IDC Offers Insurance Companies New CRM Vision

IDC Health Insights on Monday outlined best practices for customer engagement strategies to help health insurance companies adopt a semiretail approach to interacting with members or patients.

Health insurers need an integrated customer engagement strategy enabling automated interactions, shared communications, and appropriate transaction and information transparency for the health plan, the provider and the consumer, IDC said.

Payer engagement recently has expanded into social networking and the Internet of Things, it said.

New payer-specific CRM applications will address traditional member claim, enrollment and payment administrative data as well as patient care coordination, behavior, event, mental health, health record and psychographic profile data to drive real-time reaction. The need for such applications is great, IDC said.

Focus on the Customer

“Think of it as the insurance company partnering with the patient to ensure that protocols are completed and that people take all their meds because following the protocols results in reduced readmission rates and healthier patients, so the insurance company saves money in the long run,” noted Denis Pombriant, principal at Beagle Research Group.

“This is not wildly different from a true HMO like Kaiser,” he told CRM Buyer. “The fee-for-service model is breaking down and the HMO model is filling the void, but it needs software.”

IDC’s PlanScape report “Customer Engagement Planning for Payers” outlines customer engagement tactics payers should consider and offers a three-tiered approach, as well as more than a dozen tactics to enable engagement based on the idea that focusing on what matters to customers is the key to long-term success, IDC said.

The Need for Engagement Strategies

Engagement has to happen between consumer and the healthcare outfit, and employers and insurance companies are sometimes bystanders, said Pombriant, who addressed the issue of customer engagement in his new book, You Can’t Buy Customer Loyalty but You Can Earn It.

“Engagement has to be meaningful and about something the customer — the consumer in this case — cares about,” he elaborated. “This could include appointments, prescriptions, tests and much more.”

Driving Forces

A lot of change is occurring in the healthcare industry, which is confusing customers, providers and insurance companies, observed Rob Enderle, principal analyst at the Enderle Group.

That change “increases costs and lowers satisfaction,” and IDC”s effort “is designed to reverse that trend,” he told CRM Buyer.

The Affordable Care Act triggered much of the change, spawning federal and state exchanges through which uninsured individuals could obtain coverage, and spurring the setting up of 23 nonprofit insurance co-ops.

However, health insurance companies are unhappy with the result, and UnitedHealth Group, the nation’s largest health insurer, haswarned that it may pull out of the exchanges after this year because of low enrollment and high usage, which has been expensive for the company.

United HealthGroupreportedly lost about US$475 million on Obamacare-compliant plans in 2015 and expects to lose more than $500 million this year.

“A big problem is that the funding promised to these firms has largely not materialized, so many have dropped to unprofitability,” Enderle said. “Lowering unneeded costs while increasing customer satisfaction through low-cost automated engagement should allow these firms to offset this revenue shortfall substantially.”

Meanwhile, 12 of the 23 nonprofit insurance co-ops established under the ACA hadshut down as of November for various reasons, including underfunding.

Gaining Customers’ Trust

Against this backdrop, insurance companies have to deal with customer churn and a lack of trust from consumers.

IDC’s offering “showcases what healthcare providers need to do to increase customer trust and loyalty,” Enderle said.

“If successful, this should result in a better, closer and more trusting relationship between [companies] that take the advice, and their customers,” Enderle said. “This, in turn, should result in less churn, higher profits and happier customers.”

IDC’s offering signals its expansion “into areas that have not used their services in the past,” Enderle said. “I expect they will attempt to expand into other industries as well.”