The Health Plan Conundrum

September 9, 2020  |  Paula Serios, Joel English

Healthcare

Health plans are a means for individuals and families to gain affordable access to the doctors, hospitals, medicines, and tools they need to heal and stay healthy. Without health insurance many of us may not be able to afford needed care.

So, you would think that health insurance would be a service category perceived positively by consumers, right?

Unfortunately, research suggests this is not the case. Health insurance companies, historically, have had far less trust associated with them than healthcare providers. And the reason appears to be experiential.

Beyond the initial membership process, which can be needlessly confusing, most significant interactions between members and plan representatives involve a care and referral authorization and formulary management process that is often perceived as keeping them away from the doctors, hospitals, and medicines they have been told they need. From a member perspective, there is nothing more frustrating than paying substantial premiums to presumably access preferred providers and the care they recommend only to feel they are being be kept from it. This explains why health insurance is considered by many a “necessary evil” service with inherent concerns about motivations, accountability and trust and frustrations about the process.

How do we overcome this negativity and related trust issues to get to a place where we can more effectively attract and retain members?

We begin by recognizing that there will always be an inherent tension created by the medical management process. While we cannot make this go away, we can attempt to address underlying perceptions that make this process a trust buster.

In our July 2020 national research study, BVK sought to better understand ways to address this inherent tension. What emerged were three key dimensions that need to be explored: motivation, personalization, and accountability. All three ladder up to the ultimate issue: trust.

The question related to insurance company motivation is simple – “are you in it for me or for you?” And specifically, “will your medical management decisions be made with my health as the key goal, or your profitability?” In our research we explored whether ownership and business structure of the insurance company behind health plans had an impact on trust, and it does. Current trust in health plans was substantially higher (at 54%) than the health insurance companies that offer them (at 35%). On the surface this does not make sense. How else do you judge an insurance company but by experience with their plans? The good news is that the quality of the actual plan experience is solid and, in some cases, improving, which makes the fact that people have substantially less trust for the companies behind them significant and concerning.

Underlying motivation and mission matters and creates a bias that proceeds and can live independent of actual behavior. In the study, not-for-profit health insurers were perceived as more member and community focused than for-profit insurers. When you factor in healthcare provider sponsorship, the high level of trust and appreciation enjoyed by doctors and nurses (that has only gotten stronger through the COVID crisis) provides another level of credibility.

Perceptions related to motivation and size also directly impact the desire for health plans to look at the member as an individual, as opposed to a diagnosis or disease state. The dimension of personalization, which is the desire for a patient’s personal needs and circumstances to impact medical management decisions, can be stated this way: “Do you actually see me and what would be optimal for my healing or health as determined by the doctor I trust, or do you only focus on care pathways and cost driven formularies that could result in a negative outcome for me?”

In BVK’s research we found that the owner or sponsor of the health plan has a significant impact on expectations for how the plan will behave. This finding could substantially improve or hinder plan desirability. Not surprisingly, local, provider-sponsored health plans were assumed to be more member focused, enabling doctors to best care for their patients, with larger “business oriented” plans being viewed with greater skepticism.

The last, but related dimension is accountability. Over the years the media has covered many stories focusing on a person with a terrible disease who, as a last resort needed a costly but experimental procedure, only to be denied, with no apparent pathway for appeal. Local, provider sponsored plans were perceived as being far more accountable, perhaps because leadership and service personnel live in proximity to the members, implying greater impetus for sensitivity, if not formal accountability.

Yes, all health plans face head winds due to category concerns and the inherent nature of medical management associated with health plan financial management.

The good news is that by directly addressing the underlying values behind consumer sentiment, you can develop a communications strategy that helps you adjust your course and put the wind at your back.

We would welcome the opportunity to talk with you to explore our findings and your specifics. Or you could join us at our upcoming webinars where we will discuss our national research and its applications. And you can reach out to me at Paula.Serios@bvk.com with questions or comments.

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Paula Serios
is a Senior Vice President, BVK Health

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Joel English
Joel English is a Managing Partner, BVK Health

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