Increasing Engagement Just 10% Could Double Net Income For Most Health Plans
By Christine Kern, contributing writer
Study reveals the real value of consumer engagement for healthcare plans.
Engaging healthcare consumers can be one of the highest value activities undertaken by a health plan, potentially doubling net income for most by simply engaging 10 percent more members according to Welltok research. The study calculates the real value of health plans engaging with members.
“Our research validates and demonstrates the potential financial value to health plans of consumers participating in their health and health care decisions,” said David Veroff, senior vice president of evidence and value science for Welltok, and lead author of the report. “The rationale for investing in consumer health engagement is strong and dramatic improvement in engagement is possible if health plans focus on several key strategies.”
The study, Engaged Members, Real Value: How Health Plans Can Quantify Engagement, examines the role of consumerism in healthcare as it plays out in the promotion of healthcare enrollment. Study authors write, “As healthcare consumers assume greater direct financial responsibility for their care, they also are engaging much more deeply in a wide range of choices about their healthcare from provider selection to treatment options. And numerous consumer-oriented organizations are vying for healthcare consumer attention through apps, devices, incentives, retail presence, and an array of communication efforts.”
In response, health plans have developed a newfound enthusiasm for engaging members and transforming their experiences, infusing “member engagement” with new and powerful meaning, including specific metrics that must be met.
Yet, a tangible framework for fully quantifying the value of engagement still does not exist for healthcare, the way it does for retail and other industries. “Because remarkable amounts of effort and money are being spent on communication efforts to engage consumers, there is great strategic and financial importance to better understand the full potential of member engagement,” study authors note.
By increasing consumer engagement, Welltok concludes, health plans can reduce future hospitalizations and other costly care for people with chronic conditions, reduce readmissions and increase use of less expensive providers, thus reducing medical costs; reduce claims disputes, reduce the use of customer service, and improve the permissions system to use lower cost communications channels like email or SMS, thus reducing administrative costs; and improve quality bonuses, retention, and coordination of benefit resolution, resulting in increased revenue.
Fully engaging 10 percent more of a one million member individual commercial health plan population would produce a potential $107 million in medical and administrative cost reduction and new revenue, according to the report.