April 3, 2020
The impact of a first impression is inescapable. Reams of research confirm that a first impression can be both lasting and hard to reverse, with one study presented by Psychological Science finding a tenth of a second is all it takes to start determining traits like trustworthiness. Meanwhile, quickly securing the confidence and trust of new plan members is an increasing concern for insurers. As our recent article, The Medicare Advantage Switch Hit demonstrates, the number of members who shop around and ultimately switch plans during the newly extended enrollment periods is growing.
While the lowering of hurdles to switching is raising eyebrows for health plans, any investment in shoring up member retention has a big potential payoff. According to research from global consulting firm L.E.K., a typical Medicare plan may be able to increase revenues by 12 percent in two years by reducing the annual disenrollment from 18 percent to a best-in-class rate of 10 percent, and, according to Harvard Business Review, increasing customer retention rates by 5% increases profits by 95%.
With such potential gains at stake, promptly establishing and then continually reinforcing a good impression with new enrollees is more crucial than ever.
The current focus on member engagement is a positive step toward building relationships that promote retention. Recent research from McKinsey on healthcare consumerism found that, “Consumer engagement has become increasingly important for all healthcare industry stakeholders. Both payers and providers are now evaluated through rating systems that incorporate customer satisfaction, giving them a strong incentive to enhance the consumer experience.”
Engagement and retention work together as a self-reinforcing cycle. Satisfying experiences that increase plan trust and loyalty encourage reenrollment, which provides more opportunities for positive experiences, and round and round. But before this cycle can begin, a first enrollment must be successfully accomplished. That requires thoughtful and personalized member onboarding.
Once the selection of a plan has been made, and enrollment accomplished, the first contacts between a health plan and the new member will set the tone for the rest of the relationship—positively or negatively. Healthcare Financial Management Association (HFMA) calls this the “golden hour” of onboarding; “One of the most powerful lessons health plans have learned is that the ability to engage quickly and effectively with new members is a critical factor for a plan’s success. There is a crucial window of opportunity when new members join a plan.”
Customer engagement company, Relay, says “When a member enrolls in a new healthcare plan, they are naturally the most engaged and open to learning about their coverage. It’s the most opportune moment for health plans to set a standard of communication, drive adoption of digital tools, and make a great first impression.”
Support software company, Groove HQ says, “Onboarding isn’t just about your product or service. It’s about the entire experience of doing business with you.” The company also sees these first plan-to-member contacts as the launching point for a successful relationship:
“For most businesses, there are two key milestones that need to be reached before a customer can reach their full value potential:
For most payers, the health insurance ID card is their first ambassador through the door. Even a 2×3 inch card and accompanying letter offers plans an opportunity to make that positive first impression and deliver a first success for the member. One of the keys to accomplishing that first success is personalization.
Have you ever received a piece of mail addressed to “Occupant?” That’s the definition of a message that lacks personalization. When you’re talking about healthcare, the importance of relevance multiplies, e.g., just having lungs doesn’t make you a candidate for asthma treatment.
Receiving irrelevant or overly general information from any healthcare stakeholder is a red flag to many consumers. As McKinsey advises, “Both payers and providers should consider how they can better meet the needs of specific consumer segments through personalized information, delivered when, how, and where consumers need it.”
Even minor personalizations can make a big difference. Dale Carnegie famously said in his book How to Win Friends and Influence People, “Remember that a person’s name is, to that person, the sweetest and most important sound in any language.” Since Carnegie’s time, his belief has been backed up with proof across disciplines.
Marketers are applying this maxim and consumers are taking notice. Statistica reports that 90% of U.S. consumers find personalized content to be very or somewhat appealing, research by salesforce.com found that “more than half (52%) of consumers are somewhat likely to switch brands if a company doesn’t make an effort to personalize their communications to them,” and in a new report from SmarterHQ, “72% of consumers say they now only engage with marketing messages that are personalized and tailored to their interests.”
Personalization can even shift a member’s attitude about the role health plans play in their care. The Healthcare Financial Management Association advises that “Personalized outreach helps a health plan build a deeper bond by positioning itself as a true partner in improving the member’s health.”
The ability to introduce your plan and brand via a full-color health insurance ID card affixed with stickers, labels or interactive QR codes that speak to the member’s specific needs, and that are accompanied by a personalized letter or welcome guide, immediately communicates that you know who they are, and are already interested in working with them one-on-one as a health partner.
When most people think about their experiences with health plans, the first words that come to mind are typically not easy, friendly, or straightforward. Establishing your plan as being committed to helping the member navigate the complexities of healthcare will boost their satisfaction, loyalty and ultimately, retention.
Even in the first mailing of the health insurance ID card, plans can showcase the benefits of the plan and how easy it is to do business with the company. You can provide mobile delivery of ID cards and plan benefit information through a mobile app so that even if the member doesn’t have the card in hand, they can receive services and review health plan information anytime and anywhere.
Offering personalized versions of health plan communications can even help members with plan benefit comprehension. This is important because a 2019 consumer study conducted by UnitedHealthcare revealed that only 33% knew the correct meaning of the term “out-of-pocket maximum” and only 21% knew the correct meaning of the term “co-insurance.”
According to the study published by Hubspot “another reason we prefer personalized experiences is because they help reduce information overload. Or, more precisely, personalization can help reduce our perception of information overload…you aren’t presented with thousands of resources to sort through and consume. Instead, you are — ideally — presented with exactly the information you were looking for. Hence, you never feel “overloaded” with information.”
Another opportunity plans have to secure future retention during onboarding is to identify the member’s communication preferences. Managed Care Magazine notes, “Some prefer an email or a phone call. Others respond better to a traditional mailing. Knowing the communication preferences of members is akin to speaking to them in a language they understand and can be crucial to making a genuine connection and facilitating the desired clinical outcome.”
Alerting the member to the availability of a plan health portal during onboarding can delight the growing percentage of enrollees that prefer to communicate digitally. Gartner predicted that, “by 2020, a customer will manage 85% of the relationship with an enterprise without interacting with a human,” and Harvard Business Review found that “Most health plan members indicated that if a transaction can be done digitally, that’s how they want to do it.”
Most importantly, member satisfaction is improved when they are given a choice of channel to use. According to an IDC survey on customer channel expectations and preferences, 71% of respondents indicated that it is important to communicate with a company using their preferred channel.
Putting in the effort upfront to ensure plan loyalty for a renewal decision a year away is a solid strategy. Harvard Business School research estimates that healthcare payers who personalize the member experience could also see five times higher retention rates, extending the value of personalization far beyond the immediate financial impact. Relay found that members who went through a personalized onboarding experience are 30% more engaged and 21% less costly than those who did not.
Optum sums it up, “As health plan competition heats up, so too are consumers’ demands for convenience and value. Innovative health plans are therefore focusing on the consumer experience to keep costs low and differentiate themselves in the marketplace with these types of strategies.” If your focus is on improving member retention, putting out the engagement welcome mat during onboarding with an enhanced health insurance ID card is the smart play.