NPS Is Viewed as Useful, but Not Best as Sole Satisfaction Measure for MA Plans

Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and business strategies about Medicare Advantage plans, product design, marketing, enrollment, market expansions, CMS audits, and countless federal initiatives in MA and Medicaid managed care. 

By Jane Anderson

September 7, 2017 Volume 23 Issue 17

Featured Health Business Daily Story, Sept. 25, 2017

Net Promoter Scores (NPS) are generating plenty of buzz among Medicare Advantage plan sponsors, with executives boasting of increases as a proxy for customer satisfaction. But as sponsors approach the Oct. 1 start date of marketing for the 2018 plan year, experts urge plans not to rely exclusively on NPS, since it doesn’t provide the level of nuanced satisfaction information necessary to retain and especially gain members.

“My experience with NPS to date is that it is a fairly blunt instrument, so it is not going to give the detail that more in-depth interviews or surveys will provide,” says Helaine Fingold, senior counsel in the Health Care and Life Sciences practice at the law firm Epstein Becker Green. She adds that NPS “could be useful to gain insight on straightforward questions of beneficiary perspective.”

NPS, created by management consultant Fred Reichheld, is calculated from responses to a single question: How likely is it that you would recommend our company/product/service to a friend or colleague? Those who respond nine or 10 are Promoters, zero to six are Detractors, and seven and eight are Passives. NPS is the percentage of Detractors subtracted from the percentage of Promoters.

Several national Medicare managed care entities use NPS, along with a smattering of regional and local plans, Fingold tells AIS Health. Although it provides just “a limited amount of insight into customer satisfaction and perspectives,” it can help plans identify issues when used in concert with other customer satisfaction measurements like the Consumer Assessment of Healthcare Providers and Systems (CAHPS), she says.

That’s not stopping health plans from using NPS or from boasting of improvements in their scores. For example, Humana Inc. CEO Bruce Broussard said during the insurer’s Aug. 2 earnings conference call that Humana had taken steps to reduce unnecessary call transfers. “By removing these friction points for the member, a few things happen,” he said. “The member is more satisfied and our response is more timely, which improves Net Promoter Score[s], a measure of members who recommend us to friends and family.”

Broussard said Humana has improved its relationship NPS by more than 500 basis points and its transactional NPS by more than 700 basis points. “We believe our focus on eliminating friction points and providing enhanced value through health engagement positions us well for the future as we continue to improve the experience and health of our members,” he said.

“When we work with our clients, we usually look at multiple variables,” potentially including NPS, says Cary Badger, principal at management consulting firm HealthScape Advisors and a former Regence Group executive. NPS and CAHPS scores don’t always line up, so ideally, a plan would want to use both surveys to get the most information, he recommends.

NPS is a useful tool for plans to determine who might consider switching plans and carriers during open enrollment, Badger says, since “if a person’s a promoter, they will rarely change plans.” Still, inertia in the MA market is a powerful force: only half of MA plan enrollees who give their current plans the worst NPS score actually switch during open enrollment season, he says. “We can see whole plans blow up due to [CMS] sanctions or something and the plan will only lose 40%.”

According to Badger: “NPS would tell you if there’s a market of shoppers out there” or if your own members are especially dissatisfied, but it wouldn’t reveal everything a health plan would need to know to fix satisfaction issues or to successfully market to potential members. In fact, HealthScape Advisors has developed its own tool called Market Spotlight that includes multiple measures to allow plans to get “a quick snapshot” for a specific market, but that tool does not include NPS, he tells AIS Health.

NPS Is Just One Tool to Gauge Performance

Jennifer Hickman, Wunderman Health’s senior vice president, strategic planning, says that “the majority of Wunderman Health’s insurance clients are using NPS as a measurement of customer satisfaction, including national and regional health plans. It is used to identify customer loyalty and is often considered a key performance indicator.”

Companies may be able to turn around poor NPS performance rapidly, Hickman tells AIS Health. “We have worked with companies that have less than acceptable NPS scores and when we have activated around them, improvements have been realized. However, to achieve this, the organization has had to get behind this common goal.”

Hickman says NPS is a good fit for health insurers when used as one of a set of tools to measure customer satisfaction, and in some plans it’s built into leadership incentive programs. However, the Medicare Health Outcomes Survey, CAHPS and custom-developed customer satisfaction surveys are better gauges of specific service levels, she says.

“If our clients only focus on NPS, they may miss opportunities to make improvements on the clinical front and improve outcomes,” Hickman says. “While members might be extremely satisfied and willing to refer the brand, that does not mean they are actively or proactively managing their health, including chronic conditions.”

Linda Armstrong, executive vice president and practice leader at DMW Direct, agrees that NPS is just one of many tools that can provide insight into member satisfaction — and isn’t necessarily the best tool. Some of her firm’s clients use NPS as a guide to judge customer service and other customer-facing departments, she tells AIS Health, but J.D. Power customer satisfaction data, plus “simple regular and consistent surveying of members” also provide important information.

Use of all these tools is going to grow as the MA market is forced to focus on member satisfaction as a way of retaining and acquiring members, Armstrong says. “As the MA market has become more commoditized and tighter, retaining members has taken on a new significance, and obtaining members needs to rely more on the extras, like service, to attract new members.”

At the industry level, health insurers rank poorly compared to other industries, she notes, and health plans that have exceeded these poor rankings are those that pay attention to customer feedback and make changes. Still, Armstrong says, “I wouldn’t say that any one tool is better than another in evaluating the MA market,” and notes that NPS isn’t a well-known rating to the average consumer.

That being said, “particularly in the senior market, the advice of peers is extremely influential in purchase decisions,” Armstrong says. “The more ‘promoters’ you have out there providing free and unbiased information — meaning it is not the plan itself saying how good it is — the better your results will be.”

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