Industry Transformation and Consumer Adoption

by | Mar 29, 2017 | Blog


TERRY MAYTIN  |  VP, Market Development & Commercialization]

We are in the midst of an acronym revolution including ACA, MACRA, MIPs, CPC+, CCM, and APMs to name just a few (and that’s scratching the surface). Together they are leading the value-based charge, while also transforming the role of digital strategy. Healthcare companies have woken up, and digital has a front and center seat at the executive table developing high-potential strategies to achieve varying degrees of the Triple Aim vision – better care for everyone at lower total cost. It’s a show that can’t be missed.

Healthcare Industry and Change… the transformation train has left the station

The transformation of healthcare is multidimensional and complicated. Disruptive innovation, technology and consumer trends are upending traditional business models. The competitive landscape is getting ever more crowded with new entrants while at the same time, insurer and provider consolidation is accelerating.

Consumers are motivated with more skin in the game and greater information access than ever before. Payment models are shifting from volume to value, and payers, providers, pharma, and medtech will need to collaborate and coordinate to a much larger degree within a more integrated care delivery system. These factors along with intense focus on quality improvement and evidence-based outcomes have big implications for the entire care delivery continuum.

Over the past 30 years, technology has fueled innovation and consistent, incremental efficiency improvements. However, two major legislative actions altered the game and significantly accelerated the pace of change. In 2006, Med Part D expanded Rx coverage for millions of seniors, requiring large investments in data, clinical and content management solutions. This was familiar territory for PBMs and Payers who were challenged more from an executional rather than strategic standpoint requiring process innovation rather than new business models. The game changed four years later.

The ACA was altogether different in scale and scope. Encompassing the full breadth of health insurance (medical, prescription, preventive, chronic, acute, etc.), the new law established coverage standards for all Americans while expanding access to millions of previously uninsured. Mandates and incentives were included to improve care quality, population health, EMR adoption and data interoperability.

The trend continued with Congress’ passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). With full bipartisan support, MACRA promises to fundamentally change the way the United States evaluates, conducts and pays for healthcare going forward.

Consumerism and Digital Adoption

Health consumers are increasingly bearing the cost for their healthcare as evidenced by the rising prevalence of HDHPs with higher average annual deductibles. For example, 1 in 4 adults covered by employer-sponsored insurance are enrolled in a CDH plan. Nearly half have a deductible over $1000. In addition, the ACA added millions to the rolls of formerly uninsured, cash-paying customers motivated to manage their healthcare expenses.

Mirroring other industries, web and mobile are heavily utilized by health information seekers, choosers and transactors. Web usage in the U.S. is at a historic high, and over 75% of adults seek health information online on regular basis. According to Pew Research, digital penetration (web and mobile) is near saturation for < 50 users (93%) along with a majority of senior citizens (58%).

With rising financial burden, health consumers are highly motivated, emboldened and empowered to take charge of their healthcare decisions. They expect great customer service, tend to channel hop (digital for convenience, non-digital for complex tasks), and are less apt to stay brand loyal.

Healthcare companies can increase the success of value-based care with the following consumer oriented digital strategies:

  • Build high-quality, omni-channel digital experiences (web, mobile, text, email, communities) for convenience, education and decision support
  • Make it easier to understand and manage costs (plan comparison, cost transparency, and network / pharmacy locater tools)
  • Encourage healthy behaviors with interactive programs, mobile apps, online coaching, and gamification / rewards.
  • Supply patient-provider engagement tools for post-discharge support, monitoring (self reported and wearables data), alerts, messaging, and telehealth.

Faced with an annual turnover risk and a large audience of motivated choosers, health plans are adapting to a more dynamic B2C world where innovation, user experience and customer satisfaction are the highest priorities.

Related Articles:

The Impact of Value-Based Care on Digital Strategy
The Rise of Connected Health as a Strategic Imperative
Designing Great Customer-Centric Experiences