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Following the lead of the CMS, healthcare is waking up to the use of rewards to motivate consumers to get healthy.
Consumer marketers in vertical industries from financial services to retail have long seen rewards as core to their marketing arsenal, and now health care is waking up to the possibilities for using rewards to motivate consumers to get healthy. In fact, a new survey conducted by Novu shows that rewards act as an effective differentiator for plans looking to motivate their members to take positive actions for their health.
The survey findings come just months after the U.S. Centers for Medicare and Medicaid Services (CMS) announced new guidelines to enable Medicare Advantage (MA) organizations to offer health-driven rewards and incentive programs as part of an expanded list of health-related services and activities. Specifically, MA plans can now create one or more programs that provide rewards and incentives to enrollees for activities that focus on promoting improved health, preventing injuries and illness and promoting efficient use of health care resources.
The guideline changes align with Novu’s survey findings-that respondents are more likely to seek out plans with a rewards offering when choosing between MA plans. 83.97% of respondents to the survey-which was conducted with more than 1,200 MA members-are likely to choose a plan that offers rewards over an otherwise identical plan that does not offer rewards. Not only can rewards be used to move plan differentiation, but the survey also found that 83.4% of respondents are likely to complete a care screening if offered an incentive, which has implications for Stars ratings around preventive screenings and member satisfaction.
The confluence of these events presents a new opportunity for MA plans, especially as open enrollment continues and shifts in other member benefits, such as VAIS, move behind the scenes. Based on the new CMS guidance, there are three major areas where rewards can benefit plans and their members, especially as it relates to differentiating brand offerings. These include:
1. Creation ofA New Extension of Benefits Category Called “Rewards and Incentives”
This expansion allows MA plans to promote and market a rewards program to enrollees and non-enrollees as a benefit. Through a rewards offering, MA plans can augment their sales and marketing engines, as well as use the program as a tool to differentiate their brand to prospective and existing members alike, aiding acquisition efforts and driving renewals.
2. Rewards andRewarded Activities Have Been Expanded
The new regulation allows MA plans to offer incentives to enrollees “in connection with participation in activities that focus on promoting improved health, preventing injuries and illness, and promoting efficient use of health care resources.” This equips plans with a new set of tools to encourage member behavior in ways that will reduce costs and/or increase revenue. For example, MA plans can use rewards and incentives to drive preventive screenings tied to Stars measurements and encourage participation in HRAs for risk scoring, as an example.
3. Rewards Can Be Delivered Dynamically To Targeted Populations
MA plans can now target incentives to different members to drive behavior that is positive for their health. While plans cannot discriminate with rewards to the disadvantage of the unhealthy populations, there is an opportunity to deliver rewards to move specific levers for those populations. This allows MA plans to reward at the member or contract level, which is hugely efficient for Stars outcomes.
As we look into the future and CMS’s continued push for tying initiatives to quality outcomes, rewards programs will continue to help plans fill in strategic gaps. There is currently language being considered at CMS in which plans would no longer be able to promote VAIS benefits features to non-enrollees. In this language, features like perks and discounts could not be promoted going forward, and vehicles like rewards programs could fill this marketing niche, as they could be promoted as a benefit to members.
Today’s health care ecosystem requires new tactics to align risk with consumers, and rewards are now a viable option. While plans must still be strategic in their application of rewards in 2015, there is real opportunity to make significant gains in quality measures and sustained brand differentiation-which in turn stand to benefit consumers and plans alike.