Member Knowledge Has Monetary Value for Health Plans

Les Masterson, for HealthLeaders Media , April 13, 2009

The annual J.D. Power and Associates' National Health Insurance Plan Study is a chance for highly-ranked health plans to puff out their chests, but this year's results highlight more than the fact that New Englanders are happier with their health insurance than other regions and Kaiser Permanente ranked number one in four geographic areas. For the health plan executive, there is also this nugget:

Health plan members care most about coverage, benefits, and provider choice, but members' knowledge about their plans underlies all of those issues.

The third annual survey measured member satisfaction for about 33,000 Americans enrolled in 131 health plans in 17 regions by examining seven factors: coverage and benefits; provider choice; information and communication; claims processing; statements; customer service; and approval process.

Member experience is one of those difficult-to-define topics that financial experts have a tough time gauging, but the survey found that member knowledge plays a critical role in whether an individual is satisfied with his or her plan and taking advantage of offerings, such as preventive services. Members who don't understand their plans are more costly and more apt to call the health plan to ask basic questions.

In other words, positive member experience and plan knowledge have a direct correlation to costs.

"If the member understands the plan very well, they understand what's covered and what's not, and understand how to use those services," says David Stefan, executive director, healthcare, J.D. Power and Associates in Phoenix, AZ.

The survey also found that health plan members in small group and individual plans were less satisfied with their insurer than those who worked for large businesses (501-5,000 employees) and jumbo employers (more than 5,000 employees). Those who worked for large employers were more likely to re-enroll and recommend the plans to others than people who were employed by small employers or were enrolled in individual plans.

Individual health insurance has become one of the few areas of growth for health insurers in recent years as more Americans turn to individual plans because they lost their employer-based coverage. Nine percent of health plan members are enrolled in individual plans and that figure is expected to grow.

Though individual plan members are less satisfied than those in large group plans, member knowledge is a problem throughout the healthcare system. Americans simply don't understand their health plan coverage. In fact, the study showed that close to two-thirds of surveyed members were confused about how their plans work to one degree or another.

"We see a very big difference between people who say they fully understand how it works and those who have some level of confusion," says Stefan, who adds this finding shows the need for better new member communication.

Kaiser Permanente, which was one of the highest rated health plans in the J.D. Power and Associates survey, performs new member outreach that features an introductory phone call that explains offerings and benefits, and promotes the importance of forging a strong relationship with a primary care physician.

As an integrated healthcare system, Kaiser Permanente has an advantage over companies that are strictly health insurers. Having hospitals and doctors under the same umbrella as a health plan allows the Oakland, CA-based company to communicate with its member on care delivery and not just answer questions about coverage. This leads to members viewing their health plan as connected to their doctors rather than as a separate claims-paying entity.

"We tend to see the experience of the care driving the satisfaction rather than the experience of the coverage per se," says Christine Paige, senior vice president for marketing and Internet services for Kaiser Permanente. "We're very focused on connecting people with the services and making sure they have good access to [Kaiser programs], and those in turn drive satisfaction."

Paige says insurers are finding that they need to communicate with members about issues beyond urgent care or claims processing.

"I think one thing you are seeing more and more of is a focus on communicating with people about not just how to access care when you're ill, but more about prevention and wellness," says Paige.

Les Masterson is an editor for HealthLeaders Media.

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