• July 27, 2011
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Health Insurers Need to Improve Customer Relationships to Compete

Almost half of U.S. consumers are willing to pay more for quality customer service from their healthcare insurance providers, something they need to address now to effectively compete for new clients, according to new research from Accenture.

Accenture surveyed 1,000 insured individuals to assess the impact of customer service on consumer preferences and found that nearly 80 percent expect customer services to be easier and more convenient.

Accenture also found that 42 percent of customers were satisfied with their service providers, while only 7 percent were dissatisfied. Health insurers, however, have not translated customer satisfaction into revenue opportunities, as only 7 percent would consider purchasing additional services.

Health insurers have failed to provide the personalized experience customers crave from health IT investments, according to the Accenture research, which was presented in the report, titled, "Seven Secrets Your Health Insurance Customers Are Not Telling You." Only 10 percent of customers agreed that health insurers "tailor my experience to match my needs/preferences," while more than twice that amount (22 percent) strongly disagreed.

The reason, by and large, is that health insurers have "been grounded in the employer mindset for years," meaning that they've typically catered to employers rather than individual consumers, according to Rich Birhanzel, head of Accenture's health CRM practice. As such, they've focused more on large-scale offerings than on ones that meet the needs of individuals, he says.

But new healthcare reforms, which are due to take effect in January 2014, will force that to change. The industry will "move from a group purchasing model to individual choice, where individuals will be able to make their own choices without their employers acting as the primary filter," Birhanzel says.

He notes that the reforms are expected to add 40 million people to the health insurance rolls, including those who were previously uninsured or ineligible for Medicaid.

"The vast majority of that 40 million do not have previous experience with health insurance, but they've developed an expectation of what good service is based on their experiences with retailers and other companies," Birhanzel adds.

The survey also determined that health insurers are not keeping pace with rising customer expectations. This is evidenced in the following statistics:

  • Knowledgeable Representatives – Roughly 85 percent rated interaction with knowledgeable employees as highly important, yet fewer than 50 percent were satisfied with current experience.
  • Convenient Service Hours – Nearly 80 percent prefer customer service extended to weekend and evening hours, while fewer than half currently experience this convenience.
  • Wait Time – About 80 percent rate wait time as important, but more than 60 percent said they are kept waiting too long by current health plan providers.
  • Single Contact – More than 80 percent said dealing with one contact to resolve issues is important, but 60 percent are currently transferred to multiple contacts to resolve issues.

In this new consumer-driven economy, health insurers will need to better understand the consumer and predict his behavior, and then develop plans and offerings that are tailored to them. Customer service options will also have to follow suit, according to Birhanzel.

"Customers have become more diverse and more demanding, wanting service offerings, experiences, and communications increasingly on their own terms. They have also become more technology-savvy and less shy in broadcasting their experiences. Technology trends like social media have ignited a new consumer activism, whose reverberations have only begun to be felt," the report stated.

Those firms that recognize the implications now and begin moving toward developing strong new customer relationships will be in a better position in the long run, the report concludes.

"In the broadest context, there is a shift toward a broader consumer market, and [health insurance] companies need to get their arms around it soon," Birhanzel states.

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