October 31, 2019
For Medicare Advantage plans, member communication and engagement are key to high marks in the Centers for Medicaid and Medicare Services’ (CMS) 5-Star rating system and to securing member retention year over year.
However, member satisfaction with plan communications has recently taken a dive, putting current high plan ratings at risk. With a new crop of insurers entering the Medicare Advantage market, consumer willingness to switch plans increasing, and competition among top plans growing, there is a real danger that plans that are not making member engagement a priority will lose members during the next Open Enrollment Period (OEP). An existing digital channel offers an opportunity to improve member experience, secure higher retention, and protect a plan’s high Star rating.
Demographics are still the driving force on the consumer side of the Medicare Advantage market. Accenture estimates that “An average of 10,000 people turn 65 and become newly Medicare-eligible per day and the total number of people eligible for Medicare is projected to grow to 80 million by 2030. Of those eligible, more than 20 million Medicare beneficiaries (34%) are enrolled in Medicare Advantage plans,” according to the Kaiser Family Foundation.
Not surprisingly, insurers are flocking to the Medicare Advantage market. From the Kaiser Family Foundation, we learned that, “Fifteen insurers will be entering the market for the first time in 2019 – suggesting that the market remains very attractive to insurers.” The Foundation’s research also shows that there are more insurers in this market in 2019 than in any year since 2009.
Healthcare consulting firm Healthrise advises the “Medicare Advantage market …is expected to move from 35% to 50% market share inside in the next 3-4 years. In this intensely competitive market, now with an extended OEP, customer engagement has never been more important.”
The origin of the Star rating system is explained in a primer on Medicare Advantage by The American Action Forum, “The 5-Star rating system was first implemented by CMS for MA plans in 2008 serving as a tool to inform beneficiaries as to the quality of the various plan options and assist them in the plan selection process.”
CMS rates Medicare Advantage plans on how well they perform in five categories:
Healthcare analytics firm Revel Health points out that, “Of the categories listed above, member experience now exerts seemingly disproportional influence over the other four categories. In part, it’s the result of CMS Ratings weighing health outcomes and member or patient satisfaction over plan operations. But the real story behind the rise of member experience is the rise of healthcare consumerism. They’re not patients or members anymore—they’re healthcare consumers. Quite frankly, member engagement transforms the healthcare consumer experience in ways that affect all other domains of care.”
It’s clear that proactive member communication, education, and engagement programs are key to Star rating performance, and the industry is finally starting to pay attention. In a survey of health plan executives, Health insurance technology company Healthedge found that, “For the first time, when asked what their most important goal is for 2018, health plan executives cited member satisfaction. Payers seem to understand that increasing member satisfaction - and the resulting loyalty that comes with it - is the top goal for the next year.”
While the timing isn’t definitive enough to say which is the chicken and which is the egg between member dissatisfaction and this insurer epiphany, the pressure for health plans to prioritize member communications and engagement has reached a critical level.
In a Medicare Advantage Customer Satisfaction Study, JD Power found that, “Member satisfaction with the information and communication from their Medicare Advantage plan has declined significantly (-16 points) from last year and is now the lowest-scoring factor in the overall health plan experience.” The study also found that, “Aside from opportunities with member onboarding, fewer members recall receiving even one communication from their health plan in the past year.”
These findings should be raising red flags throughout the health plan market. With communications, education, and engagement the common thread throughout the Star rating categories, the risk to a plan’s current rating is real. As member engagement company Novu predicts, “Plans below 4 Stars will be edged out of the market as they lose membership and miss out on financial incentives. Plans at or above 4 Stars hold a stronger position; but if they merely rest on their laurels, they could soon lose their top status, as other plans nip at their heels and CMS continues to raise quality cut points.”
If a 16-point drop in member satisfaction and the threat of losing a Star isn’t enough to raise eyebrows, there are a number of additional indicators that improving member engagement must be job one for plans. For example, the belief that the older Medicare Advantage cohort is more loyal and less likely to switch plans is being challenged.
A study this year by Deft Research, LLC found that, “1 out of 3 seniors either switched health plans or felt compelled to at least look at other options. And about half of those who switched plans did so even though they were happy with the coverage they had in 2018.”
Another risk is the health plan lag in offering members digital options for communication and engagement. The Harvard Business Review asked what members are looking for from their health care plans, “Most health plan members indicated that if a transaction can be done digitally, that’s how they want to do it. Of the 1,600 respondents, 84 percent of them said they prefer to interact digitally with their health insurance payer.” However, in a recent survey by Adobe, only seven percent of healthcare and pharmaceutical companies said they had gone digital.
Medicare enrollees want more frequent, personalized, and relevant information from their plans. The HealthMine 2018-2019 Medicare Advantage Report survey of Medicare Advantage beneficiaries found that, “Few think their plan knows them well, with spotty personal communication about their chronic condition. The lack of perceived help in managing a chronic condition could present a huge opportunity for plans based on beneficiaries' needs and required CMS metrics and incentives.”
The good news is that plans already have a digital channel that is well-suited to quickly change the game in member satisfaction: transactional emails. Because transactional emails have much higher open and read rates than other emails, eight times the open and engagement rate of traditional marketing emails according to Campaign Monitor, they have the potential to quickly move the needle on member satisfaction and in CMS Star ratings. As healthcare engagement company Carenet Health points out, “Star ratings are heavily weighted by member experience. Positive interactions—ones that make it easy on the member, not the plan—are paramount.”
Healthcare technology blog, HIT points out that, “The average Medicare Advantage plan turns over about 10% of its members every year, and for a 100,000-member plan, that can equate to about $110 million in lost premium reimbursements as well as a decline in Star ratings.” That 10% figure could begin to grow as members explore their options during the OEP and raise their expectations about plan communications how they relate to the quality of care they are receiving.
On the other hand, taking steps to address member satisfaction and improve the CMS Star rating has significant advantages for insurers, according to JD Power:
Given the red flags of dissatisfaction the recent member surveys are showing, now is the time for plans to address any dissatisfaction with the member experience…before they hit insurers in the Star rating and the bottom line. With the opportunity that transactional emails present as a channel for frequent, personalized, and relevant communications to members, plans should begin exploring how to leverage this existing and highly effective channel to protect the health of their business.