Most of today’s consumers face a much different health insurance landscape than they did even 15 years ago.
And given today’s ever-changing vista of health care and health insurance choices, this is one area where there may only be one constant moving forward: It’s going to be complicated.
But that doesn’t mean those who are charged with marketing healthcare have their hands tied. Because one other thing is true as well: Brand still matters, even in healthcare.
What’s the Big Deal About Brand Preference, Anyway?
In an ever-expanding world full of competing products, brand preference is now more important than ever. While marketers might not want to admit it, many products and services are not actually that differentiated from their competitors.
Honestly, what’s the real difference between the Android and iPhone? I’m sure you could come up with some app, feature or resolution factoid, but in truth it’s really how they’re branded that makes the difference, not the product itself.
Healthcare is a Need, Not a Want
So how does brand preference apply in healthcare? We know the business of healthcare is completely different from the mobile phone category. It’s a need, not want category, and a complicated one at that.
One complicating factor is the reality that healthcare is nearly impossible for consumers to pin down in terms of value. Results from a consumer health-care survey found that “the typical consumer could predict the price of a Honda Accord to within $1,000, but was off by about $12,000 in estimating the average cost of a four-day hospital stay.”
It’s also not a particularly appealing category. You might enjoy shopping for a phone, but most people don’t enjoy thinking about their healthcare needs. No one really wants to go to the doctor because, if you do, you’re probably sick or injured. Nobody really wants to spend money on health insurance because, if you stay healthy, you can feel like you’re paying in and not getting anything out. In particular, young Americans especially are seemingly averse to healthcare for this reason—18 to 34 year-olds made up 40% of the uninsured population pre-Obamacare.
To dig deeper into how this plays out, let’s consider the challenge of health insurance purchase for one segment of mid-range Millennials.
The Millennial Purchase Path
At the present time, the law says everyone must have a health insurance plan. And, when a young adult reaches age 26, any healthcare coverage from their parents’ plan goes away.
What is a person to do when they’ve never had to deal with insurance before and they’re forced to make a decision that has a direct impact on their health, wellbeing and wallet? It’s complicated and much depends on a combination of personal circumstances, as well as their headspace.
Are they offered a group health plan through an employer? If so, a big issue is whether or not the doctor they’ve been seeing is in the network of the plan they’re offered. Most people don’t want to start over with a new doctor after having established a relationship with someone who knows them personally, is familiar with their health history and has likely seen them naked.
If not offered a plan through work, they’ll have to decide if they want to shop for an individual plan on their own. Some may feel they don’t need health insurance because they’re young and generally healthy so they’d rather spend their money on things they really want – technology, travel, entertainment. They may not be aware that, if they don’t enroll in a health plan, they’ll have to pay a significant fine. Others, who have had health issues in the past, may want to be sure they are covered so they can continue to manage their care and live their life normally.
Either way, they’re going to be forced to make a decision and will have to engage in a process that is by no means simple. Here’s what they’ll likely do:
• Talk to mom and dad – what do they recommend? What plans exist that would allow for a smooth transition allowing them to keep their current doctor? Who will pay for this?
• Talk to an insurance agent – again, this could be a referral from mom and dad. What plans are out there that fit with one’s personal health situation? What does the agent recommend?
• Talk to friends – what are my peers doing? Where did they go for information? Does their plan sound like it would work?
• Do some online research – hit various websites to become more informed about what’s involved and what needs to be done.
• Visit the exchange – follow the directions to enroll and review plans from different carriers. How are they different? How are they the same? Does it matter?
More Than Just Millennials
For all of us, there are choices to be made at key milestones or situations.
Here are some examples:
• When people get older. Once a person turns 65 or qualifies for Medicare for a different reason (such as a disability), they are generally not limited to a specific network or hospital. So when a more pressing health issue arises, they can choose where they’d prefer to go for care. This is especially important in more serious cases like heart disease or cancer, which are more common among this audience. People are more likely to “shop around” for a specialist from a provider network when they feel their life is threatened by illness. This is the very definition of brand preference based mostly on perceived reputation and ability to treat or cure an illness and extend someone’s life.
• When there’s a choice in the household. Sometimes both partners in a married relationship are offered group insurance through their employer and are able to choose between the two carriers. They’ll often start with which one has the lower premiums but then also evaluate which brand they feel more comfortable with.
• When a person is offered a choice of carriers within their employer group insurance offering. Some employers actually offer group plan options from multiple carriers. In fact, more than one-third of U.S. small businesses and about two-thirds of large companies have multiple health insurance plans to choose from.
In these cases, the decision may be driven not so much by the insurance carrier but access it provides to a particular physician group or hospital system. The plans will likely vary in terms of physician network and specific benefits but ...
When All Else is Equal, it Comes Down to Brand Preference
In the end, if there are multiple insurers to choose from, the decision will likely go this way:
1) What are the differences in cost?
2) What physician groups are covered by each plan?
3) What brand am I most familiar with and trust the most?
In some cases, the answers to the first two questions will show no discernable difference. Note that I’m not saying that there isn’t generally a difference. I’m saying that there isn’t always a difference that the consumer is actually able to understand. Often, there are simply too many variables and unforecastable conditions to make a purely logical decision.
At that point, the final decision often come down to brand preference. Because when logic fails, emotion always steps up to the plate. Strong brands make emotional connections with people that create lasting impressions. Often times these imprints are focused around a brand’s higher purpose or belief system that goes beyond functional benefits offered by all competitors in the category. Just like they do with other human relationships, people tend to gravitate toward brands that share their same beliefs or stand for the things they stand for. It’s these imprints in their minds that often will make the difference at the moment of truth.
In uncertain times, for insurers and health care providers alike, it will become increasingly important to ensure alignment with partner organizations with the greatest consumer awareness and the strongest, most distinct brands. That will be the way to succeed.
Chris Reinders is VP, Sr. Account Director at Madison, WI-based full service advertising agency Lindsay, Stone & Briggs. Chris’s specialty is the planning and execution of integrated communications strategies that produce results. With more than 17 years healthcare marketing experience on many brands including Marshfield Clinic, Tampa General Hospital, Security Health Plan, Free to Breathe, SSM Health and Dean Health Plan Chris has a history in virtually every aspect of the healthcare category.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.