Triple Tree Associate Joe Long
Minnesota investment banking firm Triple Tree has released a report about the rise of consumerism in the healthcare industry. The company says the industry is becoming less like a traditional healthcare system and more like a retail environment, with B2B2C, or business-to-business-to-consumer, business models becoming the dominant format.
"Viewed through the lens of many healthcare product and pharmaceutical companies as well as select services providers (e.g., Weight Watchers) that have been addressing the health needs of consumers through business-to-consumer (B2C) and direct-to-consumer (DTC) models for considerably longer, consumerism is already here," the report reads. "For payers and providers however – and for the technology and service companies they rely on – consumerism is new, and the change is having a significant impact on the industry."
Joe Long, an associate at Triple Tree, said many analyses of the consumerization of health care focus on the fact that consumers are taking on more of the cost of healthcare. He suggested that's an outdated framing of the conversation.
"A lot of people have looked at the consumer in healthcare and thought of it more along the lines of the cost shift that's occurred," he told MobiHealthNews. "But the cost shift has already happened. The issue now is consumer engagement in healthcare: Initiatives made by payers and providers to interact with the consumer and help them better navigate the system."
The report describes the shift toward a retail healthcare model as happening in three waves. The first of the three waves of this change was the rise of consumer-driven health plans, or CDHs. These efforts were driven by employers and had the advantage of making health management for patients easier, the report says. But because the patient interface wasn't matched with improved cost transparency, it was difficult to truly engage or empower patients. Too many CDH plans used B2B models, which were targeted to large groups and categories of consumers, rather than designed to help individuals.
"The issue of transparency arose as consumers really began to shop and navigate the system and learn," said Long. "One of the major questions was 'What were they paying for?' and they couldn't always answer that question."
The second wave, which Triple Tree suggests we are currently in the midst of, is the wave of true cost transparency and consumer engagement. This wave is characterized by payers and providers creating personalized tools to help consumers navigate their specific healthcare costs and health needs.
"In many ways, CDH adoption was a catalyst to healthcare’s newfound appreciation for consumerism and brought several underlying dynamics to light, most notably how much work was needed to support the empowered consumer. New B2C and B2B2C models have established direct linkages between healthcare organizations and consumers that previously did not exist," the report says.
Triple Tree projects that the third wave will take place in response to the growing number of consumers who have to be financially conscious about their healthcare decisions: baby boomers aging into Medicare's Medicare Advantage plan and a growing number of employers shifting to defined contribution plans (over 25 percent are considering such a shift, according to the report). Combined with reimbursement structures that increasingly focus on care quality, Triple Tree argues, this will lead to a fully retail healthcare market, for which the biggest challenge for payers and providers will be creating truly personalized options.
The rest of the report details the way this transition might be accomplished for the various players involved. The firm advocates a transformation in health insurance distribution -- first through more targeted and personalized interactions with customers, and then through the development of public insurance exchanges. UnitedHealthcare now has retail stores in several malls across the country, the report points out, and Aetna is distributing health insurance products in some Costco stores.
The report highlights Castlight Health as a company doing good work in the area of personalized cost transparency. It cautions that a successful cost transparency initiative will use data analytics to accurately determine costs and will be easy to use for minor health issues, not just for big events. As it currently stands, many consumers only seek out cost comparison tools for big, expensive health procedures.
Triple Tree also discusses EMRs in the report. Having an EMR is a good first step for providers, the report suggests, but in order to foster patient engagement the patient information in the system needs to be actionable.
"Early provider-led efforts to improve care quality and coordination led to investments in EMR technologies, which improved the acquisition of valuable clinical data. However, these investments created limited capability to analyze clinical outcomes and push actionable information back to providers, or to manage care outside of the facility setting following an encounter through consumer engagement – all of which limited the effectiveness of these early solutions," the report says. "As value-based or risk-based reimbursement models evolve, advanced solutions that support provider decision making, improve care coordination, and facilitate consumer engagement will become increasingly relevant to providers."
Finally, the report suggests there's value in direct-to-consumer solutions that address unmet needs outside of the traditional payer-provider system, including online patient communities and social networks, web-based health management tools, and direct-to-consumer health screening services.