All the prospecting in the world won’t help a company if it’s losing members as fast as it’s gaining them. Such was the case with Blue Cross Blue Shield of Michigan.
In 1996 its enrollment was stagnating at 1.85 million – as Blue Cross signed up new members, it lost current ones to other carriers.
The trend was partly the company’s fault. For years, Blue Cross had little competition as rival carriers stayed away from Michigan, preferring not to deal with what they saw as excessive flexibility in policies demanded by unions.
But Blue Cross continued acting as if it had no competition even as other contenders starting coming in, occasionally with client firms moving into the state.
“We had arrogance,” admits Susan Loren Davidson, Blue Cross Blue Shield of Michigan’s manager of retail marketing and communication. “But employers were offering their employees more choices. Times changed.” Although they continued to offer traditional coverage from Blue Cross, many employers started offering other carriers’ HMOs and PPOs.
“A large employer could be offering three, four, five choices,” Davidson says. “We realized that there was competition at the member level – and we had never competed at the member level.”
Indeed, Blue Cross labored under the misconception that it could not speak with its customers at the member level – that the companies would not want it to contact their workers directly.
The result was that Blue Cross spoke directly to those it insured only when the host company wanted it to or when it had to dispense mandated or negative information, such as changes in rates or benefits. “Nothing was being sent out that was positive in nature, that indicated they were valued as customers,” says Diana Pohly, president and chief executive officer of Pohly & Partners in Boston.
To address the issue, Blue Cross started Living Healthy, a biannual magazine produced by Pohly & Partners.
Blue Cross credits the magazine with changing consumers’ perceptions of the carrier, documented in focus groups, as an efficient yet distant monolith. The publication has also created a bond with policyholders and has helped to limit defections, allowing Blue Cross to increase its overall reach, Davidson says.
>From Living Healthy’s October 1996 introduction through March 1999, Blue Cross upped the total number of contracts written by 147,476. The insurer now covers an additional 284,232 people, primarily due to its not losing customers to competing HMOs and PPOs.
Pohly & Partners designed two editions of the magazine, one aimed at younger families and the other at seniors. The latter features a few age-specific articles, as well as shortened versions of pieces in the family edition, but with larger type. The bulk of the magazine is devoted to general wellness information, such as how to reduce stress or prevent cancer.
Blue Cross also wanted to use customized editorial to build affinity with its Michigan customers. Each of the two editions has six versions: one for each of five regions within Michigan and a generic national version that’s sent to out-of-state policyholders. The magazine ranges from 20 to 24 pages, depending on which (if any) special regional section is bound into it. Each geographic version has a three-page center spread, which the insurer uses to highlight its own HMOs and PPOs or tofeature smoking-cessation classes and health fairs in the recipient’s area.
“People saw us as traditional insurers,” says Davidson. “If they needed an HMO or PPO they went to another carrier. In these [customized] pages I was able to cross-market alternative healthcare plans to our policyholders.”
Blue Cross added another version when the federal government requested its own variant, one that has the federal employee logo printed on the cover.
“It was a personality thing that was easy for us to accommodate,” Davidson comments. “And they were sending it out to 35,000 employees in the state. We are here to please.”
Living Healthy was launched without having been tested beforehand. Instead, the company mailed to the entire database without selecting even a small control group of policyholders to see if the expenditure had any effect on retention rates. With just over 7 million adults (18 years and older) in Michigan, 1.85 million of whom were covered by Blue Cross, the company felt there was too great a risk of alienating a member who did not receive a copy of the magazine.
Making sure each policyholder received the right version was one of the bigger concerns for Davidson, who admits to a few sleepless nights when the first issue was sent out. Her rule has been to err on the side of caution: The national version is sent to households with two people covered by different employers. The exception to this is if one policyholder is younger than 65 and the other older. Then the household receives both issues.
The magazine has not added much to Blue Cross’ advertising costs. In fact, the carrier has not substantially increased its ad budget during the three years the magazine has been in existence.
“We are actually operating on the same budget as in 1990,” Davidson says. “That goes for advertising as well. Instead of sponsoring 10 programs [per year] we may sponsor nine and throw the dollars into the magazine. And our retention numbers are up.”
Focus Groups At least some direction for the magazine is provided by a series of focus groups conducted by the insurer.
In one such session with company decision-makers and members of Blue Cross and other plans, the focus group leaders named four healthcare carriers and asked the participants to assign to them brands with similar characteristics. “We were assigned Rolls-Royce, and competing HMOs were seen as Campbell Soup,” Davidson says.
Normally this would be a flattering comparison, but those interviewed saw coverage as price sensitive. Panelists said Blue Cross’ policies were comprehensive, of exceptionally high quality – and expensive.
The participants were also asked to assign pictures to the various plans they were evaluating. “One was the Statue of Liberty,” Davidson says. “It was given to Blue Cross.” The company was viewed as wholly American, with a “national” feel.
But the focus group members also ascribed to Blue Cross caricatures of cigar-chomping bankers and pictures of rows of empty desks. The HMOs, on the other hand, scored big with pictures of puppy dogs, children and mothers and babies.
Despite the company’s standoffish reputation, the participants still saw the coverage provided as valuable and indicated that if they had the money they would choose it. Blue Cross wanted to use the magazine to emphasize the value of its programs.
Letters
The proof that the magazine accomplishes at least two of its goals – increased interaction and a warmer image – is in the letters Davidson receives.
Most often, readers write in for reprint requests or more information. But Davidson says readers write the most vociferous notes when commenting on recipes published.
“Readers say the recipes didn’t taste good, or complain that we are throwing too much green stuff at them, or chastise us for not realizing that there are lactose intolerant people,” she says.
Such notes get a letter back promptly, apologizing for any trouble caused. “Every letter dispels the anger,” Davidson says.
But the magazine also opened the door to expanded benefits for consumers. When Living Healthy ran a story recommending mammograms, Blue Cross Blue Shield of Michigan received complaints from some readers saying that their specific plan did not cover them.
Says Davidson, “It is one way of opening the dialogue to changing coverage.”
Network
