Is Blue Cross Blue Shield a Relevant Brand?

What it means to be relevant in the health insurance industry

By most conventional measures, Blue Cross Blue Shield (BCBS) seems like a brand that has it all. It’s big, with high brand awareness. But it’s losing relevance among consumers, which signals big problems ahead for the brand—and opportunities for challengers in the space.

We believe relevance—relentless relevance—is the key to success. Brands achieve it by becoming indispensable to customers, while those without it get tossed aside.

Prophet recently released our first Brand Relevance Index, and the results in the health insurance category surprised us: Oscar, a three-year old regional company, earned a higher brand relevance ranking than Anthem Blue Cross Blue Shield, the largest (and best-performing) of the 36 companies in the BCBS family.

Four Characteristics of Brand Relevance

In all four areas that drive relevance (customer obsession, ruthless pragmatism, distinctive inspiration, and pervasive innovation) Oscar beat every other “old school” brand, including Humana, United Healthcare, Cigna, Kaiser Permanente and Aetna. (It even scored higher than many brands outside its sphere, including household names like BMW, Tiffany, Patagonia and IBM.) Unless the stewards of these older insurance companies act quickly, their decline in brand relevance will accelerate, leading to lost customers and falling revenues.

What makes us so sure? Certainly, we’re not disputing BCBS’s clout—it insures 105 million Americans in all 50 states and works with 92 percent of U.S. doctors. That dominance is built mainly on two factors: stability and historically, a broad network of providers. But in today’s changing healthcare world, those advantages are evaporating. Many companies are perceived as stable now with broad networks.  All of this in a time when BCBS, albeit for good business reasons, is actually narrowing its networks.

With BCBS’s main advantages dissipating, it’s opened the door for competitors like Oscar and others like it including Zoom+, Clover Health and Melody Health Insurance. With its simple, digital-first offerings, the tiny brand scored well on all four characteristics of relevance used in our Index. Its best marks were in customer obsession, particularly the idea of “connecting with me emotionally.” It also popped well above its competitors in terms of distinctive inspiration, particularly when it came to “purpose.” People who know it understand that Oscar has an inherently different reason for being.

The Intersection of Brand Experience & Relevance

The relevance gap between an upstart like Oscar and the stalwart BCBS takes on even deeper meaning in light of a different research report Prophet recently conducted that focused specifically on the patient experience in healthcare. Working with GE Healthcare Camden Group, we published the study, “The State of Consumer Healthcare: A Study of Patient Experience,” which uncovered  that 81 percent of all consumers are unhappy with their current healthcare experience. Insurers are a major source of that discontent. And the more people interact with the healthcare system, the greater their frustration. (See the complete results of our study here.)

In that context, brand awareness is more of a curse than a blessing. Yes, they know you. And in some cases, they know they don’t like you. As more Oscar-like companies begin to enter the healthcare insurance marketplace (and they are coming fast, with the number of competitors in the exchanges up 25 percent in the last year), consumers will ditch companies that frustrate them as soon as they can, signing up with those offering lower-hassle patient experiences.

Without swift action, BCBS and other established healthcare brands will continue to lose relevance. But it doesn’t have to be that way. Some of the highest scoring companies in our Brand Relevance Index are also some of the oldest, including Band-Aid, Disney, and Hershey’s, yet they manage to earn brand loyalty and new business every single day.

Maintaining Brand Relevance

Here’s what BCBS and other brands can do to regain (and maintain) relevance:

  1. Make products simple & transparentOscar’s tagline—“smart, simple insurance”—sums up its broad appeal, especially among millennials. They hate shopping for insurance, and are turned off by ponderous disclosures and strange vernacular. Oscar, by contrast, is easy to use, upbeat and fun. An animated video explains everything a consumer needs to know in less than two minutes. By comparison, websites from BCBS and others are cluttered and confusing.
  2. Think like a consumerOn measures of customer-focus, the old insurers fell way behind while Oscar sailed to the top on our “makes my life easier” measure. It eliminates pain points primarily through tech prowess. As consumers become increasingly reliant on digital, they expect all companies to be as easy to use as Amazon or Spotify. They can’t understand why they can’t schedule appointments via their phone, or access records through email. That’s why Gen Y is so smitten with brands like Oscar, ZocDoc and WebMD, which provide people access to health-related solutions on their own terms. And since these younger consumers are more open to alternative sources of care, there are seemingly endless possibilities. For example, some 73 percent of millennials are willing to use on-demand medical centers, while 64 percent would try retail clinics and 52 percent want telemedicine options. What is BCBS doing to enable and encourage these types of services?
  3. Lead from strengthDespite consumers’ love for Oscar, they’re smart enough to recognize that it’s not better insurance, just a better insurance experience. They see near-parity between most insurance products, which leaves ample room for brands to articulate their competitive advantages. Do you have more pediatricians than your competitors? Service claims faster? Offer longer hours? Provide more wellness perks? Whatever the secret sauce is, the old guard insurance agencies need to amplify their message in a way that’s both appealing and instantly accessible.

Final Thoughts

Companies that follow these guidelines will emerge as the biggest winners in the health insurance landscape, gaining new customers as they grow in relevance. The ongoing changes in healthcare and recent merger activity are confusing for consumers. Companies that can lead them through this new landscape will earn their trust and build brand loyalty for years to come.

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