Insurance Insights

Health management in private health insurance: Stand out from the competition and inspire customer enthusiasm

+++ Health management is a strategic component that enables private health insurance companies to position themselves against the competition +++ Customers’ perceived fulfillment of the value proposition as a central success factor +++ Development of health management requires structured development of the services on offer and of the organization. +++

The topic of health is taking on increasing importance in our society. In parallel to this, customer expectations with regard to the services and benefits included in their health insurance are also growing. Rising competitive pressure – not only between private health insurance companies (PHI), but above all in competition with statutory health insurance companies (SHI) – requires ever-greater differentiation through specific services. Each private health insurer must ensure an attractive contribution level which competes with statutory health insurers and other private health insurers, by actively managing performance expenditure as part of health management. At the same time, a private health insurance company needs to meet its customers’ expectations and function as a holistic healthcare provider with (digital) services in the areas of disease prevention, diagnosis and information, treatment and monitoring as well as administration. Successfully creating this balance between cost reduction and customer expectation requires clear strategic goals and medium-term implementation planning that includes development phases.

Though the pressure to act is growing for all private health insurance companies, each is starting out from a very different point. Larger insurers are already developing into health managers in many fields of action along the entire supply chain, while others are lagging behind the market. Many insurance companies are still in the early stages of expanding their services to become health managers, and some have no discernible strategic direction or master plan, even though this is absolutely key to being successful. Above all, medium-sized and smaller private health insurance companies must have a clear idea of how they are uniquely positioned. A “me too” approach does not set a company apart from the competition, and for some companies is simply not possible due to a lack of available resources. Some insurers are trying to position themselves in individual fields of action – for example SDK, which is building up its own health advice service specializing in complex topics.

Customer focus as a key success factor

However, the following applies for all insurers: Customer focus is a key success factor. Who is my customer? What do they need? What do they want? How much are they willing to pay? These and other questions must be answered before a health management system can be developed. Apart from comparable rates and the lean, fast processing already implemented in many companies – for example with invoicing apps, digital health records and medication management – the customer must also experience services that inspire enthusiasm. These might include, for example, the private health insurance employee as a “carer” who focuses on the needs of the customer. After all, it is only in times of difficulty that the value of health insurance as an intangible good becomes visible to the customer. The customer’s perceived fulfillment of the value proposition is decisive in ensuring a positive attitude and resulting willingness to recommend the company. Any expectation created by marketing, sales promotion and sales must be met, from the customer’s perspective, at the point of need. “Much promised but little delivered” inflicts serious damage to the relationship, which is almost impossible to repair. Strong quality management when it counts is therefore critical to success.

The benefits of health management can be perceived all the way along the customer or patient journey. For insurance companies, the focus objectives are primarily competitive positioning, medium- and long-term service cost reduction and customer willingness to recommend the company. However, analog and digital services which reduce service costs through prevention, diagnosis and information, as well as support with customer treatment and recovery, first require investment, for example in the areas of data provision and analysis. In this context, the overall business case throughout the customer lifecycle is the right perspective from which to monitor and evaluate the contribution to profits of health management services.

Furthermore, as well as enabling competitive positioning, successful health management is an asset for Sales in terms of customer contact and supports new customer business.

However, it is not possible to establish professional health management in a private health insurance scheme in the short term. Instead, such a development requires strategic decisions, clear implementation planning and the application of resources in development stages right through to professional case and disease management. Target and existing customer analyses are required to determine which medical topics are included in the services, in which order and at what level of detail. The development period must have a wider scope than merely the development and marketing of offers and services relevant to the customer target groups, such as the treatment of mental illnesses or the treatment of chronic diseases like multiple sclerosis. During this phase the organization must be fully oriented towards its role as a health manager – with the involvement of external service providers if necessary. Lean processes with omnichannel capabilities for fulfilling the value proposition, practice-oriented data analytics, sustainable digitalization of services, knowledge management and the right mindset in employees at customer contact points are just a few examples of hygiene factors relevant to successful implementation in the growing organization of a private health insurance company.

Possible development stages for health management in private health insurers

The establishment or further development of health management requires a structured approach as part of a clear strategy

Strategic analyses and the devising of a medium- to long-term, quantified strategy for setting up or improving health management should be supplemented by a critical inventory or self-analysis of the company’s own personnel, technical and financial performance along the entire value chain.

Based on this information, a clear concept and implementation plan can be developed, and this must then be checked and approved in terms of content and financial feasibility. This step includes the analysis and decision on whether to develop and provide services in-house within the company’s own organization or through the integration of service providers.

The success of health management is determined at the customer contact points, from the case worker to the health manager. These services must prove their value at the point of delivery, or “moment of truth”. Content, speed, and empathy in customer contact across all channels – from telephone calls or live chats to written information – as well as the lasting, uniform quality of services provided internally and externally must fully deliver on the customer promise.

Constant monitoring and continuous improvement of health management are not a task only for Controlling; the performance of health management has an impact on the image and competitive positioning of the entire company, and as such this is a function that must unite strategic, product-oriented, procedural, technical, and financial perspectives. The combination of the various perspectives in an institutionalized responsible body ensures long-term success, including economic success.

Six prerequisites for a successful transformation

In our view there are six must-haves for the successful transformation of a private health insurance company into a modern health partner:

  1. We recommend defining and implementing, based on a clear strategy, development stages that are feasible for the company. Gradually improving the performance of process support, prevention offerings / health advice, and case and disease management in various medical disciplines is one way of developing the organization of a private health insurance company. 
  2. Targeted, needs-oriented customer contact and support is based on customer knowledge in the form of a clean inventory database. This enables service developers and health managers to gain a comprehensive picture of the customer and to present them with needs-based offerings. It makes sense to provide the various users, from data analytics staff to health managers, with a uniform customer base available in different views.
  3. Sophisticated methodological and content-related data analytics are required to identify needs that are tailored to the target group and to define and evaluate services based on customer and partner data. It is advisable to gradually expand and monitor analysis competence and implementation in customer contact and support measures by target groups and medical topics or clinical pictures.
  4. A company which seeks to sustainably set itself apart from the competition through services and performance should evaluate these factors by means of a structured development process with quality gates and maturity level assessments, depending on the strategic objective and the skills and resources available. It is important to establish a continuous improvement process for service and performance development.
  5. Every customer expects omnichannel touchpoints for inbound and outbound contacts. Aligning customer touchpoints with these needs at different stages of the patient journey also involves achieving the right tonality and intensity. This is covered by the targeted selection, training and regular coaching of the contact persons at the contact points. We also recommend the establishment of a strong quality management system in order to optimally fulfill the value proposition.
  6. One prerequisite for implementation and the driving force for progress is provision of the right internal resources – supplemented if necessary by collaborations or strategic alliances with specialized service providers. Here, the clear assignment of roles and responsibilities in respect of cooperation in the respective tasks of internal and external resources and the establishment of clear service provider management are essential.

Have we got your attention?

We would be happy to meet with you in person to discuss the core issues as well as the possibilities for setting up or further developing your health management. Get in touch!

Stumpf, F. / Leitzmann. C.