Examples Of Best Practice In The Health Insurance Industry

When faced with complexity or too many choices, consumers often fail to act. For example, 74 percent of those who purchased health insurance were satisfied with the ease of the process, compared with 47 percent of those who shopped but didn’t purchase. Few consumers can comprehend the detailed information presented to them—in fact, a third of those who found the purchase process confusing cited “too much information” as the main barrier to purchasing. Health insurers should make it easier for consumers to make choices by offering simple, understandable information. Unfortunately, there are few examples of best practice in the health insurance industry in this realm, although many exist in other industries (such as auto insurance).

Comprehensively addressing the consumers’ health-related financial exposures (health, disability, long-term care) can involve bringing together multiple companies or distributors, further increasing complexity and confusion. To simplify the decision-making process, insurers should present consumers with multiple product options—for example, a recommendation together with one or two comparable alternatives.

The likelihood of individual purchase correlates strongly with the turnaround time for the application. For example, 55 percent made a purchase when the process lasted only a few minutes, compared with 21 percent for a Web transaction that took place over a 24-hour period. Most consumers are also unlikely to shop multiple channels—more than half only use one source of information, although it varies by segment—so rapid access and ability to transact quickly across a range of channels is important. End-to-end improvements of the acquisition process based on lean improvements and front-end automation can help make the process more