Customer experience disruption: Healthcare faces a bitter pill

Alex Allwood

Alex's focus is connecting customer and culture to empower customer-centric growth. Working with B2B2C, Alex helps improve experiences that enhance customer value and distinctively differentiate. With a 20 year track record in leadership, operations and marketing, Alex’s strength is developing customer experience strategy: customer understanding and empathy, experience vision and guiding principles and the customer narrative to enable collaboration and alignment. Alex is principal of the customer experience consultancy, All Work Together; has authored the book Customer Experience is the Brand, regularly facilitates Customer Journey Mapping workshops and is a speaker on customer-centric transformation.

Over the past decade, disruptors such as Amazon, Apple and Australia’s Atlassian have delivered technology enhanced customer experiences, which for the most part, have improved customers’ lives and delivered unparalleled growth. Can they do the same for healthcare?

On the eve of annual private health insurance price rises, Australian consumers will again be asked to swallow rising costs; on average 3.95 per cent, twice the rate of inflation. At the same time, US bluechip tech companies are making noises about improving healthcare services that could spell disruption for business-as-usual health insurance.

While their thinking is still future-state, tech brands such as Amazon, Apple, Google and Uber have already interest in reinventing healthcare; an industry that’s long been plagued by inefficiencies and rising costs. At this early stage, incumbents could be lulled into a false sense of security given Google has once tried and failed at disrupting the private health insurance industry.

When it comes to healthcare in Australia, most would agree we are the lucky county. However, if our social news feeds, mainstream news reports and conversations with colleagues and friends are anything to go by, Australian consumers are again questioning the value of private health insurance.

In an opinion poll run by Fairfax, the majority of respondents believe ‘health insurance isn't worth the money you pay for it’. In addition, 83 per cent of people believe the government should do more to keep private health insurance affordable.

With private health insurance premiums up by approximately 70 per cent over the last 10 years, funds cutting member benefits to reduce their costs and increasing gap fees, customer dissatisfaction is growing.

Like the taxi industry a decade ago, private health insurance has become a service Australians love to loath.

So much so, complaints to the Health Insurance Ombudsman increased by a massive 30 per cent to 5750 in 2016-1. In the last quarter of 2017, 12,000 Australians abandoned private health insurance altogether. 

Meanwhile, the big four global disruptors are envisaging a new world of healthcare. Apple is intending to open health clinics, Google is exploring Medicaid and Uber has a desire to disrupt ambulance services.

Their formula for innovation is simple: Create experiences that focus on solving people’s problems rather than focusing on the product or service itself.

When brands such as Amazon have customers at the centre of innovation efforts and seek to solve a customer problem or unmet need, resulting solutions not only enhance customer value, they deliver competitive advantage.

Amazon’s performance is testament to this approach. From day one, Amazon’s purpose has been its customer. Founder, Jeff Bezos, describes this higher ideal as being “customer obsessed” with a mission to be the “Earth’s most customer-centric company.”

Earlier this year, Amazon announced a joint venture with JP Morgan Chase and Warren Buffett’s company, Berkshire Hathaway, to focus innovation efforts on better healthcare for workers. In the announcement, they said they would leverage their collective scale and capability to develop technology that provided "simplified, high-quality and transparent healthcare at a reasonable cost".

So what might this new customer experience look like?

It’s worth pointing out Amazon, which commands 43 per cent of all retail sales in the US and is a specialist in retailing, has a vast customer base and huge volumes of customer behavioural data. Amazon is  perfectly placed to manage large volumes of products, services and payments, presenting the company with an opportunity to develop a technology platform to manage and distribute medical equipment, pharmacy products and even private health insurance.

Industry incumbents won’t be able to rest on their laurels for too long. Waiting in the wings are new market startups with a strong social purpose; hungry to create new experiences.    

Late last year, startup healthcare brand, Forward, founded by former employees of Google and Uber, launched in LA. Its CEO, Adrian Aoun, reportedly sold his last venture Wavii, a company that developed specialised language-processing software, to Google for US$30 million.

Featured in an article written by Sheila Marikar for The New Yorker, Forward’s new healthcare experience is inspired by the purpose of improving doctors’ offices, “with their myriad inefficiencies and unpleasantries”. 

Marikar writes: “The gee-whiz factor is on further display in Forward’s exam rooms, where a six-foot-long flat-screen monitor supplants the doctor’s clipboard. The monitor is hooked up to a natural-language-processing system similar to the one Aoun sold to Google, or to Amazon’s Alexa.

“As you and your doctor are speaking, the system is following along and taking notes for you.” After an exam, all the data collected—cholesterol numbers, glucose levels, doctor’s notes—get downloaded to Forward’s smartphone app, where members’ full medical profiles sit on their phones alongside Tinder profiles and Seamless orders.”

The danger for health insurance incumbents could well be their apathy towards change based on the status quo of government subsidies, regulatory compliance limiting new entrants and comfortable shareholder returns.  Nonetheless, with rising premium costs on 1 April and increasing customer dissatisfaction, disruption could be just what the doctor ordered to improve customer experience – albeit this may a bitter pill for the health insurance industry to swallow.

Tags: Healthcare, amazon, startups, customer engagement, customer experience management, digital disruption

Show Comments

Featured Whitepapers

State of the CMO 2018

CMO's State of the CMO is an annual research initiative aimed at understanding how Australian ...

More whitepapers

Blog Posts

Putting the ‘human element’ back in marketing

During the recent CMO Momentum conference, Paul Mitchell shared how marketing leaders can create cultures that deliver

Paul Mitchell

Managing director, The Human Enterprise

The rise and rise of voice search

In 1982, an AT&T employee by the name of Plotzke predicted the rise of voice: “In fact, it has been predicted that, by 1990, well over half the communications dollars spent by businesses will be for products and services that include voice technologies.

Michael Jenkins

Founder and director, Shout agency

Is design thinking the answer for the next generation of marketing?

The speed and pace of change will never be slower than we’re experiencing today. So in this era of unprecedented change, how can brands meet soaring consumer expectations, stay relevant and deliver differentiated and connected experiences?

Merryn Olifent

Senior consultant, G2 Innovation

Bullshit

John Winkler

Kmart turnaround chief to exit Wesfarmers, Target

Read more

End your financial worriesAre you a business man or woman? And you are in need of an urgent loan as to start up your own business? Or do ...

lance

Kmart turnaround chief to exit Wesfarmers, Target

Read more

https://uploads.disquscdn.c... [magic school bus] KID: where are we going today MS. FRIZZLE: the zoo KID: but last week we went to SPACE ...

Germain3161

Sephora Asia details its journey to data-driven decision making

Read more

DP Apparel bietet große Auswahl Audi Rennbekleidung in Deutschland zu den besten Angeboten. Das Geschäft bietet auch qualitativ hochwerti...

DP apparel

Audi Australia gets a new CMO

Read more

this is a really great news

Vincent Mouton

Mobile-first banking startup showcases fresh brand identity

Read more

Latest Podcast

More podcasts

Sign in