We live in a world where 60% of Americans would have to borrow to cover an unexpected $1,000 expense, yet if an individual is fortunate enough to have health insurance through their employer, the average individual deductible is $1,644 (source: KFF 2020 Employer Health Benefits Survey). No wonder 33% of Americans put off care in 2020 over concerns about cost.
How do we, as insurance leaders, employers, and brokers, keep burdensome health insurance cost-sharing from delaying care and creating financial stress? A 10% improvement, the kind of upgrades you can make within the framework of your existing policies and platform, isn’t going to cut it. We need employer-sponsored health benefits that create 10x the value for today’s employees.
But with entrenched business practices and slim tech resources, the insurance industry has lost the ability to think 10x. What would a 10x improvement in health benefits look like? Can we even imagine it?
As an entrepreneur, I’ve spent my career building up mental muscles for 10x thinking. You can’t build a new company on a 10% improvement of an existing product or incumbents will quickly catch up and take away your competitive advantage. So you have to think in terms of 10x value creation.
Here’s how insurance industry leaders should start thinking to create 10x value for their clients and members.
First, make sure you understand the problems in your customer’s journey.
This isn’t just about doing surveys. Gather insights through conversations with your customers. Actively engage the people you don’t usually hear from. It can be easy to respond to the loudest complaints from employers or members, but what’s working or failing for the customers who renew every year? What failed for the people whose business you lost?
This kind of qualitative research, sometimes called human-centered design, might reveal that you haven’t been trying to solve the problems that matter most to your customers. So have some open-ended conversations and get focused on the right problems that need solutions.
Define what 10x value looks like.
How will you know when you’ve solved your customers’ problems and delivered 10x value? So often in today’s insurance world we’re focused on minimizing the loss ratio. But this can sometimes breed behavior that is in conflict with the interests of the policy holder. We have to focus on customer value, and then build a profitable business on top of that value engine.
Let’s take a common example from the voluntary benefits space. Employees face huge bills if they go to the hospital, and they often wait weeks to be paid. What if instead of paying a claim in 3 weeks we could pay it in 3 days or 3 minutes? Now we’ve defined something of 10x value that we can aim for.
Next, design a product that delivers 10x value
Only after you’ve understood the customer’s problem and defined what 10x value would look like are you ready to start designing a solution. In our example above, the question becomes, how do we pay a claim in a matter of days or minutes? To get there, you’re going to have to break existing paradigms.
When we thought about that question at Brella, we realized we couldn’t build a product that reimbursed members for treatment, because employees would have to wait for EOBs or other documentation from their providers. Instead, we decided to pay claims based on the diagnosis.
This approach allows employees to submit evidence they have on hand as soon as they’re diagnosed. A mobile app and online member portal make it really easy to upload photos of documents from your phone. Plus, deciphering the diagnostic code from unstructured data like hospital discharge papers or lab results is something we can eventually automate with natural language processing and AI.
So by changing our plan design to pay benefits on diagnosis, we added value in the following ways:
1. Members can submit claims as soon as they’re diagnosed which means they can start a claim much sooner than with today’s supplemental health products.
2. We can use technology to speed up how the claim gets back to our team, which is a much better member experience than faxing pages of forms to submit your claim.
3. We can adjudicate claims in hours, and, eventually, we’ll auto-adjudicate most claims in minutes because all we need to know is the diagnosis.
By focusing on delivering a better member experience, we ended up building an insurance product that is truly valued, with a healthy and predictable loss ratio. On the way, we were able to build a company with a lean operating model to help keep our premiums low.
One last tip: 10x thinking requires both plan and technology expertise
The only reason we were able to build Brella the way we did was because we had insurance and technology experts at the same table. When you’re dreaming up a new plan design consider involving your platform team earlier in the process. The best way to drive 10x thinking in your organization is to bring cross-functional teams together to focus on designing new solutions to the problems that matter most to your customers.