Empowering Individuals to Be Better Healthcare Consumers
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Empowering Individuals to Be Better Healthcare Consumers

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An assessment of how consumerism and innovation in healthcare are redefining how consumers engage with the healthcare system.

An assessment of how consumerism and innovation in healthcare are redefining how consumers engage with the healthcare system.

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  • 1. Empowering Individuals To Be Better Healthcare Consumers A n ass ess m e nt o f h ow con s um eris m an d in n ovation i n h e a lt h c a r e a r e r edef in in g h ow con s umers e n g ag e wit h t h e h e a lt h care system. Q1 / 2013 Industry Perspective UNCOMMON CL ARITY 1
  • 2. Founded in 1997, TripleTree provides independent, research-driven advisory services on mergers and acquisitions, recapitalizations, divestitures and raising growth capital for innovative companies in healthcare. We are continuously engaged with decision makers across the sector including best-in-class companies balancing competitive realities with shareholder objectives, global companies seeking growth platforms, and financial sponsors assessing innovation investments or first mover opportunities. 2 TRIPLE-TREE.COM
  • 3. Q1 INDUSTRY PERSPECTIVE 4 / EVOLUTION OF CONSUMERISM IN HEALTHCARE 4 / WAVE 1: RISE OF CONSUMER-DIRECTED HEALTH Table of Contents 5 / WAVE 2: INITIATING TRANSPARENCY AND ENGAGEMENT 6 / WAVE 3: ENABLING A “FULLY RETAIL” INDUSTRY 8 / HOW STAKEHOLDERS ARE SOLVING FOR THE EMPOWERED CONSUMER 8 / PAYER MARKET 8 / DISTRIBUTION 10 / CONSUMER ENGAGEMENT 15 / PROVIDER MARKET 15 / Provider-Led Care Coordination 16 / Patient Experience 20 / WHERE PAYERS AND PROVIDERS GO FROM HERE 21 / NEW APPROACHES BEYOND THE PAYER-PROVIDER PARADIGM 23 / LOOKING AHEAD
  • 4. INTRODUCTION Consumerism in the healthcare industry has been steadily building them in the management of their own healthcare. Initial employee for more than a decade with the consumer increasingly placed at the uptake was slow, but increasing healthcare costs have persisted and center of the care delivery and decision-making process. Viewed continue to influence employer and health plan strategies to help through the lens of many healthcare product and pharmaceutical consumers make better decisions about how to navigate the healthcare companies as well as select services providers (e.g., Weight Watchers) system and manage their own care and conditions. Despite continued that have been addressing the health needs of consumers through growth in adoption of CDH plans and the accompanying significant business-to-consumer (B2C) and direct-to-consumer (DTC) models shift in financial liability to consumers, the impact to date on getting for considerably longer, consumerism is already here. For payers and consumers to manage their health has only been modest. Today, CDH providers however – and for the technology and service companies is one important part of the consumer equation, but evolving market they rely on – consumerism is new, and the change is having a forces, including the blurring of lines between payers and providers significant impact on the industry. (e.g., payers vertically integrating with providers; and providers taking on risk and becoming more like payers), are further complicating the This change originated largely through the introduction of consumer- landscape by redefining who the consumer engages with as he or she directed health (CDH) plans as a vehicle for employers to shift a navigates the healthcare system. greater portion of total healthcare costs to employees and engage 2 TRIPLE-TREE.COM
  • 5. The shifting of the healthcare cost burden to consumers has These macro forces are creating demand for a more “retail” impacted not only who pays for care but also how treatment options environment across an industry that has previously resisted these and care experiences are evaluated. This new role is changing how levels of consumer transparency and control. If successful, this consumers are being marketed and communicated to. As a result, transformation would eliminate the historical barrier between new tools designed for consumers to better manage their own health the healthcare system and the consumer, paving a path for a and care options have emerged. Today, the market is focused on more retail-oriented healthcare market as B2C and business-to- improved transparency, quality, and customer experience through business-to-consumer (B2B2C) models penetrate the system. tools and services more akin to the financial services and retail While the impact of consumerism may be top of mind for many sectors than healthcare. organizations, it’s still early and true consumer platform solutions are unique. Healthcare organizations know that a failure to promote Marketplace demand for more dynamic consumer focus is also being transparency and increase consumer engagement going forward accelerated by health reform. For payers, the expansion of insurance will challenge their business models. As a result, constituents coverage coinciding with the implementation of insurance exchanges across the system are focused on developing and maintaining is creating new distribution channels where direct linkages with points of intersection with consumers in order to maintain consumers can be established. Providers are facing new consumer engagement and influence decision making. realities as well, as reform has initiated and accelerated the development of accountable care organizations (ACOs) and value- Numerous research pieces have focused on the opportunity to activate based reimbursement models, which require providers to think about the healthcare consumer through B2C and DTC business models; this consumers in new ways as patients, members, and consumers whose report predominately focuses on the B2B2C models that are pervasive experience, satisfaction, and outcomes needs must be addressed. in healthcare. INDUSTRY PERSPECTIVE Q1 / 2013 3
  • 6. EVOLUTION OF CONSUMERISM IN HEALTHCARE The evolution of consumerism in healthcare can be defined by three Wave 1: Rise Of Consumer-Directed Health waves, as outlined in Figure 1 below. The initial wave was in part Early CDH strategies were largely product-driven, with health initiated by the introduction of CDH, which helped incite consumer plans and employers collaborating to educate the market on health interest in how they access and navigate the healthcare system as savings accounts and the convergence of healthcare and financial well as manage their own health. The persistent cost shift has led services. A key assumption for CDH products was consumer to new demands on healthcare organizations to enable transparency willingness to accept additional financial responsibility for their and engagement through a second wave of consumerism. This healthcare in exchange for greater control over how and where to evolution will likely persist through a third wave as consumers now pay for it. Early employer-driven efforts to drive CDH adoption were demand a degree of control and decision support in healthcare that is focusing on making management of CDH more straightforward for on par to that of other industries – that is, a fully retail experience. employees; this led to significant adoption, as employers sped to THREE WAVES OF CONSUMERISM Figure 1: Three Waves Of Consumerism In Healthcare 1st Wave: Rise of Consumer-Directed Health 2nd Wave: Initiating Transparency and Engagement 3rd Wave: Enabling a “Fully Retail” Industry •  Transition driven by introduction of CDH plans and various cost-sharing mechanisms •  Consumers learn to “shop” and navigate the healthcare system •  Need for a “retail” approach as balance has shifted toward the consumer •  Early CDH plans had minimal success in getting consumers to manage their health •  New demand for resources to support consumer decisions and provide transparency •  Personalized approach need to address individual needs and drive engagement CDH Plans Introduced 4 Growth in Outof-Pocket Spending TRIPLE-TREE.COM Tax-Exempt Savings Plans Introduced Integration with Financial Services Acceleration of ConsumerFocused Tools Web Adoption and eCommerce Value-Based Purchasing Cost Transparency Tools Retail Distribution and Exchanges
  • 7. CDH alternatives to address their growing healthcare cost burdens. As outlined in Figure 2, healthcare organizations were relatively However, as CDH plans have required consumers to assume a unprepared for this development, primarily as a result of their growing financial responsibility for their healthcare costs, a major legacy B2B business models and historical investment focus around weakness has been the lack of transparency and information improving administrative efficiency: most B2B models were built provided to consumers, which has had a detrimental effect on to solve for the needs of large groups or employers with efficient consumer engagement. cost models, not to establish and leverage points of interaction with healthcare consumers. Ignoring (or avoiding) these valuable Despite growing consumer interest in their healthcare spending and consumer touch points left many organizations poorly prepared to coverage decisions as result of the cost shift, the adoption of CDH understand consumer wants and needs. plans has not demonstrated significant success in driving consumers to manage their health. While CDH is still very much part of employer and payer strategies to manage healthcare costs, it is clear that there is more to be done in order to enable sustained engagement with Figure 2: Historical Barriers To Consumer Engagement consumers as they navigate the healthcare system. Wave 2: Initiating Transparency And Engagement The major byproduct of CDH has been the emergence of the empowered consumer, who is just beginning to learn to shop and navigate the healthcare system and gain a similar degree of autonomy to what he or she is able to experience in other industries. However, while costs were shifted to consumers, healthcare organizations were not prepared to support the empowered consumer whose expectations for information and tools exceeded the ability of the system to deliver. INDUSTRY PERSPECTIVE Q1 / 2013 5
  • 8. Figure 3: Shifting Power Paradigm – Stakeholders Aligning Around The Consumer result has left consumers with a host of newfound resources and tools to manage their own health, healthcare organizations are consistently challenged to ensure consumers actually use these tools when making healthcare choices. 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. In order to maintain momentum, healthcare organizations will need to prioritize future investment in further eliminating the barriers that limit positive healthcare experiences for consumers as well as Healthcare organizations have realized the need to accommodate driving engagement beyond enrollment and annual renewal – rather, the changing needs of consumers and create environments where across the consumer lifecycle. consumers can shop and navigate the healthcare system in a similar fashion to other industries. As indicated in Figure 3, much in the way that Amazon democratized consumer purchasing for The demand from consumers to successfully shop and navigate everything from books to auto parts, healthcare is undergoing a the healthcare system has been accelerated by healthcare reform, similar transformation as healthcare organizations strive to address which is shifting the industry towards greater individual orientation: the reality that consumers are at the center of their marketplace and the number of consumers making individual coverage and benefit that winners will become trusted, convenient resources for consumer decisions is set to grow substantially. While this is already the healthcare lifestyle management and decision making. While the 6 Wave 3: Enabling A “Fully Retail” Industry status quo in Medicare following the 1997 establishment of Medicare TRIPLE-TREE.COM
  • 9. Advantage plans (then referred to as Medicare+Choice plans), the (CAHPS) for both payers and providers. These new models provide senior marketplace will expand dramatically as baby boomer lives consumers with resources to evaluate their options across both health transition to Medicare over the next 20 years.1 The under-65 individual insurance coverage as well as care options based on these metrics. marketplace is set to grow rapidly following the introduction of This evolution has empowered consumers and established a market government-funded public exchanges; these are expected to serve for tools to help them with their benefit, coverage, and care decisions. as the primary vehicle for over 30 million people gaining coverage. 2 Furthermore, an anticipated shift of employers to defined contribution The primary end goal of this effort is to provide consumers with a benefit programs will provide additional consumers with control “retail” experience that is similar to other consumer product and over their coverage decisions. Early evidence suggests that a shift to service markets that maintain meaningful consumer engagement. defined contribution could be significant, with over 25% of employers However, the early efforts of healthcare organizations to develop considering this new approach.3 This will fuel the evolution of private the needed support tools have been largely unsuccessful given exchanges and decision tools to support employee coverage decisions. their inability to address individualized needs and preferences (e.g., Collectively, these developments point to tens of millions of people patient-specific risk factors, communication preferences, and cultural purchasing healthcare on an individual basis, highlighting the need differences). In order to establish a lasting link with consumers, it is for healthcare industry constituents to solve for the needs of these clear that more personalized approaches will need to be developed consumers in a more retail-oriented, B2C marketplace. in order to enable consumers with a customized and transparent experience as they shop and the navigate the healthcare system. While this shift to the individual is underway, the evolving care delivery and provider reimbursement environment is heightening focus on improving quality, performance and consumer experience across the system. Reimbursement is transitioning towards models where payers and providers are rewarded across various quality and performance measures such as the Five Star Quality Rating System for payers and Consumer Assessment of Healthcare Providers and Systems INDUSTRY PERSPECTIVE Q1 / 2013 7
  • 10. HOW STAKEHOLDERS ARE SOLVING FOR THE EMPOWERED CONSUMER The transition to viewing members and patients as consumers has around improving interactions and engagement while also driving not been easy as healthcare organizations have been unprepared to greater efficiency around care coordination and cost containment. address the rising consumer expectations that have developed. While many early consumer-focused investments left much to be desired, there appears to be a consensus among payers that more Payer Market targeted and personalized solutions are needed in order to sustain In response to the empowered consumer, payers are prioritizing their engagement across the entire consumer lifecycle. efforts to accommodate consumer needs and orient business models around a consumer-driven world. Payers were caught relatively Distribution flat-footed by consumerism as their historical investments, which One area of considerable payer-led innovation has been within health were focused on improving workflow automation and decreasing insurance distribution, where retail-oriented sales and distribution unit cost, left them unprepared to address consumer needs. These capabilities more consistent with other insurance sectors such as investments, rooted in payers’ traditional B2B models, intentionally property and casualty are emerging. To maintain top-line growth created barriers to the consumer – for instance, requiring consumers amid growing competition and consolidation, payers are learning to to interact with call centers and interactive voice response (IVR) better manage consumer interactions in an effort to improve member systems. As a result, payers were left with minimal understanding acquisition, retention, and cross-selling initiatives. A range of vendors of consumer needs across their critical business drivers, such as have developed expertise to support payers in these areas. As distribution, care management, and care delivery. demonstrated in Figure 4, by applying analytics to better summarize consumer data and preferences, these specialized vendors – Payers have realized the need to better accommodate consumers (or members) and create an environment where they possess (through their ConsumerEdge™ and Plan Advisor tools) – have allowed the resources to manage their own health and benefit options. As payers to address loyalty and retention issues through a series of more consumer demands increase, payers have prioritized investments 8 highlighted by HealthPlan Services, Connextions, and Connecture targeted and personalized member interactions, which have plagued TRIPLE-TREE.COM
  • 11. health plans historically.4 Additionally, they are able to utilize data Looking forward, the distribution of health insurance is likely to be from everyday consumer interactions to improve sales and distribution transformed by the advent of exchanges. The driving force behind the by establishing more effective communication methods for payers, in-development public exchanges is to make coverage more affordable achieved through an improved understanding of individual consumer through expanded risk pools (supported by various mechanisms to preferences and lifestyle characteristics. In a sense, these vendors offset risk assumed by exchange participants) and to make distribution have extended the payer-consumer sales relationship from a once a administratively efficient. Exchange products will be largely year enrollment process to continual, year-long engagement. standardized, making it difficult for payers to compete on product alone – as a result, payers will need to find other ways to compel the Figure 4: Outlining An Integrated Approach To Insurance Distribution HealthPlan Services (HPS) provides sales and distribution, benefits administration, and customer service solutions to the individual, small group, and voluntary markets. HPS’s platform extends across the consumer lifecycle, beyond member acquisition and renewal, providing payer clients with an end-to-end solution to influence member experiences across distribution, purchasing, and benefits administration. Its approach integrates clinical, financial, and personal data from across the consumer lifecycle to provide clients a more transparent view of their member population, which fuels their member acquisition, retention, and service administration efforts. This is important to not only drive revenue for payers Integrated, analytics-driven approach to member acquisition, retention, and service establishes unique touch-points that drive value across the member lifecycle and “redefine” the payer-consumer relationship but also to “redefine” the relationship with members through a personalized engagement approach. INDUSTRY PERSPECTIVE Q1 / 2013 9
  • 12. Spotlight: Payer-Led Retail Initiatives As insurance distribution individuals shopping on exchanges. Many of the specialized sales and becomes increasingly individual oriented, several payers have distribution support vendors highlighted above will also be increasingly launched retail initiatives designed to establish a direct channel relevant to payers in this area as a robust understanding of consumer to consumers to extend their product distribution and customer preferences and purchasing behavior is needed to define payer marketing, service capabilities. UnitedHealthcare has introduced retail pricing, and branding strategies for the individual consumer. stores in local shopping malls, where consumers can compare and buy insurance products as well as learn more about their existing benefit and coverage options. Many of these stores are intended as temporary locations focusing on servicing Medicareeligible beneficiaries during their annual open enrollment period. However, the company also offers permanent locations in eight locations across Queens, Manhattan, Philadelphia, and Los Angeles. Similarly, Highmark and Florida Blue operate retail locations in Pennsylvania and Florida, respectively. Florida Blue is pursuing a unique strategy to maximize the benefit of their retail footprint by incorporating a customer service element in addition to the distribution touch point, as well as adding on-site clinics at several retail locations. Aetna has made a unique play by recently forming a partnership with Costco to sell individual health insurance products in their stores across several states. Time will tell if any of these models transform the landscape of insurance distribution, but they clearly show another example of payers’ acceptance of the empowered consumer and their need to innovate. 10 TRIPLE-TREE.COM Consumer Engagement The challenges payers face in engaging consumers extends far beyond enrollment and renewal, as their ability to influence consumer behavior and lifestyle decisions is still limited. This is imperative not only to improve the health of their member base, but also to maintain profitability going forward, as poor engagement can lead to costly future consequences when health risks remain unknown and / or not addressed. Payers have traditionally offered a static, one-size-fits-all consumer experience in which their interaction was limited to such examples as a provider network directory or call center encounter. Payers have introduced a host of new tools and solutions to establish more effective consumers interactions around healthcare education and content; however, consumer adoption has been somewhat challenging for many payers. Early tools possessed little appreciation for individual-specific needs and preferences and were quickly dismissed by consumers. As consumer demands have persisted, payers have begun to accommodate individual needs and preferences into these tools to provide consumers
  • 13. with more effective resources to manage their benefit, coverage, and care plan adherence as well as communicate plan-specific and care decisions. Some of the most innovative tools have come information. While solutions like these are still early in their evolution, from third-party vendors, such as Healthline Networks, which has the ability to sync patient-specific care information with personalized created solutions that allow a payer to deliver patient-specific content messages and consumer education tools via multiple communication based on a member’s individual health data drawn from medical and channels creates a more effective medium in which payers can pharmacy claims as well as clinical data from the electronic medical successfully communicate with and engage their membership base. record (EMR). Continued innovation of these consumer-friendly solutions has come from vendors such as Silverlink and Eliza, which A central theme in engaging the empowered healthcare consumer deliver personalized, targeted messaging solutions to consumers via is providing transparency into the cost and quality of treatments multiple communications channels (email, web, automated voice, mail and providers. The lack of transparency that exists in the current and SMS text) that allow payers to influence an indvidiual’s medication system, combined with the ever-growing financial liability faced by consumers, makes this an imperative for the entire industry, with an enormous gap between consumer needs and available tools. This Healthline Networks uses a unique, medically-guided taxonomy need has been recognized by industry and government alike, with over engine that incorporates over two million semantic relationships 30 states passing transparency-related legislation and the increasing to normalize large volumes of structured and unstructured prevalence of all-payer claim databases that are intended to inform content from disparate sources. This taxonomy allow healthcare cost transparency efforts. Significant commercial momentum has organizations to unlock the full value of massive amounts of been focused on creating cost transparency, with the importance of siloed and disparate health content and data by personalizing this the space highlighted by the attraction of capital to Castlight Health. information to improve decision-making, outcomes, and the overall health experience. Payers, for example, use the technology in their consumer portals to improve the health and wellness of their members by individually personalizing both search results and engaging content that are tailored to a member’s constantly-evolving health profile and benefit coverage. INDUSTRY PERSPECTIVE Q1 / 2013 11
  • 14. A range of approaches to cost transparency has emerged, with most estimated “fair price” representing a payment level that providers solutions initially focused on providing the average total cost of a would accept from insurance companies, as well as a solution for particular high cost service based on national or regional average plan sponsors that customizes pricing data based on historical data (e.g., all payer claims or CMS data). Solutions are evolving claims. (A more broadly defined transparency landscape – including and becoming more personalized – to estimate the out of pocket provider search, provider quality / ratings, and similar solutions cost an individual should expect to pay when utilizing healthcare – would expand the list of competitors to include vendors such services or consuming prescription drugs based on his or her health as Vitals and Healthgrades.) Many health plans are pursuing plan, provider of choice, network, benefits design, and remaining transparency using homegrown tools, typically providing the service deductible, as applicable. to customers and members for free, but many plans still recognize an advantage in “plugging in” 3rd party solutions to consolidate Solution vendors face two particular challenges in providing data from multiple medical carriers, pharmacy benefit managers, this information: and dental providers in one location and to create a consistent experience for all employees with a higher degree of customization. 1: The first is the data analytics and data integration capabilities required to estimate a consumer’s financial liability for a service, as the data resides with the payer or employer (through their payer). information easy to use such that individuals actually choose to Analytic capabilities are then required to predict how a service engage with such solutions and become healthcare consumers. will be billed to the health plan (for example, the cost of a knee Accomplishing this would translate transparency into the larger replacement surgery will consist of a numerous separately billed issue in healthcare – consumer engagement – which health CPT codes). The leading competitors in pure cost transparency plans and employers have struggled to drive. Consumers are not through robust data analytics and data integration are Castlight familiar with “purchasing” healthcare services – engagement with Health, Change Healthcare, and Truven Health Analytics. Additional consumers around transparency is a critical step in transforming approaches to the market include that of Healthcare Blue Book, consumer behavior. Most transparency solutions are focused on which provides both a free solution to consumers that delivers an 12 2: The second challenge has proven more formidable: making the clarifying the cost of high cost elective and scheduled procedures TRIPLE-TREE.COM
  • 15. (such as the knee replacement example above) because these elevating the relationship with the consumer to build fundamentally services offer opportunities for significant savings to the consumer different healthcare purchasing behavior and extend solutions into (and even more so to the plan sponsor) through smarter shopping. other decision support capabilities, such as plan selection and health However, these services are typically very low frequency events, program engagement. Transparency solutions are thus at an early which makes it a challenge to create engagement with a consumer stage and continue to evolve. TripleTree sees several requirements who may not need the transparency service for months or even for future success in this space, as seen in Figure 5. years from initial sign-on. Furthermore, the early experience from self-insured employers indicates that if a beneficiary tries to use a cost transparency service and finds the information insufficient or otherwise not helpful, the level of engagement from that consumer is dramatically reduced – they may never attempt to use the service Figure 5: Critical Success Factors For Transparency Solutions + again. For these reasons, solutions are evolving to incorporate proactive messaging and alerts to make healthcare purchasing decisions more meaningful and actionable to consumers. Change Healthcare highlights an innovative approach through its Ways to Save™ alerts, which are personalized messages that introduce specific opportunities for savings based on each individual’s purchasing history with communications that are tailored to the individual’s preferences and user profile and are designed with behavioral science principles to maximize engagement. By orienting the consumer around personal savings instead of purely cost, and by driving broad engagement that is initiated through use of a transparency solution, vendors are increasingly focused on Access to a broad set of applicable health plan network prices or claims data applicable to a specific population + Consumer friendly and ease of use + Personalized and proactive messaging + Technology and analytics that drive broad engagement + Broad service offering including quality and comprehensive + Ability to integrate and work within a health plan’s or medical cost categories (e.g., medical, pharmacy, specialty) employer’s portal and coordinated member communications INDUSTRY PERSPECTIVE Q1 / 2013 13
  • 16. In fact, consumer engagement should extend far beyond transparency Health Advocate delivers a suite of advocacy solutions designed to as consumers require additional support to navigate an increasingly provide consumers with a greater understanding of their care and complicated healthcare system. This is particularly the case when coverage options. Administrative support services assist consumers a patient faces a complex and serious diagnosis, which could in navigating their benefits, resolving claims, and negotiating and require expensive treatments from multiple providers, or when an paying medical bills. Clinical support services are led by a team individual or family faces substantial and confusing bills. The vast of Personal Health Advocates trained to provide around-the-clock complexity that the healthcare system presents to some individuals assistance across a range of issues, including identifying optimal at their most vulnerable and confused times has led to navigation treatments and providers, and assisting with care coordination and advocacy services that in many ways function as the “help desk through scheduling, securing second opinions and assisting with for your health” to consumers. Several vendors, such as Health complex medical conditions. These Personal Health Advocates also Advocate and Accolade, have gained significant market momentum deliver coaching services to consumers to help them understand their by serving as support resources to consumers in managing a medical conditions, address questions related to common procedures wide range of clinical and administrative issues in their healthcare and treatments, and prepare them for medical appointments. In coverage. Common administrative support includes areas such addition, Health Advocate delivers a suite of complementary solutions as claims resolution, appeal processes, and bill settlement, while designed to support employee health and well-being. These range clinical services often involve providing critical decision support to from wellness and work-life support services such as a nurse line consumers to guide them through care decisions and to measure the that provides healthcare advice and information, to personalized costs associated with various care alternatives. health messages that promote prevention to the general population and chronic care “best practices” to those with specific diseases, to advanced tools that gauge benefits utilization or estimate medical costs and savings opportunities. 14 TRIPLE-TREE.COM
  • 17. Provider Market blurring lines between payers and providers create an increasing Evolving market forces and the blurring lines between payer and need for providers to solve for many of the same aspects around provider have caused providers to view consumers in a new light consumer experience and engagement as payers. – not only as patients but also as members and consumers. To varying degrees, providers are increasingly assuming risk that Provider-Led Care Coordination more closely ties their financial performance to their performance Providers that function essentially as payers have many of the on dimensions of cost, quality, and outcomes. At one end of the same incentives to engage members holistically in order to manage market, many providers assume fully-delegated risk for their patient healthcare costs, patient experience and care outcomes. This population – essentially functioning as payers given they possess the is well established in markets like Southern California in which identical incentives of a traditional health plan to manage the total certain providers have managed fully-delegated risk relationships cost associated with caring for a population. This is accelerating at scale for some time. In these environments, providers have rapidly through the experimentation and proliferation of ACOs, widely adopted various tools and solutions to support engaged an important result of healthcare reform. At the other end of the care management and care coordination efforts. These tools allow market, most providers remain largely risk-free (under fee-for- providers to analyze clinical and financial outcomes as well as service reimbursement arrangements), but are increasingly under practice medicine in accordance with best practices. Vendors such pressure to assume some degree of risk through reimbursement as CERECONS have been among early market movers in supporting models that incorporate performance on various measures, including providers in fully-delegated risk environments, serving as the link patient satisfaction and quality of care. Regardless of any connection between at-risk provider organizations or ACOs and their distributed between clinical performance and reimbursement, all providers now provider networks along the care continuum to continuously monitor pay much more attention to these performance measures, as their and improve clinical and financial outcomes.5 These solutions bottom line is still directly impacted in a consumer-driven world. are delivered through a platform that engages the provider and is Consumers increasingly possess the tools and resources to evaluate embedded in the clinical workflow – in this sense, the individual providers on a number of dimensions and are beginning to use this care provider is the “consumer” who engages in a new and more information in their care decisions. In all of these situations, the meaningful way. INDUSTRY PERSPECTIVE Q1 / 2013 15
  • 18. Beyond full-risk bearing entities, the vast majority of other Phytel operates as an extension of the physician or care team outside providers increasingly care about managing cost, quality, and patient of the provider setting. Phytel’s unique software automates routine experience as this all has the potential to impact their sustainability care management functions, delivering physician reminders and over time through continued evolution of reimbursement models, alerts as well as patient outreach and notifications. The software reputation (through the consumer lens, informed by widespread platform leverages up-to-date clinical information and evidence- access to quality, satisfaction, and other performance measures), based guidelines to allow providers to actively manage care and payer network status. Early provider-led efforts to improve care effectively and improve care outcomes across all phases across the quality and coordination led to investments in EMR technologies, care continuum. In addition, Phytel has established care protocols to which improved the acquisition of valuable clinical data. However, identify care gaps and track overall performance across key quality these investments created limited capability to analyze clinical measures. This allows providers to identify appropriate intervention outcomes and push actionable information back to providers, opportunities to maintain proper patient adherence and avoid costly or to manage care outside of the facility setting following an care episodes. encounter through consumer engagement – all of which limited the effectiveness of these early solutions. As value-based or riskbased reimbursement models evolve, advanced solutions that support provider decision making, improve care coordination, and facilitate consumer engagement will become increasingly relevant to providers. As this occurs, solutions that allow physicians to identify As consumers become more aware of their treatment and provider areas for necessary intervention and coordinate care before and options, providers have become more market and consumer-focused after each encounter will be critical. The solutions of Phytel, which in their efforts to grow and retain revenue. Providers are not only offer physicians the ability to appropriately identify and connect with trying to address gaps that exist within their own care coordination patients as well as monitor their responses and compliance with care efforts but also to drive exceptional patient experience and help protocols, highlight sophisticated approaches to this type of provider- consumers manage their journey through the healthcare system led care coordination. 16 Patient Experience more freely. TRIPLE-TREE.COM
  • 19. While not immediately obvious, key aspects of the patient experience MedData delivers a suite of outsourced revenue cycle management are the financial and transactional elements. As consumers become solutions to physician offices and hospitals, including billing, coding, responsible for ever larger total healthcare costs, providers are collections, and patient satisfaction services. MedData has emerged as faced with a new reality of managing consumer healthcare debt: a leading vendor in managing the self-pay portion of the billing process gone are the days in which providers could manage their financial for providers. Among MedData’s core differentiators include patient- performance while only capturing pennies on the dollar of patient centric billing and communications that address the convergence of receivables. This is important to providers not only to manage bad consumer engagement and satisfaction with provider reimbursement. debt, but also to enhance the patient’s overall satisfaction with the MedData’s approach to self-pay account resolution begins by experience, which ultimately influences attraction and retention connecting patients with a specialist prior to the patient receiving a bill. of patient volume. The billing and collections experience is often The specialist serves as a timely, hands-on reference to educate and a provider’s final touch point with a patient following a care engage the consumer around various aspect of their bill. This strategy encounter and can wield a disproportionate influence on patient identifies “at-risk” patients in need of specialized communication and satisfaction. Of note, billing issues can create unwarranted “patient education both prior to and throughout the billing process, avoiding friction” and are a key source of unnecessary administrative hassle confusion as well as identifying early patient payment issues. This for physician groups as they prolong the billing process and reduce patient-first revenue cycle management approach yields timely collection volume. and accurate reimbursement in a more transparent manner, which aims to improve patient satisfaction. In addition, these personalized, To support an improved billing and collections experience, introductory communications serve as valuable data points to gain considerable innovation has occurred around the development of insight into patient satisfaction throughout the care encounter and tools to assess and manage patient financial responsibility. Provider- billing process. MedData is unique in that its solution avoids high stress, focused revenue cycle management vendors now offer proactive facility-based patient intervention points in favor of pre- and post-bill and targeted communications to support patients as they complete communications, in order to identify potential payment issues early on the billing process. MedData has been among the early vendors to as well as eliminate some of the more intrusive collection efforts that market a patient-centric billing approach in which patient satisfaction have plagued similar patient pay billing efforts. INDUSTRY PERSPECTIVE Q1 / 2013 17
  • 20. Figure 6: Convergence Of Patient Satisfaction, Engagement And Billing PATIENT LOYALTY AND RETENTION (MEDDATA) Physician Disruption •  Multiple bills from known (e.g., hospital) and unknown providers (e.g., ED, hospitalist, etc.) •  Billed / gross charge vs. normal discount complexity •  Clunky on-boarding with new billing company impairs cash flow Hospital / Health System Patient •  Financial burden beyond current means •  No clear options for payment beyond 100% settlement Physician Group PatientFirst RCM •  Limited pre-coding data verification •  No reconciliation against hospital activity logs •  Poor demographic information capture •  Inaccurate coding creates reimbursement and compliance risk Industry Pain Points Industry Pain Points Patient Disruption Patient-Centric Capabilities Segment patients and customize outreach to optimize engagement Connect with patients prior to them ever receiving their first bill Capture and update any missing demographic or insurance information Conduct physician-focused patient satisfaction survey and communication are closely aligned, as outlined in Figure 6. The data within the context of the revenue cycle workflow. Experian, company’s differentiating capabilities support pre-bill engagement seeking to apply their expertise from other verticals in healthcare, and the early identification of “at risk” patients who are most likely acquired SearchAmerica in 2008 in what has now become Experian to need specialized communication and education during the billing Healthcare.6 process. This predictive analytics component of MedData’s offering is reminiscent of solutions from an earlier wave of consumer bad debt management, such as SearchAmerica, which developed service offerings both within and outside the facility in order to meet predictive algorithms and screening methodologies to assess the escalating customerE needsPropertyenhance Not Forproviders’ consumer and of TripleTree. the Distribution. 7 CONFID NTIAL likelihood that individual patients would pay their medical bills, value propositions. As a prominent example, providers can now incorporating healthcare-specific consumer credit and demographic 18 Providers have made numerous additional efforts to expand their choose to offer their own versions of cost transparency tools to allow TRIPLE-TREE.COM
  • 21. Passport Health Communications (Passport) delivers a range delivering cost estimation and payment collection tools that allow of administrative, clinical and financial tools via real-time and consumers to assess their financial responsibility prior to or at point integrated technology to improve the efficiency and accuracy of of service. These solutions can verify eligibility, confirm plan details, the revenue cycle process. Passport’s offering extends across the and calculate patient financial responsibility within the hospital provider revenue cycle, including insurance eligibility and benefit setting as well as assess and collect the patient responsible portion verification services as well as medical necessity validation and of standard medical bills prior to service or while at the facility. other claims management services. This includes a patient-friendly A second notable example is the advent of new patient education payment management solution that provides price transparency and tools that provide consumers with greater awareness of their enables payment collection at the point of service. The usefulness condition at all phases of the care continuum. Vendors such as Emmi of this solution to provider organizations is rooted in its ability to Solutions and PatientPoint seek to improve patient engagement assess patient liability based on price information in the facility’s chargemaster, payer contracted rates, and patient eligibility and benefits information, enabling them to collect payments at the point of service. PatientPoint offers a suite of solutions that enable sustainable patient and physician engagement along the entire continuum of care—pre-visit, at the point of care, and post-visit. Through a set of consumers to estimate the cost of treatment ahead of a scheduled communication products available via web portal or facility-based appointment as well as compare the cost of treatment options on a display screens that facilitate adherence, education and coordinated facility-by-facility basis. However, achieving pricing transparency communications, PatientPoint’s products aim to drive improved patient has not been an easy task given the non-uniformity and complexity engagement at the point of care and between care visits, which is vital of patients’ clinical needs along with significant variations in care to improving the quality and efficiency of care delivery. The solutions practices among physicians. Vendors such as Recondo Technology have use across provider and payer channels by providing a real-time, and Passport Health Communications automate the registration and interactive tool to manage patient populations as well as monitor for eligibility functions at the front-end of the provider revenue cycle. gaps in care or adherence that can significantly impact overall clinical In addition, these vendors also address key consumer needs by performance and financial success. INDUSTRY PERSPECTIVE Q1 / 2013 19
  • 22. and adherence to care protocols through the delivery of web- Where Payers And Providers Go From Here based patient education programs that support patients as they Payers and providers are aligned in their efforts to improve how manage their care. These types of solutions also play a role in care consumers view their healthcare experience and to play a larger coordination as providers are able to monitor whether patients have role in supporting consumers’ everyday lifestyles and health adhered to care protocols. improvement. One area of continued innovation will be around the consumer experience, as it has a direct impact on the ability of healthcare organizations to enable consumer engagement. To that end, healthcare organizations have grown increasingly aware of their Net Promoter Score (NPS), which measures how end users assess their overall experience using various products and services. Organizations view this ranking as important to measuring and improving customer loyalty as well as driving health improvement. As healthcare has lagged behind other industries in levels of consumer engagement and satisfaction, attention to improvement in NPS will be a key focus area going forward as healthcare organizations attempt to play a greater role in supporting consumers as they navigate the healthcare system. 20 TRIPLE-TREE.COM
  • 23. NEW APPROACHES BEYOND THE PAYER-PROVIDER PARADIGM Outside of the standard payer-provider paradigm, a range of are also delivered through a B2C channel. Consumers must pay the stakeholders have introduced a new wave of direct-to-consumer full cost of these products and services – a break with the traditional products and services designed to address consumers unmet needs payer-provider paradigm. Wellness services offer a good example. and concerns. Some forward-thinking product distributors have moved Driven by consumers’ desire to manage their health status, several beyond traditional B2B distribution strategies in favor of DTC marketing vendors that offer consumer-directed wellness management tools approaches that allow these products to be distributed in a timelier, have successfully penetrated the consumer market. For instance, convenient manner. One example is Simplex Healthcare (Simplex), WellnessFx has been an early market mover in the B2C wellness which focuses on diabetic testing supply distribution. Simplex offers market through its web-based health management tool, which allows members a “club” experience in which members are able to interact consumers to track and manage their actual health condition based through the Simplex website as part of a community of individuals with on data generated through the results of a personal health screening. similar conditions. Simplex is able to leverage this “community”, along with targeted television advertising, to penetrate their core customer Similar to consumer-oriented wellness, another area that has segments with timely, targeted advertising directed towards critical significant B2C momentum is the preventive health screening areas of need or intervention. Using this approach, Simplex is able market where Life Line Screening has emerged as a clear expand beyond their role as a distributor and reposition themselves as market leader. Life Line Screening has focused on solving for the a resource to their customers. This is relevant to payers and providers consumer experience, as evidenced by their NPS, which exceeds as they seek approaches to better understand their patient populations that of Facebook and Google. The ability of Life Line Screening as well as how to identify timely points of intervention to influence to incorporate consumer preferences into their direct marketing decisions or provide necessary support. efforts has been critical to their success in initiating engagement and establishing a presence in each local market the company enters. A host of new consumer-focused products and services that fall This serves as another valuable example to payers as they seek to outside of standard health insurance benefits have emerged that establish brand recognition at the community level or to providers as INDUSTRY PERSPECTIVE Q1 / 2013 21
  • 24. they seek to extend their presence outside of their facilities. Life Line Innovative B2C strategies have proven to be effective in motivating Screening’s marketing approach has proven to penetrate various consumer behavior and decision making. These approaches are consumer segments effectively as well as establish high-touch relevant to payers and providers as they seek to expand consumer interactions with consumers and influence decisions through their relationships and establish longer-term member relationships screening results. in order to eliminate the typical churn that complicates care management and health improvement efforts. Life Line Screening provides on-the-ground preventive health screenings to identify health problems that might otherwise go undetected. Life Line Screening’s services focus on identifying key risk factors for conditions such as stroke, peripheral arterial disease, diabetes, heart disease and osteoporosis. Life Line Screening serves over 1 million consumers annually across over 16,000 screening events, providing a key resource to consumers in managing their health risks. Life Line Screening utilizes a nationwide, community-based approach, establishing their shortterm, local bases in community centers, churches, and other community sites nationwide. Key to the approach is the company’s highly recognizable fleet of buses that sit outside of their screening locations, which serves as a highly visible branding to notify consumers of their presence in the community. 22 TRIPLE-TREE.COM
  • 25. LOOKING AHEAD As healthcare spending continues to rise and consumers assume Despite significant innovation across the payer and provider markets, a greater share of costs, their demands will influence how the healthcare organizations are still challenged in understanding who industry brings forth new solutions that help consumers manage the consumer is, what they want and how they want it. Much their healthcare and help improve the consumer experience. progress is being made, particularly as healthcare continues to These solutions will also allow healthcare organizations to align take cues from sectors like retail and financial services that have their consumer strategies with care coordination and quality developed much deeper consumer engagement capabilities. The improvement efforts to address the relentless increase in spending market leaders that emerge will be those who are able to close that has defined the industry’s shift to consumerism. the information gap between buyers and sellers and act more like these leading retailers and financial firms in their ability to The historical focus of healthcare technology investments understand and meet unique consumer needs and preferences. At around administrative efficiency and workflow had positioned this point in the evolution of healthcare consumerism, the industry most healthcare organizations elsewhere as consumer demands lacks clear end-to-end platforms that fully satisfy end market shifted as a result of CDH. The “consumer ignorance” that has demands within consumer engagement, communications, support, resulted has plagued many early consumer-directed efforts by and other critical areas of need. However, we have illustrated failing to establishing consistent and effective interactions and numerous emerging and incumbent solutions that are closing engagement with the consumer. We believe that these organizations the gaps between consumer demands and industry constituents’ face dwindling alternatives to sustainability without a concerted capabilities, and which may serve as broader consumer-oriented consumer engagement strategy – one that can influence healthcare platforms in the future. decision making. The urgency is real – the healthcare cost burden placed on consumers is reaching its limits, and consumer demands continue to grow. INDUSTRY PERSPECTIVE Q1 / 2013 23
  • 26. end notes 1 Kaiser Family Foundation, Medicare: A Primer, 2010. 2 Congressional Budget Office, Effects of the Affordable Care Act on Health Insurance Coverage – February 2013 Baseline, 2013. 3 Employee Benefit Research Institute, Private Health Insurance Exchanges and Defined Contribution Health Plans: Is It Déjà Vu All Over Again?, 2012. 4 Disclosure: TripleTree was the exclusive advisor to Connextions in their sale to Optum in 2011. 5 Disclosure: TripleTree was the exclusive advisor to CERECONS in their sale to Medecision (a subsidiary of Health Care Services Corporation) in 2013. 6 24 Disclosure: TripleTree was the exclusive advisor to SearchAmerica in their sale to Experian in 2008. TRIPLE-TREE.COM
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