Competition among health plans forces them to fight for market share, which is good for members, says Greg Hoeg, vice president of U.S. insurance operations at J.D. Power.
Bad news for residents of 34 states where UnitedHealth Group is exiting the PPACA exchanges: Health plan member satisfaction is highest in areas of the country where there is more competition among carriers.
That's the main takeaway from the recent J.D. Power 2016 Member Health Plan Study. Nationally, member satisfaction with their health plans improved nine index points in the 2016 study, scoring a total of 688 on a 1,000-point scale. This uptick comes on the heels of a 10-point improvement in 2015.
Payers Improve Service to Gain Market Share
The increase in satisfaction that is demonstrated in the 2016 study is driven by improved performance across all factors, including in coverage and benefits (+12 points); information and communication (+11); and customer service (+10).
On a regional basis, the study finds that members indicate more satisfaction with cost (610 vs. 606), communication and information (646 vs. 641), and customer service (743 vs. 740) in competitive markets as compared to those dominated by a single carrier.
Competition among health plans forces them to fight for market share, which is good for members, says Greg Hoeg, vice president of U.S. insurance operations at J.D. Power.
"Where there is competition, there tends to be more customer satisfaction. What it comes down to is a greater awareness on the part of health insurers in general that they have to monitor customer satisfaction and be more responsive to it," Hoeg says.
"Some are turning to better communication with the explanation of benefits and notification of services, whether through traditional or electronic means. A large portion of carriers are also trying to make clear during the open enrollment period exactly what their plans offer because confusion on the part of consumers can lead to loss of satisfaction."
Satisfaction Improves After Taking a Dive
J.D. Power has conducted the study since 2007 to track member satisfaction among members of 135 health plans in 18 regions throughout the country. The study focuses on six key factors:
- Coverage and benefits
- Provider choice
- Information and communication
- Claims processing
- Cost
- Customer service
Member satisfaction dipped to its lowest point in 2014, due mainly to the implementation of the Patient Protection and Affordable Care Act and the introduction of the health insurance exchanges, Hoeg says.
"Since the passage of Obamacare, there was a bit of a drop off in customer satisfaction overall. Part of that was caused by trepidation because of the unknowns of some of the changes being caused by Obamacare," he says.
"Now people are getting more familiar with how things are working, and it's working more smoothly on the payer system. These things are bringing about greater satisfaction overall again."
Carriers in competitive markets have also upped their game when it comes to communicating the details of their health plans, Hoeg says, which is also helping to increase satisfaction.
"Where there is more competition, carriers have recognized that they can't just be focused on the cost side of the business. It has changed their focus to be more oriented on customer satisfaction as a pivot point," he says.
"People have trepidation because of the complexity of the offerings. I think many carriers are realizing this and are trying to adjust by simplifying their documentation."
Mega-Mergers Won't End Competition
There have been some major mergers within the health insurance industry, such as Blue Cross Blue Shield plans merging with other Blues plans and two separate proposals that would merge Aetna and Humana, and Anthem and Cigna.
While many industry experts have speculated that this may not bode well for consumers, Hoeg says that isn't necessarily the case. Because so many provider organizations are getting into the insurance business, he says, there should continue to be robust competition in many markets.
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"We are seeing an increase in competition that is being driven by providers that are either buying or creating health insurance companies," he says.
"I think we will see the creation of more, smaller insurance companies that will facilitate greater competition, so I'm not sure the big mergers are an indication that we will have less competition. In the end, I think the winners will be the consumers."
Integrated Delivery Systems Top the Rankings
Health plans that are part of an integrated delivery system have an edge over other health plans, according to the study. Their overall member satisfaction score is 746, which is 63 points higher than nonintegrated plans.
These plans "are poised for success as healthcare and health insurance become more focused on member satisfaction," the study says.
Part of the reason for this, Hoeg says, is that payers have the potential to communicate better with providers when they are part of the same integrated system.
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"Kaiser Permanente, for example, is a very large provider and also a large payer. They tend to have that kind of crossover effect, and I think it does get consumers to feel more comfortable with the payer aspect of healthcare," he says.
"Organizations are able to more fully integrate the two sets of activities so it is less confusing, and I think consumers see more in the way of convenience."
Still Room for Improvement
While a score of 688 out of 1,000 represents an increase in member satisfaction, it is not a stellar showing when compared to other industries, Hoeg says.
And although he says that is understandable given the major changes currently happening within healthcare, Hoeg expects to see payers continue their efforts to improve.
"[Buying a health plan] is not like buying a widget where if it doesn't work correctly the consumer might not be happy but it isn't life threatening. Where healthcare and insurance are concerned, it can have that effect, therefore, dissatisfaction becomes heightened and rightly so. Individuals want the best possible healthcare, and they want it in a way that doesn't put a burden on them. It's a very personal, very intimate type of service," he says.
"Now insurance companies are becoming more focused on the satisfaction of their clients. As a result, I would hope we will see increasing satisfaction overall that would continue for an extended period."
Rene Letourneau is a contributing writer at HealthLeaders Media.