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Regardless of whether you operate from within or outside of the health care industry, the evolution of health care is something that impacts us all. Our interview with Craig Thomas, senior vice president of strategy and chief marketing officer at Florida Blue
, focuses on one of the chief drivers of this change: health care consumerism. At its core, consumerism represents a shift from employer-provided coverage to individual buying power. This is far from a simple change. Indeed, it is one of the primary reasons Florida Blue has transformed from an insurance company to a provider of health solutions.
Craig Thomas, Chief Marketing Officer
This podcast highlights how Florida Blue has responded to the consumerism trend by changing its role to:
- Help consumers navigate the larger health care system;
- Facilitate healthier lifestyles with preventive care and robust wellness programs, and
- Manage members’ chronic health conditions.
These changes are pervasive throughout the company, impacting our delivery systems, product, service, marketing and innovation strategies.
Listen to hear how our transparency on cost and quality measures, retail centers
, and collaboration with Lake Nona
are all proof points for our commitment to consumerism.
Health care consumerism is a dynamic trend that will continue to evolve the health care industry. Florida Blue is committed to delivering the tools, services and capabilities that empower consumers to stay their healthiest. What are your questions about health care consumerism? What changes would you name as the most significant? Leave us your comment below and we’ll have our experts respond directly.
Full transcript of the podcast starts here:
Welcome to Florida Blue Radio where we explore health care topics that are important to you. Whether you own business, are a health practitioner, or are an individual interested in how health care is evolving, experts from across Florida Blue will keep you in the know. For today's program, we'll learn more about health care consumerism with our host, Paul Kluding. Paul is Senior Director of Media Relations with Florida Blue. He'll be interviewing Craig Thomas, Florida Blue's Chief Strategy and Marketing Officer. Now, here's Paul.
Good morning. This is Paul Kluding. Health care consumerism. It is a subject that has received a lot of attention of late. And today, we will be speaking to someone who has been a leading advocate for the movement. You will hear first hand how this leader at Florida Blue helped steer the company in a direction of health care consumerism. And how those efforts helped to transform the organization from a health insurance company to health solutions company.
So let's get started. Today, we're here to talk to Craig Thomas who's the Chief Strategy and Marketing Officer at Florida Blue. Welcome.
Glad to have you here. The main topic today is really health care consumerism. So we're all on the same page, how would you define that?
OK. Well, it's a great topic. Health care consumerism is clearly one of the big emerging trends for the last few years and into the future in health care. I look at it. There's two levels of it. First, consumers are increasingly purchasing their own health insurance plan. Historically, in our country, maybe 80%, 90% of people have always gotten their health insurance through their employer.
That is changing rapidly with the increase of the individual under 65 market, through health care reform and the exchanges. As well as through private exchanges where employers are giving their employees much greater choice and freedom to select carrier and certainly in the growing Medicare marketplace. So that's the first level, selecting a health plan.
The second is actually purchasing planned or elective health care. The days of the co-pay are gone. And so consumers have meaningful cost sharing. Therefore, they're incented to shop. And health care costs and quality vary tremendously. when I talk in front of groups and ask them, how many of you have bought a TV in the last five years. Everybody's excited and energetic and raise their hands. And they can tell you five things about TVs. And how they shopped online.
And then ultimately, went into Best Buy and say, which one I should I get, because they need support. You ask people how many have shopped for health care services, whether it's pharmacy or imaging and what they know about cost and quality of something as important as their health care, very few people have ever had that experience. So that's the second level of consumerism in health care, the selection the right health care service and the right provider.
Well, that's probably just the notion of shopping for health care. That's probably a topic or a notion that most people don't even consider just because of the model that was presented to them before.
Yeah. This is huge change in our country that will play out over 20 or 30 years. And it will empower consumers. It will create marketplaces. And that will help drive rapid transformation in how health care is delivered. I think one of the reasons that health care value is not where everybody wants to be. It's too expensive. The outcomes aren't commensurate with that investment. Is because there has not been, like other free market categories, a consumer push.
So let's talk about Florida Blue's efforts in health care consumerism. How would you sum that up, broadly? What have we done in that arena?
Well, this has been an area that we have focused on since about 2005. So we saw the trend coming in our Florida marketplace. We saw more and more small businesses drop out of providing health insurance because of the cost issues. We saw the advent of high deductible plans and consumer directed health plans coming. And we knew it would be a very slow, gradual evolution in the marketplace.
So we have had a long, sustained innovation and development initiative across a full range of consumer products and services and programs since 2005. I think it's important here to make the point. When we talk about consumerism at Florida Blue, we're not talking about just those customer segments that are buying their own policy. So employees, groups, employer groups and their families, they're all consumers. After all, at the end of the day, we're all human. And we're all consuming and purchasing the health care.
So let's go back 2005 when you say it initiated. Talk about your personal evolution. I mean, was there are moment where you woke up and said, give me a white board? This is the future for our company. Could you see that on-- the writing on the wall, so to speak?
Well, we have tried to make sure that we are a good marketing company. Which means you're in tune with emerging trends. You're in tune with your customers. You see what other industries are doing. And so we saw consumerism coming pretty early. And some of that was due to some of the unique things in the Florida market. But that's the easy part. The hard part is getting companies to move and changing your DNA, your mindsets, and actually getting things done that advanced your capabilities to support consumers.
That was my next question. All right. So then, you had to almost present it to leadership. Say, OK, we need to make a shift. And so how did that process come about?
You know, our company, generally speaking, is very forward-looking. Tries to be very strategic. So that's a good starting point. Discussing something like consumerism in a company like ours that is a business to business company for 60 plus years, that's oriented around big business, risk management, compliance. The notion of consumerism and really what comes with that is foreign.
And it's new. And it's risky. And so there is a, for lack of a better word, a sales or an alignment process because it does take a substantial investment. It takes new partnerships. It takes new talent. And so without strong leadership at the top, a company that is in a business to business environment cannot make the shift to consumerism.
So what would you say was kind of the first initial entry into consumerism for us?
You know, I like to think of at least four early moves that we made. First, you have to have an investment in what we call actionable customer understanding. If you don't understand consumer segments, the diversity of their needs and preferences, you really can't be responsive. So you have to have that. So we invested in market research, database marketing, analytics, and those types of things.
The second thing I think we did, which was also a big change for us, is we tried to hit head-on the most important issue to consumers. And that was affordability. So we tried to apply or developing array of choices with the focus on more basic plans. You have to understand that when you're at the consumer level, there are different sets of expectations. Not everybody is used to and expects and demands a Cadillac plan with all the bells and whistles.
And not all consumers see that as a smart investment. And for sure, lots of consumers cannot afford that kind of plan. So for a premium brand that's known for high value, to offer lower cost, more basic plans but in a high value way was critical for us. The second thing was-- or the third thing, excuse me, was cost and quality transparency. In our industry, all of that type of information is really hidden from consumers.
And it's really in between the insurance company and the provider, the health care provider. So opening up simple tools that allowed consumers to shop for planned services-- how much does it cost, what are my place of setting options, what we know about quality differences? --was critical. So we developed, for example, if not the first, one of the first swipe cards.
Our ID card became a plastic swipe card. We deployed readers in physician's offices throughout the states-- throughout the state where consumers could work with their provider to understand planning. How much is this likely to cost me over the year? Shopping. What are my choices? And estimating exactly how much it's going to cost me.
Now, this was an interesting thing as well for providers, the change. They were not used to collecting money up front. They had no ability to answer a patient's question, how much does this cost. What options do I have? Because the consumer was on the hook for $5. Now, providers needed the ability to understand that, share that information with their patients, and collect. So that's consumerism. You now have your supplier talking price.
I used to say this. Imagine going to the grocery store. And you're walking down the aisle. And you're picking items. And you have no idea how much it costs. And then, maybe you get to the cash register. And you get a big surprise. Or worse yet, what if they said, well, I'm not sure how it's going to cost. Just take it. And I'll give you an estimate. It's somewhere between $100 and $150. And I'll mail you a bill in three weeks.
That's not consumerism. And that's where health care and health care providers were at that time. And boy, has that changed since [? then-- ?] so cost and quality transparency. The last thing I would say is our retail centers. And I'm sure we'll talk about that more on. But we started the first one in 2005. It was sales and service only. And it was run by one of our agency partners. And so those four things were examples, I think, of where we started back in the mid 2000s.
OK. Let's talk about a little of the consumer transformation. Because especially when we talk about quality and choices, you've got to reeducate your consumers. To tell them, hey, you have choices now. Let's take a look. So talk a little bit about how that went about.
This may be being most insightful category. Because if you don't understand this, you're going to struggle with consumerism and health care. Health care is a very emotional issue for people. I always tell the story of when my older sister first found out her youngest child had diabetes. You got to realize most people at that point don't know what diabetes is. They don't know what kind of doctor you go to. And you're kind of panicked and upset. So it's emotional.
The second thing is it's incredibly complicated. Unfortunately, health insurance is complicated. Health care financing is complicated. And the delivery system is very complicated and very fragmented. So you have to understand that education is critical. And it has to be very basic and very simple. And for lots of people they will never fully understand and be able to handle that on their own at that moment of truth.
So you have to meet consumers where they're at. And when they get in that spot, you have to be able to provide, in our view, high touch personal support. And help hold their hands and help them navigate through the system. You know, education and digital is only going to take certain consumers so far. And that's not sufficient, particularly if you look at really what's going on with the Affordable Care Act.
That is about granting access to the mainstream health insurance and health care delivery systems to people who have not had it. And I'll tell you, people have it all along are confused. And so you bring in new customers, maybe with language challenges or education challenges or just not used to it. Education is important. It's not the full answer.
So that also leads to the next question. You know, not only do you have to engage and get your members on board, but your employees as well that are servicing them. That's a whole different service model then we've probably had in the previous 20 years.
It's totally different. People who buy-- first of all, people buy their own policies, have much greater needs. They call much more frequently than employees of employer group call. They don't have an employer to go to. The second-- one of the things we learned is, if you have a very high performing customer service representative who helps customers on the phone, that does not mean they will be effective in, say, a retail center in a face-to-face environment.
I think it's a little bit different experience to sit across the table one-on-one with a person. It's faster. It's more transparent. You know, empathy, the ability to call. It's a different job, turns out. So I think those are some of the things for the employees. The other thing I will tell the people who work for providers or payers. You have business processes that support behind-the-scenes processing, batch processing overnight. You've got to retool those for real-time consumer retail experiences.
So how did we go about engaging providers in this new model? We walked in the door with the new reader. There had to be some explanations, some get on board discussions about the whole process. And where things are moving. Overall, would you say that they were on board or were there some resistance?
I think we found the typical things you find associated with change. You've got your early adopters. You've got your middle of the pack that comes along eventually. And you've got your providers or consumers that are never, never going to accept the change. And it takes a long time. It really does. So generally, I'd say, at the beginning, most providers, they have their own business processes and their own business models. It's a big, big change for providers.
And it's still going on. But we had good adoption. You got to stick at it for two years to roll out something, something like that across a state as big and diverse as Florida.
Absolutely. So let's talk about some of the retail centers a little bit. So you had the first concept that, you said, was more focused on sales and service a bit. But even that evolved. Well, even the concept of the retail center where you bought a building and invested funds to get that up and started, that was a big shift for an insurance company. No one had really done that before.
Yeah. The retail center is probably our strongest proof point of our commitment to consumerism. You talk about something different, just to get people to imagine what would be in an insurance store. I remember when we had our first one down in the Tampa area. And I took my kids to an amusement park down there and said, hey, let's swing into the retail center. And they were like, what do you possibly have in your retail center. I thought you worked for an insurance company.
So that's a big, big challenge and a big investment. But we have evolved over the years with lots of learnings to 18 retail centers. We have tailored those retail centers to the communities they serve. Some of them are large full-service centers. Some are smaller centers in plazas. Some have primary care physicians attached to them. And some are in Walmarts. So it's not one model. You have to look at the-- what you're trying to accomplish. What that community's needs are. What else is going on in that area.
But then, we generally provide four services in the retail centers. Sales, which is really for us about helping people choose the right plan for them and their family. Service of the plan. Health care, each of the centers has, at least the larger ones, nurses that are health coaches, help people develop a personalized plan, do health assessments. And then, we're a Blue Cross Blue Shield plan, so we do a lot of community service, charitable work out of the centers.
So we're pretty proud of them. We expect 250,000 to 300,000 visits this year. That is really the high touch support and engagement across both picking a plan, using your plan, and using the health care system that we've been talking about.
Right. Now, one thing I noticed is that the retail centers have become a great asset for Affordable Care Act and health care reform education in general. You may have not foreseen that. But it really has been a tremendous resource.
Absolutely. When you talked about the consumerism trend or journey, the Affordable Care Act has really accelerated across the country. Millions of new people are coming into the market. We expect the under 65 consumer market to double and the triple and then quadruple in Florida over the next few years. So the challenge early on is getting the word out. What does this mean? How does it work? Does it apply to me? I'm not sure I get it. So we made a commitment in Florida, Florida Blue did, to helping get the word out.
So we held thousands of educational seminars. And many of those occurred at the retail centers. But also the other thing, by the way, with consumerism that we've learned is, you've got to partner with companies. So a lot of these seminars were done in retail groceries, retail pharmacies. If you want to educate, say, the Hispanic market, Miami-Dade, you better partner with companies that they work with. So we worked with Univision, Navarro's. So that's a big part of the education process in getting the word out for the new program.
I've walked into retail centers. And I was amazed at the energy and the flow. And everything seems to be very well-coordinated. So I imagine a lot of thought and process had go into the actual design of these retail centers.
Yeah. I think a lot of people think you pick a corner and put a building up. First of all, picking a corner and designed the building are important pieces. But the customer experience inside has to be carefully thought out. Who you recruit and how you train them has to be carefully thought out. The services provided in there have to respond to what people walking in are looking for. And so there's a lot of secret sauce down in the details of how to make those work.
But if you think that, in general, people going into the retail centers have the more complicated issues, whether they're health care or service or buying a plan. And you think about some of the difficulties of the initial roll out of the Affordable Care Act. Despite all of that, the consumer satisfaction rate in our retail centers is over 92%
Is that right?
And it's all about that personal interaction which brings you back to the key, the people working in those retail centers and how prepared the company has them interacting with consumers on this emotional and complicated set of topics.
Sure. Sure. Absolutely, So with 18 retail centers now, how do you see the concept growing or changing?
Our view is we're scratching the surface with what these retail centers can do in this whole consumerism space. We started with, hey, let's get good locations. Let's create a warm safe, comfortable environment. And then, let's go from there. So we've evolved the products. We've evolved the services. I think were it goes is a lot more involvement in health care navigation, helping people navigate the health care system, helping people stay well, helping people manage their conditions. So I think that's a big opportunity for us.
The other thing is, when we talk about the health industry, the way consumers look at is very broad. Whatever is in their mind that part of their health and wellness. And it could be cosmetic things. It can be exercise. It can be nutrition. All kinds of things. So the scope of services that we will provide in the retail centers should expand substantially over the next few years.
You brought up a good point there that I wanted to touch on. We've talked internally about transforming from a health insurance company to health solutions company. And it's broader than the retail centers. But talk in your terms how the health solutions and consumerism all ties together.
Yeah. I think there's a couple pieces to it. One is for our members. We've got to make our insurance members. We've got to make sure we have a broad set of supportive services and programs, like help me with my diabetes. So that's an example of a health solution. We provide health fairs to hundreds of employer groups every year on the work site.
You would be surprised how many people are walking around with high-risk situations who identify those risks right there at that health fair and go straight to the hospital. We have thousands of health care providers who are employees of Florida Blue providing health. So those are examples of health solutions. We have the company that administers the Medicare, traditional Medicare program in something like 11 states, paying over $100 billion in claims a year and servicing providers and Medicare beneficiaries and that government program every day. That's an example of health solutions.
We are working, really with companies all over the country on innovation. We're anchor partners in the medical city in Lake Nona which is a kind of emerging Silicon Valley for health care with major companies there. So innovation in health care is an area where health solutions are coming. We have a program called Health Box where we work with start-ups in the health care space and try to help them develop their company. So there's a lot going on to expand what we do beyond providing health insurance.
OK. So Craig, people are used to the typical insurance model. How do you go about convincing consumers that this isn't your mom and dad's insurance company?
Well, convincing consumers. First of all, consumers are smart. And second they talk to each other. So I've always viewed it as a two-step process. One is, you have to actually do it. So if you don't have products, services, programs in the market that deliver on the promise and that are real, you cannot convince them. You should not try to convince them.
The second thing is, you have to effectively communicate. Now, if you take a brand like Blue Cross and Blue Shield of Florida that has been leading health insurance brand in Florida for 60 years, and you're trying to communicate a change, keep the good but change for the future. How do you do that? How do you change the mindset? So that becomes our rebranding effort. So we made a very big move in this area. And we moved from Blue Cross and Blue Shield of Florida to doing business in Florida as Florida Blue.
Florida Blue is intended to signify the change to more consumer orientation, more accessible, more friendly, more relevant to the new marketplace. People coming into the market, the Hispanic market, for example. And so you have to develop the new programs. And then, you must communicate consistently through all of your channels your new brand position and what that stands for.
So obviously, in this consumerism evolution, you've tried something that may have not worked. Can you think of any misses that, or opportunities that maybe you could have done little differently along the way?
I prefer to think of them as learnings.
There you go.
And we've had unbelievable sets of learnings on every single thing we have done. Maybe to pick a few. One is that consumer expectations vary dramatically. And have a lot to do with where they're starting point is, and where they're going. So for example, when we introduce some of the more basic health plans, we were concerned that our new customers would not be as satisfied with those basic products as our traditional customers were with the higher-end products. We learned the opposite. They were more satisfied. The reason was, they were going from uninsured to insured. And they had Blue Cross Blue Shield coverage.
We also were concerned is, boy these folks won't understand. They understood exactly what they bought. And did very well in those products. So learning what consumers expect and what they really value is all the way through the process. I think a second thing we learned-- and we touched on it before. --was the employees' skill sets and the business processes and just the whole thing of the experience is different.
The last thing-- and it may sound obvious. --is the incredible need to simplify. If you cannot work towards meaningful simplification of everything you do, you will not be effective at meeting the needs at the consumer level.
So is that like in bill processes? Or is that--
--everything across the board?
Everything. If you look at some of the stats now, people are signing up for insurance companies' websites. And they're watching what they do and what people are saying about them in social media. And they want to use self-service tools. If those tools aren't friendly, intuitive, easy to use, fast, simple, valuable, they're not going to use them. And then, they're going to have to go and call in which they don't want to do, which is expensive. And so all of that becomes important.
So you mentioned some self-service tools. What are some of the tools you have rolled out for members to use in this case?
You know, it starts with shopping online and comparing plans. It moves into, I want to change my address. I need a new ID card. I want to check the status of a claim. The biggest one in that space is, which doctors are participating in the network. And what's their phone number? And is there any information you tell me about the provider that I can match to my needs and preferences? Then, you move on to engagement. How do I get engaged in wellness? Is there a social community of people that have the same condition I have that I can talk to? It makes me feel better and I learn.
Do you have any incentive programs? I need a little bit of-- I need a trigger. And I need a little bit of motivation. And I need a little bit of support to improve my health status. So it moves up into health care engagement. So those are the categories of self-service that we have in the market, and we're working on.
Obviously, this transformation of your business model couldn't have happened without some key partners along the way. Are there some that have really helped the transformation more than others?
You know, when you're a leading company in a category, you have such strong and important relationships with all kinds of partners that you have to work with them. You want to work with them. And they want to work with you. So there are several categories there. If you think about our agents, these are independent business folks who have built a business helping people pick the right plan. They're critical to that shopping experience. You think about health care providers.
Our members are their patients. So the ability to support them-- providers are looking for the same thing. How do I engage with my patients better? How do I understand them better, not just clinical? And how do I check in with them in between visits? If you think about somebody who has diabetes, and maybe they come in twice a year. What's going on with that person- their diet, their fitness, their monitoring in between visits?
For most providers, it's a mystery. So working with the provider. Employers. Employers have a lot of interest in the health and wellness of their employees and their families. It's a big recruiting and retention program. Many of them, though, are moving towards more of a defined contribution or a private exchange choice model. So they want us to provide some support but greater choice. And to some extent, back out a little bit of being so intertwined with their employees' health care. That's changed for them.
But 80%, 90% of our membership in commercial business is through employers. So hard to imagine how you would drive wholesale transformative change without partnering with employers. So you can see it's a very complex environment.
Absolutely. And back to the employers for a minute. I know that there have been specific programs developed with them to help their employee base improve their health. And that's probably something that wasn't done years before, whether it be diabetes management or smoking program. Can you talk a little bit about that?
Absolutely. You know, employers see the health care cost problem and the productivity problem associated with their workforce. It is in both their natural interests as humans but also in their business interests of investing in the wellness of employees. So they're doing things like, large employers, on site health care clinics. We have one here at Florida Blue in Jacksonville. Health fairs, health assessments, a lot of them are doing health incentive programs. If you do these things, we will contribute money to your health savings account. So it's very important to them to participate in programs like that.
You talked about getting the employer engaged, but it also leads to a broader question too about getting their employees and the general consumer engaged in this process. That had to be-- that's tricky, too.
Everybody's looking for the engagement magic. If you look at the start up world, the private equity world. And how many companies are focused on bringing consumerism to health care? It's wildly successful everywhere else. I saw something the other day that it took 35 years or something for 50 million people to adopt TV. And then, a long period of time for 50 million people to adopt the radio. It took four years for the internet and 35 days for Angry Birds. So the pace is picking up quite dramatically.
OK. So you could say that Florida Blue has been leading the trend in health care consumerism. If you look out to the future, what are some of the trends that you guys are keeping an eye on?
Well, if you start the most basic, 50% or more of the growth in the health insurance industry is going to come from consumer segments. The exchange market and the Medicare market with the Baby Boomers aging. So that's the first most basic things. I mentioned the private exchanges or the choices in employer. So the whole market is moving towards consumerism. So that's the first thing. The second thing, the technology around, let's call it, monitoring.
The technology around telemedicine is unbelievable how that's exploding. And where that may go in a relatively short period of time. You cannot underestimate the impact of the social media movement and how people are interacting every day, every minute with each other. So those trends, before you even get to genomics and how genomics will rapidly evolve to help people pick the right, the medicine is likely to work for them best. The procedure that's likely to work best for them. And how that transforms care.
Medical technology, just robotics and things like that. There's the innovation in the science of medicine and technology. There will also be innovation in the process of delivering the care, likely more home health care, likely more care provided by who are sometimes called physician extenders, other types of health care providers who work directly with consumers in cost effective settings. Health educators, navigators with the health care reform.
So all of those trends are accelerating and working together to push change. The last one I'll mention is what's going on in the provider community. This is at least as fundamental of a transformation as what's going on in the consumerism in general in health insurance industry. Providers have been paid what's called a fee for service. Every procedure, every test is paid. it's not tied to outcomes or value. The world is rapidly, including how the federal government is paying and incenting and rewarding providers, to move away from that to value-based, outcomes, efficiency.
So that trend will have profound impacts on the health care provider industry. The way they serve their patients and the patient experience and support they get through their provider will be changing quickly. So this is what's driving a lot of the consolidation and integration, capability, development in the health care provider space, in delivery of care and interacting with patients.
Great. Well, Craig, I want to thank you very much for taking time to sit with us today. Your insights been very helpful. And I'm sure your focus on health care consumerism will be a model for future companies to look at.
Great. I appreciate you having me. Thanks.
You've been listening to Florida Blue Radio, recorded at our Jacksonville headquarters. For notes from today's program, visit our blog at floridablue.com. Be sure to leave us a comment there with your suggestions or ideas for future programs. Until next time, here's to you in your pursuit of health.