prophet 2014 healthcare exchange consumer study results

Proprietary and confidential. Do not distribute.

Prophet’s 2014 Consumer Healthcare Exchange Survey: Lessons From Year One & Opportunities For Year Two

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

[email protected]

John Kutz, Partner

(415) 359-7383

[email protected]

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

2

About Prophet

3 Proprietary 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

http://classic.kidconcept.com/awesome/inspiratory/1.10.12b/comp1.html


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


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


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

7

Survey Background


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?


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

10

So what did we learn?


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


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

13

Overall Findings – Upsell is Financially Viable


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

14

Overall Findings – Low Awareness of Subsidies


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%

15

Overall Findings – Two Key Groups to Address Next OEP


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


Questions?

John Kutz

Partner

(415) 359-7383

[email protected]

Jeff Gourdji

Associate Partner

(312) 404-3971

[email protected]

@ProphetBrand prophet.com/healthcare

Type them in the text box on the right side of your screen


Let’s explore The Millennial opportunity


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”


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:


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%


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


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%

Websitesrelatedspecifically tothehealthcareexchanges

News articlesor coverageabout thehealthcareexchanges

My spouse My currentinsurancecompany,broker oragent

My doctor orhealthcareprofessional

My parent(s) Other familymembers (notparents)

Informationshared onsocialnetworkingsites (e.g.,Facebook,Twitter)

Workcolleagues

Friends My employer,HR person orbenefitsspecialist

None of theabove

% O

f R

es

po

nd

en

ts

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


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.


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


Questions?

John Kutz

Partner

(415) 359-7383

[email protected]

Jeff Gourdji

Associate Partner

(312) 404-3971

[email protected]




Next, Let’s look at the Hispanic opportunity


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”


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


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


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%


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


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%


There may be an opportunity for health insurance brands to fill this information gap and expand their relationships with Hispanics


of Hispanics 38%

of Non- Hispanics

22% Trust health insurance

companies to do the

right thing

of Hispanics 38%

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


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%

Websitesrelated

specifically tothe

healthcareexchanges

My doctor orhealthcare

professional

News articlesor coverageabout thehealthcareexchanges

My spouse My currentinsurancecompany,broker or

agent

Friends Workcolleagues

My employer,HR person or

benefitsspecialist

Other familymembers (not

parents)

None of theabove

Informationshared on

socialnetworkingsites (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


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)

% O

f R

es

po

nd

en

ts

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


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


Questions?

John Kutz

Partner

(415) 359-7383

[email protected]

Jeff Gourdji

Associate Partner

(312) 404-3971

[email protected]

