The healthcare industry in the United States faces a tremendous image problem with consumers, and the issue is particularly acute with insurers. From the customers' standpoint, there's a huge disconnect between their needs (e.g., quality healthcare, adequate coverage, reasonable costs) and the primary concerns of healthcare insurers or payers (e.g., providing the lowest-cost healthcare possible while achieving optimal profit margins). Reconciling these perceived conflicts to overcome consumer skepticism is probably the biggest challenge health insurers face if they want to gain customers' trust.
One simple step insurers could take to demonstrate their intent to act in their customers' best interest is to offer a bare-bones, high-deductible catastrophic policy that any person could afford to buy. At present, there is no such thing as actual healthcare "insurance." All healthcare insurance—even the least expensive forms of major medical coverage offered—applies to medical expenses far below the financial risk posed by a catastrophic disease. If you doubt us, just try to find a major medical policy that won't pay out for routine medical expenses amounting to less than, say, $5,000 a year, but will kick in when you suffer a long-term disability.
Unfortunately, these kinds of policies are just not generally available today. But if insurers were to offer affordable healthcare policies covering genuinely catastrophic healthcare claims only, then they could create additional financial options for a share of non-catastrophic health expenses, and consumers would have the freedom to choose among insurers and to manage their own healthcare costs.
Attacking abuse
Another action insurers should take to show they have their customers' interests at heart is a tougher stance on "WFA": waste, fraud, and abuse.
Medical practitioners themselves are usually highly trusted, with the majority entering the field to provide care and to do good for others. However, it's an unfortunate fact that in a more trusting environment the potential payoff for cheaters is greater. And in healthcare, the complex regulations, misaligned incentives, and antiquated administrative and information technologies that cripple the overall industry make it all the more difficult to identify even the most obvious types of fraud. So, some doctors get quite rich simply by cheating the system.
A recent Wall Street Journal article on Medicare abuse, for instance, highlighted one Miami Beach doctor who takes in more than a million dollars a year in Medicare fees for providing very simple physical therapy to patients, including a half hour each of heat packs, ultrasound, and electrical stimulation. The newspaper quoted one authority at the American Physical Therapy Association who said that this is a legitimate kind of treatment when used in conjunction with additional medical procedures, such as neuromuscular reeducation, but used by itself "is a form of abuse."
Gaining trust
To solidify consumers' trust, a more competently architected healthcare system would do a better job of aligning patients' interests with insurers' interests. This doesn't mean that the onus has to fall solely on payers to lower their premiums or alter coverage terms. There have to be incentives for consumers to bear a higher percentage of healthcare costs, even if low-income consumers pay just a nominal share. The problem today is that an insured consumer has almost no incentive to pay attention to what can be exorbitant costs, such as, for example, the costs for tests like an MRI—a reason that costs are skyrocketing.
As the healthcare system continues to evolve, insurers will need to devote greater attention to customer experience, including being more transparent and educating consumers on costs and accountability, particularly as the industry shifts to more open competition. Insurers that take a customer-centric approach will be better positioned to improve trustability, and thus increase customer loyalty and strengthen their businesses in the long run.
