If Einstein was right that the definition of insanity is doing the
same thing over and over again and expecting different results,
then those of us involved in the marketing of consumer-direct
health plans (CDHP) should be taking some serious medication.
CDHP represents a radical departure from traditional managed-care health plans, and we
are foolish to expect that traditional business-as-usual communication strategies will affect
widespread adoption.
Most stakeholders in the health care insurance value chain, including insurance
providers, health care providers, employers and government payers are counting on
consumer-driven health care (CDHC) to change the way health care is utilized and
funded in the United States. Yet little is being done to address the two leading
barriers-transparency and complexity-that pervade every link in the chain of
adoption and utilization.
We interviewed numerous senior executives within the health care insurance industry,
including carriers, brokerage firms, benefits consultants and employers to understand
what they are doing to increase adoption of CDHPs. In this article we will examine the
barriers to adoption and demonstrate how Marketing 2.0 techniques such as
relationship marketing and loyalty programs can change the way employers approach
marketing CDHPs.
Transparency in Cost and Quality
Consumers naturally expect to know a product´s feature
set and price before agreeing to make a purchase. To be
true consumers of health care goods and services,
employees need reliable information about the
comparative prices and quality of those goods and
services. But such information is only beginning to
be available to health care consumers. Until the
cost and quality of health care are more
transparent, true consumerism cannot take
place, and consumer-directed health care will
not fulfill its potential to reduce medical
costs.
Many carriers offer Web-based costestimator
tools. These tools produce cost
figures based on averages in the member´s
region. Some carriers, such as Trustmark,
have augmented cost-estimation tools with
suggestions for alternatives to surgical
treatments. But no matter how robust the
cost-estimation tools become, they cannot
deliver end-cost figures, and thus provide
only modest capabilities for a member to
intelligently shop for his or her health care.
But transparency is not only a matter of
cost. Patients with traditional managedcare
plans are accustomed to making
provider and therapy choices based on
quality, not cost. For this reason, price
transparency alone will not be enough to
facilitate consumerism. According to Kirk
Pion, executive director for consumerism
initiatives at Blue Cross Blue Shield of
Illinois, quality transparency actually may
be easier to achieve than price
transparency.
Aetna is testing a cost- and qualitytransparency
with a tool called Aetna Navigator,
which provides both cost and quality
comparisons at the hospital level and
enables members to manage accounts,
view explanations of benefits, and even
compare pharmacies. The promise of this
tool comes close to delivering the
information that members need to make
intelligent, consumer-directed decisions
about their health care choices. Employers
should begin to require this level of service
from their carrier at renewal time.
Complexity Barriers
According to industry executives,
another important barrier to CDHP
adoption that affects employees and
employers alike is the sheer complexity of
the plans. CDHP enrollees soon learn that
managing their own health care involves
more personal -Üoverhead" than their
traditional managed-care plans did. For
example, employees must submit receipts
for tax purposes and save their records in
the event of an IRS audit.
In addition, health savings accounts
(HSA) must be set up, often through a
fiduciary partner separate from the
insurance carrier. Many executives we
interviewed for this study reported that a
large percentage of HSA customers
actually fail to set up their savings account
and end up with little more than a highdeductible
plan.
In other cases, employers are not even
giving employees the chance to determine
whether CDHPs are appropriate for their
situation. Beth Bierbower, vice president of
product innovation for Humana, notes that
some employers are so concerned about
their employees´ ability to navigate the
complexity of CDHPs that they decide not
to offer the product at all.
For those companies that make the
choice to offer CDHPs, the decision
involves both a health care and a financial
learning curve. It´s not unusual in the
CDHP evaluation process for employers
and employees to begin to raise questions
about the tax implications of certain
products-questions, that for liability
issues and even due to brokers´ lack of
knowledge, their brokers are unable to
answer.
Cheryl Lamont, director of growth
initiatives for Assurant Health, states that
tax questions are often among the first
questions that carriers receive, and they
often are left with few options besides
referring the person to his or her personal
tax adviser. This unfortunate void in
information undercuts the credibility of the
carrier, leads to lower enrollment and
results in fewer HSA enrollees who actually
set up their accounts.
Finally, employees have been so thoroughly
insulated from true medical costs
that representatives of several carriers cite
the widespread impression among consumers
that the cost of their co-pay is the
cost of the office visit or medical procedure.
An uneducated consumer does not a good
CDHP customer make.
For these reasons, the CDHC product
requires a greater commitment to education
and communication than traditional
products. In addition, the small number of
CDHP enrollees at medium to large employers
can make a serious educational effort
cost-prohibitive for carriers and brokers.
It is becoming increasingly apparent that
the role of employee communication and
education must be assumed by the
employer if it is to succeed.
Marketing 2.0 -" Relationship
Marketing
One of the most profound evolutions in
marketing strategy over the past seven
years has been the rise of relationship, or
dialogue marketing. In many ways,
relationship marketing reflects a return to
the role the 19th-century corner general
store proprietor enjoyed with his customers.
He knew all his customers by name and
product preference, and could anticipate
their unique needs. Relationship marketing
(RM) is a turn away from big brand
mass marketing and its generic message
to a faceless mass-market customer. RM
develops targeted messages and interactive
dialogue based on individual customer
profiles.
The principles of RM are as valuable for
internal communication as they are for
external marketing, and employers looking
to take responsibility for communicating
with employees around the benefits and
challenges of CDHP would do well to
consider an internal campaign strategy. RM
starts with a strategic phase. The phase
involves a three-stage process of:
n Segmentation
n Targeting
n Positioning
Segmentation
Segmentation is based on the assumption
that not all employees are created equal. In
fact, employees can be grouped based on
several types of characteristics, such as
demographic (pay grade, company tenure,
educational level), attitudinal (confident,
suspicious, fearful) or psychographic (early
adopter, pragmatist, conservative, laggard).
Some of the data needed to develop
appropriate segments can be determined
from internal HR sources; other data can be
gathered through surveys. The goal is to
develop several fairly homogeneous
groupings of employees that will respond
similarly to message stimuli.
Targeting
Based on the segmentation exercise, the
second step is to pick which segments will
be the most important to enroll early in the
process and which segments can wait. This
step is called targeting, and it forces the
employer to be disciplined in how the
internal communication budget is allocated.
Targeting involves clearly articulating
the unique profiles and characteristics of
these priority segments, including
strengths, needs and fears.
Positioning
Once the target segments are selected,
then the employer can focus on the creative
aspects of positioning. Positioning is the
process of creating key messages that are
designed specifically for each employee
segment. Employers create customized
messages that are relevant and compelling
for employees based on the unique segment
profiles. These messages are tested with a
representative sample from each segment
and revised as necessary before being
handed to the creative team.
Design Phase
The design phase of an internal communication
campaign is when the key
messages are transformed into creative
collateral that is delivered to employees
based on their segmentation profile. For
example, young single employees may
receive a brochure with different content
than a middle-aged employee with
children, and a risk-taking sales executive
may be motivated by a different value
proposition than an inside customer
service representative.
Digital printing technology now allows
for cost-effective production of personalized
letters and brochures. This enables
employers to deliver compelling and
insightful employee education that is
targeted at the needs and concerns of
each individual.
Evaluate and Evolve the Process
Finally, after the communication plan is
executed, it´s important to track, measure,
evaluate and evolve the process. This
involves evaluating the success of the
program by looking at quantitative data
(number of enrollees, utilization levels,
renewals, etc.) and qualitative (survey
data, referrals, etc.).
In 2002, as Kodak was in the midst of its
transition from film to digital, Paula Dumas,
Kodak´s vice president of advertising, realized
the importance of getting internal buyin
on the need to change the direction of the
company. She started by segmenting the
employee work force into unique role definitions
and identifying specific characteristics
common to these segments. By carefully
picking the most influential group as her initial
target, she was able to quickly get to the
key employee influencers and provide them
with the tools and information they needed
to support the corporate decision to -Üburn
their ships" and embrace digital technology.
Marketing 2.0 -" Loyalty Programs
Each year around Labor Day I prepare a
spreadsheet with my current United
Airlines Mileage Plus balance and my
anticipated travel through the end of the
year. I look at the difference between my
projected mileage balance and the next
elite status level and try to figure out if I
can make it or not. I´ve been known to
make a weekend -Ümileage run" to London
in December to push me over the next tier.
Hence the power of loyalty programs on
consumer behavior.
The goal of CDHP is to modify employee
behavior, but employers are beginning to
experiment with loyalty reward programs
to affect real change. According to an
article published in Colloquy, Virgin Life
Care´s HealthMiles is an example of a
wellness incentive program that rewards
activities such as taking a health
assessment, logging physical activities,
losing weight, or lowering cholesterol.
HealthMiles can be redeemed for gift
certificates at major retailers.
A loyalty program sponsored by Anthem
Inc. has demonstrated a direct impact on
weight loss and exercise, and Vitality, a
wellness program developed by Discovery
Health based in South Africa, offers a
consumer-based wellness program with
redeemable rewards for a range of items
from airline miles to entertainment.
It includes tiered membership levels based
on earning Vitality points.
Employers in the Driver´s Seat
Progressive employers looking at CDHP
products to reduce health care costs and
enhance employee retention need to take a
proactive leadership role in educating and
communicating with employees about
wellness programs and the use of other
health care resources. Because CDHPs
reflect a radical change in the way
employers and employees address health
care, however, traditional ways of employee
education will never be as effective as new
interactive forms of communication.
By using new marketing techniques such
as RM and loyalty programs, employers can
dramatically improve their ability to
increase enrollment and utilization of
CDHC products among their employees.
The results ultimately will lead to lower
medical costs and increased productivity
for the employer, and a better quality of life
for employees.
David Ormesher provides strategic
direction and leadership for
closerlook inc. Ormesher has
taken closerlook from a small,
creative media boutique and
grown it into a recognized
leader in creating innovative
relationship marketing solutions that help clients
relationship marketing solutions that help clients
get closer to their most important customers.
www.closerlook.com; Tel: 312/ 640-3701;
DOrmesher[at]closerlook.com
