1. insights
  2. the academy 360
  3. leadership and governance
  4. cigna ties executive compensation to customer satisfaction summary
Academy 360 | all-insights

Cigna ties executive compensation to customer satisfaction (summary)

Official logo for the 360 newsletter
Related Topics:
Leadership & GovernanceFinance and Operations
Relevant Roles:
Chief Financial OfficersChief Operation Officers

Following a disappointing Q4 earnings release, Cigna announced a new initiative to tie executive compensation to measures of customer satisfaction. The payer’s action follows in the footsteps of others like UHC and Elevance, who pledged to reform their business practices in response to increasing anti-payer sentiment following the murder of Brian Thompson.

What sets Cigna apart is its plan to link bonus awards for C-suite and other management executives to the company’s NPS, though the insurer has not detailed how.

The company also announced the addition of care navigation experts for members with complex conditions like cancer. To help patients resolve administrative issues with prior authorization, Cigna is improving a tracker that updates patients on their claim status and updating its digital portal for communications with providers.

Cigna plans to spend $150M on these initiatives this year and has created a new office to be led by Chris DeRosa, the president of Cigna’s government plans division (overseeing MA and the individual market).

So What?

  • It remains to be seen how impactful these changes will be. The proposed investment ($150M) is relatively small and it’s possible that the changes to the prior authorization process will not meaningfully affect denial rates.

  • Health systems have pushed payers to reduce prior authorization and denial rates in contract negotiations, and Cigna’s new focus on customer satisfaction could give systems an opportunity to position themselves as partners in this effort.

  • If Cigna’s initiative improves public perceptions, it could catch on more broadly in the healthcare sector, and health systems could consider their own versions that target satisfaction among key patient populations or for specific lines of business.

  • Improved brand perceptions could help Cigna maintain or grow its market share across all types of plans, and the company’s stock rose after the news. It could also help the firm improve its average MA star rating (currently 3.93 out of 5) and secure bonus payments, although the overall size of its MA business (587K enrollees) is dwarfed by other payers.

  • On the other hand, it’s possible that the initiative won’t have a significant impact on enrollment as many employers and patients pick plans based mainly on price.