile applications that provide members a 360-degree view of benefits, claims, claims history, enrollment, billing, and status of prior authorizations
- Chat capabilities that connect members and caregivers to a nurse or licensed clinical social worker for real-time answers to basic health questions
- Telehealth to connect patients and providers in real-time
- Health plan-hosted social networks that align key member segments with common needs, values, or characteristics
- Personal Assistant tools that ease healthcare scheduling, service alerts, and updates
Digitally mature health plans
To deliver this digitally innovative, consumer-centric strategy, health plans must achieve digital maturity, measured by Forrester, in four dimensions: core technology, organization, culture, and data-driven insights.
A digitally mature health plan is one where each dimension is as follows:
- Core technology — IT infrastructure and operations are linked with development channels for rapid and iterative prototyping, allowing the health plan to create high-quality, compelling, consistent digital media assets for multiple platforms (e.g., web, mobile, social, email).
- Organization — The health plan hires for subject matter expertise that is spread across all technology components (web/mobile user interface, middleware microservices, and back-end databases).
- Culture — Leaders consistently communicate a digital vision both internally and externally and invest in expanding their employees’ digital skills and knowledge.
- Data-driven insights — The health plan is able to perform demographic, psychographic, ethnographic and technographic research with consumer-facing rapid test-and-learn cycles to inform and then create human-centered designs.
Disruptor or disrupted?
In today’s healthcare environment of rapid change, industry mega-mergers (think Aetna and CVS), and cross-industry partnerships (think Amazon, Berkshire Hathaway, and J.P. Morgan), the health insurance industry is well positioned to be disrupted by a digitally innovative incumbent or an unpredictable outsider.
How mature is your organization today to deliver a full consumer-centric digital experience? How likely is your organization to be the disruptor or disrupted?
1 Forrester Data Customer Experience Index Online Survey, US Consumers 2017
2 U.S. Census Bureau, 2012 Population Estimates and 2012 National Projections. Available at https://www.census.gov/prod/2014pubs/p25-1140.pdf
3 Forrester Data Consumer Technographics North American Online Benchmark Survey (Part 1), 2017
4 Kaiser Family Foundation, Medicare Advantage Fact Sheet, October 2017. Available at https://www.kff.org/medicare/fact-sheet/medicare-advantage
5 Congressional Budget Office, “Medicare – Congressional Budget Office’s January 2017 Baseline,” January 24, 2017. Available at: https://www.cbo.gov/sites/default/files/recurringdata/51302-2017-01-med…
Andrew Savitz | Senior Consultant
Andrew is a Senior Consultant at Optimity Advisors with healthcare operations and project management experience. He has conducted multiple end-to-end operating model assessments for national healthcare payers in the Individual and Commercial markets. Through the evaluation of business processes, governance, organizational structure, and core administration platforms, he has driven improvements in claims processing, billing, enrollment, utilization management, and care management operations. Andrew has furthermore led the design, build, and implementation of a quote-to-bill IT solution in a market-leading regional health plan. In a previous role working with a state healthcare association, Andrew provided research support to chief medical officers from large integrated healthcare systems to small critical access hospitals in the design and implementation of a statewide provider burnout survey. Through the use of operational process decomposition and analysis, large and small group workshop facilitation, and multi-workstream project management, Andrew delivers business analysis and project leadership to the engagement teams with which he serves.