Health Care Reform: Insurers With the Best CRM Will Win

Health care reform is moving forward, as new laws promise to transform the $2.5 trillion U.S. health care system and extend coverage to 32 million Americans who are currently uninsured. But when it comes to managing customer relationships, will health insurers be left behind?

Forget, for a moment, the millions of dollars that insurance companies spent trying to block the overhaul, the potential increase in costs they may face, or potential restrictions on their rate hikes. Instead, let’s focus on what few insurers seem to be discussing: The enormous influx of new customers, and how to best capture and retain them, as health insurance coverage becomes mandatory as well as more affordable.

Health Care Overhaul: Market Opportunities and Risks

According to Geoffrey Moore, author of Crossing the Chasm, the proportion of profitability to market share is exponential. Meaning that if four companies control 25% of the market and generate a 10% profit margin, but one company controls 50% of the market, then that one company’s profitability will be substantially higher than the competition.

That creates a new market opportunity for health insurers, and likewise a risk. Accordingly, it’s time for insurers to act like organizations that actually need to sell and support a product, or in their case a plan. That’s going to require bolstering their customer service capabilities to handle the increased volume, and ensuring that agents position all of their new products correctly.

Greater Market Share = Better Member Services

Advanced customer relationship management practitioners, in other words, can capture an outsize part of the emerging market. This creates opportunities, for example for Innoveer client EmblemHealth, to increase its membership, as well as improve its market share versus its rival, Empire BlueCross BlueShield.

Of course, like many health insurers, these organizations are not-for-profit entities, meaning that the market-share discussion isn’t about profitability. Rather, these organizations have the opportunity to sign more members, which would provide them with more money to invest in customer care, satisfaction, additional wellness programs and similar capabilities.

In other words, it gives them an opportunity to better serve their members.

Give Members More Control

From a sales and marketing standpoint, health insurers must ensure they properly target the millions of people who will likely be shopping for insurance plans. This starts by having proper segmentation and targeting, to design optimal products and attract the best customers.

But to succeed, insurers must go further, and find new ways to become more member-centric. Speaking at the 2010 World Innovation Forum last month, Jeff Kindler, chairman and CEO of Pfizer, argued that with Baby Boomers becoming increasingly reliant on the health care system as they age, insurers must deliver better customer health care experiences.

One great starting point is to focus on customer service, since health insurance service levels leave room for improvement. Granted, health insurers are getting better, according to the American Customer Satisfaction Index, developed by the University of Michigan, which periodically measures consumer satisfaction with products and services. Some health insurers are even winning plaudits.

Steps to Customer Service Success

But to properly capture, serve and retain the millions of new customers that the health care overhaul will soon be delivering to them, the majority of insurers must still focus on becoming more member-centric. That starts by improving these five areas:

• Call center processes: Rather than devoting customer service groups to different functional areas (corporate, government, dental), insurers must retool to provide a single, complete view of any individual’s benefits.
• Data consolidation: Likewise, insurers must improve their links with partners and overhaul their online portals to provide customers with a single location for reviewing their benefits, as well as self-service.
• Organizational structures: Supporting a greater number of products and customers may require revisiting call center capabilities, for example to support more sophisticated call routing.
• Member-centricity: To combat the sorry state of member satisfaction, insurers must find new ways of becoming more member-centric, for example by training call center representatives with the proper attitude and approach, and providing CRM systems that provide them with a complete view of a member as well as their requirements.
• Product proliferation: Just like high-technology firms, which constantly iterate products and bundles, health insurers must manage product proliferation to prevent confusing salespeople, group plan administrators and individuals.

Insurers that excel at member service will continue to attract more customers and build their bottom line, enabling them to make their services even better. Conversely, health care insurers that fail to distinguish themselves to the millions of new customers could face irrelevance, declining market share and even corporate end-of-life issues. In short, insurers that want to succeed face their own mandatory reforms.

Learn More

The best strategy for health insurers to capture new customers is to get more member-centric.  In this respect, handling the post-reform customer influx looks a lot like what’s required to support the consumer-directed health (CDH) plans. See our white paper, Planning for CDH Success, for best practices about how health insurers can better target health plan groups as well as individual members with better product combinations, service and support.