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Posts Tagged ‘payers’

It is now nail-biting time, as we here at Chilmark Research brace ourselves for the upcoming Supreme Court decision on the legitimacy of the Affordable Care Act.  We as a nation are indeed living in very interesting times and I am again reminded why I find healthcare markets endlessly fascinating (and perplexing). (Editor’s note: This post was written by senior analyst Cora Sharma and highlights some of her latest research that looks at payer strategies for patient/member engagement.)

Of interest is just how many of the ~30 million uninsured US citizens will land on insurers’ doorsteps in 2014. Even if the Individual Mandate is upheld, it is still uncertain just how many of these uninsured individuals will opt to pay penalties rather than purchase health insurance.

For my patient engagement research, I have spent the past several months speaking with executives at large payers about their consumer-focused strategies.  Just how are payers planning on using relevant consumer technologies to keep new individual customers engaged and healthy?  After such a dismal track record over the years around health/wellness/DM initiatives, is it worth another go-around? (Cora’s research will culminate in a forthcoming report to be released within the next couple of weeks.)

Payer Initiatives in Consumer Technologies
Kaiser Permanente and Humana actually began experimenting in this area circa 2008, creating flash-based, online health games for children. In 2010, UHG released the first version of the OptumizeMe social game App, Anthem released its Grocery Guide App (now EOL), and Aetna partnered with OneRecovery.com to provide a social network for members in recovery.

Now all of the major payers have ongoing products, partnerships, and pilots around consumer-focused health and wellness and disease management — though with varying respective strategies (the upcoming report explores these 35 ongoing payer initiatives in detail).

The figure below shows an interesting slice of data around social games, in that the majority of these initiatives are becoming social and ‘gamified’:

Note: Data point positions do not represent degree of gamification/ social-ification. These are just meant to illustrate number of initiatives in each category

Another trend our research has found is the willingness of payers to look beyond health and wellness and towards the complex FDA-regulated space of chronic disease management solutions (partnering with Healthrageous and Welldoc), as well as seeking to improve member ‘Wellbeing’.  Aetna’s partnership with Mindbloom to offer members the premium version of the Life Game™ is one of the few efforts we found among payers that looks to engage the full spectrum of health of a member with a focus on Wellbeing.

Growing market in payers that can transition to a post-FFS world.
In the future, we predict that this market will continue growing along two distinct tracks:

  1. In payers that successfully transition their businesses to risk-sharing, care coordinating models (ACO/PCMH) looking to proactively engage members/patients in self-managing their health; and
  2. As pure marketing-plays, e.g. releasing cool mobile Apps that generate a nice press release, some market buzz, but little else.

As many readers may know, the health insurance industry is going through a period of rapid transformation.  Payers with the means and the wherewithal to innovate their business models are purchasing providers, as well as partnering with them for data-sharing agreements and ACO-like payment contracts.  Some large payers are also getting into the ACO-enablement business through acquisition of software companies.

Insurers who do not innovate their business models towards a post-FFS (fee for service) world (be they pure insurance providers or mostly claims processors) will find little incentive to experiment heavily with emerging consumer technologies.  The crux of the matter is that they will never have the long-term incentives (nor the culture) to shift gears away from their actuarial focus and will remain low margin businesses, if they manage to survive at all.

Affecting behavior change towards health and wellness has proven incredibly difficult over the long haul. There is scant evidence that these new payer initiatives that seek to adopt common consumer engagement technologies and strategies are meeting objectives. As the entire healthcare industry pivots towards new bundled care reimbursement models though, there may be a glimmer of hope. I remain cautiously optimistic to see payers experimenting with and adopting emerging consumer technologies, knowing that there is still a long road to travel.

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(Note: This is the second of a two-part post.)

Keeping it Local

This is most representative of the status quo and the most realistic path forward for the vast majority of payers who typically operate at the local level. In this scenario, one or more health plans in a regional market partner with other community stakeholders to co-fund and sustain a regional HIE. These stakeholders typically include large corporations with a large local employee base and/or provider organizations. Successful examples of such multi-stakeholder HIEs include the Louisville HIE (Humana, Anthem, Ford, Yum! and Kroger), and the Rochester RHIO, where payers (Aetna, BCBS, MVP) and hospitals share a 2/1 split of all operating expenses on a transaction model.

The benefit to payers in participating and most often funding the majority of such an HIE is three-fold. First, partnering with other organizations in the region contributes to a greater “fabric of trust” between the HIE and physicians within the region leading to greater physician participation. Secondly, by partnering with others, the payer is able to share HIE operating costs with other stakeholders. Third, physicians actively exchanging patient data can prevent some hospital readmissions and decrease duplicative lab and imaging tests, thereby lowering a payer’s total coverage cost in the region.

Conclusion: As HIE’s unfold at the community scale, local and regional stakeholders will share the operating costs and governance. As far as payer support for HIE’s goes, Chilmark predicts continued growth of these types of HIEs, particularly in less urban communities. We also predict that there will be significant growth in enterprise HIEs that are partially funded by payers, ultimately in support of a payer-provider partnership to establish an ACO. (Again, look to the recently announced NaviNet-Lumeris deal wherein three regional payers also played a role. For those payers, it’s all about making the provider transition to ACO/PCMH models as frictionless as possible.)

Real Challenges Remain

Despite a seemingly straightforward path for payers to get involved with HIE’s, there remain a number of challenges. These are two-fold in nature: Regulatory and Marketplace. On the regulatory front, the list of challenges is long and familiar: ICD-10 (while it seems like there will be another delay, much to the chagrin of the AMA this isn’t just going to go away) and HIPAA 5010, health insurance exchanges and other health reform mandates. (On the plus side, health information exchange-related spending counts favorably towards new medical loss ratio (MLR) rules).

However, the marketplace is where the true challenges lie, as there is hardly a guarantee that payers and provider groups will play nice with each other. Nowhere is this more evident than in the Western PA market, where a sort of fisticuffs have been going on between Highmark BCBS and UPMC.  Without going into the sordid details, Highmark (who just bought Pittsburgh’s second largest hospital network, West Penn Allegheny) and UPMC are now building competing HIEs in the same region because of a longstanding spat over contract negotiations. To hospitals who are now faced with participating in two separate HIE’s, this does not make much sense.

For the payers however, it does make sense when cast against the backdrop of rising competition. (Chilmark noted this challenge after attending the AHIP confab last summer.) Insurers are fighting with each other to keep their networks competitive. Providers are fighting with each other to secure preferred referral status, i.e. patient volume. Introducing an HIE in the middle of this environment has wide reaching implications for where patients are sent as well as who accrues and shares the savings. Throw in the variable of different reimbursement rates for commercial, Medicare and Medicare Advantage patients and you can see why partnering up to set up an information network is more than simply writing a check.

2012 and Beyond

So what does this all mean for a huge guest who’s seemingly unwanted at the party? Ultimately, payers’ involvement boils down into a few categories:

  • In the light of the tighter margins imposed by health reform, insurers who can afford it will diversify their business. The national health plans will be looking to acquire their own platform ala Aetna and UHG, with the additional hopes of squeezing cost savings out provider users and building a more favorable MLR. The main considerations in predicting this shift include vendor consolidation and the readiness of existing provider networks to collaborate.
  • Regional Insurers, such as the Blues and other statewide or multistate networks, have the wherewithal to setup and license their own platform for exchange either through payer-payer partnerships or on their own. The recent NaviNet deal seems to be more of an ACO play, but indicative of the business strategy of this class of payers who are willing and able to be flexible in how they approach their role as stakeholder in information networks.
  • Local Insurers who have fewer resources and who operate directly in the tides of market competition will opt for a ‘safer,’ multi-stakeholder approach in their communities. Partnerships will be heavily influenced by network dynamics, reimbursement channels and existing arrangements, such as burgeoning accountable care communities.

So, as rosy as information exchange seems on paper, it is permanently changing the way that provider and payer groups do business. From where Chilmark stands as an observer of the market’s evolution, it is all too clear that payers and providers ultimately have little choice but to work together. Payment reform and millions in IT incentives have already begun to influence the way that the delivery and payment markets work; the future of accountable care, proactive population health management and ‘smart’ health care delivery all depend on willing and trusting partnerships.

Unfortunately, as is too often the case, patients and other stakeholders get left out of the decision calculus. Pittsburgh residents will hardly benefit from the competitive business posturing there. We hope the folks deploying HIE’s over the coming years will put as much of an emphasis on leadership and governance as they do on technology and of course, the health of their business.

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The numerous changes in the healthcare sector are forcing stakeholders to develop new business models to prosper, to survive. Among health insurers, this means one thing: diversification. Health reform was the nail in the coffin of yesterday’s business model, a model that had no restrictions on margins, a model where payers sold to businesses, not individuals. Tomorrow’s strategy for payers is still a work in process but one thing is clear, its foundational elements will be consumers, technology and data. The emerging world of big data in healthcare is providing payers with new potential ways to make profits. Beyond the promise of efficiencies, some payers are beginning to look closely at harnessing the flow of clinical, claims and administrative data to allow for the creation of stand-alone business opportunities.  Specifically, information exchange will grow in importance in 2012 and beyond as value-based payment models rely to increasing extents on the availability of diverse types of data at the point of care.

So why have payers been so cautious to jump on board and fund HIE’s?

The answer is multi-faceted. First and foremost is simply the issue that many a provider is uncomfortable with a payer having direct access to clinical data and is thus unwilling to share such data with an HIE that has payer involvement. Second is the business uncertainty at this early stage of HIE maturity. The HIE market remains very dynamic and there is a lot of uncertainty as to where this market will eventually lead. Before putting some parameters around the direction of payer-involvement in the HIE market, it bears a quick run-through of what the different models of payer involvement look like today.

Infrastructure Play
Axolotl and Medicity are the clear leaders in the HIE software market. Both were acquired in 2010 by big insurers (Axolotl by United Health Group, which was folded into the Optum Division and Medicity by Aetna) and continue to dominate the HIE landscape. Both UHG/Optum and Aetna are clearly looking to build out new lines of business, in this case healthcare IT, where the opportunities for future growth and expansion are promising. Their investments are already paying big dividends: In a telling sign of the direction of this market, Optum has actually begun to grow faster than UHG’s main insurance business.

The investments these insurers have made in HIT are significant and ones that only the biggest national players will have the appetite for. Kaiser’s walled garden, in-house approach effectively rules them out of this kind of play. Other payers have not shown signs of moving towards owning their own HIE solution, or making other major bets on HIT…yet. Humana and Cigna have only helped out by funding pilots to date. Despite a national brand and association, the Blues fit into their own category because of the state-based nature of their business structure. They are certainly not slouching in the HIE race though as the next section explains. Chilmark has also heard murmuring around the water cooler about some potential partnerships on a more national scale in 2012, so again only time will confirm these rumors.

Conclusion: It may be too late for other payers to get in on the HIE market via acquisition of a leading vendor as few independent vendors remain. Lumeris, with three regional Blues acquired NaviNet this week. This acquisition may provide a non-traditional route to the same end-point, purchasing the network to build-out future pipes for numerous data types. Further crystallization in the HIE marketplace as well as more evidence from operational systems will help them make a bet on a particular vendor.

Entirely Payer Funded
These are HIE’s that are exclusively funded by payers. As it stands now, this is a pretty lonely space, as providers continue to be skeptical of payer intentions and there remains a dearth of conclusive proof of return on investment (ROI), more studies like Humana’s with WHIE will only help. However, some early movers have already tasted success with this approach, the most prominent being Availity, a Florida-based collaboration between two Blues plans, Humana and WellPoint. Their business model is simple: Payer contributions help to get the data flow and integration efforts underway, providers receive a base set of information access services for free, and pay for premium business services such as revenue cycle management and practice management tools. The value equation for providers has been enough to keep Availity in the black to date. They’ve gone one step further and it looks like Availity will be licensing this to other Blues plans around the country as well. While this work is certainly laudatory, Chilmark is skeptical that this level of collaboration will occur widely today (Availity began in 2001). While it’s possible for a national payer to partner with local plans to get an HIE off the ground, these typically include other intermediaries for purposes of getting buy-in from other stakeholders (these are insurance companies, after all), skin-in-the-game and governance. Moreover, because the ROI in HIE can be somewhat invisible, appearing in efficiencies and reduced costs for payers and providers, payers feel more comfortable sharing the investment.

Conclusion: Aside from emerging collaborations between Blues plans and some provider organizations (e.g. Catholic Healthcare West and Blue Cross of California), we foresee little progress here. For big payers considering an acquisition play, investing in one-off models is quickly becoming redundant; for local plans it makes more sense to share the load with non-payers.

In Part Two will look at local support of HIEs, challenges and what lies ahead for the future.

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Payers, as with the rest of the healthcare industry, have a lot on their plate right now. Healthcare reform, via the Affordable Care Act (ACA) continues its march forward despite legal and political uncertainty. Struggling to define the payer role in Accountable Care Organizations (ACOs), understanding the impact of Health Insurance Exchanges (HIXs) on their business (McKinsey survey results likely have many payers wondering how to market to what may be an enormous uptick in individual purchasers of coverage – something that most are ill-prepared for), and how to better engage consumers/members in proactively managing their health are a few of the top issues that were addressed at the AHIP Institute last week.

But when one sits back and reflects on the AHIP Institute – all of the sessions, all the discussions, the chatter in the halls, underlying messages within the message, the exhibit hall – it boils down to three key themes that this sector of the healthcare industry is grappling with, which much like the three stages of meaningful use, build upon one another:

  • Establishing Trust
  • Engagement
  • Collaboration

Establishing Trust
Health insurers have a major image problem and they know it. Providers don’t trust them, consumers don’t trust them and who knows, maybe even their spouses don’t trust them. Without that trust it is extremely difficult for payers to engage providers and members at a deeper level to improve overall population health and lower their risk exposure (MLR=medical loss ratio).

With the passage of the ACA, payers are now looking at the prospect of at least 30M more members (a significant portion Medicaid) joining their ranks. The 30M estimate could easily be tripled if McKinsey’s research (see above link) is indeed accurate. This creates a two-fold challenge for payers:

  1. How to market to these potential new members through a state-sponsored and run HIX. Payers do not know how to market to a market of one as they are more accustomed to marketing to employers or through brokers to reach that end consumer. Payers need to develop strategies that will assist them in attracting new members through these exchanges and one would imagine that ideally, a payer would prefer to attract the healthiest consumers on the HIX to join their ranks, again to lower MLRs. Successful marketing begins with establishing trust in a given brand and with a consumer trust ranking for payers that is towards the bottom, payers have a long road ahead of them.
  2. How to ensure that these new members receive appropriate care when they need it and not have them turn to the local, and the far more expensive, Emergency Room (ER). Many of these new members are unaccustomed to having a primary care physician and have typically gone to the local clinic or ER for care. Ensuring that these new members receive effective, value-based care will require close collaboration (and education) not only with the new member, but more importantly, the care community in which that new member resides. Payers will need to establish a higher level of trust than they have today with that care community, be they ACOs, Patient Centered Medical Homes (PCMH), clinics, you name it to develop value-based care models. With a gapping shortage in primary care, that will only be exacerbated with ACA, very creative approaches are needed to develop these new care models and trust is often a foundational element to the creative process.

Engagement
If and when trust is established, the next stage is engagement and for payers it appears that such engagement is sporadic at best. Sure, there are many examples where payers have established partnerships with provider organizations, but it has not been easy. As stated in Part One of this series, Blue Shield of California worked closely with Catholic Healthcare West to establish an ACO model that worked for both parties. This effort took four long years to accomplish which makes one wonder: if Kaiser-Permanente wasn’t beating up both parties in the market, would this ACO even exist?

Payers need this type of deeper engagement with providers to develop new models of care but do they have the time, do they have four years for each significant ACO they wish to establish in a given community/region? With 2014 a short 2.5 years away, one would have to logically conclude: No, there is not enough time. Payers will certainly take lessons learned from initial efforts, but definitely need to accelerate engagement of the provider community. But where is that engagement? While there were representatives of provider groups in attendance at AHIP Institute, AHIP’s failure to put such representatives on the stage to talk of their experiences and what they, the provider community seeks from payers is shocking almost to the point of disbelief.

Not sure if the payers are anymore successful on the member side but with an increasing number of future members being individuals, payers need to seriously rethink their consumer engagement strategies, which today rank dead last of major industries surveyed. Yes, most payers have a PHR offering for their members. Yes, most payers are seeking to engage members via calls to those with a condition. But is any of this gaining traction, engaging consumers/members in a meaningful way to help payers reign  in ever rising healthcare costs? Sure doesn’t look like it and payers will never make it to Stage 3 if they do not get members and providers engaged.

Collaboration
Collaboration is the final Stage 3 for payers. It is the nirvana of deep and meaningful collaboration between all stakeholders to improve healthcare delivery in the US – a new delivery model that reigns in costs, equitably distributes risk, and ensures accountability. This is a very elusive goal that the payer sector, which AHIP represents, is not even close to achieving today.

While a large portion of the “collaboration problem” can be laid at the feet of this industry sector, in all fairness, payers are not completely to blame. Providers, while by and large well meaning, do have some in their ranks that are less so and unnecessarily drive up costs. On the consumer side, for far too long consumers have not been held responsible for taking better care of themselves. There is very little personal, consumer accountability in today’s healthcare system but that is changing, will need to change if we as a nation wish to truly grapple with the extremely serious issue that we can no longer afford the healthcare system (system used loosely as it is hard to call the US healthcare industry a system) that we have today. As one of the keynote presenters, economist Laura Tyson so eloquently put it:

We do not have a debt problem in the US economy, we have a healthcare problem.

Without deep, meaningful collaboration among all stakeholders the debt problem we face today will seem a mere pittance to what we will face in the future. Payers can play an extremely important role in that collaboration but they have some very hard work yet to do to establish trust in the market and then engagement. Based on what we heard and saw at this year’s AHIP Institute, payers are seriously behind in these efforts and at times almost seem oblivious to just how critical these efforts are to their very survival.

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Attending the annual health insurers confab (AHIP Institute) last week gave one some insight as to the challenges this part of the healthcare industry is facing. There were plenty of sessions on addressing data analytics for everything from population health management to fraud, a number of other sessions on consumer engagement, disease management, health & wellness, and of course the ever ubiquitous sessions on Accountable Care Organizations (ACOs).

But what pervaded many a discussion, panel session, and even keynotes was the level of uncertainty in the market today. Though the Affordable Care Act (ACA) was passed and signed into law, its future is anything but certain. There is both legal and political uncertainty. Legal in the numerous lawsuits that have been filed, particularly regarding the individual mandate that will ultimately be a Supreme Court decision. Political in that numerous politicians and some presidential contenders have built a portion of their platform on repealing ACA. Such uncertainty makes it extremely difficult for payers and employers to effectively plan for the future. Regardless, there were a few key areas that seemed to attract the most attention: ACO, Consumer Engagement & HIX.

Following are some quick snapshots:

Accountable Care Organizations (ACOs): Plenty of talk on this subject, primarily from the consulting firms who seemed to have run most of the sessions at AHIP. Payers have been experimenting with the model for some time now, well in advance of CMS’s NPRM. In one session, Blue Shield of California (BS-CA) talked about their ACO with Catholic Healthcare West. A very challenging relationship that took 4 years to iron-out and stand-up the ACO and the only reason they kept at it: Calpers was supporting them with an enrollment of 40K new members and Kaiser-Permanente was beating the hell out of both of them in the market. More competitive necessity. This may foretell future attempts and challenges to move to this model. One other important point expressed many times over regarding ACO: data exchange is an ACO’s life-blood.

Consumer/Member Engagement: Numerous sessions drilled down on how payers will market to and serve their members in a deeper, more meaningful fashion but it all sounds just so superficial. Sure, payers are indeed trying to engage the consumer (marketing to new prospects via HIX – payers are really struggling here) and provide consumers with information they can use to make better “value” choices. There are also the ubiquitous efforts of payers to promote health & wellness and institute various disease management programs. Yet based on the sessions attended, seems more like a lot of hand waving and not convinced payers are seeing any meaningful traction in truly engaging their members.

Health Insurance Exchanges (HIX): In accordance with the ACA, a State must have its HIX operational by Jan. 2014. Each State in the country will have their own, slightly nuanced HIX to meet the needs of their citizens and in compliance with their laws. There is no commercial off the shelf (COTs) solution so each exchange will be a separate, custom build. The big winners here are consulting/system integrator (SI) firms (e.g., ACS, CSC, Deloitte, etc.) and they were out in force at this event. They are going to make a killing first standing up these HIXs and then of course keeping the HIX up and running over the years to come. The big challenge, however, is that these exchanges are slated to support Medicaid recipients and most States’ Medicaid IT infrastructures are so outdated that they need to be rebuilt. Even more $$$ to those SI/consulting firms.

What may have been the most bizarre aspect of this event was simply its isolation from the rest of the healthcare sector. This was a very insular event. There were no consumers/members giving presentations or keynotes on what they are looking for from this industry sector. There were few if any providers or representatives of provider organizations talking (either in sessions or keynotes) about what they were looking for from payers, how they wish to engage them, work together to improve health outcomes, improve the value of healthcare delivered.

All very, VERY strange.

If this sector of the healthcare industry is truly interested in improving the quality and value of healthcare delivered, it has its work cut out for them. In our next post we’ll delve into the three overarching challenges payers face with the coming changes brought about by ACA. Small hint, start with trust.

Addendum:

Consulting firm Perficient was also in attendance and wrote about the ACO issue as well that is worth a read.

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freeSlowly getting the hang of Twitter and while cruising around the TwitterSphere yesterday looking for updates from the WHIT’08 conference in DC came across a guy providing live tweets from the event.  Looking more closely at his profile, it turns out he works in a “skunk-like” innovations group at Humana, called Humana Innovations.

Like a dog on the scent of something interesting followed the trail to their idea factory, CrumpleItUp.  Very nicely done and gives one a sense of what may be possible, from a Web presentation stand point, if you start thinking beyond columns of text and smatterings of graphics.  Honestly, one of the best sites I’ve come across in sometime.

But I really fell in love with this little group and what they are trying to do when I learned that they are the brainchild behind Freewheel!n.  Freewheel!n is all about providing bicycles to consumers to encourage them to get around via bikes, thus contributing to health (big objective for Humana), goodwill (another Humana win – great PR), eco-friendly, (we all win) and the list goes on.

Freewheel!n made its grand intro at the Republican and Democratic conventions.  Following are some stats off of the Freewheel!n site (stats were cumulative over the 8 days of these conventions).
• 7,523 bike rides
• 41,724 miles ridden
• 1,293,429 calories burned
• 14.6 metric tons of carbon footprint reduction
What’s not to like?

Maybe that Freewheel!n is not in Boston yet, that is still in prototype mode, that we will have to wait to see it arrive in our own fair cities and towns.

Plenty has been written here and elsewhere about various initiatives of payers to encourage healthy behaviors.  Sorry Aetna, CIGNA, United Health, WellPoint, all of the BCBS plans, none of your initiatives have captured my imagination like CrumpleItUp. Humana has broken the mold in reaching out to consumers.

Take a look and learn.

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Consulting firm McKinsey announced today the release of their latest healthcare centric research study entitled: What Consumers Want in Health Care. Results are the compilation from a survey of some 3000 consumers with particular focus on consumers’ healthcare concerns, perceptions, and how they go about selecting a health plan.

I read the brief article and listened to the many taped interviews they had with consumers.  A bias was apparent in their analysis of results, clearly McKinsey is fishing for business among payers, financial service providers and to a lesser extent providers.  This bias, which was surprisingly less veiled than most consulting firm pitches, unfortunately slanted the narrative at times leading to some ill-founded conclusions.

But putting this bias aside for a moment, some interesting data (and opportunities) come forth in the video narrative discussion with the following figures that were not included in the Research Brief:

In the first figure McKinsey divided the need for information into two primary events; health events and life events, each situations where a consumer will have a definitive need for healthcare information.  What I found astounding here was the level of consumer dis-satisfaction with the information received.  Clearly, stakeholders are currently not serving consumer needs adequately, particularly those that become impaired, having a loner-term disability.  This creates an excellent opportunity for an information intermediary (via Internet?) to step-in and provide the information consumers seek. A service such as this could easily be supported with not too obtrusive (or delving into the privacy) advertising.

The second figure is more limited in that it asks consumers what information do they need to assess health plan offerings.  Unfortunately, McKinsey missed an opportunity to delve more deeply (and broadly) into what types of information consumers seek to better manage their health (but this just gets back to my earlier comment that this Research Brief is not much more than a calling card for consulting services to payers), and how they would like hat information delivered, e.g., phone, Internet, sit-down meeting. Regardless, one can ascertain from these results that consumers seek more personalized information that takes into account their specific needs/circumstances in a form factor that is easy to digest.

I can certainly empathize with the need for simplicity for I see far too much information that appears as if its purpose is to obfuscate rather than elucidate. Certainly, existing stakeholders (payers) are in the best position to fill this gap.  The real challenge here is to provide the personalized information that the consumer seeks while preserving their need for privacy.  A very delicate balance, but an area where HR consultants may be able to assist employers with by providing such tools/information to employees.  Then again, this may be an area where certain types of Internet-based healthcare information providers may step in. (Note: As a trial I did try Extend Health over on the Revolution Health site and although Extend Health states that they provide coverage in all 50 states, apparently they couldn’t find coverage for me.  Unfortunately, this type of occurrence is not that unusual.)

The third and final figure I clipped has a particularly compelling finding:  39% of those surveyed, would prefer listening to (getting advise from) an independent health advisor, but only 6% are using such a service.  With such an apparently large unmet demand, why has nothing been done to fill the gap?  Maybe the whole move to Consumer Driven Health Plans (CDHP) and the incumbent need for more information/advice outstrips what is available, or maybe as the narrator states, there are simply not many people trained today to provide this information, whatever the case, this certainly creates an opportunity, that many an employer might pay for as a service to their employees.

While the McKinsey Research Brief provides some interesting tidbits as outlined above there were a couple of things I found odd.

First were the video interviews.  Nary a one represented a young or even young/middle age adult.  All of those interviewed appeared to be retirees or soon to be retirees. Where are the families with small children, the young independent professional that may be job-hopping quite regularly as they climb the ladder, or the family with children at home and away at college?  Nothing. When reading the research brief, one does find various references to age group differences, but the data in quite thin and analysis lacking.  Thus, the research comes across as hardly a representative cross-section of healthcare consumers and makes one suspect the entire research project.

Secondly, I found the nearly complete lack of discussion of the consumer using the Internet for sourcing information to be another major oversight.  Tons of studies have been done (Pew Trust is often referenced) about the amount of healthcare related searches now being conducted online.  Clearly, the Internet has become a major source of information, but the Internet also remains a quagmire for the average consumer to wade through to get the information they need and want, which is personalized to their particular circumstances.  An online health advisor in the model of a financial planner may do quite well here, but McKinsey apparently did not wish to tread into this arena.

Hopefully, they or another will be compelled to perform such a study as this type of information could prove invaluable.  Thn again, let’s do a mash-up of research reports, combining this Brief with the Deloitte study released a few months back and the excellent, employer-centric report from Towers-Perrin.  Now that could be interesting.

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