The document discusses how healthcare payers can improve member retention and engagement by focusing on the member experience and providing tools and services that support healthy behaviors. It argues that payers need to (1) offer products and services that meet members' needs, (2) provide excellent customer experiences at all touchpoints to build relationships, and (3) engage members in healthy living through personalized programs and tools. By addressing the member experience and providing useful services, payers can build trusted relationships that enable engagement and help reduce healthcare costs over time.

1. Point of View in Consumer Centricity
Healthcare Experience and Engagement Enabling Retention

2. Executive Summary
The shift to consumer-driven health is evolving
rapidly. Payers need to adapt to retain their
members, stay relevant, and manage costs. With
medical costs rising and consumers managing
their health, payers want to engage them in healthy
behaviors and cost-effective decision making. To
engage members, payers need to develop trusted
relationships and form useful interactions with their
members. Relationships require a combination
of a superior experience and products that help
members manage their health.
A once antagonistic relationship can turn into
a productive, lasting relationship by forming an
experience high in usability around services and
products that interact with consumers, as well as
creating the whole experience or journey in dealing
with a payer.
Traditionally, healthcare payers focused on
providing support to their members through
transactions. Transactions include such tasks as
looking up benefits, submitting claims, and looking
up providers. This is a “get the job done” mentality
and lacks a good experience. Transactions
support only a fraction of what members need
in a consumer-driven world. Health reform and
Consumer-Directed Health Plans (CDHPs) started
the transformation to consumer-focused healthcare.
CDHPs put the consumer or member in control of
their health, which places demands on the payers
to provide relevant information and useful tools that
support decision making and healthy living.
Payers cannot develop meaningful relationships
through transactions alone. They need to go
where consumers engage with life every day: their
lifestyles. Lifestyle is the day-to-day living where
healthy behaviors are set and routines developed.
Enablers in healthcare, such as biometric
devices and mobility, offer a strong connection to
consumers, providing immediate monitoring and
feedback of their health indicators. The devices and
their applications are tools that support members’
healthy lifestyles. A great experience with useful
products that target a member’s lifestyle is a
winning combination to improve personal health and
manage costs.
Value Envisioned. Value Delivered.
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Abstract
Companies launch products and services to
consumers with the thought that their product
will offer so much value to the consumer
without considering the bigger picture. It is
a holistic view of the consumer experience
that matters if consumer centricity is to be
attained. The combination of a product’s
functionality and the experience it offers sets
a condition for potential consumer
engagement and relationship development.
Translating this to healthcare, it is important
for payers to provide information and tools so
members manage their health while offering a
connected experience to simplify and navigate
the complex maze of healthcare.
1

3. Doing The Job
There is a need to combine experience and
function into a consumer model, and I believe
there is a strong use for it in healthcare to achieve
member engagement. An idea came to me after I
read about the work of Clayton Christensen and a
fellow researcher. It was an article on “Milkshake
Marketing” from Harvard Business School
published in 2011. Clayton’s claim is that 95% of
new products fail, and companies need to look
at products in the way that customers do: how a
product “gets the job done.” Jobs have functional,
emotional, and social dimensions.
I was fascinated by this article, which followed
the role of a milkshake in the eyes of a consumer.
The goal was to increase the sales of milkshakes.
The study found that consumers bought the most
milkshakes in the morning and for a common
reason. Consumers faced a long commute and
needed something to make their commute more
interesting. They were not hungry but would be by
10:00 a.m. The milkshake was thick, so sucking
through a straw gave them something to do. They
were in business clothes and the milkshake was
less likely to get their clothes dirty than a donut or
bagel would; it was contained enjoyment.
Traditional marketing says to segment the market
by demographics and product. Clayton’s argument
was to segment according to jobs-to-be-done.
Focusing on the job, they found that by increasing
the thickness and adding chunks of fruit, they
enhanced the job-to-be-done and sales increased.
They also had another version, a treat for children
with a thinner consistency so parents would not
have to wait for them to finish it. This shows two
jobs that needed to be done. Now add experience.
Experience
I noticed a correlation between a product’s job
and the overall experience the person has with
it. It seems that more than just user experience
(usability), this involves the journey or customer
experience of the event before use, during use,
and after use. I observed that products that were
lean on features but robust on the experience
were more likely to be adopted and succeed. The
concept of consumers choosing packaging over
content has been around for a while. We choose
a laundry detergent because our family used
it when growing up (brand) or the color of the
package is striking (packaging). Not many people
actually read and understand the chemistry of
the ingredients (content). Maybe we are seeing
a shift in consumer behavior and the new form
of “packaging” is the experience. Personally,
I sacrifice features to remove the hassles of
product selection, purchase, and use. To me,
experience became the product differentiator,
if for no other reason than to avoid adding
frustration to my busy lifestyle. If a vendor has a
useful product with a great experience, then I do
not mind waiting in lines to get it, either. Even the
wait can turn into an interesting experience if we
design the experience well.
Figure 1 shows a model for connecting the
experience and functionality with consumer
relationships
2

4. Value Envisioned. Value Delivered.
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Commodity
Bored
Acceptance
Trash
None
None
Valued
Satisfied
Engagement
Fad
Excited
Courtship
CUSTOMER EXPERIENCE
JOB-TO-BE-DONE
Relationship
M
aturity- Stickiness
Short-Lived Relationship
NoRelationship
better
better
Scenario 1 – High excitement and limited use
IIf you have a useful product that offers a great
experience in purchasing it and using it, you
could see strong user adoption. The excitement
may not be sustained over time, as users realize
the “fun” is gone and the usability of the product
has waned. Remember the fads of yesteryear.
Clothing can fit into the category of a fad. Articles
of clothing that have lost their excitement include
bleached jeans, hoop earrings, penny loafers, and
leggings. They are still functional, but a shift in the
experience occurred. Experience can impact the
functionality, as well. If a style no longer creates
a good feeling while wearing it, the clothing no
longer “performs its job” to make the person feel
good, and it will be discarded for another piece
of clothing. In this mode, you create a short-term
relationship and the product seems more like a fad
with a short lifecycle.
Scenario 2 – High use and limited experience
A product such as phone service and cable TV
from a cable provider, which does an OK job and
provides a poor customer experience, may not
have a foundation for a relationship to develop.
Forrester reports the customer index for cable TV
providers is in the poor range. From a consumer
perspective, we put up with the cable TV provider
and consumers accept what they are given but
will jump to another provider at an opportunity if
the product stops performing or they are fed up
with the experience. This industry has retention
issues, which could be more severe if there were
more vendors offering services. The barrier to
switching to another provider is low.
Scenario 3 – High use and high experience
If you have a service with great products and
a satisfying experience, such as Amazon.
com, there is a foundation on which to build
a relationship – even online. Amazon ripped
business away from brick-and-mortar stores and
offers excellent customer service throughout my
shopping experience. I get reviews of products,
updates on my order, and an evolving shipping
status in real time. The experience supports two
tenants of consumerism: It is convenient and fast.
Facebook is another example of a product that
Figure 1

5. 4
Some ideas are to offer
consumer centered products
and services aligned to
personalized needs, tune
customer experiences to build
relationships, and engage
members in healthy living
and decision making with
personalized programs.
does the job without getting overly complicated
and offers a good experience. Users of Facebook
are truly engaged and we see this in how much
time is spent on it. It has integrated into the user’s
lifestyle – a powerful combination.
To sustain the relationship and use, you must
either tune the experience to keep it fresh or
maintain the usefulness of the product. I believe
I see this in Apple’s iPods. I own four iPods
and wondered, “Why?” Apple generated a fun
experience for me with their initial product launch.
For me, it hit the fad stage first and moved into
the valued area. Early iPods did the job of playing
music, but over time I began to retire my iPod to a
drawer. Why? I found that the excitement of having
one diminished and the experience decreased. I
then moved into the commodity area.
Soon, Apple released a newer model, which
increased my excitement, and the bonus was the
newer model had a new feature, making it seem
more useful to me. So I bought it. I believe that I
quickly moved back to the fad area. Usefulness
and experience are high again, so I drift into the
valued area. Repeat that cycle nine months later.
It seems like the experience was being pulsed
to hook me into buying “upgrades” to keep the
experience going. I call this “Pulsating Experience
Marketing.” I was an experience junkie, and the
behavior seemed a lot like the way I play with a
cat. I would put a toy on a string and then tease
the cat by moving the toy close and then pulling it
away. Repeat for a sustainable experience.
Without the introduction of a new experience,
the first iPod would have gone to my daughter’s
play box with no repeat of the cycle. I believe that
experience and usefulness are closely linked to
driving consumer behavior, and behaviors drive
consumer engagement.
Experience + Job = Relationship
Expanding on the concept of “Milkshake
Marketing” and translating it to healthcare
and consumer engagement, payers “do the
job” of providing benefit plans and services to
consumers. In their annual customer experience
index, Forrester ranks health plans in the
“poor-to-very-poor” range, mostly because the

6. Value Envisioned. Value Delivered.
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experience of purchasing and using health plans
is less than desirable. On top of this, payers lack
differentiation between themselves, and there is
a low barrier to change payers for consumers.
This is largely because payers do not practice
relationship building with consumers.
Contrary to popular belief, payers want to engage
consumers and help them live a healthy life, but
consumers do not want to be engaged by payers
at this early stage. Instead, consumers prefer
to have an existing relationship in place with
payers in order to build a deeper relationship.
Only when the consumer experience and the “job
to be done” are considered acceptable by the
consumer, can a payer then begin to build and
nurture the relationship.
If you ask them, payers may say there is a lack
of consumer or member experience during
the claims process because payers process
the claims internally and the member does not
participate directly. The payers to a degree can be
considered right and wrong in this regard. They
are right in that payers do not in fact generate a
member experience during this process and it
is possible that the member will start wondering
what happened to their claim. Payers are wrong in
that there is no managed experience – a missed
opportunity in relationship building. After all, it is
human nature to think the worst, and in this case,
members imagine their claim is not going well or
something has gone wrong.
After a period of time, the member will enter the
frustrated stage and call their payer to find out the
status of their claim. This call will end up costing
the payer approximately $3 to $5. If payers could
generate a better member experience around the
claims process, the payer would not incur the
cost of this call. Perhaps, payers could provide
a message to members using SMS or email to
advise them where their claim is in the process.
They could use a simple graphic with a five-stage
process or a text message stating the claim is
in “Stage 3” with “We are processing your claim
with no expected delays,” which provides the
necessary and relevant information to prevent the
consumer from entering the “frustrated stage.”
Does this sound familiar? Amazon accomplishes
this feat by communicating order-tracking
Stage 1
Logged
Stage 2
Validation
Stage 3
Determination
Stage 4
Claim
Denied
Stage 4
Claim
Accepted
Stage 5
Appeals
Stage 5
Payment
We received
your claim
We are
reviewing
your claim
We are
processing
your claim
The status
of your
claim is...
Payment issued
or
Appeals started
DELIVERY CHANNELS
SMS
@

7. 6
information to show consumers their order
statuses. Seeing order activity or progress eases
the concerns of consumers as they wait for their
order to be processed and shipped.
In a consumer-driven world, we usually do not
like to wait. That being so, if payers were able to
communicate the status of a consumer’s claim
as it traveled through the process, the member
experience would be much more enjoyable.
Members would become satisfied, since the
payer took the action first and generated a dialog
around the claim event. This may even sound like
a reassuring voice, such as, “Don’t worry, we are
providing personalized attention to your claim.”
With this capability, members would be able
to choose how much information they want to
receive, how often, and even select their preferred
channel of delivery. After all, it is all about “me” in
the world of the consumer.
By providing a positive member experience
coupled with products that do the required job,
payers are now able to build relationships with
members through useful communications and
interactions. Over time, as the relationship grows,
the opportunity for engagement by the payer will
be created.
In order to build relationships with members,
however, payers must focus on the following
three guidelines:
1. Offer a product that does the job for members
in a way they want the job to be done.
2. Provide a grand experience in two areas: a
well-designed member experience on all
member touch points and a tuned member
experience so that consumers are happy
interacting with the payer.
3. Extend their products to be more than
benefit plans and provide members the tools
to help them in their pursuit of healthy living
and enjoyable lifestyles. The result is that the
“doing the job” indicator goes up.
Building relationships aids in member
engagement and increases retention. It is about
the quality of the interaction, and not the quantity.
The relationship is formed around common
goals such as improving members’ health. If
the interaction is pointless and without value,
it becomes annoying to the member and the
experience deteriorates.
Engagement is Good for Everyone
Engagement at a member level has many
benefits, not only for members, but also for
payers and the health system. At the “Engaged
Stage,” payers can:
• Modify member behaviors to lower likelihood of
chronic diseases
• Promote healthy living for members
• Offer information and tools to help members
make intelligent health decisions
Because medical costs are increasing at an
alarming rate each year, member health is a
priority for payers and providers in order to
manage costs. The CDC says chronic diseases
account for $3 of every $4 spent on healthcare
and that chronic diseases are preventable by
modifying consumer behaviors. This is a perfect
example of how consumer engagement solutions
can help lower costs and decrease chronic
diseases, but member relationships are required
for engagement programs. For payers to engage
their members, they need to focus on two areas:
1. The customer and user experience
2. A product or service that performs what the
member wants to do
By bringing these two items into the design of a
mobile app that supports healthy behaviors with
relevant content, healthy tips, and encouragement,
the payers open the door to engagement with
members by helping them modify their behaviors
that lead to chronic diseases. That is a lot to
say, but you can see how it is all connected, and
healthcare has many moving parts

8. Value Envisioned. Value Delivered.
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Consumer Centricity
A rise in priority of consumer centricity is just
as important as cost management is for payers.
Engaging members in healthy living and using
self-service tools is important to lowering health
costs and empowering members in an era of
consumer-driven healthcare. Therefore, in the end,
a sustainable solution to lowering health costs and
having a healthy member base over the long term
can be achieved through consumer centricity.
This approach takes time and is an investment in
the health system and in its members.
If you are looking for low-hanging fruit and easy
successes, focus on the user experience. The
fastest road to a good experience is to remove
pain points in services and products that touch
customers. Usability testing can provide
enlightening results and insight into any such pain
points. An annoyed customer can be transformed
into a satisfied customer by assessing online
assets and updating the design based on
the findings.
In order to offer a more consumer-centric
experience, some solutions could be to offer
consumer-centered products and services that
are aligned to the consumer’s personalized needs,
tune customer experiences to build relationships,
or engage members in healthy living and decision
making with personalized programs. These are
all examples that can contribute to lower costs
by improving member health and consumer
engagement. Payers now have a raison d’etre
and they remain relevant. Payers can use their big
data repositories filled with member information
to provide members with targeted and relevant
information and tools backed by a terrific
experience. Why would it work? Payers would
take time to build relationships and trust with
their members and shift into a consumer mode of
business. Moving to a consumer view is a graceful
transition toward diversification, since payers can
provide solutions that accommodate members
where they live the most: in their lifestyle.
HealthScape
The traditional interaction with payers has been
around transactions: find a doctor or pharmacy,
look up my benefits, and look up my claim. This is
the transaction layer in the consumer relationship.
There is little opportunity for a payer to develop
a relationship and generate consumer stickiness
in this area. Members, in this case, only go to the
transaction layer to perform a transaction, which
for any large payer is about one to two times a
year. The main reason that many members perform
a transaction is because they are going through a
health event, like a sickness or medical condition,
and members are already in a stressed state of
mind dealing with a personal or family health issue.
This is not the best time to generate a relationship.
The best way a payer can generate a positive
experience in this layer is to provide superior
support for the member when needed. This
translates to a flawless experience by offering a
caring connection, managing administrative tasks
and processes, and performing event logistics
so members can focus on their health. In order
to build productive relationships, payers need to
go where the people are when they are in a good
state of mind.
Figure 3 shows a representation of the
HealthScape from a consumer perspective.
There are three distinct layers around health and
consumer involvement, with the transaction layer
being at the core. Each layer is different in how
often members interact in each layer.
In the “Transaction Layer,” members may interact
several times a year with a payer performing
a health transaction. In the “Wellness Layer,”
members interact far more often, such as one to
two times a week, depending on their personal
plans for nutrition and exercise. When in the
“Lifestyle Layer,” there is a potential for members
to be involved in health every day, as it becomes
part of a routine in a person’s daily living. In the
“Lifestyle Layer,” a payer has the potential
to achieve relationship nirvana – stickiness.

9. 8
Figure 3
HealthScape for Consumers
While in the “Wellness Layer,” members are
focusing on sustaining or achieving a state
of wellness. In this layer, the main issues on
members’ minds are nutrition, exercise, and
healthy behaviors. Members are focusing on their
health to minimize the risk of becoming sick and
maximize the potential of leading a productive life.
Members also begin to enter into a relationship
with wellness providers and coaches to engage
in healthy behaviors. Telephone coaching is an
example of this. However, wellness is one of
many personal priorities a member
manages, so it may not be their
top priority all the time. For
wellness to be embraced,
a member must absorb
healthy thinking into
their life on a daily
basis and it must
become part of
their lifestyle.
In a “Lifestyle
Layer,” members
interact, work, play,
and experience life
every day. Examples
of health in the
“Lifestyle Layer” are the
many new devices that
monitor daily activity, such
as sleeping habits and nutrition.
The “Jawbone UP” and “Fitbit
Flex” are wearable devices
providing biometric data to
consumers throughout the day. These devices
provide feedback to members so they can adjust
their actions and behaviors in order to reach their
desired goals. These devices become part of the
wearer’s lifestyle and that lifestyle changes based
on the feedback they receive. If a member works
in an office and sits at a desk too long, an alarm
will go off, letting the wearer know they need to
be more active and move around. If this happens
often enough, their thinking will be changed
and a new behavior formed, leading to
healthy outcomes.
Solutions in the “Lifestyle Layer” focus on
supporting consumers in their quest for sustained
healthy living. It is important to help members
approach health in a holistic manner and offer
encouragement in the form of helpful tools
that promote education in the areas of nutrition,
exercise, stress, care, community, and healthy living
habits. In this layer, relationship maturity
can blossom. To assist payers in
their vision to diversify, they
can take advantage of
this opportunity in the
“Lifestyle Layer” by
offering such tools
to reinforce healthy
behaviors for their
members and
provide more than
just health plans.
The definition of
health to a payer is
more about healthy
living for members and
not just paying a claim.
Years ago, the same
transformation occurred in
the banking industry. Banks
interacted with consumers simply
by performing transactions such
as depositing a check. Now
banks offer a full suite of services, such as financial
planning for retirement, college savings, and family
growth, supporting a person throughout their life.
An extension of a payer’s offer could be to
aggregate data from multiple biometric devices to
provide services to their members such as a health
dashboard with relevant content to support decision
making and behavior changes in pursuit of healthier
living. As mentioned under the “Engagement

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Section,” healthy behavior lowers the likelihood of
chronic diseases, which in turn lowers medical
costs in health care.
Summary
It may appear that payers are losing some control
to consumers, but in reality, they are increasing cost
control through member enablement. It is important
for payers to trust and empower members to do
the right thing for their health. Payers must provide
relevant information and decision tools to arm their
members in their pursuit of a healthy lifestyle.
The benefits of consumer centricity align well with
payer value:
• Coordinated member experience
• Personalized communications to channel
preferences for engagement
• Usable consumer tools and online assets to
manage the experience
• Align consumer programs with the business
strategy to manage effectiveness
• Drive member healthy behaviors to manage
chronic diseases and manage costs
• Support consumer health decisions with
information and tools to manage costs
• Unified platform for member communications
for consistency
• Generate 1:1 relationships with members for
retention and engagement
• Increase stickiness with members for retention
• Compliance to CMS and federal disabilities
organizations to minimize risks
• Integrated mobile and social enablers to optimize
consumer engagement
• Payer remains relevant through useful solutions
Payer centricity and provider centricity is replaced
over time with consumer centricity. Consumers
begin to take control of their health, with payers
and providers transforming to meet the consumer
challenge of a long, productive life and quality care
while managing costs.
The goal is to have an engaged, healthy community
of people. With so many moving parts and
interactions, a thorough assessment of the payer’s
approach to a consumer-driven world is required
before embarking on launching disparate tactical
programs, or confusion replaces engagement.
trust - relationship indicator
plan tasks
transaction
procuct provider
wellness
engaged
coordinated partner
lifestyle
embedded
strategic advisor

11. 10
Very Poor Poor Okay Good Excellent
Low Score Industry Average High Score
Grocery Chains
Fast Food Chains
Parcel Delivery Service
Retailers
Banks
Hotels
Insurance
Companies
Investment Firms
Auto Dealers
Credit Card Issuers
Software Firms
Car Rental Agencies
Computer Makers
Airlines
Wireless Carriers
Appliance Makers
Internet Service Providers
Health Plans
TV Service Providers
Base: 10,000 U.S Consumers
Source: Temkin Group Q1 2013 Consumer Benchmark Survey
Copyright ©2013 Temkin Group All Rights Reserved
2013 Temkin Experience Ratings (TxR),
Range of Industry Scores
50% 60% 70% 80%
Corporate Headquarters – Cranford, NJ
Chicago • Boston • New York • Philadelphia
London • Bangalore, India
Copyright ©2013 Paragon Solutions is a registered
trademark of Paragon Solutions, Inc.
https://www.facebook.com/paragonsolutions
https://twitter.com/consultparagon
http://www.linkedin.com/company/paragon
Forrester and the Temkin Group
publish an annual customer
experience index with health
plans landing in the poor to very
poor range and below all other
industries tested.
About Paragon Solutions:
Paragon Solutions is an advisory consulting
and systems integration firm that specializes in
enterprise information management to help clients
leverage information assets for better business
results. The company does this through its industry
practices, solution accelerators and specialized
technology competencies that help clients achieve
operational efficiency, business scalability, and
regulatory compliance.
Paragon works with businesses that are focused
in a few key industries − communications, financial
services, healthcare, insurance, and life sciences.
The industry-focused practices
work with Paragon’s competency groups to address
today’s client concerns in Process Optimization,
Information Management, and Information Insight.
For more information, please visit the Paragon
website at www.consultparagon.com, or call
1.800.462.5582.