Health insurance goes digital: Are the insured ready for the change?

From electronic medical records to video appointments and health apps: Digital technologies are permanently changing the services health insurance companies offer and the experiences their customers have. Individuals with health insurance do not always consider these innovations an added value, however. In collaboration with the ZHAW School of Management & Law, BSI, the CRM software company, conducted a comparative study on “Digital Health” in Germany and Switzerland. The study provides a conclusive comparison of the opinions and needs of the insured vs. the digitalization their health insurance companies provide. It also offers very differing snapshots on the acceptance of digital services and risk-adjusted rate models in the healthcare sector.

Homogeneous customer expectations in a two-country comparison

Strongly negative survey results show that overall, there is a high degree of dissatisfaction with the insurance models available within the framework of the statutory public health insurance system in Germany and Switzerland. The expectations the respondents with public health insurance have of their health insurance companies are as consistent as their negative opinion: The top priority of 72% of respondents in Germany and 70% of Swiss respondents is for their insurance companies to cover the cost of regular checkups, followed by the reimbursement for homeopathic services (44% in D vs. 40% in CH). They rated treatment at private clinics as the least critical service (21% in D vs. 30% in CH). In contrast to that, however, not being able to get a single-bed hospital room is a frequently stated reason for switching to private health insurance in both countries. To make their services more attractive and to prevent significant churn to competitors or the previously stated private insurance companies, public health insurers should also modernize their existing product portfolio in digital terms.

Digital services polarize

While overall, the use of digital services by those covered by public health insurance is more widespread in Switzerland than in Germany, data protection-related concerns prevent broad acceptance, particularly in Germany, but to a degree in Switzerland as well. The study revealed that there are many proponents of digital services (about 50%), provided that these services offer a suitable added value. 30% of the surveyed customers with public health insurance can be categorized as being opposed to digitalization; they are concerned that the collection of their personal insurance data might be to their personal disadvantage and would ultimately exclude them from benefits. “Approximately 10 to 20% of respondents continue to stand undecided in terms of their opinion of digital health services. A lack of knowledge plays a major role in this: Almost half of public health insurance customers are not familiar with existing services, such as second-opinion services or the ability to use an app to scan medical bills. This situation requires health insurance companies to build trust,” states Prof. Dr. Frank M. Hannich, Deputy Director of the Institute of Marketing Management at the ZHAW School of Management and Law, regarding the results.

Consumers think straightforward e-services provide the biggest benefits

Considering the digital health insurance services available in Germany, the digital insurance card is the most popular (33% vs. 25% in CH), followed by online insurance portals (18% in D vs. 40% in CH) and fitness trackers (18% in D vs. 17% in CH). Given the high popularity of smartphones – 87% of Germans own a mobile device – there is a need to catch up as well as a lot of potential in this area. Because it is precisely the seemingly straightforward administrative conveniences that provide the highest level of satisfaction to those covered by health insurance: Frequently mentioned needs are a reduction in administrative work, fast reimbursement of pre-payments made by the insured, and expedited digital processes that are not tied to the time of day.

Half of all respondents are open to risk-adjusted rate models

Generally, about 50% of all respondents in both countries are open to risk-adjusted rate models – as long as they are fair. For many, this means that positive behaviors should be rewarded, while risky behaviors should not be excessively penalized. Further, incentivization should be based on behaviors and should not count genetic predispositions or immutable illnesses. Consequently, the response to a proposed rate model that links premium refunds to daily physical exercise, documented via a step-counting app, was also positive. About 58% of German respondents and 53% of those in Switzerland can picture themselves participating in such a model in general terms. In comparison, the model was rejected by only about 30% of those surveyed in both countries. The majority of those with a potential interest in the model would consider it sufficiently attractive if it started at a premium reduction of about one month’s worth.

The best customer journey will settle the issue

The results of the study show that a significant percentage of the population had been ready to use digital services even before the COVID crisis reached Germany and Switzerland, and the measures taken to contain the crisis are likely to reinforce this trend. “After several years of experience with digital services and, in some cases, the clear preferences on the part of the insured, health insurers are faced with this question: Which digital services generate the highest customer satisfaction per budget used, and in what areas can insurers create complementary services app-only providers cannot offer?”, notes Dr. Jens Haarmann, Professor of New Product and Healthcare Marketing, Institute of Marketing Management.

Research shows that customers select their insurance partners based on individual needs and expectations, while age and sociodemographic backgrounds play less of a role. Therefore, needs-based segmentation seems to be the means to future success when it comes to designing the services and customer contact points to be provided. At the same time, a focus on the needs of the insured must be compatible with the business objectives. “The consolidation of the IT landscape, touchpoints, and customer data, as well as process automation, all provide enormous potential for efficiency gains, cost savings, and improved customer satisfaction at the same time. Also, when you use a CRM system in combination with marketing automation, you can track customer behavior reliably, identify customer needs, and support customers based on their individual behaviors and needs,” explains Adrian Bucher, Community Manager Health at BSI, regarding the results of the study.

The study design

In collaboration with Bilendi, the market research company, 1069 persons with public health insurance in Germany, and 569 in Switzerland were queried for the study in October and November of 2019 in a representative survey. The survey was based on responses to an interview with 58 questions via an online panel. Additional qualitative results were obtained from 11 in-depth interviews (5 in Germany, 6 in Switzerland), as well as from 22 spontaneous interviews (10 in Germany, 12 in Switzerland) with health insurance customers.

The study (in German) can be downloaded here:

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