Health-Insurance Providers Seek Direct-to-Consumer Connections

To Stand Out in What Will Likely Be a Crowded Environment, Companies Are Building Private Exchanges and Retail Outlets, and Working to Differentiate Their Brands

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The affordable care act that President Obama signed into law in 2010 slated for full implementation in 2014 is forcing health-insurance companies outside their comfort zone of business-to-business marketing.

Fitbit, which makes pedometer and activity monitors, partnered with OptumHealth to create an app that follows and coaches consumers.
Fitbit, which makes pedometer and activity monitors, partnered with OptumHealth to create an app that follows and coaches consumers.
For consumers, the law guarantees health insurance and more power to choose and switch plans. For health insurers, it means heightened competition, an opportunity to tap 50 million uninsured people, and a three-year window to implement bigger budgets to develop more direct-to-consumer efforts.

"The insurance industry, as is typical to a bureaucratic industry, is probably two to three years behind the curve [on DTC marketing], but there's a lot of quick pickup by companies," said Lindsay Resnick, CMO of KBM Group Health Services, a WPP direct-marketing shop.

This "quick pickup" is causing the industry to replace its agent-driven model with a consumer-facing strategy led by direct-marketing teams, Mr. Resnick said. And these marketing teams will work to gain consumer support when the law creates, among other things, insurance exchanges. Mr. Resnick likened the state-run e-commerce platforms for health-insurance plans to travel sites that compile deals and packages.

To stand out in what will likely be a crowded environment, companies are building private exchanges and retail outlets. And insurers such as Aetna, which recently rebranded itself as a "health-solutions company," are aggressively working to differentiate their corporate brands.

Karl Ulfers
Karl Ulfers
"We're evolving from an insurance company that was historically more b-to-b in the insurance and benefits arena," said Belinda Lang, VP-brand, advertising and consumer marketing at Aetna. "We need to think about how, with the tools and resources we have [and] ones we're investing in [building], we make the health-care system less complex and overwhelming. We want consumers to feel like we're approachable."

The company is placing an emphasis on its 160-year-old heritage in corporate branding and is building out a number of DTC efforts, such as preventive health-care programs. These have traditionally helped insurers lower consumer health risk and, ultimately, cost through employer-run incentives such as discounts on gym memberships or lower deductibles. But what's new is the speed at which insurers are enhancing these types of programs through investment in digital apps and technology, and leveraging them to reach consumers directly -- as opposed to going through an employer group.

Aetna also acquired a company, iTriage, which developed an app for finding doctors and checking symptoms. "We're making this more readily available to people through online [platforms], phones but we need to evolve how we communicate so they understand why it's important to them," said Ms. Lang.

Similarly, United Healthcare's OptumHealth partnered with Fitbit, a company that sells pedometers and activity monitors in places such as Apple stores and Best Buy. They built a mobile app, "Optimize Me," which synchronizes Fitbit's app with Optum's app and follows and coaches consumers on the efficiency of their daily activities. It then connects that information back to a mobile, online and telephonic-based coaching service.

"In the past, we only had claims data," said Karl Ulfers, VP-consumer solutions at OptumHealth, which was set up as an outbound consumer-marketing unit. "This is real-time information we can get and personalize digitally."

That, of course, could conjure up nightmare images of Big Brother monitoring every move a consumer makes -- and jacking up premiums if a consumer is abusing the buffet.

But the companies involved say that they're hyperaware of such concerns -- as is the government. With what will likely be tighter regulation of the industry and new DTC marketing practices, the stakes are higher for insurers to protect their newly collected consumer data from the risk-profilers who have typically used this data to inform rates. "It's a heavily regulated industry … and with health-care reform there's even more regulation," said Aetna's Ms. Lang. "We take people's medical and private information seriously, so we really need to look closely at [the] appropriate use of this data that we're gathering for individuals around the purpose of managing health."

Added OptumHealth's Mr. Ulfers: "We're ultimately walled off -- we're the service provider and enabler to insurance plans, but not part of the insurance plans. That's the distinction about our business model. We wouldn't then share that info to do risk profiling."

And so far, consumers seem to be receptive. Based on positive results from the Optimize Me initiative, the company has a number of products in the works that tie consumer activity back to its own tools. It's planning to launch an online-based product that tasks consumer teams with competing for the best habits, such as healthy eating or the number of steps taken per week.

The company is also "very focused on how to actually host a network of apps that consumers can use," Mr. Ulfers said. Through this initiative, Optum would certify that other companies' content and apps are consumer-friendly.

He said that the company's recent acquisition of Conextions, a health technology and analytics organization, is key to its informing its segmentation for the coming changes in 2014. "It's really about aligning the communications mechanism and marketing dollars to segment who we're going after," Mr. Ulfers said.

Insurers are now likely segmenting the consumer population to market to different low-risk groups, as well as those who will have an opportunity to leave their employers' plans. And within uninsured consumer groups, they're looking to reach what Mr. Ulfers calls "young invincibles" who spend most of their time online and don't think they need insurance, as well as uninsured 40- to 55-year-olds.

It's these more-diverse targets that are influencing the shift in dollars from traditional print or outdoor to mobile, SEO and other online properties, said Mr. Ulfers, emphasizing the growing number of people engaging with Optum's apps through tablets.

"You're starting to see a much different mix between telephone, and web and mobile and social," said

Mr. Resnick. "What you're seeing starting now is much more of a deep dive in getting to understand consumer populations."

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