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Health insurers seek to soften their image

As the country waits to see how the Supreme Court will rule on the Affordable Care Act, insurers say their future depends on engaging with the consumer.
/ Source: The New York Times

As the country waits to see how the Supreme Court will rule on the Affordable Care Act, health insurance companies are taking matters into their own hands.

Over the past year, many of the largest insurance companies in the country, including Aetna, Cigna and Humana, have introduced elaborate marketing campaigns to reposition themselves as consumer-friendly health care companies, not just insurance providers. The insurers have been preparing for the possibility that the court may uphold the most controversial provision in the legislation — the individual mandate that would require people to buy health insurance or face a fine.

While a majority of Americans would still be left to choose among the options their employers offer, a favorable ruling would expand the market for the insurance companies, allowing them to sell directly to millions of uninsured Americans.

Insurers say that even if the mandate is struck down, they will press forward with their strategy because future success will depend on engaging directly with the consumer. “I expect to see a fair amount of competition for the public’s attention,” said Michael B. McCallister, chairman and chief executive of Humana. “The individual relationship is going to be ever more important.”

The new efforts include themed messages like a “Go You” campaign by Cigna, as well as loyalty and rewards programs that take a page directly from the marketing playbook of traditional retailers.

The campaigns represent a departure for insurers, who had previously directed their marketing to wholesale business accounts, not individual consumers. The shift in strategy may become necessary no matter what happens with the health care act, but it is fraught with challenges for an industry that is better known for causing consumer headaches than for curing them.

“They are among the most disliked industries in the United States,” said Regina E. Herzlinger, a professor of business administration at the Harvard Business School and the author of the book “Who Killed Health Care? America’s $2 Trillion Medical Problem and the Consumer-Driven Cure.” “The nature of the business is that they really are not that eager to O.K. every expense,” Ms. Herzlinger said.

Indeed, insurance companies expressed concern about certain provisions in the Affordable Care Act when it was being debated in 2009, and lobbied to shape some of the rules. If the law is upheld by the Supreme Court, it could force insurance companies to extend coverage to tens of millions of uninsured Americans, regardless of pre-existing medical conditions.

In the meantime, insurance companies have been spending more on their marketing and advertising efforts. According to Kantar Media, a research unit of WPP, spending on medical and dental insurance advertising increased to $789.3 million in 2011 from $667.7 million dollars in 2010.

Mr. McAllister described Humana’s new approach as “bright, honest, aware and bold.” One television ad the company released in 2011 showed a family reunion at a summer home, complete with giggling children, cooing grandparents, bonfires and swimming at the lake.

In January, Aetna announced it, too, was refreshing its brand to continue “its evolution from an insurance carrier to a health solutions company,” the company said in a statement. “More and more, the end consumer is who we need to focus on,” said Belinda Lang, the head of brand and consumer marketing at Aetna.

Along with new advertising campaigns, several insurers are introducing new digital products, including some that seem to borrow equally from shopping comparison sites, airline loyalty programs and Groupon.

For example, Humana has created a program that rewards members for healthy behavior like losing weight or quitting smoking, awarding points that can be redeemed for things like hotel reservations, electronics and clothing.

One of the biggest insurers in the country, the Blue Cross and Blue Shield Association, recently updated its daily deals Web site, which offers members discounts on things like eye surgery and gym memberships. Aetna introduced a digital tool that allows consumers to compare out-of-pocket expenses. “Ah, the potential of putting people first,” says the narrator of its ad.

Putting people first is not a phrase many consumers associate with insurers, which instead tend to conjure up memories of endless bureaucracy, skyrocketing premiums and declined coverage. The advertising campaigns are an attempt by health insurance companies to humanize themselves and “to make the patient believe that the health insurance company really cares about them and to reassure the customer that they get what they pay for,” said Nora J. Rifon, a professor in the department of advertising, public relations and retailing at Michigan State University.

Fred Karutz, the general manager of health plan solutions at Silverlink Communications, a health care technology company, said that if the health care overhaul was left intact by the court, as many as 120 million Americans could be in the market for health insurance by the end of the decade.

“Insurance is a large-numbers business,” Mr. Karutz said. “The marketing push is for nonbuyers, the people who are ambivalent.” By nabbing new customers, sick, old, young and healthy, the companies can create “a balanced risk pool” he added.

EmblemHealth’s advertising campaign focuses on telling stories of its employees and sending its members a message that insurance can be personal. Some of the ads are large billboards placed at major intersections and landmarks in New York City, like Madison Square Garden. One ad, which quotes from Sonia, an Emblem employee, reads, “ You really develop a connection with someone when you can look in their eyes and help.”

With its “Go You” campaign, Cigna addresses consumers directly for the first time. “It is a shift, it’s an important shift,” said Maggie FitzPatrick, the chief communications officer at Cigna. The campaign includes bold colored ads with more personal messages like: “Why would you want to be like someone else? Its exhausting just trying to be yourself.”

Dr. Elliott S. Fisher, the director of the Center for Population Health at the Dartmouth Institute for Health Policy and Clinical Practice, said the campaigns were necessary regardless of the outcome of the Supreme Court case.

“Their future is going to depend on their ability to demonstrate value to patients and to employers,” Dr. Fisher said of insurance companies. “No one any longer questions the fact that health care is unaffordable and that the current way we are doing business isn’t working.”

Despite all of their efforts, Mr. Karutz of Silverlink said, the companies still have a long way to go since many of them are new to the retail environment. “As people become consumers, they seek out value,” he said. “In the group space, health plans could never hear the consumer scream, but in the retail space everybody can hear the consumer scream.”

“They need it,” said John Kamp, the executive director of the Coalition for Healthcare Communication, a policy and marketing group. “They know they are on the wrong side of the public attitude.”

This story, "," originally appeared in The New York Times.