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The Affordable Care Act’s Impact on Healthcare Marketing

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Healthcare in the United States is undergoing the most dramatic change since the establishment of Medicare and Medicaid in 1965. The Patient Protection and Affordable Care Act (PPACA)---set to go into effect on Jan. 1, 2014---brings with it a myriad of changes for healthcare customers and insurers alike.


Health insurance will become a public commodity as all US citizens will be required to carry health insurance or pay a penalty. Thousands of consumers will be shopping for health insurance for the first time, and many current customers will be in search of new plans. As a result, healthcare marketers have their work cut out for them.



Changes for Consumers


While PPACA requires all consumers to purchase health insurance coverage, it also gives consumers more control over which plans they choose, and many current customers will no longer be tied to employer plans. These customers will have incentive to shop around to determine if their employers' plans are truly what’s best for them or attempt to purchase new plans that may be a better fit for their medical or financial needs.


Because thousands of consumers who were previously uninsured will need to purchase health coverage for the first time, consumers will soon begin to comparison shop for a provider based on price, quality of care, perceived value and other medical services available. For the first time, health insurance marketing will become almost entirely consumer driven and health insurance companies will be forced to compete head to head with one another for customers.



What Healthcare Marketers Need to Do


With so many options for current and potential customers, healthcare marketers need to focus on both retaining current customers and securing new customers. To do this, marketers will need to revamp their marketing strategy entirely to become much more consumer-focused.


First, new customers who are shopping for health coverage for the first time will likely be uneducated regarding health insurance and will need to better understand what types of plans are best for them before making purchasing decisions. Marketers will need to create highly targeted messaging strategies that address typical consumer wants and needs about health insurance.


For those new customers, brand recognition will be crucial. Marketers will need to develop a brand-recognition strategy to differentiate themselves from competitors and ensure that consumers not familiar with the industry will remember their company name. Marketers will need to stand out among a crowd of insurance providers attempting to attract the same customers, so it’s important to remember that new customers are likely to choose an insurance company they’ve heard about before.


Retaining current customers will also be important as PPACA changes take place. Current health insurance customers will have more freedom to shop around, and many will choose to look beyond their employers’ plans to search of something that may be a better fit for them medically or financially. In these cases, marketing that focuses on retention will be vital. Reiterate what your products are offering, why you’re the best fit for your current customers and offer them incentives to stay on board.



How Big Data Can Help


Although PPACA requires uninsured US citizens to purchase health insurance, consumers can pay a penalty if they do not wish to purchase a healthcare plan. Demographic data can help predict which type of individual is most likely to pay the penalty rather than purchase a plan. That will narrow the large field down to those that are worth pursuing.


Consumer data can also help determine which type of coverage an individual is most likely to purchase to help tailor marketing efforts. Healthcare marketers can take advantage of data to profile current customers to better understand the ideal customer for certain tiers of coverage and use that insight to reach new health care consumers who fit similar profiles.


Additionally, for both current and new healthcare consumers, marketers can use data to determine value proposition of marketing efforts. Data can identify current customers who are most likely to be loyal, which in turn can help steer marketing efforts in the right direction. Similarly, by determining high coverage rate customers versus low coverage rate customers, marketers can better understand which type of potential customer is most important to target, ultimately leading to a more cost effective approach.


There’s no doubt that the healthcare industry faces an abundance of changes, and it’s up to marketers within the industry to determine how they will handle what’s to come. With the implementation of PPACA, marketers will need to take a fresh approach to their current marketing strategies as they’ll be forced to compete head to head with competitors within a consumer-driven market. Whether the upcoming influx of healthcare consumers are shopping around for alternative plans or searching for health insurance for the first time ever, marketers will need to take advantage of big data to understand which consumers are worth targeting and at what cost.


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Dana Hayman is vice president of strategy & insights at Infogroup Targeting Solutions.

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Comments

  • by Dirk Schroeder Mon Sep 23, 2013 via blog

    Good points Dana. To add to the challenge for health insurance providers, over a third of the newly insured will be Hispanic and/or multicultural and of limited English proficiency. It is crucial marketers have a strategy for building brand and acquiring and retaining new, ethnically diverse populations. These demographic groups tend to be younger, healthier and therefore highly desirable as members. Dr. Dirk Schroeder, Senior Latino Strategy Consultant, HolaDoctor & Press 2 Advisors.

  • by Girisha Tue Feb 4, 2014 via web

    Great article. It's impressive how much digital is helping healthcare in terms of visibility and reach. Even medium like social networks are providing the credibility that healthcare marketers need to create. In fact, this post talks about what marketers have been doing to help the healthcare vertical http://bit.ly/1aoM22Z

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