Consumer engagement is currently one of the most talked-about topics in healthcare, and not just among marketing or member retention teams. Financial decision-makers are making it a priority as well.
A recent survey from the Deloitte Center for Health Solutions found that consumer engagement is the top priority risk among healthcare organization CFOs, with 58 percent ranking it above other key concerns such as cybersecurity and value-based care. Half of CFOs said their organizations are only moderately prepared to deal with consumer engagement, while 8 percent said they’re not prepared at all.
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Eileen Cianciolo At NovuHealth , Eileen leads product innovation, management and development. She has 25 years of experience formulating and implementing effective products, processes and procedures that drive revenue growth, operational efficiency and productivity in the healthcare industry. NovuHealth is the leading healthcare consumer engagement company, driven to improve consumer health and health plan performance. […]
While this focus from the CFO may seem somewhat surprising, it actually makes sense considering poor member engagement can significantly impact an organization’s bottom line.
The High Cost of Low Member Engagement
As the industry shifts to a value-based care model, providers have a clear incentive to engage with their patients, since in theory they are paid on the quality of their patients’ health rather than the quantity of care given. Engagement is no less important to health plans, and there are a number of reasons plan CFOs should care:
- For Medicare Advantage plans, unengaged members threaten star ratings — and the plan’s financial health. Even if a fraction of members are unengaged, it can mean the difference between a plan maintaining a high star rating and falling back to a level that doesn’t earn quality bonus payments from CMS. Depending on the plan, that could translate to millions of dollars.
- Unengaged members limit accurate risk adjustment. On average, one in five plan members is not accurately risk adjusted. Unengaged members who don’t visit the doctor have not had the opportunity to be fully evaluated for all of their chronic health conditions, and may be coded incompletely or inaccurately. That means members aren’t getting the care they need, and it can also cost millions in risk adjustment revenue for the plan.
- Unengaged members negatively impact retention. Based on data from the Medicare plans that we worked with in 2018, actively engaged members churned at a rate of just 2.5 percent, compared to an 8.3 percent churn rate for non-engaged members. Put another way, unengaged members were more than three times more likely to churn than engaged members. And as financial leaders know, member churn hurts profitability.
- Similarly, unengaged members can hamper growth. Five of the nation’s largest health plans hold a 60 percent share of Medicare Advantage enrollment nationwide, while accounting for 86 percent of total net enrollment growth from 2015 to 2018. This makes it harder and harder for other plans to attract new members. In this scenario, engaging members means giving them fewer reasons to shop around.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Best Practices to Improve Consumer Engagement — And the Bottom Line
Given how significantly consumer engagement can impact a health plan’s bottom line, it’s no wonder it’s a top concern among CFOs. Leading health plans are taking action, leveraging proven best practices surrounding member engagement, such as:
- Prioritizing the healthcare activities that improve member health and align with plan business objectives.
- Focusing on the member populations that will deliver the biggest impact.
- Personalizing the approach to deliver the right message at the right time in the right channel to each member.
- Using optimized rewards and incentives to inspire action and build trust.
- Measuring engagement program performance regularly and adjusting as needed.
Big-name consumer brands such as Starbucks, Target and Zappos have already figured this out. They approach consumer engagement with loyalty marketing and behavioral science best practices, using meaningful incentives and personalized experiences to build lasting relationships.
Today, the rise of the consumer no longer applies only to industries such as retail or services — it now includes healthcare as well. It has been said for years that health plans need to start seeing members as consumers, and as each day passes it becomes more and more true.
In order for both plans and providers to win and be successful under this new paradigm, they need to take a page from the retail industry’s consumer marketing playbook and build member engagement strategies around best practices from brands that have become experts at it. Only then will they be in a position to see consumer engagement as a strategic business advantage rather than an organizational risk.
Photo: FinnBrandt, Getty Images
At NovuHealth , Eileen leads product innovation, management and development. She has 25 years of experience formulating and implementing effective products, processes and procedures that drive revenue growth, operational efficiency and productivity in the healthcare industry. NovuHealth is the leading healthcare consumer engagement company, driven to improve consumer health and health plan performance. Headquartered in Minneapolis, NovuHealth has worked with nearly 40 health plans and served more than 15 million consumers across all 50 states.
