Global Reviews' latest Health Insurance Online Benchmark assessed ten Australian private health funds, including, Medibank Private, MBF, HCF, NIB and the Government Employees Heath Fund (GEHF), across 500 individual criteria and evaluated elements including online services available to existing members; information and tools for prospective members; and e-mail and telephone customer service. Performance ratings were then weighted according to the habits and preferences of over 1500 surveyed online users.
According to Adir Shiffman, founding director of Global Reviews, the vast majority of interaction between potential new customers, existing clients and private health insurers - including joining health funds; changing membership details; making claims; and requesting information -- still has to happen over the phone or in a branch.
-These are areas where they [health funds] could and should be saving costs," Shiffman told ZDNet Australia. However, "It's very rare that health funds have implemented a system that enables members to dynamically interact online," he added.
-Service delivery via the Internet is far cheaper than traditional channels...and funds that embrace this opportunity will likely experience a reduction in per-member management costs."
According to Shiffman, new customers are predominantly applying via printed brochures or over the counter in branches; very few sites offer making claims online; and only a small number use -wizards" -- which help people choose the best plan.
-In six months health funds that don't seriously start implementing Web site systems will find themselves losing customers to their competitors," he said.
Whilst the quality of Internet services differs dramatically between different health funds, -none were brilliant", Shiffman said, referring to the research.
Australia's largest health fund, government-owned Medibank, doesn't offer a member login, for example, and most form filling is handled in a manual way rather than dynamically at the back-end, according to Shiffman. The site does, however, provide general health and wellbeing information online, which is what customers are saying they want, he added.
According to the research, GEHF is really trailblazing in its use of online wizards, and whilst Axa-owned HBA does has a member login it provides extremely limited services to those users.
The top five health funds were GEHF on 63.0 percent, closely followed by MBF at 62.7 percent, Medibank Private rolled up with 56 percent, HCF 55 percent, and NRMA 52 percent.
Russell Schneider, CEO of the Australian Health Insurance Association, defended Australia's private health insurers saying they were -progressively improving and increasing" their online offerings. A number of the funds, he said, would quite reasonably be able to come back and say the research was -inaccurate and misleading".
The funds' limited implementation of online claiming, Schneider said, was due in part to issues relating to fraud, and the fact that not all members are -technically competent or enthusiastic".
Australia's heaviest claimers, according to Scheider, are aged 50-plus and will -run a long way" before they touch electronic payments of this kind. On the other hand, younger consumers' claims use is not necessarily as high, therefore online claiming options -might not have the desirable market impact", Schneider said. If health funds deliberately go down that path, it could alienate the customers who most need the services, he suggested.
-There's no point in investing a lot in a claiming facility if the member base is not likely to want that," he said. Furthermore, some people, -like it or not", do like to talk to a voice over the counter or phone, Schneider added.
-In 10 years, or 20 years time, when culture has changed, I think you'll see health funds will be at the forefront," of this, Schneider said. In the meantime, -we're not as much in the business of pissing off our customers as the banks are".
However, Shiffman believes health insurers should be acting now, not waiting for a consumer culture-change to occur.
-Very rarely in life does the opportunity come along to reduce costs in the longer term whilst simultaneously increasing the quality of customer service...not to have embraced that significantly it extremely disappointing," he said.
With an average industry-wide score of 49 percent, he said the research shows there are clearly opportunities for improvement.
-The first company that creates a satisfying and complete online customer experience will reap a multitude of rewards including lower operating costs, increased member retention, and a greater potential for client acquisition," Shiffman said. For consumers, the benefits of a better online experience could extend to a diminished need for future fees hikes, he added.
At present, however, Shiffman concedes that that consumer expectations of health funds online operations are low. -If they expected from health funds what they got from banks online, they'd be very much disappointed," he said.
New Privacy Act Hinders Web Healt Insurance:
This law, introduced late last year, stopped me in my tracks when I tried to e-mail my health fund about dental benefits and received the following reply:
"... adherence to the Privacy Act, introduced on 21 December 2001, does not allow us to discuss membership details via email. Therefore, please
either contact our enquires line or visit a Retail Centre."
Seriously - do ANY Federal MPs have an IT background ? MPs making IT laws whilst proudly confessing " I know nothing about computers " is a gross dis-service to the Australian community in the 21st Century and results in snafus such as that above. Atleast one senator from each of the major parties should come from an IT background - then atleast we might get some informed law-making instead of the administrative - and privacy - nighmare that is the new Act.