Measuring the Value of Trust for Health Insurers

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an
Measuring the Value of Trust for impact!
Health Insurers

March 1, 2012

#prghealthcare
COPYRIGHT ©2012 ALL RIGHTS PROTECTED AND RESERVED

Today’s Speakers

Marc Ruggiano Tom Lacki, Ph.D. Elizabeth Glagowski
Partner, Director of Research Executive Editor, Strategy
Peppers & Rogers Group Peppers & Rogers Group Peppers & Rogers Group


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Agenda

What Health Insurers Are Facing Today

Why Trust Matters

Creating a Trusted Environment


What Health
Insurers Are Facing Today


US Healthcare Spending Leads OECD

Total Health Expenditure, Per Capita (PPP adjusted dollars)

Source: OECD Health Data (database) from Kaiser Family Foundation via http://facts.kff.org/ accessed on February 25, 2012.


While Life Expectancy Lags Considerably

Life Expectancy at Birth, Total (Number of Years)
90

80

70

60

50

40

Source: OECD FactBook 2010; via www.oecd-ilibrary.org/ accessed on February 25, 2012.


and Consumers Rate the Experience Poorly

Customer Experience Index (CxI) by Industry

Source: Forrester Research, The Customer Experience 2012


Consumer Perception of Today’s Health Insurers

Source: Peppers & Rogers Group research


The result is an environment of distrust …

50%

43%

40% 38%
Respondents

30%

19%
20%

10%

0%
Distrusters Neutral Trusters



… which puts all insurers at risk of consumer defection
The Affordable Care Act will offer options to the distrusting and disengaged

“How likely are you to switch “You indicated that you are unlikely to switch
health insurance providers health insurers. Which of the following is closest
next year?” to the reason you are not likely to switch?”

Source: Forrester Research


Consumers Describe the Ideal Health Insurer



Why
Trust Matters


Looking Through the Trust Lens


Levels of Customers’ Trust

“My health insurer can be trusted”

0 1 2 3 4 5 6 7 8 9 10

Distrusters Neutrals Trusters



Customers’ Trust in the Health Insurance Sector

38%
43%
Trust

19%




Trust Impacts the Perception of a Health Insurer

Clear/Confusing
Transparent/Secretive 3 Easy/Difficult

Organized/Disorganized Caring/Uncaring
2

Accessible/Inaccessible 1 Generous/Stingy

0
Up-to-date/Outdated Fair/Unfair
-1

Superior/Inferior -2 Compassionate/Uncompassionate

-3

Kind/Unkind Flexible/Inflexible

Reliable/Unreliable Helpful/Unhelpful

Informative/Uninformative Believable/Unbelieveable

Friendly/Unfriendly Effective/Ineffective

Cooperative/Combative Warm-hearted/Cold-hearted
Fast/Slow
Distrusters Trusters


Poll question


Customers’ Trust in Health Insurers


Customers’ Trust for Individual Health Insurers

100%

80%
Respondents

60%

40%

20%

0%
Anthem BCBS United Aetna Humana CIGNA Kaiser
Healthcare Permanente
Health Insurer




Share-of-Trust

Trust Capacity = Σ General Belief that Most People Can be
(a) Trusted, and are (b) Fair and (c) Helpful

3

Trust in Health Insurer
Share-of-Trust =
Trust Capacity


Share-of-Trust by Health Insurer

Anthem Blue Cross Blue Shield

Kaiser Permanente
Health Insurer

Aetna

CIGNA

United Healthcare

Humana

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8
Share-of-Trust



Taking Action to Improve
Customer Trust


The Basics

10
9
8
7
6
Rating

5
4
3
2
1
0
Does a great job of Processes claims Demonstrates a Covers me when I'm Makes enrolling in the Works well with my Is typically first to
keeping the promises it accurately high level of business traveling away from plan easy and primary doctor's office market with new
makes and home straightforward services
technology innovation
that
directly benefits me


Scale: 0 = strongly disagree, 10 = strongly agree


Communications from the Health Insurer

10
9
8
7
6
Rating

5
4
3
2
1
0
Communicates clearly Proactively alerts me Provides easy to read Uses simple language Communicates with Sends me
with me to potential problems statements and and words I can easily me on a timely basis communications that
and issues that may explanation of benefits understand reflect my unique
affect my coverage needs and interests




Trust and Communication Frequency and Channel

100%

80%
Respondents

60%

Truster
40% Distruster

20%

0%
Too little Just right Too much All of the Some of the None of the
time time time

Volume of communication Amount of time health insurer
from health insurer uses preferred channel of
communication



Communications with the Health Insurer

10
9
8
7
6
Rating

5
4
3
2
1
0
Representatives of I can typically solve Representatives do I am able to reach a My issues, problems At the conclusion of I am asked for Representatives of
my health insurer any problem I am an excellent job of representative of my and concerns are a contact, I am feedback on my my health insurer
listen carefully to my having by contacting understanding health insurer in a typically resolved in warmly and health insurer's apologize
issues and concerns my health insurer complex issues reasonable amount one contact genuinely thanked representatives each immediately when a
of time for being a customer time I make contact mistake has been
made




Goodwill

10
9
8
7
6
Rating

5
4
3
2
1
0
Focuses on doing the right thing Demonstrates Has earned my respect Has a strong reputation for Places my interests above its own
for its customers truthfulness and a high level of honesty and openness with its
believability customers




Reaping the Rewards of
Improved Trust


Trust Impacts Commitment

10

9

8

Commitment* 7

6

5

4

3

2

1

0

Example Items
I feel a strong attachment to my health insurer.
I am fully committed to my health insurer.
It is worth my effort to work closely with my health insurer.
My relationship with my health insurer is very important to me.
* Factor weighted mean of responses to 4 questionnaire items assessing “commitment.”


Trust Impacts Loyalty

10

9

8

7

Loyalty* 6

5

4

3

2

1

0

Example Items
Because my health insurer has created a strong, delightful customer experience for me, I have no need to look for better alternatives..
I anticipate that I will remain a customer of my health insurer for a long time.
I feel a strong sense of loyalty to my health insurer.

* Factor weighted mean of responses to 5 questionnaire items assessing “loyalty.”



Trust Impacts Advocacy

10

9

8

7
Advocacy* 6

5

4

3

2

1

0

Example Items
How likely would you be to recommend your current health insurer to a friend or colleague?
If asked by your health insurer to serve as an ambassador to your community on their behalf, how likely would you be to participate?

* Factor weighted mean of responses to 2 questionnaire items assessing “advocacy.”



Sensitivity of Outcomes to Trust

Anthem BCBS

United Healthcare
Health Insurer

Aetna

Humana

CIGNA

Kaiser Permanente

0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45
Change in Outcome per Unit of Trust

Commitment Loyalty Advocacy



Trust and Employment

10

9

8

7

6
Rating

5

4 Distrusters

3
Trusters

2

1

0
I would recommend to my employer that we keep the If my employer switched to a different health insurer, I
same health insurer next year would try to find another job allows me to stay with
my current health insurer



Trust Impacts Health Outcomes

10

9

8

7

6
Rating

5

4

3

2

1

0
Follow Doctor's Instructions Follow Health Insurer's Instructions Healthier Because of Health
Insurer



Customers Value Trustworthiness

How much more per month, if any, would you be willing
to pay in premiums for a health insurer with high levels of trustability?
50%

40%
Respondents

30%

20%

10%

0%
$0 $1-$25 $26-$50 $51-$100 $101-$150 $151-$250 $251 or more



Why Trust Matters
In summary, …


Creating a
Trusted Environment


6 Building Blocks of Trust

Anticipate customers’ needs, understand the
Empathy context in which they present, and work to
deliver beneficial solutions

Proactively and reactively communicate
Goodwill Transparency openly with customers about information,
policies, decisions, and outcomes

Take ownership and action at the individual
Accountability and organizational level when customers
encounter negative experiences
Trust
Deliver accessible, convenient, consistent,
Customer
and credible experiences to customers
Experience
regardless of all else

Train, enable, and authorize employees to
Competence Empowerment
take actions that earn customers’ trust

Recognize and reward trust-building actions
Recognition and customer-centric behaviors of high-
performing employees


Customer Experience as a Trust Driver

Deliver accessible, convenient, consistent,
Customer
and credible experiences to customers
Experience
regardless of all else

Goodwill
Can our customers reach us through their desired
channels and complete their intended actions? ?

Are our customers served by trained, relevant,
empowered, understanding employees? ?
Trust

Do our customers receive the same messages and have
access to the same capabilities across channels? ?
Do we ensure that we deliver on commitments we
Competence make to our customers (e.g. trackable confirmation
numbers, scheduled follow-up actions, etc.)?
?

Do we measure our customer experience performance
and its impact on trustability? ?


Building a Platform for Trustability

2011 2012

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

Phase 1 Initiatives

1.1 High 1.2 Med. 1.3 Low
Impact Impact Impact

7 Initiatives Phase 2 Initiatives 5 Initiatives


Phase 3 Initiatives
12 Initiatives


Q&A Session

Marc Ruggiano Tom Lacki, Ph.D. Elizabeth Glagowski
Partner, Director of Research Executive Editor, Strategy
Peppers & Rogers Group Peppers & Rogers Group Peppers & Rogers Group


We’re Just Getting Started…

1. You will receive:
“Creating a Healthy Level of Trust,” a special preview from Customer
Strategist, the executive journal from Peppers & Rogers Group

2. Join us for upcoming webinars in the “Trust” series:
• “The Roadmap to Trustability” – March 28
• “The Social Media Agenda for Healthcare” – April 25
• “Case Study: Making the Consumer-centric Transformation” – May 17

3. Come visit our booth at World Healthcare Congress
• April 16 – 18 in Washington, DC

4. Trustability Working Sessions
• Schedule your own on-site working session for your colleagues

5. Follow us on Twitter @PeppersRogers


For more information please contact:

Marc Ruggiano Tom Lacki, Ph.D.
Partner Director of Research
mruggiano@peppersandrogersgroup.com tlacki@peppersandrogersgroup.com
+1.203.989.2189 (office) +1.203.989.2199 (office)


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