While a myriad of trend outlook reports are published at the start of each year highlighting the forces expected to have the most impact on the healthcare industry, it was the PwC Health Institute annual report that caught my attention. Rather than looking at the uncertainties of political change as cause for health insurance industry panic and anxiety, the PwC looked at it from a perspective of opportunity. As a member of a company founded on the notion of “where there’s change—there’s opportunity,” this unique outlook quickly drew me in!
The report explains how while the notion of potentially adapting to the dismantling of the Affordable Care Act after years of working to evolve to it might seem daunting, there is one key resulting element of it that is here to stay and that in fact, according to what Trump has stated thus far regarding his proposed healthcare policies, may actually be further driven by policy change. What I am speaking of is the shift to value-based care. President Trump has said that his healthcare mission is “…to create a patient-centered healthcare system that promotes choice, quality and affordability.” These goals are all hallmarks of value-based care, a shift that has been driven by both Democrats and Republicans alike for nearly a decade. Perhaps it is in the concept of value-based care that both sides can not only come together to find common ground, but truly form a basis for transforming the industry and improving the health and lives of Americans.
The PwC report explained how there are three main tactics that healthcare organizations will use to address the expanded and accelerated shift to value – they will adapt, they will innovate and they will build for value. Let’s explore some of the tactics being implemented under of each of these approaches:
ADAPTING FOR VALUE:
Educating & Advocating on the Hill:
Industry players are educating the new administration on the interplay between premium costs and essential benefits—they are explaining the links between the individual mandate, the cost of premiums on the exchange and the levels of uninsured Americans to ensure that whatever option replaces the ACA is one that is built upon value and that will not cause undue risk to their business or their beneficiaries.
Partnering with Performance-Driven Products:
This year, regulations, such as the reauthorization of the FDA’s Prescription Drug User Fee Act, will go into effect that include policies that require pharma companies to engage with their patients. In response, insurers, such as Harvard Pilgrim Health Care, Aetna and Cigna are entering into deals with drugmakers to pay for products that are based on performance while other insurers are collaborating with pharma companies to help provide them with the platforms, data structures and engagement channels they need to deliver individualized product engagement.
Understanding Preferences & Tailoring Experiences:
Consumers, now facing higher deductibles and premiums, are looking for added benefits and assurance that their health plan is well-worth the money. They are looking for personalization—tailored offerings and experiences that incorporate a level of human touch, possible only through a deeper understanding of consumer preferences. As a result, insurers are working to build preference-driven experience and communication output capabilities.
Increasing Analytics Infrastructure:
In order to deliver higher value, lower cost care, insurers are investing in analytics-driven approaches that segment their member populations into specific groups based on demographic, geographic and health data to deliver more localized and personalized content tailored to specific needs and interests. In order to do so, they are investing in infrastructures of data management and segmentation automation technologies.
INNOVATING FOR VALUE:
Integrating Emerging Technologies:
Health insurers are preparing for the industry arrival of emerging technologies such artificial intelligence and virtual reality within the industry, and the impacts they will have on business models, operations, workforce needs and cybersecurity. At the same time, they are considering how they can be tapped into to digitize their supply chain and deliver their services in real-time, non-traditional settings.
Defining Role in Digital Ecosystem:
As health insurers consider the technologies they wish to adapt, they are thinking of them as parts of an integrated, holistic solution, with each application working in synchronicity with the other toward a defined set of goals. As they do so, they are realizing the need to develop a strategic plan that defines and outlines the role they wish their business to play in the digital health ecosystem, and the need to ensure that the technologies they choose to focus their investments in are directly aligned with the vision of that role.
Recruiting New Talent:
As emerging technologies make their way into the health industry, health insurers are working to transform their culture in order to attract and hire fresh, young digital media and IT talent, or else partner with enterprises stocked with this type of new tech talent as some insurers report finding it difficult to lure talent away from the tech world.
Investing in Cybersecurity:
With the integration of new technologies comes new wellsprings of data, but as the health ecosystem grows into an interconnected web of consumer devices and partner databases, hackers will find new opportunities to exploit vulnerabilities. As a result, insurers are making investments in cybersecurity in alignment with their adoption of emerging technologies to avoid costly breaches and meet regulator expectations.
Leveraging Food as Medicine:
The drive toward value-based care is prompting health insurers and new entrants to focus on nutrition as a way to prevent costly medical problems and improve the overall health of the populations they serve. This growing industry awareness of diet as a key driver of healthcare costs for many Americans is fueling creation of inventive programs and retail collaborations this year, as insurers work to build a network of partners that can support the execution of these programs.
BUILDING FOR VALUE:
Forging New Partnerships:
The health industry will continue to consolidate through mergers and acquisitions in 2017, but as sector-specific silos crumble and an intertwined health ecosystem emerges, the new year will also bring an uptick in joint ventures, partnerships and strategic alliances. Working with partners in other sectors and other industries will become the norm. Health insurers will form new partnerships with pharmaceutical companies, providers, grocery retailers, tech companies, health & wellness category consumer product brands and more to deliver add-on benefits, increase their presence beyond the traditional confines of the healthcare experience and most importantly, improve 1:1 member engagement.
The broad industry shift to pay for value over volume and a growing interest in wellness are driving organizations to build new capabilities and partnerships in order to stay competitive in a year expected to be predominated by value. To explore the processes, technologies and partnerships Cierant is developing to help our health insurance clients adapt, build and innovate for value, please call 203-731-3555 or email email@example.com.