MINNEAPOLIS – Medica, a commercial and Medicaid HMO, recently unveiled return on investment – fewer claims denials, greater efficiency and customer retention – derived from its automated call programs.

Medica implemented the programs, using technology developed by Silverlink in the spring of 2005 to reach its 1.3 million members in the upper Midwest in more direct ways and through different channels.

Response time for notifications, typically done by mail, were reduced anywhere from two weeks to a month to a couple of days, said Larry Bussey, director of Medica’s corporate communications.

Welcome calls, which were limited to Medica’s large accounts because they were done manually, have now been expanded to a much larger population. “We saw modest cost savings,” he said.

Bussey said the orientation of benefits provided in the welcome calls played a role in the plan seeing 2,000 fewer claims denials or “pends” per month.

Surveys showed that members appreciated the calls and the faster response times, which led to improved member satisfaction.

Stan Nowak, CEO and president of Silverlink, said Medica is part of a growing trend of health plans doing more with less in an environment where healthcare administrative costs are rising exponentially and consumers are demanding more personalization.

Solutions such as automated call programs make it possible to support individuals while keeping administrative costs in check.

Compared to other industries, the healthcare industry dramatically under-spends in traditional marketing and communication to members. Yet health plans spend $40 per member per month, or $100 per household – more than $9 billion a year – on operational communication.

Nowak said health plans are not seeing member growth and must concentrate on member retention. “Healthcare communications is the key strategy for retaining members,” he said. “This is a top five priority for managed care CEOs.”

While cost benefits are easy to calculate, satisfaction and retention benefits are less certain, said Elizabeth Boehm, principal analyst with Forrester Research.

“Satisfaction is highly dependent on execution,” she said. Plans need to be able to give members the ability to choose which messages they receive through which channels and how frequently they receive those messages.

“Determining the root cause of retention – especially for members who are insured through their employers – is very challenging,” Boehm said. Outside forces such as employer choices and cost and benefits differences, as well as members’ changing needs and perceived lack of differentiation, may impact member retention, regardless of satisfaction levels.

“Service – even excellent service – is only one piece of the puzzle,” she said.