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.
In fact, a recent survey from the Deloitte Center for Health Solutions found that consumer engagement is the top priority risk among healthcare CFOs, with 58 percent ranking it above other key concerns such as cybersecurity and the transition to value-based care.
While this focus from the CFO may seem somewhat surprising, it actually makes sense considering that poor member engagement can significantly impact an organization’s bottom line.
4 key ways unengaged members impact a health plan’s bottom line
For Medicare Advantage plans, unengaged members threaten Star ratings—and the plan’s financial health.
Based on our work with more than 40 plans and nearly 15 million members, we find that if even 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 we worked with in 2018, actively engaged members churned at a rate of just 2.5% compared to an 8.3% churn rate for non-engaged members. Put another way, unengaged members were more than 3X more likely to churn than engaged members. And as financial decision-makers know all too well, member churn hurts profitability.
Similarly, unengaged members can hamper growth.
The “big five” health plans (UnitedHealth Group, Anthem, Aetna, Cigna and Humana) hold a 60% share of Medicare Advantage enrollment nationwide, while accounting for 86% 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, successfully engaging members means giving them fewer reasons to shop around.
Given the significant impact consumer engagement can have on a health plan’s bottom line, it’s no wonder CFOs are taking notice. And beyond the CFO, plan leaders in many departments are taking notice—recognizing that using the same one-size-fits-all member engagement strategy isn’t going to cut it any longer.
To effectively address consumer engagement, high-performing health plans are leveraging several proven consumer marketing best practices, including:
– Focusing on the member populations that will deliver the biggest impact
– Prioritizing the healthcare activities that improve member health and align with plan business objectives
– 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
Taking a page from the consumer brand playbook
Other consumer brands, such as Starbucks, Target and Zappos, have already figured this out. They approach consumer engagement with these loyalty marketing and behavioral science best practices—using meaningful incentives and personalized experiences to build lasting relationships.
But the rise of the consumer no longer only applies to only industries such as retail or services—it now includes healthcare as well. It’s 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 plans to win and be successful under today’s new consumer-driven paradigm, they need to take a page from the retail industry’s consumer marketing playbook and build member engagement strategies around best practices. Only then will they be in a position to see consumer engagement as a strategic business advantage rather than an organizational risk.
NovuHealth is the leading healthcare consumer engagement company, driven to improve consumer health and health plan performance. NovuHealth motivates consumers to complete high-value healthcare activities by leveraging its sophisticated engagement platform, proven loyalty and behavioral science strategies, and deep industry and regulatory expertise. Headquartered in Minneapolis, NovuHealth has worked with nearly 40 health plans and served nearly 15 million consumers across all 50 states. Learn more at novuhealth.com.