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Engage Consumers February 23, 2015

Health Insurers, Retailers Partner to Change Consumer Behavior

Principal, Oliver Wyman

Earlier this month, UnitedHealthcare’s Wisconsin subsidiary announced a new program with Roundy’s, a regional grocery store chain. The program, titled Healthy Savings, provides different discounts every week on a variety of healthier foods. This follows other similar partnerships: HumanaVitality and Walmart launched a national program to incentivize people to eat better through savings on healthier foods, while Anthem works with a number of retailers to provide a range of discounts on healthy living products and services. Oliver Wyman Principal Graegar Smith, who works at the intersection of healthcare and retail, offers the following take on how to optimize these promising new partnerships:

By working together, health insurers and retailers have an opportunity to achieve mutual benefits: reduced healthcare costs and increased store traffic. At the same time, enrollees can potentially win with improved health and wellness. But to effectively create these upsides, health insurers and retailers must constructively engage not just consumers but also healthcare providers and the food manufacturers.

A closer look at United’s new Healthy Savings program highlights several appealing features. The program, as described, allows enrolled consumers to choose the products they want ahead of time, presumably at home or using a mobile app. Consumers then shop for these items at their local Roundy’s banner store and present their Healthy Savings membership card at check-out. The discounts are taken off automatically. The program also provides additional discounts on produce or fresh products for buying certain discounted packaged food products. Surrounding the program is information on general nutrition and how to prepare foods in a healthy way.

As programs like this become more common, partners can ensure success with these 7 steps:

  • Engage healthcare providers. Providers’ recommendations are a powerful tool and can encourage consumers to use the program. Payers and retailers must engage in a meaningful amount of outreach and education with the provider community to make sure they fully understand program details, particularly the guidelines used to determine eligible items and the dietary standards being followed for certain conditions like diabetes or high blood pressure.
  • Tailor designs for each target consumer segment. Payers and retailers need to identify all the unique segments that exist and assess where the potential impact is greatest, both from the consumers’ perspective as well as the various program partners. Ask what’s going to improve customer retention, increase overall shopping basket size, or affect profitability.
But to effectively create these upsides, health insurers and retailers must constructively engage not just consumers but also healthcare providers and the food manufacturers. – Oliver Wyman’s Graegar Smith
  • Emphasize the consumer experience. That is, how they enroll in the program, identify and shop for eligible items, the support provided to help properly prepare those items once they get home, and so on. In-store reminders are needed to reinforce the decisions made before walking through the aisles and to reach new consumers previously unaware of the program.
  • Go beyond packaged food. Produce and fresh food need to be part of every program. There are opportunities to expand beyond food into general merchandise. For example, exercise apparel and fitness equipment would further delight the consumer. If the “healthy” message is to be seen as authentic, the payer and retailer need to expand the categories covered.
  • Take an equitable approach to funding the program. Someone has to pay for the discounts provided (and the back-end infrastructure to run the program.) It’s shortsighted to conclude that retailers should bear the lion’s share of it, because they, for example, benefit from added store traffic. Solving for this, whether through corporate sponsorships or other novel deals, will also make it easier to grow a program from just packaged to fresh food categories.
  • Set up an infrastructure and data back-end that focuses on outcomes. Getting items in the shopping basket is one thing, but getting greater visibility to what happens to those items once they are unpacked in consumers’ homes is a gap and a real need. Partners need to track health status changes and consumer engagement and satisfaction improvements. Strengthening outcomes data will also go a long way in addressing funding issues—having outcomes data unlocks additional payment dollars. There’s opportunity to leverage social media and peer-to-peer connections to understand the homefront, with Instagram pictures of plates being mined using image recognition algorithms, for example.
  • Create a fuller picture of the consumer. An expanded set of data assets, including pharmacy transactions or health and beauty category purchases (such as vitamins and supplements) can provide a fuller profile of the consumer and their retail shopping habits. This information could significantly improve predictive models and the ability to deliver actionable insights when combined with claims information held by payers and clinical information held by providers.

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