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Consumer Engagement 1Consumer Engagement 1

How Payers Can Benefit by Adopting a Consumer-centric Approach

Consumer Engagement Improves Consumer Experience, Member Retention and Risk Adjustment


T he health care insurance market is evolving rapidly, with consumers becoming ever more responsible for making decisions and carrying a larger financial burden for their health care. The result is a consum-

er-driven market, with consumers demanding a level of service from their health plans that they’ve come to expect from consumer-centric companies in other markets. Visionaries in the health care industry recognize this as an opportunity to build a customer engagement model that exceeds member expectations and builds trust and loyalty, while also helping to optimize risk adjustment performance and improve payer margins.

Industry Changes Have Affected the Consumer’s RoleChanges in the health care industry have trans-formed the relationship between health care insurers and consumers. The Affordable Care Act (ACA) obliges all Americans to have health insur-ance or face tax penalties. To make the purchasing process easier, the Affordable Care Act legislated the creation of health insurance exchanges, which allow individuals and businesses to assess and compare standardized coverage options. These exchanges have shifted power to health care con-sumers, who are making decisions based on value and cost. At the same time, additional ACA provi-sions such as Guaranteed Issue and Community Rating have made it more challenging for insurers to manage risk through traditional means.

Given these and other industry changes, mem-bers in commercial, Medicaid, and Medicare plans are responsible for more health care deci-

Backgroundsion making than ever before when it comes to selecting, utilizing, and evaluating their coverage options. They must now pick from a variety of health plans, weigh the cost and value of provid-ers and payers, and process complex medical and financial information about services and treatments. They are expected to understand copayments, deductibles, co-insurance, out-of-pocket maximums, in- and out-of-network, metal levels, and other complicated information. Unfor-tunately, the process becomes even more diffi-cult once the member has to engage the plan for claims, preauthorization, prior approval, etc.

Consumers are also required to carry much more of the financial burden for their medical care. Premium contributions for employees, individuals, and Medicare users have all risen rapidly. Furthermore, most consumers are now enrolled in high deductible health plans and are responsible for much more than a simple,


inexpensive copayment. In 2015, the ACA health exchanges’ bronze-level plans had an average deductible of $5,181 for individuals, and Silver plans, the exchanges’ most popular plans, had an average deductible of $2,927 for individuals and $6,010 for families.1 Those insured under employer-sponsored insurance found themselves in a similar situation. In 2015, more than 35 million—24% of the 147 million people covered by employer-sponsored insurance—were covered by a high-deductible health plan.2 According to a September 2014 survey, the average deductible for employees who receive health coverage from their employer has risen 47% to $1,217 from $826 since 2009.3

Moreover, there is every in-dication that the health care industry will continue along this trajectory with consumers paying for more health care services directly and exercising increased control over how they spend their money and where they choose to spend it.4

The Altered Landscape Has Led to a Focus on Consumers As consumers become more involved in manag-ing their insurance coverage, as they are required to pay more and are asked to do more, they have begun to expect more in return. In a national

survey of over 11,000 people regarding health care needs and desires, consumers indicated that they expect the same quali-ties from health care organiza-tions as they do from compa-nies outside the health care market. They want health care organizations to engage with them in the same manner as Apple and Amazon, the com-panies they see as having the strongest consumer focus. They desire superior customer service, fulfillment of expecta-tions, and great value and want their lives made easier.5

Consumers are setting their expectations for their health care on their experiences in the retail market, and they’re holding payers to those standards. Unfortunately, the health care industry does

1 Stephanie Armour, “More Cost of Health Care Shifts to Consumers,” December 3, 2014, The Wall Street Journal. http://www.wsj.com/articles/more-cost-of-health-care-shifts-to-consumers-1417640559

2 Deloitte Insights, “2016 Health Plans Industry Outlook,” Risk and Compliance Journal. http://deloitte.wsj.com/riskandcompliance/2016/01/28/2016-health-plans-industry-outlook/. See also, Health Care Current: December 22, 2015, “Consumerism and Affordability: Two Sides of the Same Coin,” Deloitte. http://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/health-care-current-december22-2015.html

3 Armour, “More Cost of Health Care Shifts.” See also, Health Care Current, “Consumerism and Affordability.”

4 Deloitte Insights, “Health Care Current—January 26, 2016,” CFO Journal. http://deloitte.wsj.com/cfo/2016/01/26/health-care-current-january-26-2016/

5 Jenny Cordina, et al., “Debunking Common Myths About Healthcare Consumerism,” McKinsey & Company, December 2015. http://www.mckinsey.com/insights/health_systems_and_services/debunking_common_myths_about_healthcare_consumerism

“The challenge of affordability, the rise of the empowered health care consumer and the

shift from volume to value are top issues impact-

ing health plans in 2016,” says Greg Scott,

U.S. Health Plans leader and Vice Chairman,

Deloitte LLP.–2016 Health Plans

Industry Outlook


not have a reputation for service excellence. Sometimes health insurance companies simply fall short in providing services to their customers. For example, in January of 2016, one national insurance carrier accidentally en-rolled approximately 25,000 members into the wrong health plans, withdrew automatic bank drafts from 3,200 customers for the wrong amount, assigned customers to two plans and billed for both, and made other serious errors.6 Likewise, consumers who signed up for health insurance with a different health plan in 2014 faced enrollment problems and other issues including missing ID cards, late premium bills, failure to ensure that enrollees were properly transferred into appropriate plans,

and failure to answer or handle telephone inquiries in a timely manner.7

Other times, carriers simply do not engage with their customers frequently enough to build the type of relationship consumers are seeking. While a survey of 600 health-plan members indicate that they prefer at least monthly communication from their health plan, the amount of communication actually received is significantly less. When asked how often their health plan or employer connects with them about available health care tools and information, 35% of members said they receive contact once a year on average, 23% said “several times a year,” and only 8% of members indicated that their health plan communicates with them more than once per month.8

6 John MurawskI, “Blue Cross: Refunds, fixes coming this week,” The Charlotte Observer, January 2016. http://www.charlotteobserver.com/living/health-family/article54016900.html#storylink=cpy

7 Department of Financial Services, Press Release, “Governor Cuomo Announces Thousands of Empire Blue Cross Blue Shield Consumers Will Receive Three Weeks of Free Coverage,” February 2014. http://www.dfs.ny.gov/about/press/pr1402101.htm

8 Cicero Group, “How to Engage Your Members: Frequently, Relevantly, and Simply,” p. 3. http://www.healthsparq.com/assets/files/HealthSparq_Cicero_Member_White_Paper_102014-How-to-engage-your-members.pdf

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McKinsey & Company Consumer Experience Survey 2013Survey of 27,000 consumers-Scale of 1-10

Health Insurance Consumer Satisfaction


The result of the level of service typically pro-vided by health insurance companies: some of the lowest customer-service ratings across all industries. In a 2014 Tempkin survey of 10,000 U.S. consumers inquiring into their experiences with 268 national and regional companies, those who ranked lowest were either in the Cable Tele-vision, Internet, or Health Insurance industries. “These three industries have had a hard time fo-cusing on customers,” said survey analysts. “And, even the best of these companies have scores so mediocre [compared to other businesses] that there’s not a lot of competitive motivation to improve customer service.”9

The same survey found that the top-rated health plan only received an “okay” rating and ranked 87 out of 268 overall. Seven plans received “poor” ratings, and another four received “very poor” ratings and ranked in the bottom seven across all 18 industries.10

Consumers Don’t Trust Their Health PlansConsumers need assistance making key health care decisions. Indeed, in spite of their new role as active consumers of health care products, consum-ers are confused by their insurance coverage and options. Only 14% of Americans who have health insurance can explain deductibles, copayments, co-

insurance, and out-of pocket maximums. Only 11% can calculate the cost of a four-day hospital stay to within $1,000 when provided with all of the neces-sary information.11

While consumers need a partner to navigate the complex health care landscape, their experience with the health care industry has taught them to turn elsewhere when they need assistance. According to a survey about what consumers need, expect, and receive from health insurers, carriers rank low as the source people turn to for assistance. The follow-ing are the rankings of the resources used in each category investigated: • Researching symptoms: health insurers

placed last, with a ranking of 5 out of 5. • Finding a doctor: health insurers ranked

second out of 4. • Accessing medical information: health

insurers ranked 3 out of 5. • Estimating medical costs: health insurers fell

near the bottom, ranking 5 out of 6.12

This reluctance to use health plans as a means to obtain assistance with health care decision making is seen even when health plans provide significant tools for attaining desired information. Though many insurers have introduced tools to help consumers, they have not seen an increase in consumer engagement with those tools.13

9 Caroline Mayer, “Best and Worst Customer Service in America,” Forbes, July 2014. http://www.forbes.com/sites/nextavenue/2014/07/23/best-and-worst-customer-service-in-america/#31e440f7466d

10 Customer Experience Matters, “Health Plans Deliver the Worst Customer Experience,” February 2012. https://experiencematters.wordpress.com/2012/02/20/health-plans-deliver-the-worst-customer-experience/

11 George Loewenstein, Economist, Carnegie Mellon University.

12 Accenture, “Building Trust Using Patient Engagement and the Wisdom of the Crowd,” pp. 2-3. https://www.accenture.com/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Dualpub_9/Accen-ture-Building-Trust-Using-Patient-Engagement.pdf

13 Cicero, “How to Engage,” p. 2.


The Opportunity

Health plans have the chance to work closely with their members and deliver highly personalized education, information, transparency, and access to the tools they need and want to manage their health successfully. They can perform outreach for medi-cation adherence, preventive exams, in-between visit communications, and more. They can help their customers understand their health plan and the con-fusing acronyms and concepts (e.g., co-payments,

deductibles, co-insurance, etc.) and use them effi-ciently. They can also assist consumers in selecting the coverage that’s right for them and their families and help allay fears that they won’t be covered when a health issue arises. When implemented correctly, health plans’ consumer engagement strategy can change consumers’ perceptions of the health care industry and their heath plan and build a loyal, trusting customer base. 14

In the current health care environment, payers have the chance to redefine the health care user’s experience.

They have the opportunity to deliver individualized outreach and consumer engagement, to create a holistic brand experience in which

customers feel they are more than an ID number and a claim.

14 “The more consumers access and act on health plan information, the more they will come to trust it as a source of information” (Accenture, “Building Trust,” p. 4); “As carriers seek to improve their growth rates, they rely on three main methods: acquisition, retention and, related to retention, cross-selling. Performance in each of these areas can be substantially improved by a systematic program to earn customers’ goodwill, creating more promoters and eliminating detractors in the customer base” (David Whelan and Sean O’Neill, “Customer loyalty in P&C insurance: US edition 2014,” Bain & Company, p. 3. http://www.bain.com/Images/BAIN_BRIEF_Customer_loyalty_in_PC_insurance_US_edition_2014.pdf); “…when members receive more frequent communi-cation, they are more likely to use the tools. And with tool usage something profound happens: members experience an elevated level of trust and a deeper level of satisfaction with their health insurance provider” (Cicero Group, “How to Engage,” pp. 2-3).


What Kind of Engagement?

Interactions That Meet Brand PromisesFor customer engagement to have a positive impact on consumer experience, brand promises must align with consumers’ actual experience of the company. Companies that promise they’ll be there when they’re needed but, in times of trouble, fail to provide the support required, will fall short when it comes to customer satisfaction.15 A message that doesn’t coincide with the actual experiences of custom-ers will reflect in payers’ satisfaction rankings and consumers’ perceptions of them. On the other hand, when messaging and experience align, the pay off is notable. USAA’s brand promise, “For those who stood tall for this country and for their families, we stand ready to return the favor,” is similar in senti-ment to that of other insurance companies; however, this company delivers on its promises. As a result, in

2011 and 2015, KPMG Nunwood’s Customer Experience Excellence survey ranking the top brands, named USAA the number one brand for customer experience in America.16

Nunwood also asked consumers across the U.S. about 250 major American companies to determine what it takes to deliver “an exceptional customer experience.” The brands that ranked highest in their survey shared the following characteristics: • Offering both low prices and high quality. • Providing a consistently branded experience. • Listening to customers and correcting

issues expeditiously. • Consistently over-exceeding customer

expectations.

Not all consumer engagement is effective consumer engagement. It’s important to know what works and what does not, and what technology tools are most use-

ful for building a robust consumer engagement program.

15 J.D. Power, “Auto Insurance Customer Satisfaction Reaches an All-Time High, Driven by Satisfaction with Policy Offerings,” Press Release, June 2012. http://www.jdpower.com/press-releases/2012-us-auto-insurance-study

16 KPMG Nunwood, “Customer Experience Excellence Centre: 2015 USA Top 20.” http://www.nunwood.com/?portfolio=1-usaa-us-customer-experience-excellence-report-2015; Sheila Shayon “USAA Gets Top Marks for Customer Experience,“ May 2011. http://brandchannel.com/2011/05/19/usaa-gets-top-marks-for-customer-experience/


“What distinguishes these companies… [is that] they all have the ability to deliver on their customers’ ex-pectations,” said Nunwood’s chief strategy officer.17 Clearly, the lesson to be learned from all of this data is, “don’t make promises you can’t keep.”

The way you market your com-pany sets a level of expectation in consumers’ minds; when their experience doesn’t meet that level of expectation your bottom line will suffer. According to an Ac-centure survey measuring consumer dynamics and buying behaviors, 75% of the more than 12,000 re-spondents noted their frustration when companies either fail to deliver or deliver something different from what was promised.18 Furthermore, according to Accenture’s Broken Promises research, 90% of customers who encounter a broken promise switch companies or at least consider doing so: • 38% switch soon after experiencing a broken

promise. • 10% stay with the company but shift a portion

of their spending to another company. • 48% consider switching.19

The bottom line: the more customer experiences (and expectations) mirror the brand promise, the greater the positive impact your company will have on your customer relationships.

Frequent CommunicationsAs noted above, consumers would like to receive updates and information from their health insurers frequently—at least once a

month. When this happens, members are more satisfied. Indeed, in the Cicero Group’s survey, over 90% of members who receive at least monthly communication from their insurer are satisfied with their health plan. The correlation between customer satisfaction

and frequency of contact is as follows: • More than once a month communication:

94% health plan satisfaction. • Monthly communication: 93%

health plan satisfaction. • Several communications per year: 82%

health plan satisfaction. • Annual communication: 66%

health plan satisfaction.20

As part of this same study, members were asked about trust with respect to their health plan. When they integrated this feedback with their findings about frequency of communication, researchers found that members who received the most com-munication also had the greatest level of trust in the information received. Their conclusion was that “frequent communication leads to trust.”21

17 Sheila Shayon “USAA Gets Top Marks.”

18 Accenture, “Promises, Promises: Easily Made, Easily Broken,” p. 9. https://www.accenture.com/t20150523T052424__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Strategy_3/Accenture-Broken-Promises-Survey-Retain-Customers.pdf

19 Accenture, “Promises, Promises,” p. 7.

20 Cicero, “How to Engage,” p. 6.

21 Cicero, “How to Engage,” pp. 3-5.

“In a recent survey, 85% of those asked indicated

that they want to receive communications that are tailored to their

specific situation.”–Cicero, “How to Engage,” p. 7


Traditionally, payers have rela-tively few opportunities to engage with members—this makes the endeavor to build a loyal, satisfied customer base that much more difficult. Thus, it is critical for them to create opportunities to engage with customers and build a relationship whenever contact occurs, whether it be during en-rollment, on-boarding, health-plan education, claim adjudication, or change-of-life events.22

Personalized CommunicationsThese days, health care consumers are looking for much more than renewal and policy change notices from their health plan. They are searching for a part-ner they can trust, who will help them understand and negotiate the complex world of health care. Likewise, they are looking for a seamless experience across multiple channels in which companies know their pur-chase history, their buying and communication prefer-ences, their birthdays, and other personal information like cell phone numbers, email addresses, and more.

Thus, the goal with every engagement should be to collect and integrate member data. This information can then be used to conduct ongoing personalized and pertinent outreach, design better wellness plans and customized interventions, gain the ability to evaluate and re-evaluate the customer lifecycle, and assess the likelihood that members may be interested in addition-al services.23 With this type of engagement, outreach is

tailored for each customer’s needs, and each customer service repre-sentative is aware of the customer’s issue, preferences, and history with-out having to be told.

To deliver this level of targeted, cus-tom-built communications, carriers need to be able to utilize the data they obtain adeptly. They require sophisticated technology tools that help them manage all levels of con-sumer information. In addition, they require campaign management

and communication capabilities that enable them to segment and target messages to members at every stage of their relationship.

Among the technology tools that should be in a payer’s arsenal are: • A data repository that consolidates and ag-

gregates data, no matter what its source. • Analytical resources to uncover patterns and

ascertain deep, usable data insights. • Customer Relationship Management software

(CRM) that allows representatives to connect with consumers, manage communications, and service incidents.

• Call-center capabilities to improve processes and advance business opportunities.

• Exchange-like capabilities including online enrollment and billing and decision support.

• Email, online chat, click-to-call voice capa-bilities, and more to ensure that members not

22 Anand Natampalli and Mark Poling, “The Uberification of Health Insurance: Digital Transformation for Improved Member Experience and Operational Efficiency,” Colibrium, p. 3. http://www.colibrium.com/knowledge-center/downloads/Uber_whitepaper.pdf

23 Natampalli, “The Uberification of Health Insurance,” p. 3.

“Without the technology to integrate

member health data and preferences, insurers will fail to meet consumers’ rising expectations for a seamless and satisfying

experience, leaving members frustrated and

difficult to retain.”–Natampalli,

“The Uberification,” p. 3


The Benefits

Consumers benefit by becoming better informed, more actively engaged in their health care, and, ultimately, healthier. For payers, consumer engage-ment elevates customer experience, satisfaction, and retention and helps optimize risk adjust-ment—all of these, in turn, improve margins and, in the end, population health.

An Elevated Consumer ExperienceAn effective consumer engagement strategy will create a heightened consumer experience, which translates into higher customer

satisfaction, loyalty, and retention as well as margin improvement.

In a survey of consumers with individual coverage, those whose satisfaction with their insurer was 75% or higher were roughly 60% more likely to recom-mend their insurer to others than were those with an average level of satisfaction, and they were 40% more likely to purchase additional products from the company.24 Moreover, high customer satisfac-tion levels have been linked to stronger loyalty, sales, and profits in other industries, and evidence

only have access to pertinent information and relevant communications but also receive in-formation and communications by way of their preferred method.

• A unified communications strategy that utilizes numerous touchpoints.

• Proactive, personalized outreach and communications capabilities.

With increased knowledge of each member, health plans are better informed to drive sales, create tar-geted outreach to improve wellness, and enhance every customer’s health plan experience.

A well-executed consumer engagement strategy will benefit not only consumers but also insurers.

24 Cordina, “Winning with Consumers,” p. 2.


suggests that this applies in the new consumer-driven health care industry as well.25

While carriers should strive to eliminate factors that cause customer dissatisfaction (82% of consumers have stopped doing business with a company as a result of a negative experi-ence26), it is perhaps more im-portant to create opportunities for positive experiences with consumers. Bain & Company’s research into customer loyalty in the P&C insurance market shows that turning a passive customer into a promoter (one who is most likely to recommend their insurance to a friend) is roughly three times as valuable as con-vincing a detractor to become a passive. As the below chart shows, promoters bring nearly three times more in lifetime value than passives and roughly seven times more than detractors.27 The analysts’ conclusion is that it is more important to create promoters by delivering positive experi-ences than just avoid detractors.28

Great experiences influence where consumers buy and how much they are willing to spend. Research from the 2010 Customer Experience Impact Report

(CEI) reveals the following about the relationship between spending and customer experience: • 55% purchased from a company because of

its reputation for excellent customer service. • 40% began purchasing from a competitive

brand because of its reputation for excellent customer service.

• 85% said they would pay more than the standard price to ensure a superior cus-tomer experience.29

Well designed customer engagement programs create quality consumer experiences and satisfaction, build loyalty and trust, and improve customer spending.

25 Carrus, “Measuring the Patient Experience.”

26 Right Now, “Customer Experience Report North America 2010,” p. 2. http://media.stellaservice.com/public/pdf/Customer_Experience_Impact_North_America.pdf

27 Whelan, “Customer Loyalty”, p. 5.

28 Whelan, “Customer Loyalty”, p. 7.

29 Right Now, “Customer Experience Report,” p. 2. See also, Jenny Cordina, et al., “Winning with Consumers: What Payors Can Learn from ‘Consumer’ Companies,” McKinsey & Company, May 2013. http://healthcare.mckinsey.com/sites/default/files/WinningWithConsumers.pdf.

Share of wallet

Size of wallet

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200

100

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47 10 3 100

13322

15 270

Detractor Retention Cross sell Cross sellReferrals Referrals PromoterPassive Retention

Estimated Lifetime Value of a Customer (inexed to passive)

Note: all products are assumed to be of equal value to the insurerSource: Bain/Research Now US P&C Insurance Survey 2014

Whelan, “Customer Loyalty,” p. 11


Higher Retention RatesConsumer engagement helps elevate customer retention rates and, for various reasons, reten-tion is vital for payers. For one, the longer a member remains with a health plan, the higher the return on investment. According to research conducted by L.E.K., “a typical Medicare plan may be able to increase revenues by 12% in two years by reducing annual disenrollment from 18% to a best-in-class rate of 10%.” They contin-ue by extrapolating that non-Medicare plans in the individual market are likely to see similar results.30

Secondly, member retention delivers direct financial advan-tages to insurers. It is far less expensive to retain a member than to acquire a new one. In fact, aside from the mandatory 80% MLR, mem-ber acquisition is the single largest payer expense. Additionally, high retention rates indicate a high level of customer satisfaction. And, satisfaction with a payer’s service can lead customers to recommend the plan to other prospects, which in turn reduces expenses associated with bringing in new customers.

Higher retention rates are also central to success-ful care management. The information gathered and integrated over the course of an extended relationship can enable insurers to help customers manage their health conditions, reduce the need to obtain medical services, and more.31

Other benefits of increased retention rates include: • Potentially higher Medicare Advantage Star

Quality ratings and bonuses through improved results on two member surveys, the Health Outcomes Survey (HOS) and the Consumer Assessment of Healthcare Providers and Sys-tems (CAHPS).

• An avenue for higher profits, as long-term customers’ risk data will be on record and available for use in Risk Adjustment.

• Aiding the collection of data and analytics.

As noted already, a well-executed consumer engagement program can help with retention rates by improving customer experience and eventually customer satis-faction and loyalty. Consumer engagement is also invaluable for

identifying why members dis-enroll, and this knowl-edge can be used to improve retention rates.

Payers frequently spend time and money fixing the wrong problem because they don’t really understand why their members have dis-enrolled. They address what they believe to be the cause but have failed to drill down to the core issue.32 According to an L.E.K. analysis, recognizing the underlying grounds for dis-enrollment involves two critical steps. The first step is to collect intelligence during exit interviews; the second is to convert the information provided in interviews into a root-cause hierarchy based on a careful interpretation of each consumer’s exit interview narrative.33 Given this, the questions asked

30 Tom Rekart, “Disenrollment: How to Solve the Health-Plan Retention Puzzle,” L.E.K. Executive Insights, Volume XVI, Issue 8, p. 1. http://www.lek.com/sites/default/files/LEK_HealthcareRetentionEI0214_WEB.pdf

31 Rekart, “Disenrollment,” p. 1.

76% would pay 5% or more55% would pay 10% or more27% would pay 15% or more18% would pay 20% or more10% would pay 25% or more

–Right Now, “Customer Experience Report,” p. 2


during exit interviews should be designed to help highlight underlying problems and get beyond the surface issue, which may merely have been the final straw in the decision to dis-enroll. Customer service representatives should collect feedback verbatim; the data collected should then be synthesized and categorized. With this information in hand, health plans can chip away at each root cause of dis-enroll-ment. The result will be the ongoing creation of an ever growing base of long-term customers.

Risk AdjustmentWhen organizations reframe their business model with a customer-centric focus and incorporate personalized consumer engagement, it reflects customers’ intensified role as consumers of health care products. It also reflects payers’ new financial reality; in the current milieu, in which risk adjust-ment and chronic disease interventions help payers manage costs, it has become crucial for payers to engage meaningfully with customers.

Under the risk adjustment arrangement that is integral to the Affordable Care Act, insurers are partially compensated based on the health status of their membership. This approach ensures that risk is shared between carriers, which levels the playing field, and that no single carrier can win or lose completely. This zero-sum game protects pay-ers from losses when they disproportionately enroll individuals with high-cost conditions.

While risk adjustment is one of the tools that makes the new health care system viable, it does

introduce some potential challenges. The key con-cern for payers under this new scheme is that the risk adjustment score may not adequately reflect their enrollee population. For example: • New members may delay completing their risk

assessment. In this situation, the new mem-ber’s health status may be unknown and would not be factored into the payer’s risk score.

• New members may postpone their visit to the doctor when they join, perhaps because they visited their doctor or had their prescrip-tion renewed just prior to switching plans. These patients’ diagnosis codes would not be recorded, which would negatively impact risk scores—a missed opportunity for the carrier.

• New members—both individuals and groups—may start mid-year. Because risk adjustment is conducted on the calendar year, they may not get to the doctor until the following year—the result would negatively impact risk scores.

One of the primary uses of risk adjustment is to ensure that each health plan’s revenue adequately reflects the expected risk of providing coverage for its members. If health plans’ risk scores fail to reflect their enrollees’ aggregate health, the plans may have to pay into the risk adjustment pool, which would negatively affect their margins.

With a systematic, personalized consumer engage-ment strategy in place, payers can gather the data needed to drive accurate population risk scores and optimize risk adjustment. Consumer engagement

32 See Frack, “Pinpointing” and Rekart, “Disenrollment.”

33 Bill Frack, “Pinpointing the Drivers of Health Plan Member Disenrollment.” Executive Insights, Volume XIV, Issue 8, pp. 2-3. http://www.lek.com/sites/default/files/L.E.K._Pinpointing_the_Drivers_of_Health_Plan_Member_Disenrollment.pdf. See also, Whelan, “Customer Loyalty,” p. 9.


VistaBPO Can Help

VistaBPO can help. We help our clients maximize member satisfaction and retention, risk adjustment, and population health by delivering personalized consumer engagement and comprehensive contact center solutions utilizing secure, innovative technology.

VistaBPO provides: • Member Engagement and Retention Solutions • Member Acquisition Solutions • Adjustment Optimization Solutions

can help in various ways: • Maximize the collection of risk assessments. • Penetrate populations that are often difficult

to access. • Create intervention plans based on

member risk.

• Help gather detailed member analytics. • Engage new member populations and elevate

utilization of preventative care.When it comes to risk adjustment, consumer en-gagement can have a very real effect on a health plan’s bottom line.

For a complete list of VistaBPO work streams or to learn how VistaBPO can assist your organization:

Visit us: Vistabpo.comEmail us: [email protected] us: 845-372-6321

In today’s consumer-centric health insurance market, service must be reimagined and recreated; it must be more personalized,

more customer-centric, more customizable, and more proactive.


ReferencesAcademy Health. “Issue Brief: Improving Quality Health Care: The Role of Consumer Engagement.” https://www.academyhealth.org/files/issues/ConsumerEngagement.pdf

Accenture. “Building Trust Using Patient Engagement and the Wisdom of the Crowd.” https://www.accenture.com/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Dualpub_9/Accenture-Building-Trust-Using-Patient-Engagement.pdf

Accenture. “Promises, Promises: Easily Made, Easily Broken.” https://www.accenture.com/t20150523T052424__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Strategy_3/Accenture-Broken-Promises-Survey-Retain-Customers.pdf

American Academy of Actuaries. “Risk Assessment and Risk Adjustment.” Issue Brief, May 2010. http://www.actuary.org/pdf/health/Risk_Adjustment_Issue_Brief_Final_5-26-10.pdf

Armour, Stephanie, “More Cost of Health Care Shifts to Consumers,” The Wall Street Journal, December 3, 2014. http://www.wsj.com/articles/more-cost-of-health-care-shifts-to-consumers-1417640559

Carrus, Brandon. “Measuring the Patient Experience: Lessons from Other Industries.” August 2015. http://healthcare.mckinsey.com/measuring-patient-experience-lessons-other-industries

Cicero Group. “How to Engage Your Members: Frequently, Relevantly, and Simply.” http://www.healthsparq.com/assets/files/HealthSparq_Cicero_Member_White_Paper_102014-How-to-engage-your-members.pdf

Cordina, Jenny, et al. “Debunking Common Myths About Healthcare Consumerism.” McKinsey & Company, December 2015. http://www.mckinsey.com/insights/health_systems_and_services/debunking_common_myths_about_healthcare_consumerism

Ibid., “Winning with Consumers: What Payors Can Learn from ‘Consumer’ Companies.” McKinsey & Company, May 2013. http://healthcare.mckinsey.com/sites/default/files/WinningWithConsumers.pdf

Customer Experience Matters. “Health Plans Deliver the Worst Customer Experience.” February 2012. https://experiencematters.wordpress.com/2012/02/20/health-plans-deliver-the-worst-customer-experience/

Davis Scott. “When Geico Accelerated Past Allstate.” Forbes, March 2014. http://www.forbes.com/sites/scottdavis/2014/03/10/when-geico-accelerated-past-allstate/#1bd001b61931

Deloitte Insights. “2016 Health Plans Industry Outlook.” Risk & Compliance Journal. http://deloitte.wsj.com/riskandcompliance/2016/01/28/2016-health-plans-industry-outlook/

Deloitte Insights. “Health Care Current – January 26, 2016.” CFO Journal. http://deloitte.wsj.com/cfo/2016/01/26/health-care-current-january-26-2016/

Department of Financial Services, Press Release. “Governor Cuomo Announces Thousands of Empire Blue Cross Blue Shield Consumers Will Receive Three Weeks of Free Coverage.” February 2014. http://www.dfs.ny.gov/about/press/pr1402101.htm

Frack, Bill. “Pinpointing the Drivers of Health Plan Member Disenrollment.” Executive Insights, Volume XIV, Issue 8. http://www.lek.com/sites/default/files/L.E.K._Pinpointing_the_Drivers_of_Health_Plan_Member_Disenrollment.pdf

Frost & Sullivan. Best Practices Research, 2015. http://cdn2.hubspot.net/hubfs/415877/Assets/Frost_and_Sullivan_Product_Leadership_Award_Report.pdf?t=1452198813038

Health Care Current: December 22, 2015. “Consumerism and Affordability: Two Sides of the Same Coin.” Deloitte. http://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/health-care-current-december22-2015.html

Health Policy Briefs, Health Affairs. “Risk Adjustment in Health Insurance.” http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=74


Mayer, Caroline. “Best and Worst Customer Service in America.” Forbes, July 2014. http://www.forbes.com/sites/nextavenue/2014/07/23/best-and-worst-customer-service-in-america/#31e440f7466d

MurawskI, John. “Blue Cross: Refunds, Fixes Coming this Week.” The Charlotte Observer, January 2016. http://www.charlotteobserver.com/living/health-family/article54016900.html#storylink=cpy

Natampalli, Anand and Poling, Mark. “The Uberification of Health Insurance: Digital Transformation for Improved Member Experience and Operational Efficiency.” Colibrium. http://www.colibrium.com/knowledge-center/downloads/Uber_whitepaper.pdf

Pulido, Alfonso. “The Three Cs of Customer Satisfaction: Consistency, Consistency, Consistency,” March 2014. http://www.mckinsey.com/insights/consumer_and_retail/the_three_cs_of_customer_satisfaction_consistency_consistency_consistency

Rekart, Tom. “Disenrollment: How to Solve the Health-Plan Retention Puzzle.” L.E.K. Executive Insights, Volume XVI, Issue 8. http://www.lek.com/sites/default/files/LEK_HealthcareRetentionEI0214_WEB.pdf

Right Now. “Customer Experience Report North America 2010.” http://media.stellaservice.com/public/pdf/Customer_Experience_Impact_North_America.pdf

Schone, Eric, Ph.D. and Brown, Randall S. Ph.D. “Risk Adjustment: What is the Current State of the Art, and How Can it be Improved?” Research Synthesis Report No. 25, July 2013. http://www.rwjf.org/content/dam/farm/reports/reports/2013/rwjf407046

Stevens, Lori. “Consumer Engagement Program Paves the Way for Stronger Member Satisfaction, Lower Costs.” https://www.optum.com/content/dam/optum/resources/whitePapers/consumer-engagement-program-paves-the-way.pdf

Whelan, David and O’Neill, Sean. “Customer Loyalty in P&C Insurance: US Edition 2014.” Bain & Company. http://www.bain.com/Images/BAIN_BRIEF_Customer_loyalty_in_PC_insurance_US_edition_2014.pdf

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