As a result of the Affordable Care Act and the additional 30 million new customers who will be shopping for and buying insurance products starting in October, health insurance companies are trying to find ways to change their business model. Whereas insurers' focus for decade has been on B-to-B relationships, this new world of healthcare consumerism will make it necessary to become focused on a retail consumer market.
Jean-Pierre Stephan, management consulting lead for the Health Customer Relationship Management (CRM) Practice at Accenture, recently spoke to Healthcare Payer News Editor Chris Anderson about the challenges awaiting insurers as they make this transition
Q: What things will insurers be focused on as we approach 2014?
A: The biggest thing will be their focus on acquisitions and developing capabilities in order to acquire members. Over 90 percent of retail consumers are on the Internet daily or on email daily, and over 50 percent of them are using mobile apps. But these same digitally savvy consumers, over three-quarters of them still want some live interaction and don't value self-service.
I think the focus for insurers will be on digital capabilities, but it also may require more types of channels, more face-to-face channels. Similar to what Apple did over a decade ago in opening retail stores, they focused more on the in-store shopping experience and marrying that with their digital experience.
We are seeing the same thing with health insurers. For instance Highmark opened a retail store in 2009 and used that as a way to start to deliver a face-to-face insurance shopping experience and they also recently announced that they are opening a medical mall. A medical mall in addition to the retail stores is showing a shift of how insurers aren't just trying to acquire these members, but they are trying to figure out how to engage them with a brick and mortar approach.
Q: Since brick and mortar investments are expensive will this put smaller regional insurers at a disadvantage?
A: It could. There is a both an upside and downside to being smaller. The downside is do they have the resources and scale to build these brick and mortar establishments? The other thing we have seen is that the bigger the insurer, the more difficult it is for them to change how they operate from being a B-to-B company to a B-to-C company.
Q: Is there an uphill battle for insurers to get consumers to interact digitally?
A: I think it is how they approach the design and development of these apps. Are they really taking what the consumer is trying to accomplish through this app and delivering on that? This deals with how these organizations have traditionally approached initiatives and projects. In the b-to-B world, it was all about being able to demonstrate you had these capabilities but in being to demonstrate that you had them as part of employer RFP process, not as an individual consumer making a decision whether to stay with a brand or not.
So I think the fundamental choice of shifting from a B-to-B to a B-to-C marketplace is going to inherently drive different ways of approaching both the design and development of these digital tools.
Q: Have insurers reached into successful consumer companies to bring some expertise in house?
A: They have, some at more senior levels than others. I think for the individual (coming into an insurance company) it can be a challenge for them to come in and drive a new agenda with people who have been there for decades. There is clearly a growing trend in doing that. These payers are recognizing this now as a core competency they need. It is no longer a nice-to-have.
Q: Do you think these consumer skills are needed in the C-suite at payer companies?
A: Yes. That is what other industries have done that have made this transition. The challenge is not only having someone at the C-suite that owns and is driving the consumer agenda, but also empowering that individual. Many payers have named a chief customer officer, but they don't have people and they don't have the budget. So this is going to fizzle if they don't' start empowering these individuals with more line responsibility, with people, with budget, in order to make things happen.
Q: From a strictly retail standpoint, what specifically do insurers need to do to better engage consumers?
A: A big part is to try to demystify this complex system we are in. If a consumer walks out of a retail store with a better understanding of what options they have and what options may be best for them, that is a step in the right direction.
For the stores themselves, the insurers need to understand why they are opening them. Is it purely for sales? Is it purely more of a community resource center? Is it a service center or are they getting more into the clinical space? Being clear about what the insurer wants to achieve with that brick and mortar storefront is important, as well.
I think there is a big opportunity for consumers to understand their options and understand how to navigate the system and with that for insurers to start building trust with the consumer, because right now there is more confusion and that is a vicious cycle.