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With the days of house calls long gone, today’s healthcare industry has burgeoned into nothing short of a full-fledged, multi-billion-dollar consumer-service business. Loyal customers are the cornerstone of success for healthcare organizations at every level, from insurance providers and HMOs to hospitals and individual practitioners. Today these groups are beginning to use relationship marketing tactics championed by other consumer-driven industries. And they’re starting to reap the benefits of high customer retention. But unlike other companies, these organizations have a unique motivator that goes way beyond the bottom line: their customers’ health. The Disenrollment Dilemma Staggering turnover rates of 20 percent per year cost healthcare groups millions of dollars annually, notes Roberta Clarke, a leader in healthcare marketing and a professor of marketing at Boston University. A 200,000-member plan with a $120 monthly premium and 8 percent annual disenrollment loses $24 million in revenue each year, according to The Bayer Corporation Guide to Improving Member Retention. And industry experts agree that, in healthcare as in other industries, the cost of acquiring new customers is 6 to 10 times greater than the cost of retaining existing clients. Beyond these financial factors, healthcare organizations must also consider the cost of customer well-being. Says Clarke, “If you’re turning over your membership all the time, you’re not keeping people long enough to have an incentive to invest in them.” So customers — in this case, patients — don’t reap the full, long-term rewards a healthcare plan can provide. Preventive services (such as cervical cancer screenings) and ongoing treatment programs (such as diabetic care) lose their edge. And by switching plans and/or doctors frequently, patients lose the benefit of having a physician who is intimately familiar with their healthcare history and needs. In fact, according to a recent study published in the Journal of the American Medical Association, patients who were seen by the same physician for 10 years or more had lower healthcare expenses and spent fewer days in the hospital than those who did not have lengthy relationships with their physicians.
As if keeping customers around weren’t hard enough, healthcare organizations face the daunting challenge of having to please not only members, but multiple intermediaries as well. Targeting physicians with innovation – The physician-patient link is crucial to enrollee loyalty. Yet with so many demands on doctors’ time, this integral relationship often suffers. To help physicians recoup time lost to paperwork, Cigna HealthCare in Phoenix, Ariz., is developing a paperless online referral and in-office treatment authorization system. The service is expected to significantly boost physician advocacy for its plan, with the end result of increased patient satisfaction. Targeting employers with teamwork – To woo employers and help keep their employees enrolled, Harvard Pilgrim Health Care in Brookline, Mass., created a partnership program that pairs HMO employees with executives from the plan’s largest employers. The teams help troubleshoot and avert employer attrition. For example, when Harvard Pilgrim contemplated a premium increase, one team identified several major employers that would leave the plan if rates were hiked. The HMO met with the team and reached a compromise to retain those employers. In 1997, U.S. News & World Report ranked Harvard Pilgrim the best healthcare organization in the state and third best nationwide. Beyond its proven track record in improving retention rates, relationship marketing is a perfect fit for healthcare organizations. After all, in order to do their job properly, these businesses must already have the detailed demographic information necessary to create one-on-one partnerships with their end customer, the patient. Getting Personal Using their detailed databases, healthcare organizations can divide customers into small, well-defined segments that identify factors such as which patients value quality of care over price. This kind of segmentation allows healthcare groups to more effectively customize programs, services and communications on a one-to-one level. Here’s how three healthcare companies have used what they learned from their databases to increase member loyalty. We’ll Pencil You In – Member surveys and interviews with current and disenrolled members showed Lovelace Health Systems in Albuquerque, N.M., that scheduling difficulties ranked as a prime reason for disenrollment. So the HMO created a rotating physician schedule that expanded appointment availability into evening and weekend hours without overburdening doctors. Today, patients can see a doctor the same day they call for an appointment, an improvement that’s made a marked impact on customer satisfaction. The Old Switcharoo – When CareAmerica of Woodland Hills, Calif., looked at its records and local competition, it realized that patients often switched plans without changing doctors. The HMO saw that it needed to develop a customer-loyalty program based on a direct relationship between its staff and its enrollees. Targeting its 45,000 Medicare members, CareAmerica began a community-level customer service program that includes separate toll-free numbers and employees for each area, plus problem-solving CareAdvisors assigned to individual members. A year after the program was launched, monthly disenrollment had fallen from 2 percent to about 1.7 percent. Seniors Rule – Through its annual Health Care Financing Administration audit, Intergroup of Tucson, Ariz., discovered it had the highest disenrollment in the state and the quickest disenrollment of Medicare members. Focus groups, surveys and interviews showed that unresponsive customer service was a top cause of dissatisfaction among this senior group.
These forward-thinking healthcare organizations aren’t alone. More than virtually any other industry, healthcare is sitting on a rich vein of relationship marketing fuel. Leading the way into the 21st century will be those who recognize that the key to keeping members enrolled lies right under their noses, in the details they gather simply to do their jobs. STRATESCAPES and STRATESCAPES SUPPLEMENTS are published by Customer Communications Group, Inc., a full-service agency specializing in relationship marketing and customer communications. Our comprehensive, turnkey services include data analysis, customer segmentation, strategic consulting, account management, creative execution, print production and multimedia solutions. Copyright 2002 Customer Communications Group, Inc. For more information, call 1.800.525.0313. Or visit us online at: http://www.customer.com
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