HMOs Looking to Improve Their Image With Consumers

Among the complexities raised by the federal healthcare law signed by President Obama in March are the challenges that health maintenance organizations face in the realm of marketing. This point was driven home just last week, when EmblemHealth became the fourth HMO since February to launch an advertising review—an admission, some companies acknowledge, that they must change course and shift from primarily targeting businesses to a focus on consumers.“We recognize the need to be more consumer oriented in everything we do—both because we want to satisfy our members and because as more and more coverage is going to be sold through the exchanges, direct-to-consumer marketing will be needed,” said Ilene Margolin, svp of public affairs and communications at EmblemHealth in New York.Along with this sea change, HMOs face the dual task of defining their brands in a heavily commoditized category and overcoming a generally negative public image. And, of course, marketing alone won’t fix such problems. That’s why some, like Cigna, are trying to improve their customer communication channels, be it online or on the phone.“The rhetoric and change have to be hand-and-hand. The [marketing] message has to reflect real changes,” said Domenico Vitale, a strategic planner at People Ideas & Culture in New York. The healthcare law will add an estimated 32 million Americans to the market for health insurance. Unlike workers whose employers predetermine their HMOs, new enrollees will pick the provider of their choice via health insurance exchanges that begin operating in 2014. The anticipated influx of potential new customers underscores the need for consumer-directed efforts and, although the exchange is four years away, HMOs are clearly ready to shake up their marketing efforts.EmblemHealth joined Aetna, Cigna and Humana in launching a review. In May, Humana consolidated its marketing services duties, after a review, at units of Omnicom Group, chief among them Rapp and PHD, and in June, Aetna awarded lead creative duties on its account to Havas’ Arnold in New York. Cigna began its ongoing creative and media review in August, with Omnicom’s Doremus defending.Each company intends to increase its major media spending next year, with Humana, for example, upping its total to a planned $100 million compared to last year’s outlay of $80 million, said sources. Aetna, according to its initial RFP, will spend $15 million this fall, $35 million next year, $45 million in 2012 and $55 million in 2013. EmblemHealth plans to triple its spending to $15 million next year. Creating a distinctive brand in this category will be a formidable task for any agency. “The biggest challenge is there is an absolute sea of sameness across the brands,” said an agency leader who has researched the space.The executive added that acknowledging the cloud surrounding the healthcare services industry—an approach mirroring the recent mea culpa effort from Domino’s Pizza—is a non-starter. “We tested it. It won’t work,” said the exec, who declined to be named. HMOs should emphasize how they’re going to help customers get care and “move from a transactional relationship to relationship marketing,” the executive added. Cigna, whose spending will likely rise to $20 million in 2010 from less than $1 million last year, is already moving to become more consumer friendly, adding a “Let’s be clear” button on its Web site last month that redefines healthcare jargon in hopefully simpler terms. In addition, Cigna last year expanded its help line to take calls 24 hours a day, seven days a week, said Joseph Mondy, a company representative.Both initiatives were spearheaded by customer experience officer Ingrid Lindberg, who joined Cigna in early 2008 and reports to CMO Benjamin Karsch. Lindberg is the first to hold this role.“In the public’s mind, we’ve been down at the bottom of the list in terms of businesses they like to do business with,” said Mondy. “Frankly, that’s a lot of the reason that drove things like hiring Ingrid.”Aetna declined to comment, but its April RFP spelled out the challenges facing most HMOs under the new healthcare law.“Aetna enjoys strong name awareness, but the brand is relatively undifferentiated,” the document indicated. “The category is complex, healthcare reform is on the horizon and the industry is under a dark cloud. Aetna’s way forward is a business strategy that will leverage its awareness strength and transform the brand from its current b-to-b focus into a relevant and compelling consumer brand leader.”Humana did not return messages and executives at its lead creative agency, Rapp, could not be reached at press time.

Brand Marketing

HMOs Looking to Improve Their Image With Consumers

Andrew McMains

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Andrew McMains