2016: New Business Model, New Role for Insurance Providers
Employer-provided healthcare started in the 1940s as a workaround for the WWII wage and price controls. Companies couldn’t entice GIs with more salary, but they could offer health insurance (and also get some nice tax breaks to boot). That was great when employees typically worked their entire career at one company. Today, employees switch jobs like they change apps on their phone. Which means that they are switching their health insurance, too. And this makes no sense because your health is best managed with consistent individual-focused coverage.
Flash forward 60 years to the introduction of health insurance exchanges that offer the American population a choice in healthcare providers. In addition to the competitive exchanges, substantial technology advances and easier access to more data are allowing patients to gain more control of their health—not just in the insurance they choose, but their providers and treatments as well.
I believe the future is shifting; patients and insurance companies are actually collaborating to create mutually beneficial outcomes. But first, a significant mindset and strategy shift is needed by healthcare insurance companies to more closely align with auto insurance companies, when it comes to consumer and digital marketing.
Healthcare Allowance
Accenture recently reported that the number of workers who bought health insurance on a private exchange doubled from 3 million to 6 million in 2015, and is expected to double again in 2016 to 12 million. Employees still have a 60-year engrained expectation of some kind of health care provision for employment, so at least in the short term, I see employers offering a set amount of money for health care to their employees to choose their own plan. Sort of like a 401k for health insurance. This shift will be easier for the consumer who already expect and increasing level of control than health insurance providers.
Creating an Amazon-like Experience (Or Just Put Your Plan On Amazon?)
We don’t yet buy our insurance on Amazon, but the same study uncovered that 25 percent of the population would be open to it. My guess is that if you polled only Millennials that percentage would be even higher. There’s no denying that many private plans are now purchased online—and likely via mobile screens—so the faster healthcare insurers can adopt this mindset, the faster they will gain market share. Take it a step further—those that can not only master digital marketing, but also incorporate consumer data and analytics—will be lengths in front of the field.
A Trusted Advisor Role Opportunity
If you’ve ever undergone surgery or spent a night in the hospital, you know that navigating insurance claims is often complicated enough to make even the Dalai Lama frustrated. Nothing is more memorable than good customer service – except, perhaps for poor customer service. Providers will need to take a more retail approach to motivate and empower their staff. With customers at the center of care, insurance providers must re-evaluate and ensure they have customer-friendly policies and train their teams to deliver first-rate customer service skills that personalizes their customer experience.
New Business Model Required
This shift from a B2B to B2C focus requires companies to take a step back and look at their overall business strategy. Selling to individuals or groups of individuals versus working directly with companies likely means they need to consider an entirely different business model. They need to shift from a focus on companies to one focused on personalization, tailoring toward an individual’s health interests. Insurance providers need to determine what is important to their new audience and where can they can get the right information so they can deliver.
The evolution toward direct-to-consumer insurance plans gives insurance companies the opportunity to step into the role of the patient’s trusted advisor. Or, perhaps a better description might be a trusted navigator. Those insurance providers who develop the digital marketing strategy, leverage consumer data and create effective customer service teams will help lead the charge and quickly differentiate them from their competition. This personalized service will be critical to long-term success of insurance providers.