Loyalty…Retention

I had a good lunch meeting today discussing loyalty in healthcare.  The loyalty expert asked me what I meant when I use the word “loyalty”.  Good question.  I immediately jumped to points programs which is what I usually think about when I say loyalty.  He asked about points versus information versus experience.  I usually think of those as some of the key components of retention.  Retention to me is a lifecycle program that address the patient experience from getting them to select you, welcoming them to the program, educating them, and exiting them at the right time.  It involves information, tools, incentives and rewards, and has to be relevant to them.

Healthcare is unique in that you can’t simply incent on volume.  I don’t want you to get an prescription if an OTC will work.  I don’t want to you to go the physician unnecessarily.  I want to incent you to do the right thing – go to your physician versus the ER; exercise; get appropriate tests done; participate in disease management programs; or use a generic drug.  Some of these are easy to capture, but some of them become self-reported data which is hard to automate and collect.

So, we talked about the different constituents and what they might do:

• Providers (MDs, clinics, hospitals): pretty difficult to see the right model here…obviously they want your business if/when your sick so a share of wallet concept could work, but there isn’t a clear alignment of incentives without a pay-for-performance (P4P) or capitated relationship.
• Pharmacies or Durable Medical Equipment (DME) Providers: this is the easiest model to understand, but you still have to make sure you don’t incent inappropriate behavior
• Managed Care or Other Insurers: this is where the biggest opportunity exists, but the question is how to you get companies to invest in rewarding preventative actions rather than running the odds of having a major cost factor for the patient prior to the patient churning (i.e., going to another payor)
• Disease Mgmt Companies: this is a clear model since they are being paid to manage a disease and lower the costs.  offering incentives or rewards that make a patient compliant (i.e., loyal) or drive behavior to a care plan would be in their interest.
• Pharmacy Benefit Managers (PBMs): there is something here especially around mail order pharmacy, but I think the big opportunity here is reward for behaviors such as using self-service (web, IVR) or choosing the lowest cost option – OTC, generic, mail order, etc.
• Pharmaceutical Manufacturers:  here there is clear alignment.  We used to do programs such as the 5-7-9 card which was for some drug (that I can’t remember).  The patient got the 5th, 7th, and 9th fill free if they stayed compliant and enrolled in the program.

In researching this, I found this good loyalty presentation by Carlson Marketing.  With healthcare being so behind other industries and struggling to figure this model out, the only place we are going to find a lot of research and information is going to be in other industries.