Healthcare Customer Service is Terrible... Why?

This video provides a critical analysis of the consistently poor customer service within the healthcare sector, specifically focusing on health insurance companies and hospitals. Dr. Bricker begins by citing Forrester Research, which ranks health insurance customer service 15th out of 19 industries, highlighting major players like Blue Cross Blue Shield, Anthem, United Healthcare, Cigna, and Aetna for their particularly poor service. The problem extends to hospital billing, where the complexity is so severe that 40% of surveyed patients admit to skipping preventive care and screenings just to avoid the associated billing headaches, paradoxically leading to sicker patients and potentially more hospital services.

Dr. Bricker argues that this pervasive poor customer service is not due to incompetence but rather a "calculated business decision." He posits that health insurance companies and hospitals lack the fundamental business incentive to improve customer service. For health insurers, their stock prices continue to soar despite poor service, indicating that the market does not penalize them. This is largely because health insurance is primarily a B2B service, where the true customer is the employer (HR, CFO), not the individual plan member. Similarly, hospitals, whose services are often episodic, do not rely on repeat patient business in the same way consumer-facing businesses do. Their primary "customer" is often the referring physician, and neglecting patient billing satisfaction does not significantly impact their revenue.

The video contrasts this with industries known for excellent customer service, such as Zappos, Nordstrom, and Ritz Carlton. These companies thrive on direct consumer relationships and repeat business, making good customer service a core requirement for their success. Dr. Bricker emphasizes that these successful companies empower their employees to "own the problem" when a customer issue arises, a stark contrast to the common experience with healthcare providers who often deflect responsibility. He concludes that the structural dynamics of the healthcare industry, particularly the B2B nature of health insurance and the episodic nature of hospital care, are unlikely to change, making systemic improvement in customer service highly improbable.

Finally, the discussion shifts to existing and emerging solutions that circumvent or directly address these systemic failures. Dr. Bricker mentions healthcare navigation and advocacy firms like Compass, which arose precisely because of the poor customer service from traditional players. He also highlights innovative models like Devoted Health (a Medicare Advantage plan) and Oscar (an Obamacare plan), which were founded on the principle of providing excellent customer service, often targeting direct-to-consumer markets. He expresses excitement for direct primary care, onsite/near-site clinics, and virtual care models, which allow individuals to receive care without having to navigate the complex and frustrating traditional health insurance and hospital systems, thereby completely avoiding the poor customer service dynamic.

Key Takeaways:

• Pervasive Poor Customer Service in Healthcare: Health insurance customer service is ranked 15th out of 19 industries by Forrester Research, with major carriers like Anthem, United Healthcare, Cigna, and Aetna specifically identified for poor service. Hospital billing customer service is equally problematic, leading to significant patient frustration.
• Patient Avoidance of Care Due to Billing Complexity: A staggering 40% of surveyed patients skip preventive care and screenings to avoid the complexity and headache of hospital billing. This has severe implications for public health, potentially leading to sicker populations and increased need for more intensive, costly treatments later.
• Poor Customer Service as a "Calculated Business Decision": The speaker argues that the lack of improvement in healthcare customer service is not due to incompetence but rather a strategic choice. Health insurance companies and hospitals do not face significant financial penalties (e.g., declining stock prices) for poor customer service, thus removing the incentive to invest in improvements.
• Structural Incentives Drive Behavior: For health insurance, the primary customer is typically the employer (B2B model), not the individual plan member. This disconnect means that patient satisfaction is not a direct driver of business success for insurers. For hospitals, services are often episodic, reducing the need for repeat business driven by positive customer experiences.
• "Owning the Problem" is Key to Good Customer Service: Exemplary customer service companies like Zappos, Nordstrom, and Ritz Carlton empower their employees to take ownership of customer problems and resolve them. This contrasts sharply with healthcare customer service, where responsibility is frequently averted or deflected.
• Lack of Return on Investment for Customer Service: Healthcare organizations, particularly large insurers, have likely analyzed the ROI of investing in customer service improvements and concluded it's not financially beneficial, as their stock prices and revenues continue to grow regardless.
• Negative Impact of Neglected Billing on Patient Health: While not necessarily a conscious decision, the neglect of billing customer service by hospitals can inadvertently generate more business. Patients skipping preventive care due to billing fears become sicker, eventually requiring more extensive and profitable hospital services.
• Existing Solutions Address the Gap: The systemic failure of traditional healthcare customer service has led to the rise of healthcare navigation and advocacy firms (e.g., Compass) and innovative direct-to-consumer health plans (e.g., Devoted Health, Oscar) that prioritize customer experience.
• Emerging Models Bypass the Traditional System: Dr. Bricker highlights the potential of direct primary care, onsite/near-site clinics, and virtual care as effective ways for patients to receive necessary care without having to engage with the notoriously poor customer service of traditional health insurance companies and hospitals.
• Unlikely Systemic Change: The fundamental structural dynamics of the healthcare industry, particularly the B2B nature of health insurance and the episodic nature of hospital care, make it highly probable that traditional health insurance and hospital customer service will not significantly improve.

Key Concepts:

• B2B vs. B2C Service Models: This distinction is central to the video's argument, explaining why health insurance (B2B) has different customer service incentives than direct-to-consumer businesses (B2C).
• Episodic vs. Repeat Business: Hospitals often provide episodic care, meaning patients may not return for extended periods, reducing the incentive for customer service driven by repeat business.
• Healthcare Navigation/Advocacy Firms: Companies that help individuals navigate the complex healthcare system, often arising as a direct response to the poor customer service and complexity of traditional providers.
• Direct Primary Care (DPC): A healthcare model where patients pay a monthly fee directly to their primary care provider, bypassing insurance for many services.
• Onsite/Near-site Clinics: Employer-sponsored clinics that provide convenient healthcare services to employees, aiming to improve health outcomes and reduce costs.
• Virtual Care: Healthcare services delivered remotely via telecommunications, offering convenience and potentially avoiding administrative complexities.

Examples/Case Studies:

• Forrester Research: Cited for its ranking of health insurance customer service and for identifying specific poor performers like Anthem, United Healthcare, Cigna, and Aetna.
• Zappos, Nordstrom, Ritz Carlton: Used as examples of companies in consumer-facing industries that excel at customer service due to their business models.
• Compass: Mentioned as a healthcare navigation/advocacy firm that exists because of the poor customer service from traditional providers.
• Devoted Health: A Medicare Advantage plan founded on the principle of providing fantastic customer service.
• Oscar: An Obamacare plan started by its CEO after a personal negative experience with UnitedHealthcare, specifically to offer superior customer service.