How Health Insurers Can Get Closer to Consumers

healthcare big data

Individuals become part of the health care system at birth, and they remain enmeshed in it until death. So when health care companies talk about the lifetime value of a customer, they really mean it.

Cigna, a health care insurer that does business in more than 30 countries, including those with a single-payer health care system, has been focused on determining customer lifetime value and how that impacts its business.

“We’ve got products for infants, and we’ve got Medicare products,” David Fogarty, head of global customer value management for Cigna Insurance, said at Thursday’s Customer Centricity Summit in New York, organized by Knowledge@Wharton, the Wharton Customer Analytics Initiative and Momentum Event Group.

Fogarty is leading the company’s shift from a business-to-business model in the U.S. to a “business-to-business-to-consumer” focus — that is, businesses, not individuals, usually are the company’s first point of contact for selling. The challenge, he noted, is making a highly complex system more easily navigable by customers when Cigna often isn’t their first contact for care and often doesn’t know a lot about the customer’s experience when receiving that care.

“There are many players in the health care value chain,” Fogarty noted. “How do you manage and delight the customer when you have a lot of factors that you don’t really control?”

“Customer lifetime value looks at profitability outside of the business lines. It’s not just profit-and-loss focused.”

The key differentiator, he said, are the insights companies can gain from traditional customer research, such as surveys and focus groups, but also through data mining and analytics. “Customer lifetime value brings unique insights,” Fogarty noted. “It looks at profitability outside of the business lines. It’s not just profit-and-loss focused. If you do it right, you can apply it to new and existing customers. Twitter 

Customer Segmentation

As part of these efforts, Cigna is using data to segment customers, analyzing those segments and trying to personalize services based on the findings. For example, the company used information such as what type of communications customers preferred, their health conditions and how the customers felt about their health to target messages it sent about biometric screening and preventative care.

Customers who said they were unclear about which preventative care to choose received a message focused on the different options available, while employees who thought preventative care didn’t offer long-term benefits received messages about how such care can prevent chronic disease. A control group that was part of the same effort got more generalized messages.

The findings: 82% of those who received the personalized messages participated in biometric screening, and 64% went to a health care provider for a wellness visit, compared to 40% and 23.3% respectively from the control group, noted Fogarty.

“If you do it right, you can apply [customer lifetime value] to both new and existing customers.”

“We’re using marketing analytics not just to sell, but to engage,” Fogarty said, adding that similar efforts to promote responsible behavior are equally applicable in industries such as auto insurance and airlines.

In using the customer lifetime value model, Fogarty works closely with Cigna’s legal side to ensure its data-mining efforts aren’t violating privacy regulations. He said the company would ideally like to obtain data that stretches from birth to when a consumer goes on Medicare. “If we [calculate lifetime value] successfully, we can assess the value of customers, customize strategies, and do better at acquisition and retention,” Fogarty said. “There are all types of marketing models, but these are strategic models across the whole company.

“In the future,” he continued, “once we delight the customer … hopefully we’ll be able to turn that [engagement] into sales.”

 

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"How Health Insurers Can Get Closer to Consumers." Knowledge@Wharton. The Wharton School, University of Pennsylvania, 07 November, 2014. Web. 30 August, 2016 <http://knowledge.wharton.upenn.edu/article/health-insurers-can-get-closer-consumers/>

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