Perspective: Health Plan CRM Driving Consumer Value into the Customer Relationship

Transcription

1 Perspective: Health Plan CRM Driving Consumer Value into the Customer Relationship PERSPECTIVE Eric Newmark # HI Global Headquarters: 5 Speen Street Framingham, MA USA P F IN THIS PERSPECTIVE This IDC Health Insights Perspective discusses the growing importance of CRM for healthcare payers, its expected benefits and potential challenges, and suggested best practices for harnessing CRM capabilities to drive enhanced value for both payers and end consumers. Situation Overview In the wake of skyrocketing insurance premiums, payers face deepseated pressure to help lower healthcare costs and improve patient outcomes. The 2010 Patient Protection and Affordable Care Act (PPACA), set to expand insurance coverage to over 32 million new patients, simultaneously changes how health plans sell and deliver healthcare benefits while restricting healthcare payer business expenses. As a result of this disruptive force, U.S. healthcare payers now face a decade long business transformation journey that will carry growing market demands and financial pressures. Software Rationalization and Data Integration To successfully navigate this business model evolution, payers will need to significantly improve their operational efficiency while concurrently reducing administrative costs. IT operations are one area, in particular, that hold room for much improved tactical efficiency. Many health plans have grown through acquisition or by adding new products to their portfolio, which has resulted in tremendous redundancy and infrastructure silos. Rationalization of this technology should be among the first steps health plans take to increase efficiency, since most legacy applications will not support the business agility required to meet new business demands and opportunities. Healthcare payers need to craft new reimbursement methods that reward value rather than volume of services. This includes outcomebased incentives aimed at reducing the incidence and severity of chronic diseases. From a data standpoint, it will become increasingly January 2013, IDC Health Insights #HI IDC Health Insights: Healthcare Payer IT Strategies: Perspective

2 important that payers improve integration and management of data to support expanding customer intelligence needs. For example, PPACA legislation requires health plans keep their medical loss ratio at 80 85%, depending on the size of the health plan, which will require significantly improved data visibility above and beyond current levels. Likewise, incentive-based payment programs will need to link customer service, administrative, and care management interactions, while consumer-driven models will require the unification of data across sales, product, and customer service. Both of these data initiatives will similarly require improved cross-department linkages and elimination of data silos. Customer Interaction and Communication In just one year, payers will need to begin interacting with consumers through a retail model, including a direct-to-consumer retail healthcare market. Roughly, two-thirds of future new members are expected to be enrolled through both direct and multipayer state insurance exchanges. This makes it absolutely vital that payers improve access to automated enrollment systems, since current systems lack efficiency and scalability, and these exchanges are supposed to help simplify how consumers and health plans interact going forward. CRM, in particular, will play an important role in helping payers both attract new customers and retain existing subscribers. For example, if a small and medium-sized business decides to revoke its group plan and opts to let employees buy their own insurance on newly launched exchanges, payers could proactively contact those lost subscribers to entice their reenrollment under individual plans, since most of them will likely have never had to buy their own insurance, might be overwhelmed by it, and may appreciate the simpler alternative of reenrolling with their existing health plan provider. As more responsibility shifts to consumers, for example, with the growth of health savings accounts and consumer-directed health plans, payers need to do a better job engaging consumers and providing them with improved tools and service. As a result, it is no surprise that many health insurance companies are beginning to focus much more intently on corporate branding and are now looking to increase their CRMrelated investments to bolster their consumer-oriented capabilities. In the past, payers have been slow to expand investment in CRM for a number of reasons, such as cost, the complexity of data integration within data silo oriented organizations, and the existence of legacy systems that still remain under long-term contract. But the emergence of consumer-driven healthcare and the need for better consumer engagement have created a strong necessity for the industry to enhance its CRM proficiency. Page 2 #HI IDC Health Insights

3 Payers Set Their Sights on CRM With the individual consumer becoming instrumental in making coverage, payment, health, and care decisions under emerging consumer models, payers will need to create relationships that help them identify and foster opportunities for better communication, efficiency, incentives, and care at every touch point. Even customer contact management, which makes up the most basic aspect of core CRM functionality, remains incredibly disconnected and inefficient within the payer industry and holds substantial opportunity for improvement. Simple improvements such as more frequent and accurate management of customer contact information (i.e., phone numbers, mailing addresses, and addresses) can go a long way to minimizing missed opportunities from misdirected communication and associated expenses. Moreover, beyond these basics, CRM promises to deliver extensive consumer engagement enhancements and improvements in customer management intelligence, which is appropriately reflected in industry spending data recently captured by IDC Health Insights' Worldwide Healthcare IT Spending Guide. Currently, the U.S. healthcare payer market for CRM is roughly $65 million, which is small in comparison with other industries. However, it is already growing faster than most industries, presently at 7%, and is expected to accelerate to 9% growth within just two years. CRM Will Deliver Broad New Capabilities to Payers For an industry that is more than a decade behind most other business verticals in terms of CRM proficiency, it is actually a very exciting time, considering the broad set of new (actually, more than 10 years old), innovative capabilities that awaits most payers, which are only now beginning to adopt CRM and expand their customer-focused capabilities. For example, CRM can help payers streamline and automate the renewal process while also reducing time and cost. By replacing paper processes with wizard-guided online submission forms, the enrollment process can be dramatically simplified for group administrators and insurance brokers. Payers can also improve support capabilities for consumers in a similar fashion with online personalized guidance tools to help maneuver consumers through challenges like coverage gaps. Ultimately, CRM has the potential to enhance many different areas for payers, including the management and monitoring of sales, marketing, enrollment, underwriting, and member services, and even improve interoperability with state health insurance exchanges. Table 1 outlines some of the most basic capabilities that CRM will provide for payers IDC Health Insights #HI Page 3

4 TABLE 1 Core CRM Capabilities for Healthcare Payers Capabilities Activity management Automated workflow Dashboards, reporting, and analytics Campaign management Employee collaboration Lead and opportunity management Profile management Provider network management Quotes and renewal processing Details Logging and analysis of user interactions across all channels (call center, , Web, etc.) Streamline multiparty tasks, enhance asset handoff security, and improve documentation of processes to drive efficiency and ensure process auditability Analysis of data across all channels to help drive enhanced sales, services, crosssells, and upsell opportunities Tracking leads and managing marketing campaigns Tools such as team calendars, shared scheduling, and task assignments help improve workflow and orchestration between all resources in sales, service, marketing, support, and other consumer-facing departments Improved management of prospects, sales opportunities, surrounding workflow, and associated communication, helping to drive improved pipeline visibility Hierarchical relationship modeling (i.e., families) and member profile management Patient eligibility data for providers (i.e., for referrals, prescriptions, and claims) and management of provider information Management of policy pricing quotes, renewal documentation, and related workflow Source: IDC Health Insights, 2013 While expanding CRM capabilities holds significant promise for healthcare payers, most payers today are still in the early innings of their road map for CRM expansion. Many payer efforts thus far have been focused simply on replacing their outdated legacy systems, implementing basic enterprise CRM capabilities in their call center, and achieving adequate data integration across all systems and repositories to bring a unified view of data to their call center agents. Something as simple as providing call center reps the ability to access all relevant information inside a single CRM dashboard without having to toggle back and forth between systems is still a highly regarded achievement in this industry. As highlighted by the two case studies in the sections that follow, most CRM capabilities implemented by other industries in years have only recently begun to find their way into payer organizations. Though each case study is unique and focuses on payers with very different Page 4 #HI IDC Health Insights

5 demographically focused businesses, it is interesting to note how archaic both companies' technology footprint surrounding CRM was only a few short years ago. Case 1: Large National U. S. Healthcare Insurance Provider A leading healthcare payer, whose mission is to provide high-quality, cost-effective healthcare services exclusively to the military, including active duty members, reserves, retirees, and their families, has long suffered from poor customer visibility and a lack of process automation. The company, which historically did not own a CRM system, had never tracked customer interactions beyond short unstructured call notes. Instead, it simply used the GUI of its thirdparty claim adjudicator's system to answer basic customer questions in the call center and possessed no ability to perform any proactive outreach to its customers. Now, five years after embarking on an organizationwide transformation project to implement CRM and BPM software and renovate its business processes and technology foundation, the company is beginning to receive some significant dividends. Background Managing healthcare insurance for the military is complex. In addition to administering in-system care, payers must also help coordinate care for customers with outside providers, since military families sometimes need to go outside standard military treatment facilities to get certain additional specialized services, like the delivery of babies and other services outside of primary care. For this particular payer, services cover more than 20 states, 180,000 physicians, and over 100 military facilities. Back in 2008, the company started setting goals for what it wanted its business to look like in five-year increments, with the objective of persistently improving its organization and making it more appealing to the Department of Defense (DoD). The DoD subsidizes its business on an ongoing basis with five-year government contracts, so the company's guiding philosophy was to create a long-term plan that would help it continually deliver care more efficiently. Maintaining high customer satisfaction and care quality ratings are both instrumental to protecting its funding. Project Goals As a payer with a defined population (i.e., the military), the company really cannot gain or lose customers or sales. Instead, its goal is to optimize the health of military families, and do so in a manner that most efficiently utilizes tax payer dollars. Keeping an eye to the future, the company realized that in order to continue growing and driving 2013 IDC Health Insights #HI Page 5

6 wellness for its millions of beneficiaries, it needed to become more scalable and agile as an organization. This meant ensuring its staff had the best tools available for assisting consumers and driving customer satisfaction. But when it comes to technology, unlike a health insurance company that can depreciate investments in IT over a long period of time, this payer does not have that luxury. It has no ability to spend large sums of money unless it directly leads to quickly realized benefits and proven ROI, so it built its business case around three fundamental aims: Reduce the workload burden on its employees (i.e., eliminate unnecessary tasks and improve first-call resolution rates to eliminate callbacks from people on the same issue) Reduce the number of steps it takes its personnel to perform tasks (i.e., increase employee productivity) Drive the highest level of quality out of each interaction by increasing process standardization (i.e., remove variability) After what the company described as "an exhaustive procurement and evaluation process," it decided to implement CRM and BPM software from Pegasystems, including PegaRULES Process Commander (PRPC), which has provided the company with greatly improved customer management capabilities. Rollout and Results After rolling out its first deployment three-and-a-half years ago, the company has continued to ramp up from the initial 100 users to now over 1,200 users and has extended its use to some of its partners. For example, its government service counterparts now have customized viewership into the system, providing full transparency into the payer's operational efficiency, which helps drive a deeper relationship and increase the likelihood of future grant renewals. Benefits from the system have also been far reaching. CRM has afforded the company greatly improved multichannel synchronization and optimization, which allows the company to touch consumers about the same topic multiple times from different channels like mobile, text, phone, and online. Though, the most significant improvements have come inside the call center. Call center agents now have more accurate and complete information immediately accessible to them, permitting them to do a better job delivering the right information during their first customer interaction, which has both reduced repeat call and improved customer satisfaction. Process standardization has also been greatly increased, specifically around call narratives, which has led to more time on calls spent delivering information that can improve health and wellness and less time on ancillary non-value-adding topics. The unified presentation of multifaceted data (i.e., historical customer Page 6 #HI IDC Health Insights

7 interaction data, health data, and claims data) to call center agents has also helped discussions with customers become more meaningful, leading to better questions asked and recommendations given. Since initial deployment, the company has constantly measured success on a daily basis and kept metrics on dozens of categories, including measurements by employee, activity, and location. As expected, with most of the first year having been dedicated to training on the new system and changed business processes, the company was able to meet all of its initial business case goals for success within roughly two-and-a-half years from initial launch. Today, the company is able to efficiently manage its 10,000 authorizations per day, 900,000 claims per month, and over 1.5 million total transactions per month, most of which occur via call center and Web self-service. With its transformation project complete, the healthcare insurer now believes it is better positioned to deal with future industry headwinds, such as the potential $500 billion cuts in defense spending that could impact its government grants. The company's ability to continue to operate more efficiently than its competitors will help maintain its long-term top-of-the-list status in terms of government funding. Case 2: Mids ize Regional U. S. Healthcare Insurance Provider Background A leading midsize regional healthcare payer has long experienced substandard call center efficiency and poor customer visibility. Prior to 2005, call center agents tracked all calls by entering long unstructured call notes into their legacy system. After a call, agents would go offline and become unavailable while they wrote up a description of their customer interaction. After completing their notes, they would then go back online and become available for the next customer in the queue. Not only was this poor utilization of agents' time, but unstructured call notes made it very troublesome for reps to pull up and quickly digest prior call information if a customer were to call back. As a result, it was extremely challenging to supervise or improve its call center, since managers had no visibility into how call agents were spending their time nor any means of identifying where inefficiencies resided. Ultimately, call center bandwidth suffered, causing longer call wait times and lower customer satisfaction. Project Goals and Implementation of CRM After evaluating several different CRM systems available, the company decided to deploy Oracle CRM in The payer, which already ran Oracle ERP and several Oracle E-Business Suite products, saw great value in Oracle CRM's breadth of functionality and ability to 2013 IDC Health Insights #HI Page 7

8 easily integrate with the company's existing applications and repositories of data. One of the payer's primary project goals was to better leverage customer information from all other existing systems to significantly improve the value created during customer interactions. This included not only consumers but communication with all forms of customers such as brokers, providers, and other third parties. The payer also wanted to integrate claim information directly into the CRM interface to be displayed to call agents so they could better answer claim-based questions. Another key consideration the payer needed to address was its approach to managing privacy, to help ensure information made available to call center representatives was carried out in a secure fashion. For example, forcing agents to ask and confirm customer identification questions before showing the agent private information was a way to further validate and protect consumer privacy. This made certain that an agent speaking to customer "Bob Smith" could not accidentally reference information from a different client with the same name. The company actively chose to move slowly away from its legacy insurance administrative system over several years to a more component-based architecture with Oracle, since it believed a measured approach would be more conducive to a smoother business transformation. After the initial deployment in 2005, while certain account information was accessible and utilized within the company's CRM system, data was still being fed back to its legacy insurance system to accommodate premium billing. It wasn't until the payer went live with its latest deployment in 2010 that reps could view all information within Oracle CRM, including comprehensive contracting and pricing capabilities. Project Results Benefits from the new system have been plentiful. Oracle CRM has helped the company reduce the average length of customer calls and improve the quality of information being delivered to its customers. By providing reps with better access to all relevant information in a single system (customer interaction history, provider information, pricing, claims data, etc.) and eliminating the need to toggle between multiple applications, it has helped drive quicker and more accurate responses. This has resulted in shorter wait times, increased customer satisfaction, and significantly more productive call center resources. "One of the key things that the Oracle CRM suite brought us was the ability to model our business better," said a spokesman from the company that oversaw the implementation. "We can now make more informed decisions on how workflows should operate and have been Page 8 #HI IDC Health Insights

9 able to improve efficiency through the creation of broader process standardization." An example of this includes a smarter call structure. Reps can now more quickly anticipate what types of questions people are asking, spend less time researching on calls, and spend added time delivering more thorough and accurate answers. Similarly, efficiency surrounding the member appeals process has also improved since reps now have better tools available to utilize for researching each particular appeal case. All of these improvements have led to their company receiving several industry awards for high customer satisfaction. While the company's CRM initiative to date has been strictly focused on call center phone interactions, its next planned step is to implement similar capabilities around other modes of interaction ( , online chat, texting, etc.). Its goal is to unify all customer interaction channels and concentrate on multichannel optimization and synchronization of customer data to further streamline its CRM processes and expand corporate intelligence around all areas of customer interaction. Future Outlook Health plans are in need of becoming more agile and responsive to the market in their offerings while also providing a greatly improved multichannel customer experience. Online mediums, in particular, need to incorporate more intuitive easy-to-use functionality, such as social capabilities, in order to maintain long-term growth. Without prompt action on these fronts, health plans will have a difficult time protecting market share and staving off customer attrition. Complexity and poor presentation of information has long been a major obstacle for the industry. Difficulty for consumers to easily understand and digest health plan details has prevented consumers from feeling in control when it comes to health insurance, as few consumers today are fully satisfied with their ability to compare and contrast available healthcare plan options. Payers need to eloquently craft the presentation of healthcare options into easy-to-use online interactive tools for consumers, including intuitive side-by-side comparisons and wizard-driven support to guide consumers through the decision process. Enormous potential exists here to dramatically improve customer self-service and provide consumers the empowerment they desire, thus improving customer satisfaction in the process. Investment in CRM has already been ramping up in the healthcare insurance industry over the past few years, though some leading payers are significantly further down this transformation path than others. And as discussed in U.S. Health Industry Provider 2013 Top 10 Predictions: Providers Move into New Business Models While Meaningful Use Adoption Continues (IDC Health Insights #HI238411, forthcoming), IDC Health Insights expects payers to continue expanding their investment in CRM solutions to further support 2013 IDC Health Insights #HI Page 9

10 closed-loop marketing and the development of interactive, targeted outreach campaigns that help drive efforts around consumer engagement. Investment in analytics, connected health technologies, mobile, and social media capabilities are also expected to follow suit, and health plans are placing increased priority on the Web enablement of sales, marketing, billing, and enrollment. Likewise, health and wellness strategies are also a popular topic among health insurers right now, and as payers further invest in these initiatives, it will be instrumental for them to better understand what programs produce the best results, through which channel (mobile apps, Web, , etc.), and for which consumers, thus further expanding the business need for more advanced CRM capabilities. Ultimately, though many payers are still way behind other industries in terms of comprehensive CRM utilization, more payers are now venturing forward, moving off their legacy systems and bolt-on solutions, and adopting commercially available, highly scalable, cloudbased CRM solutions. As this trend continues, we can expect to see increasing transaction efficiency, improving workflow, streamlining of business processes, and more intelligent sales and marketing, which will give way to a more value- and information-driven healthcare insurance market model. LEARN MORE Related Research U.S. Health Industry Provider 2013 Top 10 Predictions: Providers Move into New Business Models While Meaningful Use Adoption Continues (IDC Health Insights #HI238411, forthcoming) Perspective: Cloud Adoption and Deployment in the Healthcare Payer Market in 2012 (IDC Health Insights #HI237023, September 2012) Perspective: Castlight Next-Generation Healthcare Consumer Engagement (IDC Health Insights #HI235696, June 2012) Worldwide Healthcare IT Spending Guide, , Version 2 (IDC Health Insights #HI234891, May 2012) Page 10 #HI IDC Health Insights

11 Copyright Notice Copyright 2013 IDC Health Insights. Reproduction without written permission is completely forbidden. External Publication of IDC Health Insights Information and Data: Any IDC Health Insights information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Health Insights Vice President. A draft of the proposed document should accompany any such request. IDC Health Insights reserves the right to deny approval of external usage for any reason IDC Health Insights #HI Page 11