Insurers will have to change to survive
A major healthcare investment firm says the insurance industry will have to abandon its 50-year-old business plan and embrace mHealth, among other changes, to survive.
The key to that transition lies in the shift to consumer-directed healthcare. According to Steve Krupa, managing member of the New York-based Psilos Group, insurers need to ditch their "business-to-business" model and target two new partners: the individual consumer and the healthcare provider.
"Health insurance is going to become a very consumer-focused market," Krupa told mHealth News. "And right now insurers don't have a great consumer rating."
[See also: Aetna forms Northern California ACO.]
In its 2014 Annual Healthcare Outlook, Psilos notes a "dramatic shift" to individual policies, from 10 percent prior to the Affordable Care Act to as much as 40 percent, through both public and private healthcare exchanges. This in turn will fuel what it calls an "overhaul of the entire value chain – including market research, benefit design, network development, operations, marketing and sales – essentially reinventing insurers' longstanding business strategy and value proposition."
And Krupa believes mHealth will play a key role in an insurer's successful transition to the new order.
"They're going to be competing for individual consumers – they want to reach out and connect with them," he said. "They also don't want to have that first interaction be the day they (consumers) go to the doctor. They want to get up front and ahead of that."
That may be in promoting wearables, which could enable payers to get ahead of the curve and help their members avoid costly medical interventions. Krupa calls the wearable device a "fad product" at present because it's only attracting the self-motivated. But "we are going to reach a point where (insurers) are going to be in the center of that activity. The payers are in the driver's seat to some extent."
[See also: Payers embracing consumer technology.]
With payers competing for the consumer market, Krupa said, they're going to be looking for ways to differentiate from other payers. A key attraction may be the payer's provider base – which, in turn, means that payers are going to have to forge new relationships with the provider community.
"Consumer interactions with providers are branding opportunities" for insurers, said Krupa. "They're going to be looking for change in a very meaningful way. Relationships will evolve from what they are now, which is primarily a function of reimbursement, negotiations and network inclusion."
The prime currency that will fuel improved interactions between payers and providers, Krupa said, will be data.
Insurers, he said, will want to market their relationships with providers. And they'll want to work with providers to build attractive health plans. For that to work, they'll want to aggregate and share data – from mobile devices, consumer-provider interactions, etc. They'll also be best positioned to provide the capital that providers need to adopt mHealth and telehealth tools.
To sum things up: Payers can provide the foundation for a successful mHealth and telehealth platform, aggregating and analyzing consumer data that their providers will use to improve clinical outcomes and thus improve the consumer experience. This, in turn, will drive more customers to the payer.