Knowing The Future

Understanding how attribute changes can influence customer loyalty in health care

James Bologna
MORPACE International

BACKGROUND

In the United States, health insurance is generally provided to consumers (often referred to as health plan 'members') in either one of two methods; either using a non-managed care protocol or under a provision for managed care. The primary method used for managing care is through Health Maintenance Organizations (HMOs). In the 1980s HMOs had enjoyed a reputation for providing preventative care and reducing health care costs. Throughout the 1990s, HMOs lost favor with physicians and consumers due to the HMO's administrative requirements that made obtaining care more difficult.

This dissatisfaction by consumers (health plan insured members), providers (physicians and hospitals) and purchasers (i.e., employers, government agencies, and health care purchasing coalitions) and has led to greater member turnover. The typical HMO in the United States has a member turnover rate of 15% to 25% per year. For consumers especially, changing health plans often requires changing doctors and learning new regulations required to obtain care – not an easy task.