The Great Disruption: Commoditization of Health Plans

It was clear that health insurance carriers attending AHIP Institute 2015 this past June in Nashville had the same end goal: devise ways to more efficiently and effectively engage the consumer in their health care. This was easier said than done considering the overall perception of insurance carriers isn’t a great one in the mind of Americans. But it is more important than ever as public and private exchange disrupt distribution channels and offer consumers more choice, resulting in the commoditization of health plans.

However, insurance carriers do have one thing going for them – consumers don’t want the cheapest health plan. So how does a carrier stand out as the preferred provider and gain the trust of consumers? Here are a few pointers Benefitfocus Director of Marketplaces, Shandon Fowler and Enterprise Architect Tom Dugan shared during their session, “Beyond Private Exchanges: What Companies and Individuals Really Want from their Benefit Programs.”

Build your brand

Health plan providers have never had a direct relationship with consumers, so that trust isn’t there. They could stand to take a page from the playbooks of property & casualty (P&C) insurance providers who’ve gone directly to the consumer. Think about the television ads you see from Allstate, Nationwide and Liberty Mutual to name a few… they all present situations that are relevant to the consumer. There is also a culture difference here. P&C insurance providers take every opportunity to engage with their members and prospective members. For example, when someone experiences a car accident and has to call the other person’s insurance company, that is an opportunity to convert the caller to a customer.

Go deep with the power of data

A private insurance exchange can be more than just a place for carriers to sell health plans; they can actually be a holistic strategy to engage members on a deeper level. Carriers need a private exchange with system-level design principles that take the entire customer journey into account and give them the ability to use their massive data sets to deliver a superior member experience. Claims data in particular is something that can be used to engage customers during each connection point. Think about it… most life events – birth, marriage, divorce – are critical points in an individual’s life. If a member calls to make a change to their benefits, having a personal conversation with them about the life event they’ve just experienced is going to make a long-lasting impression.

Enter the era of personalization

Enrolling in a health plan is a big decision, and the wrong one can result in significant financial distress on the individual and their family. For years, consumers were making health plan decisions largely blindfolded. There were no online risk profiles that showed them their past claims and costs or helped them plan for the future. Now, carriers can create a personalized experience via technology that uses data and behavioral science to provide the consumers the decision support they need to make the best health care decisions. The more transparency they have, the more likely they are to trust their provider.

Commoditization of health plans through private exchanges is giving insurance carriers the opportunity to transform individuals from health care utilizers to health care consumers that are empowered with choice and seeking guidance. Complementing engagement with exceptional service and relevant, personalized experiences will be the keys to customer loyalty and increased market share.

Learn more about how scalable private exchanges enable insurance carriers to tailor experiences to meet a wide range of customer needs and expectations.