Interrupting the Hunt for a Bargain
This write-up continues our series on reducing churn among different kinds of Medicare Advantage buyers.
This post takes a look at the largest such group: Bargain Hunters
Roughly speaking, Bargain Hunters are those consumers who gravitate toward plans that do not have a monthly cost to them. These plans are deservedly popular and appeal to many, especially to lower income consumers or consumers who are on a fixed budget. And what’s not to like about a plan that doesn’t appear to have an ongoing cost?
The challenge is that this largest cohort of consumers might also be most prone to rapid churn; more likely to suffer buyer’s remorse than some of our other cohorts. Making a price-based decision, these consumers are then most likely to be surprised if they find that the plan doesn’t provide the coverage they think it does.
At Predict Health, we find that a few levers are effective at reducing this buyer’s remorse and at reducing churn. The goal is to convince even the thriftiest of bargain hunters to abandon the chase and to enjoy what they have.
Churn is reduced by making sure that the plan has been selected and not because of a lack of insight into their medical needs and wants. This also applies if a consumer doesn’t have the means to choose a different-in-kind plan. The goal is to make sure that the consumer feels as if they have made the best choice given their circumstances. The best way of doing this is during the onboarding call where it’s possible to have a candid conversation around the strengths of different plans.
A well-managed onboarding call can also increase the consumer’s perception of value as they are walked through the benefits they can receive. Behavioral Science shows us again and again that people unconsciously place less value on ‘bargains’ so it is crucial to make sure that consumers know what they’re getting. Rapid consumer education is key here. Predict Health has seen plans succeed by adopting some of the following strategies:
Being clear about the breadth and depth of the plan. It’s useful to enumerate the benefits that become available through the plan. For example, to what kinds of providers does the plan provide access?
Rapidly clarifying in plain language what a consumer might expect. It’s not enough to tell people that there is a deductible, it helps to give people a sense for how long it may or may not take different people to meet their deductible.
The bigger challenge might be those consumers for whom choosing the cheapest option was a defensive decision, a negative choice in response to complexity.
A well-designed onboarding experience can help consumers retrospectively identify what matters to them. Do they already have any prescriptions? Would any of these prescriptions suggest needing to manage a chronic condition? Does the consumer need other services that are available? We would then advise payors to make a pro-active recommendation to switch plans if it seems that there is a large gap between needs and what the plan offers.
To summarize, the goal is always to make sure that the consumer doesn’t suffer buyer’s remorse. The goal is to identify the plan’s strengths but to also steer them toward alternatives if it seems likely that consumer will experience subsequent disappoint. Failing to do this will result in unnecessary churn.