A Washington Post-ABC News Poll this past September found that more than six in 10 Americans do not understand the changes the Affordable Care Act will bring. Health insurers should see this as an opportunity; insurers that can answer the questions Americans are asking will earn the trust of their customers and this trust will ultimately lead to their enrollment. Health insurers are relatively new to the game of consumer advertising, and if all goes as planned, 30 million Americans will have bought health insurance by the end of March. The insured population in this country is about to grow by over 10%. And that 10% will be choosing for themselves what health insurance to buy, rather than having that decision made by their employer.
Now, instead of devising sales and marketing strategies directed largely at benefits consultants and brokers, health insurers are turning focus to the growing direct-to-consumer marketplace. The question becomes, how do we get Bob, an uninsured 34-year-old to buy insurance from us? How do we market to these uninsured individuals? And ultimately, how do we capture this market opportunity?
Anna Haghooie is a Managing Director at Sandbox Industries, a hybrid venture capital firm specializing in connecting corporate clients with innovation. Sandbox has an exclusive partnership with several BlueCross and BlueShield Plans to manage and invest two venture capital funds. She works with innovative companies every day, several of which focus in the payer services arena.
Anna remarks, “Successful health insurers will be the ones that talk to their members about how their plans can deliver valuable services outside of the conventional insurance model. Look at what commercial banks have done with things like mobile apps and automatic bill-pay. They get people out of the mindset that a bank is a bank is a bank and make it difficult for people to switch from their current bank to another.” Insurers facing the threat of commoditization should draw from this model by wrapping their conventional health insurance offerings with consumer-friendly suites of services that appeal to those uninsured individuals while differentiating themselves from other insurers.
Health insurers could also turn to the auto insurance industry for precedent. There are clear parallels: both cover you in the event of misfortune and they both face the risk of commoditization in extremely competitive markets. Just as Geico, Allstate and Progressive are relatively comparable in their rates and offerings so are United, CIGNA and Aetna.
In a car insurance market of near identical products the predominant strategy is to differentiate with gimmicks and memorable characters. The Geico Gecko, for example, is recognizable by a stunning 93% of American consumers. And most are probably also familiar with Progressive’s Flo, AllState’s Mayhem and State Farm’s ‘Discount Double Check.’ But the healthcare industry is not the auto insurance industry. Whereas the car insurance model is relatively straightforward—they pay for you when your car breaks or when you break someone else’s car—the health insurance industry is not so black and white. And with company mission statements like, “To help the people we serve improve their health,” “Dedicated to helping people achieve health and financial security” and “Help people live healthier lives,” health insurers like Cigna, Aetna and United cannot get away with cheap ploys and cheesy characters.
Rather, health plans need to differentiate themselves in the eyes of the consumer by successfully marketing the unique services they offer to improve the health and convenience of their members, like commercial banks have done with their services. Cambia Health Solutions, an Oxeon client, built a company called SprigHealth that allows members and nonmembers to book medical appointments online with full price transparency. Aetna recently bundled a suite of health and fitness apps for its members, and it’s this CarePass offering the health insurer should promote… not Aetna the Australian Accented Anteater.
Also, keep in mind that when it comes to healthcare, Americans are confused. Again, this shouldn’t be a hurdle for health plans but an opportunity. When was the last time so many Americans were actively seeking information to educate themselves about different health plan options and services available? By reaching out to engage those six out of 10 Americans who don’t understand how the ACA affects them, health insurers can not only capture more of the newly found market but even more so, they will enroll members who are informed. If you’ve been flipping channels on a Sunday, you may have seen that Humana has been airing a number of infomercials walking their members and potential customers through the ins and outs of Medicare. By clearing up consumers’ questions and catering to their curiosity, the brand portrays itself as helpful, engaging and transparent. Capital Blue of Pennsylvania has also championed this approach of proactive member education. They recently partnered with Change Healthcare to introduce Healthcare University™, a series of short, fun video courses to help members with the basics of health care reform. If health insurers are to maintain the integrity of their mission statements, they need to reorient themselves to consumers as entities that answer questions rather than entities that raise them.
But what if they don’t? What if they do take a page out of the car insurers’ book? It’s entirely possible. They could say, ‘In this free market we need to grab the most eyeballs we can: let’s just copy what the car insurers have been doing.’ However, that idea is inherently flawed. No one weeps when a Silverado’s taillight goes out or when a Camaro’s transmission fails, but they do cheer when a new mother leaves the hospital with her firstborn. And so, inherent within health insurers’ approach to the modern day, post-ACA consumer is also the necessity for continued innovation on their offerings and services, in order to deliver products that people need, want and can afford. Health insurers have the opportunity to actually do well by doing good; they should seize it for the betterment of not only their members, but also their bottom line.