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Wednesday, September 21, 2011

Winning the hearts and minds of the consumer – the battle is on!

by Torsten Bernewitz

Two days ago, health insurer Cigna announced a national brand campaign directed at consumers. With the theme “GO YOU” and to the tune of $25 million, national advertising will be on major television and cable networks including USA, CNN, Discovery and A&E. Print ads will appear in publications such as Time, Marie Claire, Family Circle and Runners World as well as online on, and The company has also updated its logo to reflect its focus on individual customers.
Here’s the story:

It can be expected that this initiative – though certainly standing out as a high-profile move - will just be the kick-off to a series of similar activities by health insurers aimed at capturing the hearts and minds of the consumer. Or perhaps other strategies to achieve the same goal.
Why do health insurers all of a sudden care about consumers?
After the Affordable Care Act - in the new world of health insurance - individual consumers will have a much more prominent role. There will be more of them. They will be better informed, and with the exchanges they will have a market place that facilitates comparison-shopping. 
Consumers will have different and more heterogeneous profiles, needs and expectations than the people in the small individual market today. Their choices and behaviors are crucial for healthcare utilization and outcomes, which in turn are critical to contain medical costs.
For all these reasons it is obvious that a key success factor for the industry is to create effective ways to win and retain consumers, and to engage them in a mutually beneficial way that builds trust and loyalty, and that encourages the right behaviors to keep them as healthy as possible.
There is still a very long way to go!
Historically, the industry has not been very consumer-centric. And that shows. In a 2010/11 survey by consulting firm McKinsey, 72% of the 11,000 survey participants thought that plans were too complex to understand what was covered, and at what cost. 57% found the process of choosing a health plan “overwhelming”.
The prevailing health insurance go-to-market approach is not well suited to the retail space. The insurer perspective has historically been group focused and transaction based. Because insurers are relying on brokers, there is relatively little direct contact with the consumer. Worse, in the cases where there is contact – for example if there is a question regarding coverage or claims – the circumstances surrounding these interactions are usually negatively pre-loaded and stressful, not the natural habitat of trust and open exchange.
Perennially rising premiums, network constraints, administrative hassles, mediocre service levels and lack of transparency have all contributed to consumer relationships that are frequently adversarial.
So how do we change this?
Answer: we have to put the consumer more at the center of our marketing efforts!

OK- but what does this mean? What capabilities do we need to create?
I will post some thoughts about this over the following days.

Torsten Bernewitz is a healthcare industry analyst and management consultant.
He is Managing Principal, Health Insurers and Payers at
ZS Associates.

This post is the author’s own and does not necessarily represent ZS Associates’ positions, strategies or opinions.

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