If the health insurance market in 2018 could have been summed up in one word, it would have been “disruption.”
It was the year CVS announced its intent to acquire Aetna, and the consortium of Amazon, Berkshire Hathaway and JPMorgan—now known as Haven—stole the spotlight. Add to that the Cigna acquisition of Express Scripts, UnitedHealth Group’s shopping spree and Walmart-Humana speculation.
What partially drove all of this madness is the realization (finally) that healthcare costs too much while providing a consumer experience that rivals airlines during a snowstorm or the Department of Motor Vehicles.
Regardless of it all, the real questions are, “Will anything really change for healthcare consumers?” and “When will consumers finally be fed up?” For the purposes of this article, let’s explore some recent data trends on the latter.
In a July 2018 study conducted by Survata and HealthEdge, 69% of consumers still have faith in the current insurance model, followed by 19% for government-run programs and a distant 12% for retailer-led megamergers like those involving CVS, Amazon and perhaps Walmart. However, millennials aren’t quite as trusting. Why?
In the past, healthcare consumers were largely passive and trusted both providers and health plans to deliver the best care and services, but with consumers paying more for healthcare and expecting cutting edge technology to enable their interactions with service providers, consumers are now more engaged and ready to make decisions.
Who cares what healthcare consumers want?
In addition to value-based reimbursement models and rising consumer costs, millennials—those born between 1981 and 1996—are driving even more change in the industry. According to 2015 U.S. Census Bureau data, millennials numbered 83.1 million and are now the largest age group in the U.S.
Millennials place more value on “the experience” and make choices based on price and service. As millennials grow their buying power as they age, they will pay for more healthcare services out of pocket than previous living generations and the implications of their buying decisions will be greater than today.
In the same July survey referenced above, 45% of millennials desire incentives for healthy behaviors directly from their health plan.”
Millennials rank their health insurers very low in their “ability to communicate via social media and mobile apps,” signaling they want more options through those channels. And, more so than the other age groups, 35% of millennials assign the blame for the high cost of care directly to health insurers.
A recent article by Windham Professionals agrees: “Millennial healthcare preferences focus on service and payment models that incentivize and reward quality care and experiences. Because millennials are digital natives, appeasing them largely means having self-service healthcare management at their fingertips. They crave mobile-friendly online health portals to view medical records and to schedule appointments. They prefer live chat with customer support instead of calling, and they want timely reminder texts and personalized health offers.”
Millennials’ preferences are already impacting health plans as well. Health insurers should carefully consider these statistics, as millennials’ buying power will continue to grow as they age and dominate the industry.
The health plan of the future, redesigned
All is not lost. Another recent study of health plan executives found that “member satisfaction” was the most important organizational priority for 2018. The healthcare consumer is taking the “driver’s seat,” which is forcing health insurance executives to rethink their core objectives and strategies. As best stated in a recent Deloitte article, “Health plans will likely find that they should redefine their value propositions—and create new sources of value and new partnerships—to help steer members to high-value, cost-efficient care outlets with new products, networks, plan designs, and digital health offerings.”
Successful health plans must be agile enough to quickly meet market demands and interact with the healthcare consumer with speed and accuracy. According to a recent McKinsey article, “companies that can learn to understand, guide, and engage healthcare consumers, while inspiring their loyalty, have a significant opportunity to change the healthcare landscape … Greater consumer engagement could help them improve customer acquisition and retention, strengthen brand premium, lower administrative costs, and develop competitive advantages.”
Some innovative health plans are already delivering on improved ways to service customers, including ensuring that members have consistent information in real time about their plan and benefits. Those same health plans are also starting to allow customers to use mobile apps to obtain plan information. Others are working to provide consumers with easy-to-understand information on health plan benefits and prices online before they buy. To wit, according to the 2017 McKinsey Consumer Health Insights (CHI) study, 68% preferred to use a digital solution to shop for a health plan.
What’s more, according to a March 2018 policy brief from healthcare researchers at Rice University’s Baker Institute for Public Policy, “rising costs and changing attitudes about convenience and the ability to personalize life choices are driving a trend toward greater consumer purchasing power and individual responsibility in health care services.” However, the brief goes on to say that “the industry needs some fixes to drive patient empowerment and assist patients who face growing financial responsibility.”
While this data should indicate a shot across the bow for payers, the bevy of mega business moves by traditional payers in 2018 demonstrated they still have time to react to the healthcare-consumerism wave. Only time will tell if 2019 might be a different story.
Harry Merkin is the vice president of marketing at HealthEdge.