4 Ways to Transform a Health Insurance Company

Blockbuster thought they’d be renting videos from brick and mortar stores forever. Then Netflix came along with a modern way to watch videos. Kodak thought they’d be selling cameras, film, paper, and chemicals forever. Then digital cameras eliminated the need for their cameras and consumables.

Disruption happens. And it happens in the blink of an eye. Though health insurers likely aren’t as ripe for disruption as Blockbuster and Kodak due to the regulated nature of the business, lack of digital maturity and ingrained operational processes leave health insurers vulnerable to market share erosion. As a CEO or CIO, you need to ensure your company not only exists in ten years but thrives.

Here are 4 ways to transform a health insurance company and ensure it doesn’t go the way of Kodak and Blockbuster:

Customer Centricity

If you’re as old as me, you remember the early days of Internet search engines when Ask Jeeves, Yahoo, and Alta Vista dominated the market. Then a couple of Ph.D. students at Stanford decided to take a customer-centric approach to search engines. The incumbent search engines usually were as simple as counting the keywords on a specific page. The more there were, the more likely that page would rank high in their search engine. The upstart search engine from the Stanford students, Google, believed that the more backlinks — links to a page – a page had generated, the more likely it was to be a quality page and the more likely they were to rank it high.

Later, Google started leveraging data to make their search engine even more customer-friendly. They tracked how long people stayed on a page after a search to determine the quality of the search result. If a searcher returned to Google’s search results within five seconds, Google realized that result wasn’t a good match for the search and moved it down in search rankings. If the searcher stayed on the page and didn’t return to search again, it was a good search result. Google likely moved it up in search results.

It seems like an obvious conclusion but wasn’t something other search engines did. Competing search engines earned revenue by showing ads on their search pages. As a result, the more views their search page garnered, the more revenue they earned. This disincentivized those search engines from leveraging customer data to display better results. It also was a poor customer experience.

Google’s focus on providing better search results — and a better customer experience — should be a guide for health insurance CEO and CIOs looking to stave off disruption. Healthcare in the US – though still largely dominated by employer-based coverage — has become more consumer-driven in the past decade. Public and private marketplaces and Medicare Advantage plans offer direct-to-consumer models and are becoming pathways to growth.

But if you don’t have a customer-centric approach, you won’t be successful long-term in those markets.

How do you do it? Put the customer’s concerns front and center. It’s common for consumers to call buying, using, and understanding health insurance confusing. As an example, a past insurer I used didn’t show any detail from my explanation of benefits online and customer support representatives didn’t have access to the EOB detail. The only way I could get an EOB was to request one by mail. In an always-on, always-connected world, that’s just not good enough.

Also, simplify processes for the consumer. I couldn’t set up recurring payments with that same insurer — I had to either pay by check or log in to their website to pay my insurance monthly. It was a pain. All insurers serving individual markets should readily accept recurring payments.

Interact with customers in new ways. Make it easy to see who is in their network, their typical cost, and their quality score. Instead of making customers wait on hold on their phone, use chatbots and knowledgebases to streamline answering common questions.

Another way to be closely aligned with the customer is to build partnerships with ancillary products that the customer may find useful. Or build a community around customer interests. The better you understand your customers, the better you’ll be able to find complementary products or build like-minded communities.

Have a Technology-first Hiring Strategy

According to a recent article by McKinsey, real estate investor and developer RXR Realty wanted to become a digital-first company. Instead of investing in on-site employees to make buying, living, and working in their properties better, they invested in a lab of more than 25 data scientists, designers, engineers, and product managers who worked to reinvent the company to make it a digitally native business.

The company wanted to build a unique, personalized customer experience in its properties. They leveraged that technology team to build things like a new app that allows residents to manage things like moving into an apartment, get housekeeping, and request a grocery delivery. For commercial properties, they built technology to monitor energy efficiency and environmental conditions.

More importantly, they redefined their business and future roles. They began looking for software developers and data scientists as well as agile coaches so they could continue to be a digital-first company.

It’s a lesson health insurers should learn. To compete, you’ll need to be digital-first. You’ll need data scientists, developers, product managers, and agile facilitators to build digital solutions that replace legacy technology platforms as well as automates customer interactions. When you examine your strategic hiring plan, determine whether you can replace some of your operational headcounts with technology solutions.

Invest in Emerging Technology

An Accenture analysis found AI applications can potentially create $150 billion in annual savings for the US economy by 2026. Virtual nursing assistants alone can save $20 billion and free up nurses to be more productive. AI and machine learning can deliver significant returns on investment.

For health insurers, AI offers many customer-facing and revenue-generating opportunities. Plus, AI can be a real competitive advantage. Earlier we discussed how Google leveraged user behavior to improve its search engine. Similarly, insurers can leverage machine learning and their vast amounts of data to identify opportunities to generate revenue. For example, using data to improve business efficiency — we’ve leveraged AI to identify and process lockbox payments that are missing account numbers we can match to a user — or leveraging data as a value-added part of an existing product — think dashboards for group insurers or usage reports for individuals.

But AI isn’t the only opportunity to leverage emerging technology. Upstart insurers and insurtech businesses leverage the cloud to make their applications scalable and secure at a reduced cost compared to server-based applications. They use chatbots to enable them to serve customers at scale — without adding staff. And they leverage automation — like touchless claims processing — to build efficiencies.

Leverage Your Data

You’ve probably heard the saying “Data is the new oil.” Even at oil company Shell, that’s true. The company has lately been trying to be more data-driven.  They built perhaps the largest curated set of data on the planet and leverage it to solve business problems and drive growth.

Many large businesses like Amazon have turned balance sheet liabilities into revenue streams. Amazon Web Services got its start when Amazon recognized they had vast expertise building cloud-based data solutions and turned that knowledge into the fastest-growing segment of their business.

Housing your data shouldn’t be a liability. There are several ways insurers can innovate by leveraging the data they have on hand. Examples include leveraging data to identify new opportunities — potentially with industry partners. For example, leveraging life event data to create products complementary to those events. You can also leverage data to target and identify sales opportunities. And you can use consumer data to build a better customer experience.

Or, you can sell access to your de-identified data. Mercy Health launched a real-world evidence network that pools data from across the country and sells access to the data to researchers, regulators, and startup Medtech companies. Highmark offers claims data from its insurance plans and clinical data from its health network to startups looking to validate whether their product works from an economic perspective as well as a customer experience perspective. These commercialized products not only generate revenue, but they also help improve innovative products’ time-to-market.

Certifi’s health insurance premium billing and payment solutions help healthcare payers improve member satisfaction while reducing administrative costs.