Health plans consumer transformation trends | Deloitte US | Health Plans
pentalogy, consumer experience


Consumer Transformation

5 Trends Health Plans can’t ignore

The initial "‘land grab" on the public exchanges is in the rearview mirror. With it, health plans have witnessed anew the challenges and opportunities in the direct-to-consumer market. More broadly, industry leadership recognizes an opportunity to better meet the needs of consumers across the entire book of business. Though talked about for years, the industry has hit a crucial tipping point in focusing on the individual. Winners and losers may be separated by their success in engaging the ever more tech-savvy and empowered cohort of health care consumers.

Health Plans: 5-Trends of Consumer Transformation

To speak with our consumer transformation leader, Leslie Read, click here.
Private exchangesOmni-channelConsumer analyticsConsumer engagementDigital transparency
pentology, consumer transformation

​What does direct-to-consumer mean for health plans?

Continued evolution in the markets. Executives around the country are beginning to place strategic bets and drive the transformation versus sitting on the sidelines. These bets include customization at the individual level to meet varied needs, diversification to attract and retain members for life, and development and execution of cutting-edge capabilities.

The five-part series will explore key consumer transformation topics and strategies for success by hitting on the following trends:

  • Private exchanges: Gain access to new consumers and protect existing ones
  • Omni-channel: Consumer engagement everywhere
  • Consumer analytics: Finding the individual in the masses
  • Consumer engagement: Models to support long-term retention
  • Digital transparency: Increase satisfaction for more demanding consumers

Private exchanges: Wolf at the health plan’s door?

Pundits project private exchange (PIX) enrollment to accelerate rapidly; between 30 and 50 percent of employers are considering moving to a private exchange for full-time active employees by 2018, suggesting that a shift in the group health care benefits space might be at hand.1 In addition, numerous press releases in 2014 have described substantial growth in private exchange enrollment.2 These data points corroborate Deloitte Consulting’s and various other projections3 that private exchanges could grow from 2.5M covered lives in 2014 to 25–40M covered lives in 2018. Health plans such as Aetna, Cigna, United, WellPoint, and select “Blues” are participating with both proprietary and third party exchanges, but many other health plans are still formulating a response.

These plans should develop a strategy quickly given the private exchange momentum in the marketplace propelled by broad macro trends:
  1. Rising health care costs are causing employers to explore PIX as a mechanism for better cost control.4
  2. Employers, especially small and medium size ones, are looking for solutions to handle ever more complex benefits administration and compliance responsibilities.4
  3. Emergence of public exchanges has made the notion of benefits marketplaces and employees having choice “mainstream”; consumers are expecting significantly more choice in benefit options.
  4. Private exchanges allow consultants/brokers to reinsert themselves as the key "control point" in configuring benefits for employers.
  5. Publicly owned consultants have leveraged expectations for growth in sponsored private exchanges into higher stock valuations.5
  6. Retail powerhouses such as Costco and Sam’s Club (WMT) have launched private exchanges aimed at individuals and small employers.

To learn more, read the first paper in this five-part series on a case for an offensive strategy.

1 Meta study of 7 surveys presented at GNPH Webinar-Payor Perspective, May 20, 2014
2 Press Releases from Aon Hewitt, Mercer, and Aetna
3 Various reports, including Morgan Stanley (30MM by 2017), eHealth (46MM by 2018)
4 PEEC, “Private Exchange Employer Survey Findings”, December 2014
5 Morningstar, “Insurance Brokers Find Opportunity in ACA”, January 5, 2015

Omni-channel: Explore new heights

There has never been a more critical time for health plans to effectively engage with consumers, yet consumer engagement scores for most health plans are poor. By providing an adaptive, seamless, and compelling experience throughout the entire consumer life cycle, Omni-channel offers health plans the opportunity to bridge the gap between consumer expectations and leap ahead of competitors, generating growth and value in the process.

To learn more, read the second paper in this five-part series about using integrated consumer experiences to drive growth and value.

Consumer analytics: Spinning straw into gold

The individual commercial market has fundamentally changed over the past year, radically reshaping the value drivers for health plans. Many of the analytical capabilities health plans developed to support the old model—especially the pricing and underwriting of risk—are either obsolete or have become table-stakes.

The next few years present a rare and powerful opportunity for health plans to rapidly take share in a completely new market. But making growth profitable in this low-margin retail business is expected to require a radically different approach to customer strategy across the member lifecycle. Health plans need to ask the right questions and act quickly to develop the right analytical tools for answering them.

To learn more, read the third paper in this five-part series about using consumer data to enhance member lifetime value.

Consumer engagement: Guiding your customers down the yellow brick road

Consumers are beginning to expect from health care companies similar levels and types of service and experiences that they receive in other parts of their lives (travel/hospitality, retail, e-commerce, etc.)—using more information to make increasingly complex sets of choices1. To compete in this new normal, health plans need to see individuals not as “members” but as “consumers,” and engage them as such.

  • Health plans lag behind other industries—such as hospitality and retail—in consumer experience today, but they recognize that it is one of the most critical capabilities to compete in the market going forward, with over 90 percent of plans rating it as “highly important” or “critical” in a recent survey2
  • Additionally, health plans, employers, and consumers can save considerable costs by encouraging and enabling more efficient benefit utilization and health and wellness behaviors
  • Health plans that do not react to “consumerism” trends risk being left behind as capabilities that are differentiating now—i.e. only 30-50 percent of plans have them—will become table stakes in the next three years (download the PDF to see Chart 1 for details)3
  • Health plans are also increasing their investments in analytics and emerging technology to further enhance consumer touchpoints (download the PDF to see Chart 2 for details)4

To learn more, read the fourth paper in this five-part series about strengthening the health care customer journey.

1 Paul Keckley, et al. “Consumerism in Healthcare,” Deloitte Review, Issue 11, 2012
2 “Highlights from Deloitte’s 2013 Health Plan retail capability survey,” April 2014
3 Ibid
4 Ibid

Digital transparency, consumer experience

Digital transparency: Mirror, mirror, what is the fairest choice of them all?

Coming soon!

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