Patients, in today’s changing health care world, are no longer patients. They are “consumers.” And as the industry adapts to that redefinition, many insurers have made prominent hires from non-traditional backgrounds.
That highlights a fundamental change in the payer business model — one created primarily by the ACA exchanges. In the past, an insurer’s major clients were employers: large corporations with which it would negotiate. In an exchange, payers have to communicate directly with individual consumers.
Plus, individuals now have more skin in the game. According to a recent PwC study on the consumer experience of health care, 25% of employees contributed one-fourth of the cost of their insurance premiums in 2011. This year, that number has grown to 31% covering the same share.
Suddenly, insurers were faced with the need to enter into one-on-one arrangements with different clients, all of whom feel as strongly — and as divergently — about their insurance needs and preferences as they do about what color sweater they want to purchase.
“That’s why they are looking to people who have worked closely to individual consumers in the retail sector,” says Ceci Connolly, managing director of PwC’s Health Research Institute. “They have a better sense of how to communicate with consumers, how to motivate them, how to help them make shopping decisions, how to get them engaged in their care once they’ve signed them up, and how to retain them.”
“We’re already thinking about loyalty and retention for these health plans going into 2015,” Connolly said.
Although Connolly acknowledges that it’s hard to prove that you’re “early in a trend,” she insists that health insurers have recognized the need to recruit experienced consumer-oriented talent ito fill a strategy gap, and they are increasingly looking outside of the industry to do so.
For example, Aetna has hired former Wal-Mart executive solutions senior vice president Dijuana Lewis to lead a new consumer products division aiming to personalize the health care experience. WellPoint’s new chief information officer Thomas Miller spent 30 years at Coca-Cola, most recently as CIO. Humana’s new chief innovation officer, Christopher Kay, has a background at both Target and Citigroup Inc.
These executives bring an evergreen rule to health plans: Know your customer. Connolly calls for the same sophisticated segmentation strategies that have been vital in other industries; Kay calls it “getting a 360-degree view of the consumer,” and cites data strategy giants like Amazon as examples of companies that have done it well.
“When you look for points of interaction, you want to create an ecosystem that is tuned to the needs of the consumer, and design connected sets of experiences that are easy and transparent,” Kay said.
While it’s easy to draw parallels between retail and the new exchange model that puts individual customers at the forefront, the industry that both Kay and Connolly point to is banking — although Kay is less bullish on the head start that industry may have, casting both health care and banking services as being on the same “journey” to a consumer-oriented model. Connolly points to banking’s shift to online payment services in the last 10 years as an example that is getting “a lot of attention” from PwC’s health care clients.
Kay points to a different analogy between the two industries: Both are heavily regulated. And according to Kay, that doesn’t necessarily stifle customer-motivated innovation.
“In the context of a regulated environment, although this kind of work is complicated, it’s still very possible to deliver new products and services if you put the customer at the center,” Kay said. “Putting the customer at the center is how you identify unmet needs, and how you identify new capabilities, solutions and models to meet those needs.”
Humana recently opened two telemedicine suites at Wal-Marts in San Antonio; the Health & Well-being Centers offer digital audio and video interaction with physicians who can “evaluate, diagnose and treat various medical conditions.” These suites, according to Kay, are an applied example of the insurer’s consumer-centered approach — “consumer-centered,” meaning, of course, market-based.
When picking a market for the centers, Humana looked first at where it had significant membership, according to Dr. Bill Lewis, senior vice president of medical operations for clinical delivery subsidiary Concentra.
“The opportunity in the innovation space, and my team’s focus, is personalizing these health experiences so we can deliver better outcomes for the patients,” Kay told Healthcare Dive.
Kay's word choice "for the patients" suggests something about the underlying assumption that treating patients like consumers will improve outcomes and costs: that ultimately, insurers don’t have a choice. With the introduction of exchanges, and the increased shift of the cost burden onto consumers, that is what the market is demanding. And as the PwC study notes, “As ‘patients’ behave more like ‘consumers,’ health care companies need to deliver a higher level of personalized service, satisfaction and overall experience — or risk losing business to the competition.”
“The business model has changed and it has gotten more complex,” said Connolly. “You have to think about individual consumers, and you have to think about individual consumer preferences, needs, desires and behaviors.”