Prophet 2014 Healthcare Exchange Consumer Study Results

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Eight million people signed up for insurance plans via public exchanges in the first year of the Affordable Care Act, yet an estimated 40+ million still remain uninsured. When annual enrollment opens again in October, how should companies change their tactics and targets based on experiences in year one? It’s time to learn from year one, and plan for year two and beyond.

We've released our findings from our 2014 survey of consumer attitudes and experiences with the Affordable Care Act’s first healthcare exchange open enrollment period. The survey of 1000 American adults shows that while nearly half of respondents plan to purchase healthcare on the exchange in the future, concerns over cost, confusion over subsidies and general distrust of health insurance companies persist.

To hear the audio that accompanies these slides, watch a recording of our webinar here: http://bit.ly/1vbOvUO.

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Prophet 2014 Healthcare Exchange Consumer Study Results

  1. 1. Proprietary and confidential. Do not distribute. Prophet’s 2014 Consumer Healthcare Exchange Survey: Lessons From Year One & Opportunities For Year Two
  2. 2. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 1 Prophet’s 2014 Consumer Healthcare Exchange Survey: Lessons From Year One & Opportunities For Year Two Reach out to us to learn more about these and other Prophet consumer-focused healthcare initiatives Jeff Gourdji, Associate Partner (312) 404-3971 jgourdji@prophet.com John Kutz, Partner (415) 359-7383 jkutz@prophet.com Jeff brings a breadth of experience in marketing, brand and customer-driven growth strategy that comes from working across many industries, as marketing practitioner, management consultant and political strategist. Jeff has worked in extensively in health care, including payers and health care service provider organizations. John has 16 years of consulting experience working with companies on customer driven strategy and growth projects. He brings deep experience in healthcare across provider systems, life sciences, health plans and distribution. He’s helped several health provider organizations with their transformation toward more person-centered care models. Introduction
  3. 3. 2 About Prophet
  4. 4. 3Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 3 We are a strategic brand and marketing consultancy About Prophet We help our clients win by delivering inspired and actionable ideas Our recognized thought leaders and cross-industry experts work collaboratively with clients to create superior outcomes
  5. 5. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 4 We provide a range of customer-driven solutions to our clients We grow businesses Companies don't drive growth – their customers do. We transform customer experiences Memorable experiences are flawless, engaging and leave you feeling surprisingly satisfied We build brands Brand building takes both strategy and imagination. About Prophet
  6. 6. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 5 Our perspective today is informed by working across the health care landscape Life Sciences Pharmaceuticals Devices & Diagnostics Consumer Health & Wellness Healthcare Providers Health Systems and IDNs Related Healthcare Providers Payers & Administrators Insurance Carriers Other Third-Party Payers Technology & Operations Information & Technology Distribution & Operations Illustrative and partial client list About Prophet
  7. 7. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 6 Our recent engagements have focused on understanding the health care consumer and how they are likely to act in the reform-environment Consumer Segmentation Determined consumer needs in the retail marketplace, and how those needs grouped into distinct segments Study Analyses Major Findings • Less than half of respondents were primarily motivated by price • Others were primarily influenced by access to information, guidance and support and care related attributes Consumer Experience Strategy Development Examined the healthcare consumer’s journey to uncover significant painpoints and opportunities for improvement A heightened consumer experience revolved around: • Robust member onboarding program • An improved digital / mobile experience • Personalization in member communication Consumer Trends Exploration Examined emerging trends in consumer attitudes and behaviors and determine applicability to healthcare Today’s consumers: • Are concerned with making more considerate choices • Seek omnipresent connectivity • Want to track and be rewarded for their progress About Prophet
  8. 8. 7 Survey Background
  9. 9. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 8 As health exchanges and how consumers interacted with them became a major hot button, we had a several questions Survey Background We set out to understand what happened in year one and what can be learned in anticipation for year two: ? • What can we learn from those that signed up for 2014? • Which groups are ripe to target for 2015 • What will it take to win with them?
  10. 10. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 9 We designed our survey to pick up on target consumer preferences, drivers, and barriers when engaging with the Exchange Survey Background Who did we talk to? Qualifying respondents… Were over 18 Were the sole decision makers or shared decision making responsibilities Are any one of the following: - Purchasers on the exchange, - Are uninsured and eligible for subsidies, These respondents are those we believe to resemble the primary targets for sign up on an exchange 01 02 03
  11. 11. 10 So what did we learn?
  12. 12. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 11 Overall Findings Avoid the Stubborn Subset: Top headlines for overall sample Upsell is Financially Viable: The long term uninsured are a difficult audience for the Exchange, due to their dismal future plans to purchase, and might not be ripe to target The Metal type that respondents purchase did not indicate a higher instance of chronic health condition Low Awareness of Subsidies: More than half of those who were eligible for subsidies on the Exchange were unaware of their status Two Key Groups to Address Next OEP: Millennials & Hispanics Millennials and Hispanics are groups with high interest in the Exchange and should be targets of interest leading up to the year two OEP
  13. 13. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 12 Overall Findings – Avoid the Stubborn Subset? Data suggested that the long term uninsured are a difficult audience for the Exchange, and might not be ripe to target Definitely / probably will buy on the exchange Definitely / probably will not buy on the exchange Uninsured for less than 5 years The “Stubborn Subset” Uninsured for more than 5 years 3.2: Which of the following statements best reflects how likely you are to consider purchasing insurance for yourself or a family member through the Healthcare Exchange? 32% -20% 12% 41% +22% 63% Only 3% of the “Stubborn Subset” claimed to have had a positive experience on the site. A potential reason for these poor experiences? Only 17% of them agreed that the Exchange made it easy to find plans relevant for them
  14. 14. 13 Overall Findings – Upsell is Financially Viable Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 13 Presence of a chronic health condition is not highly correlated with the purchase of more expensive plans In addition, those with multiple chronic health conditions, did not have higher purchase levels of premium plans No Chronic Health Condition Has Chronic Health Condition* Catastrophic 4% 3% Bronze 25% 19% Silver 38% 48% Gold 18% 16% Platinum 15% 15% 4.2: Which of the following insurance plan levels did you select? (Select one) Note: Bronze, Silver, Gold and Platinum plans provide the same set of essential health benefits *Chronic conditions included: Asthma, Chronic lung disease, emphysema, chronic bronchitis or COPD, Congestive Heart Failure (CHF), Coronary Artery Disease (CAD), High Cholesterol, High Blood Pressure or Hypertension Diabetes, Hemophilia, Arthritis or Rheumatism Cancer, Chronic Pain including chronic back pain, Multiple sclerosis, cystic fybrosis, or hemophelia
  15. 15. 14 Overall Findings – Low Awareness of Subsidies Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 14 More than half of those who were eligible for subsidies on the Exchange were unaware of their status 1.10: Do you believe you are eligible to receive discounted rates, or subsidies, to purchase health insurance through the exchange? The Kaiser Family Foundation estimates that 17 million people who are now uninsured or who buy insurance on their own are eligible for premium tax credits Of those actually eligible Respondent believe they are eligible for subsidies through the Exchange 43% Respondent believe they are not eligible for subsidies through the Exchange 21% Respondent is not sure 36%
  16. 16. 15 Overall Findings – Two Key Groups to Address Next OEP Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 15 Research identified two attractive and viable groups to target leading up to the year two OEP What about these groups, why do we want them? Can we even get them? How? The Independent Millenials • Do we want them: Favorable from an actuarial perspective: healthy, young, and of those who are uninsured, they have not been for long • Can we get them: Express that they had very positive experiences with the exchange so far, and many claim to be open to future use of the Exchange • How do we can get them: Through education and guidance, specifically around the shopping experience • Do we want them: Purchase more expensive plans, and want to stay with the same HIC long- term • Can we get them: Value health insurance and consider it extremely important, especially for their families. About half believe that HCR will bring them greater access to better health benefits. They also consider the exchange to be an attractive channel for cost savings • How do we get them: Through guidance. Many are confused about how the Exchange works, and would be open to guidance from HICs The Acculturated Hispanics
  17. 17. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 16 Questions? John Kutz Partner (415) 359-7383 jkutz@prophet.com Jeff Gourdji Associate Partner (312) 404-3971 jgourdji@prophet.com @ProphetBrand prophet.com/healthcare Type them in the text box on the right side of your screen
  18. 18. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 17 Let’s explore The Millennial opportunity
  19. 19. 18Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 18 Sampling Information Millennials Who are the “Millennials” we talked to? We disqualified respondents who are covered under a parent’s insurance plan; therefore, our sample of Millennials tend to be: Older More independent More educated than the nation’s population of 18-34 years old However, we believe this sample better reflects the target for whom the Exchange was designed. Due to these nuances, we have consider them “Independent Millennials”
  20. 20. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 19 Sampling Information Millennials The Millennial opportunity Young, Stubborn, but Interested: Young, Stubborn, but Interested: Not surprisingly, Millennials tend to be more disengaged with their health until they are sick, however, they are generally still very intent on utilizing the exchange Unexpected Positivity: For Millennials, the experience on the exchanges has been far more positive than older groups, which could indicate a higher likelihood to purchase in the future Seek Guidance: Millennials seek guidance when shopping for plans, and value that the Exchange lets them easily compare prices of plans. Right now they seek guidance from friends and family, but there is an opportunity for payers to come in as expert guides Unexpected Positivity Seek Guidance:
  21. 21. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 20 Despite attitudes that suggest apathy towards health insurance, Millennials still are interested in HCR and plan to purchase on the Exchange Attitude Millennials Non-Millennials I do not think about my health until I get sick 34% 22% Compared to other things I spend my money on, health insurance is not a priority for me 43% 26% Healthcare reform will give me greater access to better health benefits in the future 44% 28% T2B% Scores 7.4: Using the scale below, please indicate how much you agree or disagree with the following statements that relate to your finances, health care, and making decisions about health insurance coverage? 3.2: Which of the following statements best reflects how likely you are to consider purchasing insurance for yourself or a family member through the Healthcare Exchange? However… Young, Stubborn, but Interested Millennials Definitely / probably will buy on the exchange Definitely / probably will not buy on the exchange Plan to purchase in the future 44% 21% 28% 57%
  22. 22. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 21 Visit experience in detail Upon visiting needed the exchange site, it was clear to me where I to navigate 64% 41% The exchange website helped find the right insurance plan for my needs 60% 38% The exchange website did a good job explaining the benefits of each plan 64% 39% It was easy for me to compare health insurance plans side-by-side 66% 43% I did NOT encounter any errors or "bugs" while using the exchange website 52% 35% Millennials clearly had a more pleasant experience on the exchange, which we expect to translate to positive word of mouth and momentum for the second OEP Unexpected Positivity Millennials General visit experience on the Exchange: 56% 21% 35%38% Had a positive experience Had a negative experience Millennials Non-Millennials 3.8: You mentioned that you [answer from 3.1]. How would you rate your overall experience with using the exchange site? T2B% Scores
  23. 23. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 22 Overall, 45% of Millennials look for advice from others when choosing a health insurance plan, compared to 22% of non-Millennials Seek Guidance Millennials Currently, Millennials are disproportionately influenced by social connections and more modern informational outlets Top sources of Influence or guidance (Select up to three)45% 24% 23% 16% 16% 15% 15% 15% 15% 13% 12% 10% 44% 32% 11% 20% 18% 5% 12% 9% 7% 18% 8% 19% 0% 10% 20% 30% 40% 50% Websites related specifically to the healthcare exchanges News articles or coverage about the healthcare exchanges My spouse My current insurance company, broker or agent My doctor or healthcare professional My parent(s) Other family members (not parents) Information shared on social networking sites (e.g., Facebook, Twitter) Work colleagues Friends My employer, HR person or benefits specialist None of the above %OfRespondents 3.7: [For those who might or will plan to use Exchange – Sources of influence] Which of the following sources of information do you plan to rely on for guidance? Select up to three primary sources of information) Sources of Influence
  24. 24. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 23 We believe, however, that there is opportunity for health insurance companies to provider additional guidance to Millennials Seek Guidance Millennials When asked: “Do you trust health insurance companies to do the right thing?” of Millennials said “yes” of Non- Millennials said“yes” 35% 19% Because Millennial trust is almost twice that of older respondents, there may be an opportunity for these health insurance brands to expand relationships with them.
  25. 25. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 24 These findings are consistent with Millennial attitudes and needs observable across other categories Millennial Trends Millennials 35% They expect to be able to seamlessly compare products / prices They seek guidance that is intuitive and in language they understand They desire simplicity with few restrictions There is an opportunity to take learnings from brands successful in catering to Millennials outside of healthcare
  26. 26. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 25 Questions? John Kutz Partner (415) 359-7383 jkutz@prophet.com Jeff Gourdji Associate Partner (312) 404-3971 jgourdji@prophet.com @ProphetBrand prophet.com/healthcare Type them in the text box on the right side of your screen
  27. 27. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 26 Next, Let’s look at the Hispanic opportunity
  28. 28. 27Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 27 Sampling Information Hispanics Who are the “Hispanics” we talked to? We deliberately targeted a sample of Hispanic respondents that were inherently more acculturated than the nation’s populations of Hispanics. Our sample tends to be: More educated Wealthier Slightly younger than the nation’s populations of Hispanics Our findings on Hispanics cannot be blanketed over the entire population, but describe a large subset of more acculturated Hispanics. Due to these nuances, we should consider them “Acculturated Hispanics”
  29. 29. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 28 Sampling Information Hispanics The Hispanic opportunity Advocates for Health Insurance: Advocates for Health Insurance: Hispanics are very enthusiastic about health insurance, valuing its importance highly for themselves, and especially for their families Open-minded Positivity: Open-minded Positivity: Hispanics are more likely to have positive experiences than non- Hispanics when visiting the Exchange, and are more open to the idea of using it to purchase in the future Enthusiasm Not Translating: Enthusiasm Not Translating: Higher levels of enthusiasm, however have not translated to higher purchase on the Exchange compared to non-Hispanics – with both purchasing behaviors on par with one another Opportunity for Guidance and Clarity: Opportunity for Guidance and Clarity: Hispanics disproportionally seek out assistance from a range of sources due to high confusion in the plan selection process – therefore, there is an opportunity to educate and guide Hispanics on the plan selection process and the program in general
  30. 30. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 29 Hispanics consider health insurance to be much more important than their counterparts, especially for their families Advocates for Health Insurance Hispanics …For Themselves …For their Family Hispanics Non-Hispanics Hispanics Non-Hispanics Extremely Important 38% 32% 51% 43% Very important 38% 31% 30% 30% Somewhat Important 17% 22% 15% 23% Importance of health insurance 7.3: [Ask only if have other family members in Q 1.2/1.3] And how important is it to you to have health insurance coverage for your family members? 7.2: Overall, how important is it to you to have health insurance coverage for yourself, personally? 97% of Hispanics see health insurance as at least somewhat important for their families making them an approachable and willing population to target with emotional marketing
  31. 31. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 30 Hispanics also had generally positive experiences on the exchange, which could lead to high levels of future purchase Open-minded Positivity Hispanics General visit experience on the Exchange: 52% 20% 40% 35% Had a positive experience Had a negative experience Hispanics Non-Hispanics 3.8: You mentioned that you [answer from 3.1]. How would you rate your overall experience with using the exchange site? Definitely / probably will buy on the exchange Definitely / probably will not buy on the exchange Plan to purchase in the future 46% 26% 28% 51%
  32. 32. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 31 3.1: In what ways have you interacted with the Healthcare Marketplace Exchange? (Select all that apply) Level of Interaction with the Exchange Hispanics Non-Hispanics Enrolled through the Exchange 28% 26% Created an account on the Exchange but did NOT enroll 19% 21% Visited the Exchange but did NOT create an account or enroll 24% 20% Did NOT visit the Exchange 33% 38% This gap between enthusiasm for the Exchange and actual enrollment signals Hispanics as a key year 2 OEP target Despite these high levels of optimism, Hispanics did not enroll at significantly higher rates vs. Non-Hispanics in the first OEP Enthusiasm Not Translating Hispanics
  33. 33. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 32 One major barrier to Hispanic enrollment is confusion around how the Exchange works Opportunity for Guidance and Clarity Hispanics We tested for the highest barriers of enrollment on the exchange and found that: of Hispanics claim that they “don’t really understand how the program works” of Non- Hispanics claim that they “don’t really understand how the program works” 24% 9%
  34. 34. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 33 There may be an opportunity for health insurance brands to fill this information gap and expand their relationships with Hispanics Opportunity for Guidance and Clarity Hispanics of Hispanics38% of Non- Hispanics 22% Trust health insurance companies to do the right thing of Hispanics38% of Non- Hispanics 28% Would never consider buying a health plan that was offered by the government While the government has traditionally supplied information and education regarding the Exchange, they are less trusted by Hispanics – there may be an opportunity for health insurance companies to be the trusted source for guidance
  35. 35. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 34 44% 24% 23% 20% 19% 18% 17% 15% 11% 10% 8% 6% 44% 16% 30% 15% 19% 15% 8% 8% 13% 16% 13% 10% 0% 10% 20% 30% 40% 50% Websites related specifically to the healthcare exchanges My doctor or healthcare professional News articles or coverage about the healthcare exchanges My spouse My current insurance company, broker or agent Friends Work colleagues My employer, HR person or benefits specialist Other family members (not parents) None of the above Information shared on social networking sites (e.g., Facebook, Twitter) My parent(s) Overall, 45% of Hispanics look for advice from others when choosing a health insurance plan, compared to 26% of non-Hispanics Opportunity for Guidance and Clarity Hispanics Currently, Hispanics are disproportionately influenced by experts–such as providers, plan sponsors, and their employers– when it comes to healthcare Top sources of Influence or guidance (Select up to three) %OfRespondents 3.7: [For those who might or will plan to use Exchange – Sources of influence] Which of the following sources of information do you plan to rely on for guidance? Select up to three primary sources of information) Sources of Influence
  36. 36. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 35 These findings are consistent with Hispanic attitudes and needs observable across other categories Hispanic Trends Hispanics 35% They seek mobile-enabled connections They are extremely brand loyal, especially during acculturation process They are strongly “family-centric” There is an opportunity to take learnings from brands successful in catering to Hispanics outside of healthcare
  37. 37. Proprietary and confidential. Do not distribute.Lessons From Year One & Opportunities For Year Two 36 Questions? John Kutz Partner (415) 359-7383 jkutz@prophet.com Jeff Gourdji Associate Partner (312) 404-3971 jgourdji@prophet.com @ProphetBrand prophet.com/healthcare Type them in the text box on the right side of your screen

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