Baby Boomers Drive Health Plan Innovation

The long-anticipated flood of Baby Boomers into the Medicare market is underway and health plans are benefiting in the short term from the influx of new members to Medicare Advantage plans. But more aggressive health plan innovation will be necessary to meet the needs and expectations of these digitally savvy “silver surfers” and to develop long-term member engagement capabilities that will enable the data-driven future of digital healthcare.

The Silver Tsunami is Here

The Baby Boomer generation, born 1946 to 1964, was at the time the largest generation the US had ever seen. In 1964, the last year of the baby boom, there were nearly 72.5 million people in this cohort.

While the arrival of this generation at retirement age is no surprise, many of the preexisting assumptions about them have come up against their unique characteristics as health care consumers and the reality of today’s health plan market.

First, Baby Boomers are not a monolith. A Deloitte analysis, Understanding the next wave of Medicare enrollees, points out:

“A Boomer born in 1946 is very different from one born in 1964. Many researchers describe two groups within the Baby Boomer generation: ‘leading-edge’ and ‘trailing-edge.”

Health plans that have been interacting with leading-edge enrollees are finding they need different strategies for targeting, attracting and engaging the trailing-edge segment.

Plans needs to act quickly—Accenture estimates that “An average of 10,000 people turn 65 and become newly Medicare-eligible per day and the total number of people eligible for Medicare is projected to grow to 80 million by 2030.”

Health plan innovation to adapt and adjust to the needs of this second wave should be a driving force for the next decade. In a recent survey of health plans by health care intelligence firm Sg2, 78% of respondents expected moderate to significant Medicare Advantage (MA) growth in their markets over the next 10 years, but only 27% listed MA as a top strategic concern. Understanding the unique characteristics of the trailing-edge enrollee should be job one for payers.

Not Your Grandmother’s Grandmother

Silver surfers are people aged 65 and over who use digital in their everyday lives, in some ways outstripping younger generations in their extent of use according to Accenture:

Serving the senior audience is not just about larger fonts or bigger buttons; they expect to communicate digitally with their healthcare providers. Accenture’s survey found that, “Most report that digital health capabilities like electronic prescription refill requests (66 percent), email or text reminders (53 percent), online appointment scheduling (49 percent), and secure email communications (46 percent) would make them more likely to select a provider.”

The trailing-edge seniors are actually on the leading edge when it comes to adopting health technology, according to Deloitte:

Accenture, in their white paper, Baby Boomers Demand Digital Medicare Now found that, “Among health technology users, Americans age 65 and over are now the most likely to have used electronic health records in the last year… the most active in managing their health… interested in the latest in digital health technologies like virtual health… and are also open to using an artificial intelligence doctor.”

There is a powerful benefit to health plans increasing their share of digital new-to-Medicare consumers: they may be healthier. Accenture research shows that, “among new-to-Medicare consumers and already-65 consumers, those who place importance on technology in managing their health are more likely to do things that help keep them healthy, such as track physical activity, monitor blood pressure and monitor cholesterol.”

Learn to Speak Their Language, or Else

Whether it is the myth of the tech-averse senior or lack of digital channel adoption thus far by leading-edge Medicare Advantage enrollees, health plans are falling behind in providing satisfying digital member communications.

A JD Power study found that:

“Member satisfaction with the information and communication from their Medicare Advantage plan has declined significantly (-16 points) from last year, and is now the lowest-scoring factor in the overall health plan experience.”

This dissatisfaction can be a warning for health plans in a Medicare Advantage market where members have a choice of provider and, as Forbes advises, “Tech-savvy consumers are willing to change their provider for a better digital experience.“

A study from health action provider HealthMine surfaces some of the reasons for member’s dissatisfaction with digital plan communications.

First is the disconnect between seniors’ appetite for digital engagement vs. the current reality, “Forty-seven (47) percent of all respondents prefer digital communication with their plan compared to 34 percent actually receiving communication digitally.”

In addition to method, the frequency of communication is also lacking. JD Power found that, “Aside from opportunities with member onboarding, fewer members recall receiving even one communication from their health plan in the past year.”

Another source of frustration is the lack of personalization in communications from MA health plans. HealthMine found that of respondents, “75 percent said that incentives provided are mass oriented, or similar incentives and recommendations to the entire population:”

For health plans, failing to market to and engage members about to age-in to the Medicare Advantage market can have serious financial consequences. Accenture warns that:

“In a competitive environment where each new Medicare Advantage member is worth close to $11,000 in government premium reimbursement per year, improved marketing performance can mean hundreds of millions in revenue increases for health plans over time.”

Deloitte encourages segmentation as “an important tool to help health plans tailor messages, channels, and other tactics for customer acquisition and engagement… Developing deep insights to help understand how to tailor messages to capture this consumer segment will likely be critical.”

Accenture recommends, “When asking questions such as ‘What are the newest digital tools and applications we can use to attract patients?’ and ‘What technology do we need to enable the right interaction with patients?’ health plans should consider focusing on customer engagement and experience using the same principles that successful, customer-driven businesses use.”

Engagement Feeds Innovation

Having digitally savvy Medicare Advantage enrollees offers significant advantages for plans as they prepare for the future. Deloitte predicts, “By 2040, health care as we know it today will no longer exist. There will be a fundamental shift from ‘health care’ to ‘health.’” Deloitte expects this future state will be, “driven by greater data connectivity; interoperable and open, secure platforms; and increasing consumer engagement.”

Efforts health plans are making today to increase digital engagement with members will fuel the health plan innovation of tomorrow.

Using data gathered via digital channels for targeting and personalization allows health plans to deliver relevant content and to establish the plan as a valued and respected resource.

Already comfortable accessing plan documentation, ordering prescription refills, paying bills, and making appointments online, silver surfers are predisposed to sharing the private health data that will power analytics, artificial intelligence systems, chronic condition management, and health risk assessment.

In fact, according to Deloitte’s research, “70 percent of people nearing Medicare age report going online to perform at least one health activity in the last year…” and “62 percent of people nearing Medicare age say they would be willing to share key health information from mobile devices (including wearables) with their health insurer.”

Collection and sharing of individual health data are rapidly being normalized via such wearables. A Stanford University Health Trends report emphasized that, “The popularity of wearable devices, such as pedometers and heart rate monitors, is exploding… Among consumers, fitness bands are the most popular type of wearable, and people cite health as a top motivator for using the new wearable technologies.”

As mentioned earlier, Medicare Advantage members want their health plans to take a more proactive approach to helping them manage their own health and healthcare costs and therefore see the sharing of individual health data as a reasonable price to pay for personalized incentives.

Deloitte sees the potential of such engagement for patient activation, i.e., the level at which a patient is activated in her own care: “Health plans can use predictive analytics to identify those most at risk for disease or disease progression, especially for the highest-cost chronic conditions. Moreover, patient-activation scores can help health plans understand where their members fall along a spectrum of activation in their health care… Patient activation and health literacy have been shown to enhance decision-making, healthy behavior, and self-management of chronic conditions.”