Member Mind Reading

July 1, 2005

Since 1968, J.D. Power and Associates has been cultivating and maintaining one of the largest customer-satisfaction databases in the world. Its brand is recognized by consumers and leveraged in organizations' advertising campaigns as a benchmark for excellent performance in meeting customer expectations within several major industries, including airlines, automobiles and, since 2001, healthcare.

Steven D. Wood, senior vice president at J.D. Power and Associates and general manager of the healthcare division, which is based in Mesa, Ariz., says that earlier this year, McGraw-Hill Companies purchased J.D. Power partly because of the firm's focus on the healthcare industry.

Wood says there is a distinct need for payers and providers to listen to the voice of the member, especially now that consumer-directed healthcare (CDHC) has emerged as the fastest growing product model in the market. Many healthcare organizations have missed the point that customer satisfaction increasingly holds strategic value, he says.

J.D. Power uses telephone and in-person survey methods to gauge customer views on hospitals, physicians, MCOs and pharmaceutical companies. According to Wood, the firm looks for the rationale behind customer opinion to distinguish the degree to which products and services live up to customer expectations. Each year, the healthcare division conducts several national syndicated studies of patients and members, as well as proprietary studies for its clients.

Q You survey millions of people every year. Have you discovered any issues that health plans should be paying more attention to?

A We've done our national study on an annual basis since 2001. We've seen a steady decline in the perception of service quality of managed care organizations. The member has not been viewed as a customer because they don't pay the bill. They're an ingredient, but they're not where the influence is. In our most recent study, only 43% of members reported overall satisfaction ratings of 8, 9 or 10 on a 10-point scale. As we look at different industries-hospitality, automotive, banking-managed care ranks low, probably in the bottom three or four of the 15 or so industries that we survey in terms of levels of satisfaction.

As managed care is moving to have more of a retail element to it-although I won't say it's a retail business yet-there are opportunities out there to differentiate the business by being better at providing the service needs of the members. The other trend is about the information provided and assistance in making decisions. That has continually moved up the scale along with preventive care services.

We survey individual health plans and compare their results against the national norms. We have a distinction program so the plans that do well with their members can leverage the power-no pun intended-of J.D. Power and Associates' worldwide recognition of customer satisfaction, differentiating themselves in their market and setting hard targets for further improvement. In our 2004 study, the top three things that were most important were: information provided proactively and reactively, effective processing of claims, and preventive services.

With the emerging forms of health plans, being able to provide good information in a consumable form for members is increasingly important. Particularly since people are going to be spending more of their own money, they're looking to their health plan to provide good intelligence about what resources are available, what the relative quality is of the services, and what the costs are.