Case Study: Making the Consumer-centric Transformation

COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED.

make an

impact!

Customer Centricity in Healthcare

May 17, 2012

Laying the Foundation

for a Customer-Centric Organization

COPYRIGHT © 2011. ALL RIGHTS PROTECTED AND RESERVED. 2

Today’s Speakers

Elizabeth Glagowski Executive Editor, Strategy

Peppers & Rogers Group

Marc Ruggiano Partner,



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The Case for Trusted Relationships

Peppers & Rogers Group Client Examples

Q&A Discussion

Agenda


The Case for

Trusted Relationships


US Healthcare Spending Leads OECD

Total Health Expenditure, Per Capita (PPP adjusted dollars)

Source: OECD Health Data (database) from Kaiser Family Foundation via http://facts.kff.org/ accessed on February 25, 2012.

COPYRIGHT ©2012 ALL RIGHTS PROTECTED AND RESERVED

http://facts.kff.org/


While Life Expectancy Lags Considerably

40

50

60

70

80

90

Source: OECD FactBook 2010; via www.oecd-ilibrary.org/ accessed on February 25, 2012.

Life Expectancy at Birth, Total (Number of Years)


http://www.oecd-ilibrary.org/




and Consumers Rate the Experience Poorly

Customer Experience Index (CxI) by Industry

Source: Forrester Research, The Customer Experience 2012



Health Visual Definition

a healthy

state of

wellbeing free

from disease

the general

condition of

body and

mind

Source: ThinkMap Visual Thesaurus, 2011


Care Visual Definition

the work of

providing

treatment for

or attending

to someone

or something

Source: ThinkMap Visual Thesaurus, 2011


Consumers Define Health in Many Ways

Source: Peppers & Rogers Group research



Consumer Perception of Today’s Health Insurers




Consumers Describe the Ideal Health Insurer










Customers’ Trust in the Health Insurance Sector

43%

19%

38%

Distrusters Neutral Trusters

Trust




Characteristics of a Trustable Health Insurer

-3

-2

-1

0

1

2

3

Clear/Confusing

Easy/Difficult

Caring/Uncaring

Generous/Stingy

Fair/Unfair

Compassionate/Uncompassionate

Flexible/Inflexible

Helpful/Unhelpful

Believable/Unbelieveable

Effective/Ineffective

Warm-hearted/Cold-hearted

Fast/Slow

Cooperative/Combative

Friendly/Unfriendly

Informative/Uninformative

Reliable/Unreliable

Kind/Unkind

Superior/Inferior

Up-to-date/Outdated

Accessible/Inaccessible

Organized/Disorganized

Transparent/Secretive

Distrusters Trusters




Customers’ Trust for Individual Health Insurers


Variations in Trust Among Large Insurers

Customers’ Trust for Individual Health Insurers

0%

20%

40%

60%

80%

100%

Anthem BCBS United

Healthcare

Aetna Humana Kaiser

Permanente

Re

spo

nd

en

ts

Distrusters Neutral Trusters



Customers Value Trustworthiness


Consumer Willingness to Pay for Trustability

Customers Value Trustworthiness


$12.1

$24.7

$6.4

$3.9 $3.1

$-

$10.0

$20.0

$30.0

Anthem BCBS United

Healthcare

Aetna Humana Kaiser

Permanente

Annual Premium

$B

illio

ns


Peppers &

Rogers Group

Client Examples


Making the Case for Transformation

Expectation Competition Regulation

Consumer choice is only increasing, as they take a more active role in the healthcare decision-making process.

The Affordable Care Act and other healthcare reform is ongoing at both the state and federal level.

Customer expectations from their experiences in other industries has begun to permeate the healthcare industry.


We started by taking the pulse of our client’s organization with a

current state assessment…

• Document

Reviews (70+)

• Working Sessions

• Interviews across

the organization

• Industry

Dynamics and

Trends

• Key

Stakeholders

• Competitive

Landscape

Internal External

PRG analyzed both internal and external factors over a five week period, in order to gain a

snapshot of which areas needed more support and which areas are already further along in their customer centricity journey.


…which yielded a clear picture of where the organization stood and

which areas required additional attention going forward

Consumer/ Outcome-Driven

Integrated 1to1 Enterprise

Consumer/ Outcome-Sensitive

Sales Operations

Health Care Services

Communications

Product/ Process-Driven

Co

nsu

me

r C

en

tric

ity M

atu

rity

Sp

ec

tru

m

Risk Finance IT HR

Group/Division

Illustrative


Market Research yielded key insights about attitudes and motivations

regarding Health Insurance and Health and Wellness…


…as well as insights into which new products and services would

consumers be most interested in if offered by their health insurer

Illustrative A new product concept

survey was conducted

with members of the

client’s internal online

community, evaluating 6

new product concepts

Research revealed that if

any one of the product

concepts that were part

of the survey were

offered, members were

more likely to consider

the insurer as a partner in

their health and wellness,

with results of increased

partnership ranging from

22-39%, depending on

the product


Branding, while not historically a huge focus area for health insurers,

has now come to the forefront in today’s environment

By answering

these three

questions, we

were able to

help our client

undertake a serious look at

their branding

strategy


Our branding approach consists of 3 key steps that inform the

branding recommendation that we ultimately make for our clients

•3rd party research was used to understand what terms customers associated with the company

•Research provided guidance about where work was needed in order to improve brand perception

Brand Perception

•Competitive Analysis provided insight into which brand positions were cluttered and which were “untapped”, providing insights into potential areas of opportunity from a branding perspective

Competitive

Analysis •Underlying needs emerged via market research

•Understanding which needs are common, shared and differentiating helps determine channels and messaging used for branding

Needs Research

With the keys to branding firmly in their grasp, our clients are well positioned to better organize the

firm’s operations to help deliver on these brand promises


Our 3D Segmentation methodology serves as the tool to gain a more

robust, holistic understanding of who the customer is


Integrated Customer Segments are depicted with personas to help

make the segment more tangible for the organization

• 29 years old on average

• 61% female

• High level of employment (83% fully

employed)

• High income level (52% have higher

than $95 K household income)

• 76% have earned a Bachelor’s degree

or greater

• She spends less time on average

relative to her peers in other segments

reading about health and wellness

Needs and Behavior

• This segment is defined by their active, on-the-go lifestyle and

attitude towards their health and wellness.

• Their busy lifestyle and overall high levels of health means that

this segment utilizes their health insurance benefits only

minimally.

• When this segment does have the need to interact with their

insurer, they prefer to do so via an app or a mobile website. And

would prefer to avoid having to speak on the phone with a CSR

• Young and Mobiles secure coverage from a health insurer most

often to provide coverage in the event of a life-changing event

Value

• As this segment pays a relatively high monthly premium and only

utilizes their benefits on a few occasions per year, this segment is

considered to be a high value segment, which on average

contribute $922 annually towards gross margin

Young and Mobile

Illustrative


Mapping existing processes from a member’s perspective highlights

experience improvement opportunities

No

Yes

A

Denial Letter: An application rejection notice is gets sent to applicant

Mail (Out)

•Acknowledgement letter

Mail (Out) [7 days after application]

An application receipt acknowledgement letter is sent within 7

days

Verification contacts are made with all Medicare Advantage applicants (One verification

call followed by one letter and two more calls)

Eligible?

Welcome Pack: •Confirmation letter •EOC •Summary of benefits •PHI opt-out info •Provider directory •Pharmacy directory •Formulary •Advanced directives •Mail-order pharmacy info

Mail (Out) [Within 10 days of

effective date]

New Member Socials: •They kick off on 1st of Feb

In Person (Out)

Welcome Call: •Make sure member received everything that’s been sent •Answer questions •Great retention tool to keep member from switching in the January change period •Let member know that she can give permission to speak on her behalf by sending a letter •Verbal permission is good only for 14 days •Tell about:

•client-medicare.com •Customer service #

•Billing information

Phone (Out) [Approx. 30 days after effective date]

Facets/SalesLogix

D4

Welcome Call

•ID Card

Mail (Out) [Before the effective

date]

Health Risk Assesment (HRA): •Mail includes directions about how to do the HRA online or using customer service

Mail (Out) [???]

Health Risk Assesment (HRA): •If member doesn’t respond then call them to complete the HRA •CMS requires HRA to be compeleted within 90 days of coverage

Phone (Out)

Member doesn’t complete the HRA.

•Member completes HRA

Mail (In)


Phone (In)


Web (In)

Healthcare Handbook: •When the member completes the HRA, she receives a Healthcare Handbook •The handbook is positioned as an incentive

Mail (In)

D5

HRA Data

Care Advance

Quarterly Newsletter •Originally a compliance tool •Moving away from product newsletter towards a “Medicare” newsletter •May need separate versions for Med Adv. vs. Med Sup.

Mail (Out)

client-medicare.com: •BlueAccess •Personal Health Manager (PHM)

Web(In/Out)

Medical EOB •Sent after every claim is made

Mail (Out)

MEDai Facets

Automated preventive calls: •Annual exam and flu shot reminders •Gaps in care reminders based on analytics •Scripts are tailored for different seasonal initiatives

Call (Out)

Nurses reach out to members to enroll them in DM or CM programs

Call (Out)

Care Advance

Claims, current conditions, data from HRA, demographic data and other

3rd party data about the member are used to identify gaps in care and members may be referred to DM or

CM.

EOB for Medicare Part D •Sent monthly to members who subscribed to the MAPD program

Mail (Out)

•Sales agent try to call within 24 hours •They first try schedule home visit •If individuals don’t take the home visits they intive them to information meetings

Phone (Out)

•During peak periods (Q4 and Q1) call center agents ( Dial America) •At othe times sales agents take the inbound calls •They first try to schedule home visit •If individuals don’t take the home visits they intive them to information meetings

Phone (In)

Did prospect

take a face-to-face

meeting?

Did prospect

give consent to

receive enrollment

kit?

Enrollment Kit: •Summary of benefits •Automatic bank draft form •Application form •Rx drug coverage •Education material on PFFS plans

Mail (In)

Face-to-face sales call

Broker or Captive Staff (Out)

Yes

No

A

Yes

Prospect applies

D3

Application Data

D2

Pre-Sales Call

client contacts prospects who

provided consent for calling

•People can apply online at www.client-medicare.com or www.medicare.gov

Web (In)

•People can download, print, complete and mail application forms

Mail (In)

•People can call to enroll by phone

Phone (In)

SalesLogix

•Med. Adv. info (3 mons before age 65) •BRC to get consent to call

Mail (Out)

Dep. of Motor Vehicles DB

Filter out sensitive groups (Tenn rural health, fed gov. or sensitive

broker accounts)

•Prospective member gives consent to receive a call or pre-enrollment kit • Consent expires after 14 days

BRC (In)

BRC is manually keyed in to the

CRM tool

D1

Driver’s License Data

•Med. Sup. info(1 month before age 65) •BRC to get consent to call

Mail (Out)

•Reminder (1 month after age 65) •BRC to get consent to call

Mail (Out)

•Community events •SCHIP meetings

In Person (Out)

Direct Mail Marketing Campaigns: •They target ail individuals older than 65 •Use both internal and external data

Mail (Out)

Newspaper ads

Print (Out)

Medicare CRM Tool

•Welcome to Medicare (6 mons before age 65) •BRC to get consent to call

Mail (Out)

http://www.bcbst-medicare.com/



http://www.medicare.gov/


Redesigning the critical onboarding phase yielded member experience

improvements, insurer cost savings, and greater employer satisfaction

Pre Enrollment Enrollment Post Enrollment

Contact Us 1

Posters, postcards, that ask member/prospect to call a consumer advisor

with any question or experience BCBSX Blue

Access with online demo

Call a

Consumer

Advisor

4

Call a consumer advisor with questions about

plan, general insurance questions, etc. For

existing members we use as a chance to path them into wellness or

disease mgmt.

Online

Demo

3

Provides an overview of insurance 101 topics,

demonstration of online tools and resources. For

existing members it provides an

opportunity to “configure your

relationship”

Value

Statement

Existing Members Only: Personalized mailer to thank the member for

their membership, summarize health

activity, point out gaps in care

2 Enrollment

Data Capture (paper)

6

For paper enrollment, modify forms, or provide

an additional form, to enable BCBSX to collect data to communicate

with the member in relevant ways

Enrollment

Data Capture (web)

5

Modify online enrollment to ask a

small number of additional questions to

enable BCBSX to communicate with

them in relevant ways.

Welcome Kit (paper)

7

Redesigned kit focused on welcoming

members, informing them about their plan, referencing EOC and other materials online,

educating about blue perks, and reminds

them to register online

Welcome Kit (email)

Redesigned kit focused on welcoming members,

informing them about their plan, referencing

EOC and other materials online, educating about blue perks, and reminds them to register online

8

ID Card

Mailer

9

Personalized mailer with welcoming tone,

personalized by name, lists family members,

contains location based health suggestions (gyms, hospitals,

clinics,), and reminds them to register online

Configure

Your

Relationship

10

Improved Blue Access Registration Process. This is a key interaction where members can tell us how they want to be communicated with by BCBSX

Welcome

Call

11

Personalized welcome call based on info from online registration process and disease mgmt. / wellness segmentation. Purpose

is to educate, welcome, and help with health issue

Email

Newsletter (quarterly)

Personalized quarterly email newsletter with the standard and personalized content to inform member and provide key messages based on health status

12


A Value Map drives decision making on current and existing services

and offerings by putting customer-based initiatives into financial terms

Using Peppers & Rogers Group’s “Get-Keep-Grow” framework, the map outlines how specific initiatives, such

as decreasing the number of claims, connect to consumer value, and what the appropriate metrics are to measure progress for each initiative

The Value Map utilizes the concept of consumer value to determine the financial feasibility of a consumer initiative Analytical Tool/

Framework

"Get-Keep-Grow” framework

It is helpful when deciding which initiatives to prioritize while giving a rough estimate on possible ROI for taking initiatives through to implementation

Prioritization

Value Map Description


Although based on a fixed framework, the Value Map expands and

flexes continually to ensure that all potential initiatives can leverage it

Illustrative


Why a Roadmap?

Customer Centricity is a journey, not a project… In fact, most client’s journey will take

approximately 24-36 months until they complete the full roll-out and implementation

of the Roadmap recommendations

PRG created a Roadmap to help serve as a compass as our client continues onto the next stages in

their journey


The Roadmap serves as a project plan to guide clients on the

implementation phase of their journey

Duration: The

Roadmap covers a

3-4 year time period

Individual

Recommendations:

Each item is

sequenced based on

the difficulty, priority

and dependency on

other items that must

be completed prior to

focusing on a

recommendation

Legend:

Recommendation

items have been

color-coded to help

easily distinguish

between pilot

programs and full

recommendations


• Support from executive

leadership

• Managing the organizational

appetite

• Handling the resistance that

will crop up

• Involving the support functions

• Communicating with all levels

• Evaluating the business impact

• Separating opinion from expertise

Lessons Learned


Q & A Session






PRG Healthcare Practice Activity

1. Download our white paper on a consumer-centric transformation

• Click on the bottom right button in the presentation screen

2. Peppers & Rogers Group Healthcare Webinar Series

• If you’ve missed any installments in our Healthcare Webinar Series, view the archives at http://www.peppersandrogersgroup.com/healthcare

3. Continue the conversation with Peppers & Rogers Group’s Healthcare experts with our new LinkedIn Group “Customer-Centric Healthcare”

• Join today at http://linkd.in/KPXUv5

4. Follow us on Twitter @PeppersRogers

5. Visit us on Facebook.com/PeppersandRogersGroup

http://www.peppersandrogersgroup.com/healthcare

http://linkd.in/KPXUv5


Q & A Session






Marc Ruggiano Partner

[email protected] +1.203.989.2189 (office)

Tom Schmalzl

Director, Business Development

[email protected]

+1.203.989.2208(office)

mailto:[email protected]

mailto:[email protected]

Health & Medicine

Case Study: Making the Consumer-centric Transformation