In Depth: Highmark Launches Retail Initiatives

Like Blue Cross Blue Shield (BCBS) of Florida did before it, and BCBS of South Carolina did shortly afterward, Pittsburgh-based Highmark Blue Cross Blue Shield recently announced that it planned to open two retail stores in Pennsylvania targeted at customers in the individual, senior and small-business insurance markets.

The retail store initiative, branded as "Highmark Direct," is the product of an industry that is becoming increasingly consumer-driven, says the insurer's vice president of consumerism and retail marketing, Steven Nelson. "With healthcare becoming more consumer-driven, we've been researching, studying and building strategic plans to create better ways to engage the consumer," Nelson says, noting that the retail stores represent one of the first such plans to be enacted.

In addition to selling plans to customers in the individual, senior and small-business markets, Highmark will utilize the two retail spaces, one in Mechanicsburg, one in Ross Township, for informational and educational seminars about its products and programs. BCBS of Florida launched a similar retail store in February 2007 and opened a second location in early 2008. In mid-January 2009 BCBS of South Carolina announced that it would be opening a store as well. In all three cases, carrier executives have identified the value of face-to-face interactions — as customers navigate the oft-confusing world of health insurance intricacies and acronyms — as a key part of the retail stores value proposition.

"It's that one-on-one engagement. That's obviously a big opportunity for us," Nelson explains. "It's a very daunting experience: What is the terminology? What products are good for me? How much is it going to cost me and can I afford it? With the perceptions that health insurance has in the [market], we need to break down a lot of those barriers."

With such importance attributed to those face-to-face interactions, Nelson says, technology is not a large part of the first step when someone initially enters a Highmark Direct store. Carrier employees' immediate inclination, he notes, is to leave all materials behind and engage the customers in a dialogue. In many cases, though, subsequent steps will make heavy use of Highmark's systems, particularly those accessible via the Web.

Currently Highmark is developing a new splash page for its customer-facing Web portal that will act as a retail store-specific gateway between customers and the insurer's Web portal. "We really wanted to establish a different type of starting point into our Web site that was more around what the store's look and feel was," Nelson describes. "It's a [different] face to our Web site, so that when people come into the store, we can help them navigate our Web site based on the targeted audience — individuals, seniors or small groups."

How purchases are finalized within the retail stores will vary on a case-by-case basis and depends on a variety of factors, such as whether access to state systems or medical underwriting is required. Nelson estimates that Highmark has mapped out more than 25 transactions that could take place at the retail stores. With the stores set to open in the first quarter of 2009, Highmark expects its knowledge of the retail insurance space to develop over time. Nelson says the company will be looking to evolve the process.

"Technology and retail move quickly and, in addressing consumers' needs in the insurance market, I envision us moving very quickly to adjust and change what the transaction process is," Nelson says. "You don't walk into an insurance store and walk out with a bag of gifts, you don't buy something right off the shelf. So there's a need to truly evolve the retail space that we have with technology."