Infographic: Opening the door for a new generation of engaged health care consumers

Public health insurance exchanges (HIX) are beginning to deliver on the promise of transforming the individual insurance market giving way to a new generation of highly engaged health care consumers. Findings from the Deloitte Center for Health Solutions 2015 Survey of US Health Care Consumers suggest that HIX customers differ from those with other sources of insurance coverage in several ways. Understanding these differences is key to knowing how to engage and equip this new group of health care consumers.

  Deloitte Center for Health Solutions _ Public Health Insurance Exchanges Infographic

To download the full report, visit www.deloitte.com/us/hix-consumer-experience.


Employing wellness: The employer’s role in promoting health

by Harry Greenspun, MD, Director, Deloitte Center for Health Solutions, Deloitte LLP

My 13 year-old son Luca recently took up cycling. Inspired by my wife’s cycling prowess (see the June 30, 2015 Health Care Current), we created our “Tour de Pain” – family rides ranging from 15 to 65 miles amid the spectacular scenery in and around Washington, DC. When I was at work, Luca would ride on his own. With each stage we did together, it became clear that Luca was getting stronger, while I was simply getting older.

Determined to catch up, I considered investing in an indoor spinning bike so I could train before or after work (or even during excruciatingly long conference calls). But, doing my research, I found the prices steeper than some of the hills I struggled to climb. Much to my delight, Deloitte offers its employees a wellness benefit that can defray some of the cost of fitness equipment, making a sophisticated bike quite affordable. A few clicks and a few days later, it arrived at my door.

Deloitte is one of the many employers that offers some type of wellness program or incentive to their employees. By the latest count, 70 percent of employers offer general wellness programs – this can include newsletters, smoking cessation programs, health fairs, on-site fitness centers and more.1

It makes sense: The US is struggling with an epidemic of “lifestyle diseases” derived from unhealthy behaviors. Inactivity, poor nutrition, tobacco use and frequent alcohol consumption are just some of the issues contributing to this epidemic. And, because employers play a significant role in the provision and financing of health insurance – more than half the US population is covered by employer-based insurance – many have begun seeking ways to encourage healthier lifestyles among their employees.2

But, as employers continue to adopt wellness strategies that aim to encourage health, lower absenteeism and presenteeism and reduce health care expenditures, there are skeptics.

Many privacy advocates believe that giving employers access to sensitive health information puts employee privacy at risk. With the advent of fitness-related wearables, there is also concern that employers could use them to track employee whereabouts.

Some patient advocates are concerned that cost savings will be achieved at the expense of the disabled or unhealthy. The Affordable Care Act (ACA) increased the amount that employers can incentivize their employees for participating in health-contingent wellness programs. Employers can reduce insurance premiums by 30 percent if employees complete health-contingent action items. But in 2014, the Equal Employment Opportunity Commission (EEOC) filed several lawsuits against employers, challenging that requiring employees to submit to biometric testing and health risk screening may force employees to provide health information that is not job-related or required by business necessity. The Commission also challenged organizations that had what it deemed to be excessive penalties or rewards for participation in employer wellness programs. Then earlier this year, the EEOC published a proposed rule to reconcile the Americans with Disabilities Act (ADA) and current tax incentives for employer wellness programs. This proposed rule is intended to supplement earlier regulations issued by the US Departments of Labor, Health and Human Services, and Treasury. It clarifies how employers can promote better health without violating ADA prohibitions against using excessive penalties or rewards that essentially make the programs mandatory.

Finally, even some of the “believers” are skeptical that employee wellness programs will limit or reduce health care costs. Results from Deloitte’s 2013 Survey of US Employers found that while 36 percent of employers use health improvement tactics as part of their strategy, only 25 percent believe this will have a high impact on managing or reducing health care costs. Another survey found that fewer than half of employees (46 percent) have had clinical screenings or completed health risk assessments (HRA), which are used to identify employees for lifestyle health interventions.3 

However, according to Deloitte’s 2013 Survey of US Health Care Consumers, nearly one in five consumers covered by employer-sponsored insurance participated in a healthy living or wellness program to help them improve their health. Healthier employers can reduce absenteeism and improve productivity.

Ultimately, employers are likely to continue using wellness strategies – not only to encourage healthy habits among their employees, but also to bolster recruitment. For now, the question is how to proceed amidst the conflicting viewpoints, regulations and study findings on return on investment. Though subsidizing a gym membership seems straight forward enough, evidence suggests that disease management programs are more effective at limiting costs.4 Today, one of the best strategies for organizations may be to have a multi-faceted approach to their wellness programs so that their employees have several options for engagement.

I am fortunate enough to be healthy, but I also recognize I need to get into better shape. It’s likely I would have purchased the spin bike on my own, but my employer’s program certainly made the decision easier. Time will tell how this and other programs, bolstered by flexibility built into the ACA, will get me and others to make healthier lifestyle choices. For now, I have run out of excuses not to exercise, so when Luca and I are not out biking on the road, I will be sweating in the basement while wondering if our program will also cover the cost of a defibrillator.  


Read the entire Health Care Current here and subscribe to receive weekly updates.


Harry Greenspun, MD, Senior Advisor, Health Care Transformation and Technology, Deloitte Center for Health Solutions, Deloitte LLPDr. Greenspun, director with the Deloitte Center for Health Solutions, Deloitte Services LP,  serves health care, life sciences and government clients on key innovation and clinical transformation issues. He was named one of the “50 Most Influential Physician Executives in Healthcare” by Modern Healthcare, co-authored the book “Reengineering Healthcare” and has served on advisory boards for the World Economic Forum, WellPoint, HIMSS, and Georgetown University. He previously served as the CMO for Dell.
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3 Mattke, Soeren et al.

4 Caloyeras, John, Liu, Hangsheng, Exum, Ellen, Brderick, Megan, and Mattke, Soeren. Manging Manifest Diseases, But Not Health Risks, Saved PepsiCO Money Over Seven Years. Health Affairs, 33, no. 1 (2014): 124-131. http://content.healthaffairs.org/content/33/1/124.full.html


Value-based care: Why life sciences should be at the table

by Mary Cummins, Principal, Deloitte Consulting LLP

The accelerating move toward value-based care is resulting in new health care delivery structures, changing payment models, and new roles for everyone from physicians and care providers to payers, employers, and consumers themselves. At the national and local levels, there is debate on “who should be at the table” to drive this progress. Where do life sciences companies fit in? Do they have a seat at the value-based care table?

The short answer? Yes.

The move from volume-based care delivery to an ecosystem that values better health outcomes and effective cost-containment is usually discussed from a provider or plan perspective. Less attention has been paid to the role life sciences organizations are and should be playing in the evolving health care ecosystem.

In a recent meeting with biopharma and medtech clients, our conversation turned to the dramatic acceleration of value-based care. Until quite recently, many executives in the provider sector have been skeptical about the move to value, or have taken at best a “toe in the water” approach. Not surprisingly, many life sciences executives have followed suit. Many of us remember the undelivered promises of managed care from the 1980s and 1990s, and of course, all health care players still have much to earn through the existing fee-for-service model.

But now government and commercial health plans have set clear timelines for incorporating value-based care incentives into the majority of their payments.

In local markets, providers and plans have been coming to the table to create new partnerships and alliances and to invest in capabilities to effectively manage care as well as financial risk. Over the past year in particular, we have seen a growing set of health care players strengthen their core capabilities to rethink and integrate clinical workflows across organizations and sites of care, collect and analyze data for specific patient populations, and pilot new payment models. At the same time, new entities are emerging with a singular focus on improving transparency for cost and quality to further drive progress through better health care decision- making.

While change has already begun, providers and health plans still have a long way to go to achieve the goals of the Triple Aim and to deliver more value in a way that ensures their own business models are sustainable. The care continuum - physician practices, hospitals, post-acute skilled nursing facilities, home health providers, and so on - looks different by locality, as do patient characteristics. Although the market is experimenting with strategies to share risk through new payment models, some of which have shown early results, it is unclear if these will be scalable across diverse delivery systems and patient populations. As a result, there is no consensus on how best to design a system or a simple pathway to deliver lower costs and improved quality.

Despite the lack of consensus on how to make value-based care work, life sciences companies are already being impacted by this volume-to-value shift. In our meeting, the pharma and medtech executives were swapping stories on a range of topics regarding value-based care. They focused on the increasingly high hurdles to demonstrate value, a pharmacy benefit manager’s plans to set pricing for cancer drugs based on efficacy in different tumor types, and the intensifying public debate over affordability of even the most clinically impressive medicines.

One executive was calling out the growing trend for hospitals to significantly restrict the numbers of device suppliers with which they contract. Two things struck him about this trend. First, was the fact that even academic medical centers, which have historically welcomed a diversity of choices given their research and teaching missions, are starting to discuss and explore this streamlining. Second, he noted that this is not simply a continuation of previous cost-focused supply chain initiatives to improve purchasing power and inventory management, but rather intended to drive better outcomes by eliminating unnecessary variability in standards of care.

The headlines tell stories of biopharma and medtech companies redesigning their customer teams to better align with consolidating provider organizations and adopting new contracting models (e.g., pay-for-performance) for drugs and implantable devices. However, the strategic implications of a shift to value for biopharma and medtech companies go far beyond these moves. Succeeding in a value-based world means a new value proposition for life sciences companies. They will no longer be able to compete by focusing on clinical innovation alone, but will need to deliver innovation, through their portfolios of products and services, that drives economic value in addition to improved clinical outcomes.

Some leaders are already rethinking their portfolio of offerings to create new standalone services, while others are making more modest investments in wrap-around solutions such as patient-oriented apps to support treatment compliance and provide coaching for behavioral change. New strategic collaborations are beginning to form between life sciences companies, providers, plans, and entrants such as technology players to identify, deliver, and drive value across the health care system.

In addition, companies will need to build new capabilities to deliver on the value of their portfolios. These new capabilities span the entire life sciences enterprise from R&D to commercial operations and throughout the supply chain. Some examples include rapid incorporation of real world evidence into decision-making, faster investment cycles to drive new product development on this new view of unmet needs, robust actuarial capabilities to enable pricing models commensurate with reductions in total health care costs for specific patient populations, and segmented commercial models to engage with new decision makers.

And finally, as life sciences companies consider their strategies, they will need to make choices on how to build advantage through scale and/or therapeutic focus. These choices are already playing out in the market and continue to fuel M&A activity and asset swaps.

At my client meeting we discussed what these changes mean for life sciences leaders who need to operate in this heterogeneous and fast-changing set of local markets while still managing the scale of a national and global business. However, I believe this also creates an opportunity for life sciences companies who understand the emerging archetypes within the market and can engage their customers in assessing where both clinical and economic value is leaking from the system and how to address it – making them highly valuable innovation partners “at the table” with providers and health plans. This vantage point, combined with impressive resources – scientific expertise, deep knowledge of disease management and treatments, and analytic capabilities that extend beyond data integration to drive true insight – will set the life sciences leaders apart.

These leading companies will do more than just have a seat at the table. They will set the pace for value transformation and differentiate themselves from competitors by becoming indispensable partners to fuel the next-generation of innovation as the health care ecosystem continues to evolve.



Mary Cummins is a principal with Deloitte Consulting LLP, in the Life Sciences and Health Care strategy group and is leading multiple cross-sector initiatives for the Value-Based Care practice. Mary works with CEOs and management teams to redefine strategy and achieve operational transformation in the changing health care ecosystem. Her track record spans more than 20 years of delivering growth and improved profitability for a broad portfolio of life sciences clients as well as providers and payers, and her experience covers global leaders as well as earlier stage growth companies and non-profit organizations.
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Precision medicine: Bridging the gap between potential and reality

by Terri Cooper, PhD, Principal, Federal Health Sector Leader, Deloitte Consulting LLP

Twenty-six years ago, researchers announced they had discovered the gene that causes cystic fibrosis (CF).1 Just three years ago, the US Food and Drug Administration (FDA) approved Ivacaftor (Kalydeco™), the first drug to target the underlying cause of CF: a faulty gene and its protein product. KalydecoTM  is now approved for use in about 10 percent of patients who have particular genetic mutations. Though there is more work to be done to develop targeted therapies for patients with CF, the discovery of the gene and the decades-long quest for a targeted, effective treatment is a precision medicine success story.

Some diseases like CF and Huntington’s disease stem from an error in a single gene. Unfortunately, many other, more common conditions (e.g., depression, autism and schizophrenia) likely result from the interaction of several genes and other factors. These can take years to identify. And even in the case of CF, multiple therapies may need to be developed to target different mutations. As another example, because cancers are caused by multiple mutations, it has long been recognized that it is not a disease that can be treated with a single therapy. Even cancers of the same tissue or organ vary significantly in their molecular details and have different responses to treatments.

Precision medicine offers the potential for more targeted therapies – targeting treatment to positively responding patients – and reducing adverse events. A recent report from the Tufts Center for the Study of Drug Development shows that investment in precision medicine has nearly doubled in the last five years.2 Despite this growth in investment, we would be remiss to forget that targeted treatments still have to go through the rigorous and costly research and development process. And because the treatments may only be used for a small subset of patients, the return on investment is potentially reduced. It is both in spite of and because of these challenges that momentum around precision medicine is gathering like never before.

The President announced the Precision Medicine initiative in January, and funding for it is included in the President’s Budget. The 21st Century Cures Act, which includes a provision around precision medicine as well as many other ideas to spur biomedical innovation, just passed the House of Representatives this month. Finally, last month, the National Cancer Institute (NCI) launched its “precision cancer” effort (see the June 9, 2015 Health Care Current) and the American Society of Clinical Oncology (ASCO) announced the Targeted Agent and Profiling Utilization Registry.

These initiatives are exciting to track, but both the Tufts report and a recent Deloitte report, “In the face of uncertainty: A challenging future for biopharmaceutical innovation,” explain that there are still challenges to overcome in biopharma innovation. Scientific uncertainty and uncertainty around the regulatory and insurance coverage landscape continue to hinder innovation. Companies face challenges on the scientific front in the areas of biomarker identification and diagnostic test development. The report, “The current and future state of companion diagnostics,” discusses the challenge around aligning incentives of the multiple stakeholders in the area of companion diagnostics.3 Regulators and payers want to see clear evidence of safety and efficacy. With the health care system transitioning toward value-based care, providers want to select a therapy based on diagnostic testing that compares similar therapeutics against one another. Drug developers want to see compelling economic incentives for the continued investment of time and money.

Companion diagnostics offers solutions to some of these challenges: Regulators see the potential for more directed regulatory submissions with fewer adverse events based on targeted therapies, while payers see the potential for fewer unnecessary treatments. Drug developers can achieve faster time to market with less expensive clinical trials for drugs with significant revenue potential. The uptake of targeted therapies, such as Herceptin® (trastuzumab) and Gleevec® (imatinib mesylate) which require testing with companion diagnostics before they can be prescribed, demonstrates the rapid evolution of companion diagnostics and the potential that some the above-mentioned challenges can be overcome.

I am encouraged by the momentum precision medicine is gaining. Dr. Francis Collins, Director of the National Institutes of Health, remarked at the annual Biotechnology Innovation Organization (BIO) International Convention recently that medical knowledge is far outpacing treatment gain, but that the Precision Medicine Initiative will greatly enhance our ability to take precision medicine from a promise to a reality. What is most exciting to me is the collaborative ecosystem that is emerging from these announcements. Examples like the NCI’s precision cancer effort and ASCO’s initiative both illustrate what can happen when the different stakeholders come together under the shared goal of getting the right treatment to the right patient at the right time. In the NCI example, the Molecular Analysis for Therapy Choice (MATCH) trial is currently enrolling thousands of patients with intractable cancers in 2,400 clinics around the country. Ten pharmaceutical companies are providing more than 20 drugs – some that are currently on the market and others that are still in development – to be tested on different gene mutations during the first few months of the trial. ASCO’s Targeted Agent and Profiling Utilization Registry will collect real-world evidence on the outcomes of patients with advanced cancers who receive molecularly targeted drugs for uses not approved by the FDA.

Both of these large initiatives require a high level of coordination between the clinical trial networks, the pharmaceutical companies providing the drugs and the patient advocates who were engaged in the development of the trial and who will help oversee the protocols and other aspects of the study. Learnings from these initiatives could help demonstrate the power of informatics, connectivity and collaboration to spur biomedical innovation.

Currently there are around 7,000 known rare diseases. We have treatments for around 500 of them. In many ways, we are just setting out on the precision medicine path. If we can keep up this momentum, we may be well-positioned to make more ground-breaking discoveries that lead to many more cures.


Read the entire Health Care Current here and subscribe to receive weekly updates.


 Terri Cooper, Principal, Deloitte Consulting LLP Dr. Terri Cooper is a Deloitte Consulting LLP Principal, Lead Client Service Partner for the NIH, and the Federal Health Sector Leader. Previously, Terri served as the National Life Sciences R&D practice leader and the National Inclusion Leader for Consulting. She has more than two decades of experience in the LS industry and has provided a broad range of strategic advisory services. She holds a Joint Honors BS Degree in Chemistry/Pharmacology and a PhD in Pharmacology from the University of London.

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2 Personalized Medicine Coalition and PhRMA, “Biopharmaceutical Companies’ Personalized Medicine Research Yields Innovative Treatments for Patients,” 2015: https://www.genomeweb.com/sites/default/files/public/downloads/news/pmc-phrma-personalized-medicine-investment.pdf
3 The FDA definition of companion diagnostic: A companion diagnostic device can be an in vitro diagnostic device or an imaging tool that provides information that is essential for the safe and effective use of a corresponding therapeutic product. The use of an in vitro diagnostic companion device with a particular therapeutic product is stipulated in the instructions for use in the labeling of both the device and the corresponding therapeutic product, as well as in the labeling of any generic equivalents and biosimilar equivalents of the therapeutic product.


The risk-intelligent board: Rethinking the approach to risk oversight

by Tom Aaron, Partner, Deloitte & Touche LLP

Recent front-page developments in health care – the Supreme Court’s King v. Burwell decision, potential national payer mergers, and continuing cyber-attacks – lead me to wonder whether boards of directors should be rethinking the frequency of their enterprise risk oversight activities.

Until recently, many governing boards of leading health systems have conducted their formal enterprise risk oversight on an annual basis, with management performing its annual assessment and review in advance of the board meeting.

Of course, as key developments occur throughout the year, management and its board perform some form of responsive enterprise risk activities, though not with the rigor of the annual review.

In the past, a comprehensive annual review might have been enough to adequately assess, manage, and respond to risks facing management and the enterprise. In this era of transformative health reform, governance oversight needs to be regular, vigilant, and more adaptive to shifting market and consumer demands.

That’s not to say boards should be leaning over the shoulders of their management teams and IT operations on a daily basis. Day-to-day risk management is the work of senior management and department heads.

In order to optimize their risk oversight, board members should continuously engage in risk management oversight. Attaining a high level of risk management “maturity” to better handle emerging marketplace, regulatory, IT, and other challenges is a modern-day priority.

Especially in urban markets, health reform is reshaping competitive landscapes and payment models in ways that, while not matching the national headlines of the aforementioned topics, can quickly impact a provider organization’s strategy and risk profile.  For example, even if management is taking a “wait and see” health reform approach, governing boards should be asking “what could go wrong?” with this strategy as part of their ongoing risk oversight activities.

Health reform is already causing organizations to modify or change their strategies.  Depending on the complexity and operating effectiveness of the organization, this is not always easy or able to be done in a timely way.  For example, organizations that have underinvested or have historically “patched” older information technologies and may not be ready to effectively perform under value-based payment or population health management models.

Also, just as organizations with strong operating performance and balance sheets are better positioned to respond to the changing marketplace, weaker performing and less liquid organizations will be more challenged by the changes and have fewer strategic options.

Risk is arising from regulatory, cyber, and consolidation activity. While many health care organizations already have initiated their health reform strategies, the Supreme Court decision has confirmed the overall direction and may elicit more comprehensive or aggressive strategies from organizations and their competitors. More frequent and new forms of cyber-attacks and potential changes in the payer market are intensifying the rate of change in the industry.  These sources of risk, among others, demand that organizations’ risk management processes keep pace.

At Deloitte Advisory, we’ve developed a Risk Intelligent Enterprise™ framework that consists of three levels to help industry participants manage risk and gain that competitive advantage. These are designed at each level to develop and deploy workable strategies, bolstered by sustained and continuous improvement.

The first level is putting in place the highest degree of risk governance, as boards of directors set the strategy and tone at the top for an effective system of oversight – and thoroughly reviewing their approach, processes and structure no less than once a quarter.

Second is developing an infrastructure that effectively incorporates an organization’s people, policies and technology at each step of the process. Risk management works best when it as widely inclusive as possible.

The third is understanding the challenges an enterprise faces in the current environment. An effective real-time process of risk identification, assessment, and response needs to be established, followed by the design, testing, and implementation of controls.

The risk-intelligent board understands that risk oversight is a continuous responsibility, and that it’s not just about avoidance and mitigation, but that risk-taking as a means of effecting true value creation occupies an equally important role.



AaronTom has 30 years of experience providing audit and accounting, consulting, and tax services to health care and insurance entities. His experiences include assistance in health system formation, initial public offerings, acquisition and divestiture due diligence for financial and strategic buyers, bankruptcies, litigation support, internal controls and implementation of managed care strategies. 

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Why health care is not “status quo”

by Anne Phelps, Principal, US Health Care Regulatory Leader, Deloitte & Touche LLP

The US Supreme Court decision on June 25, 2015 to allow premium assistance tax credits to continue through federally-facilitated Exchanges resolves an important underlying question around a major coverage provision in the Affordable Care Act (ACA). The decision removes the threat of 6.4 million people losing federal help to purchase health insurance this year and gives health plans and providers greater certainty heading into the open enrollment period for 2016 (see the June 25, 2015 Health Care Current Special Edition).1

In the days following the Court’s decision, I heard many comment, “Now we are back to status quo.” In my 26 years of health policy experience, I have never considered health care to be “status quo.”

Yes, the ruling in favor of the Administration provided some certainty in the insurance markets regarding the status of Exchanges. But, we are still facing a time of incredible change in health care that is certain to keep us on our toes. Health care providers and plans are experimenting with innovative models to finance and deliver care, not just as a result of the ACA, but on their own accord and to adapt to a changing marketplace and consumer demand. We still have large numbers of uninsured in the US whom providers, plans, and states are seeking to bring into the system through expanded outreach efforts and coverage options.

There also are major regulatory developments coming down the pike beyond 2015 at both the federal and state levels. Now, the Administration will be working to finalize regulations on key provisions of the ACA before President Obama leaves office in January of 2017. For example, regulators will be working on new rules that will set the stage for states who wish to seek “Innovation Waivers” to start reshaping their insurance reforms and mechanisms to expand coverage in 2017. Another provision of the ACA that takes effect in 2017 will open the door to allow large employers (100+ employees) to purchase coverage through health insurance Exchanges previously only open to smaller employers.

Perhaps most notably, the Administration will issue new regulations regarding the excise tax on high-cost employer-sponsored coverage (the so-called “Cadillac” tax), which will take effect in 2018. The imposition of this new tax could drive companies to offer less generous health care benefits to employees. The movement toward less generous employer-sponsored coverage could in turn prompt health care plans and providers to re-evaluate their products, payer mix and services.

The next presidential election is widely considered to be the most significant upcoming event for health care in the next 18 months. Regardless of who is elected on November 8, 2016, it will mark the first time someone other than President Obama will have stewardship over the ACA and responsibility for developing regulations to implement the law. A new Administration might revisit some of these regulations, raising prospects for health care providers, plans and other stakeholders to re-open certain rules and put forward alternative approaches for consideration.

Beyond the ACA, the next Administration will bear considerable influence over the implementation of the recently enacted Medicare physician payment law, which aims to more closely align Medicare reimbursements with health care quality and outcomes (see the April 14, 2015 Health Care Current). The next Administration largely will determine how new incentive payments for providers in traditional care delivery models will be developed and refined over time.

The Supreme Court steadied the ground beneath our feet. But health care is anything but “status quo” and we are a far cry from standing still in one place. We must continue to look ahead to the changing health care landscape, plot our course and travel full speed ahead.


Read the entire Health Care Current here and subscribe to receive weekly updates.


Anne PhelpsAnne Phelps is a principal with Deloitte & Touche LLP and the US Health Care Regulatory Leader. She has over twenty-five years of health care policy experience having worked in federal agencies, the US Senate, the White House and in consulting firms. She serves as a strategic business advisor to numerous health care stakeholders - including providers, health plans, employers, and life sciences companies - helping them navigate the complex health care regulatory environment and how it will impact their organizations. 

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1Centers for Medicare & Medicaid Services, “March 31, 2015 Effectuated Enrollment Snapshot,” June 2, 2015.


How digital health apps can become a change agent for health care

by Karen Taylor, Director, UK Centre for Health Solutions

In the report Connected health: How digital technology is transforming health and social care, the Deloitte UK Centre for Health Solutions highlighted the increasing pervasiveness of health apps and an urgent need to help patients and clinicians understand the efficacy and effectiveness of individual apps. We noted that, depending on definition, there are more than 100,000 health apps available to download from the various app stores; with the sheer number and variety of apps confusing clinicians and patients alike. Research in October 2013 that focused on 43,000 wellness, diet and exercise apps found that only 23,682 had a legitimate health function and most had limited and simple functionality. Indeed around 50 percent achieved fewer than 500 downloads. 

Importantly, many health apps do not support the areas of greatest demand in health care – namely patients with multiple chronic diseases, typically over the age of 65. These patients are generally among the top health care consumers yet smartphone penetration, which is the key driver behind the explosion in health apps, is lowest among this group (albeit growing at the highest rate).

Despite clear consensus from most stakeholders that health apps have significant potential to support patient self-care and reduce the demand on health care systems, their use has yet to be mainstreamed. A key reason for this is a lack of user, both clinician and patient, involvement. A new report "What do patients and carers need in health apps - but are not getting?" identifies ten key recommendations that would support better patient self-care and provide more sustainable models for app developers. The research for the report comprised the views of 1,130 patient and carer groups worldwide, supplemented by a multi-stakeholder meeting.1

The research found that some of the key uses that patients want from health apps include:

  • Helping them understand and manage their medical condition and treatments (61 percent)
  • Providing practical support, such as care planning (55 percent)
  • Supporting their communication with their doctor or nurse (45 percent)

However, most responses suggest that they are still not able to do so. Furthermore, while many health app developers report that they are keen to include patient and clinical input into their development process, they have found it difficult to engage meaningfully with users or understand their needs in order to translate them into better apps.

The survey revealed unmet needs across many areas, but five areas were felt to be particularly poorly supported: cancer, diabetes, disability (pain relief and management), mental health, and wellness. Based on the findings of the survey and the workshop, the ten recommendations aimed at improving patient self-care and help app development are:


  1. Involve patients: Establish a transparent, fair, and sustainable way to involve patients, patient groups and carers in app development
  2. Address unmet needs: Identify and address truly unmet patient and public needs, and switch the balance from information-giving and trackers to tools that help patients put this knowledge and data into action, enabling them to self-manage
  3. Set up a one-stop advice shop for developers: In one place, provide them with definitive, up-to-date guidance on key issues such as regulatory requirements, clinical approval methods, best practice in involving patients, and horizon-scanning on technological developments, issues and opportunities
  4. Share best practice: Identify, develop, and communicate models of best practice, for example in involving patients and carers in identifying unmet needs
  5. Gain “air time” for quality apps: Identifying ways for developers of quality health apps to market and differentiate themselves from the many products available
  6. Find the business model: Identify sustainable business models for apps, and make this funding transparent to browsing consumers
  7. Demonstrate clinical rigor: Confirm and clarify the clinical approval requirements which apply to health apps
  8. Bring apps into the mainstream: Integrate them into wider and “real-world” health care solutions, rather than remaining fragmentary “add-ons”
  9. Future-proof apps: Make them sustainable and adaptable to future changes 
  10. Enable informed choices to be made by patients and carers about health care apps, for example by raising standards of digital/app/mhealth literacy, and gaining clinician input on recommending and prescribing apps.2

 Meanwhile, a hospital in the US has developed a more direct approach to helping patients and clinicians navigate the confusion of health apps and associated technology. HealtheConnect, an on-site, physical store located just off the hospital’s main lobby was launched at the end of 2014 by Morristown Medical Center, a part of the Atlantic Health System in New Jersey. The aim is to provide advice and support to patients, family members, and medical professionals by helping them learn about health apps and wearable devices through health app curation and technology evaluation. The idea was developed in response to an increase in the number of patients seeking advice on which apps clinicians would use.3

 Twenty-four physician leaders, one from each of the facility’s clinical areas, reviewed patient-facing health apps relevant to their area of expertise. Most were amazed at the amount and quality of information that was available and many of them subsequently started talking to their own patients and other members of their staff about the quality of the apps that they saw. Physicians now use a special mobile app prescription pad that patients take to the HealtheConnect store where a member of the health IT team walks the patient through how to install and use the app. The evidence suggests that providing this human interaction is a more effective method of engagement and supports the behaviour change that is needed to change how clinicians and patients interact.4

While an on-site physical store in every hospital is unlikely to find favor with many organizations we believe this example and the recommendations in the above research report re-enforce the findings of our own research for the Connected Health study; that patient and clinician engagement in technology development is vital to its adoption. Without it, the potential for digital health and the rise of health consumerism to be a true change agent for the practice of health care will be undermined.

 This post originally appeared on the Deloitte UK Centre for Health Solutions blog, "Thoughts from the Centre."


TaylorKaren Taylor is the Research Director of the Center for Health Solutions. She supports the Healthcare and Life Sciences practice by driving independent and objective business research and analysis into key industry challenges and associated solutions; generating evidence based insights and points of view on issues from pharmaceuticals and technology innovation to health care management and reform.
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What do patients and carers need in health apps - but are not getting?, A report by PatientView, in conjunction with Health 2.0 and TICBioMed, co-ordinator of the EU-funded GET project. June 2015. 
4 Ibid


The peloton of health care: Breaking away from the pack

by Harry Greenspun, M.D., Director, Deloitte Center for Health Solutions, Deloitte LLP

My wife, Kerry, recently returned from a 10-day cycling trip in Italy, staying in a beautiful hotel near Tuscany that caters to professional cycling teams. Kerry’s group typically rode 50 to 70 miles each day through the countryside, culminating in a grueling 120-mile “gran fondo” with more than 12,000 feet of climbing. A highlight of the trip was when she watched at the finish line of one of the stages of the Giro d’Italia, a premier cycling race, along with the Tour de France and the Vuelta a Espana. 

While she was away, the boys and I got by as best we could, frequently falling back on the loneliness exception to our “no bad dessert” rule. One evening, ice cream sundaes in hand, we watched TV coverage of the Giro d’Italia. In most competitive cycling races, you can watch as the peloton – the main pack of riders from all teams – moves along together. Riders do this to save energy by remaining close. At some point, a “breakaway” group emerges. In it, competing riders have to work together, leading or drafting off each other to maintain their distance from the pack. Ultimately, there is a winner at the finish line, but in a multi-stage race, those who finish before the peloton still gain advantage, even if they do not win the stage.

This concept struck me recently while I led a panel discussion with representatives from organizations that are often viewed as competitors in health care: a large health plan, a health care system, a pharmaceutical company and a former government leader. In the traditional fee-for-service environment, success for one often comes at the expense of another. However, as progressive organizations focus on outcomes and react to the government’s priorities for value-based care, they have created remarkable synergies in their approach to the market.

The upcoming Deloitte Center for Health Solutions paper, The convergence of health care trends: Innovation strategies for emerging opportunities, outlines four colliding trends that are changing the health care landscape. New technologies, a demand for value, the growing health economy and influential government policies are creating growth opportunities and pushing health care organizations to innovate. Like the peloton that creates both forward momentum as well as some dramatic collisions for riders, these converging trends will create opportunities and challenges for innovation among industry stakeholders.

In particular four significant areas rise to the surface:

  • The shift from the traditional health care facility to “Everywhere care”
  • Wellness and preventive care
  • Personalized care
  • Aging, chronic and end-of-life care

“Innovation plays” that leverage all four of these colliding trends to utilize new technology, expand delivery options and access, improve patient experiences and form industry partnerships may help organizations gain a competitive edge in the changing health care landscape. For example, an organization seeking to capitalize on the challenge of wellness and preventive care could simplify and integrate the “monitored self” by harnessing a platform that aggregates consumer data from point-of-care devices and consumer actions, and seamlessly integrates them into the care system. Similarly, the shift to personalized care could create an opportunity for organizations to develop combinations of treatment, diagnostic, and care protocols that are optimized for impact and ease of use based on individuals’ specific needs.  Successful implementation of these programs will likely require collaboration across many industry stakeholders.

As the industry begins to tackle these innovation plays, there will be some tough uphill climbs. Connectivity is an area that all stakeholders are facing. One of the panelists said that while he believes that collaboration among the multiple stakeholders is challenging, it is doable. He cautioned that if 12 individual health plans designed their own proprietary systems, then there will be 12 that no one uses. Many organizations are already realizing this. These are the organizations that are breaking away from the peloton of the larger health care system and working in parallel with each other to differentiate themselves from the pack and address the needs of health care consumers.

The future of health care will likely be based on collaboration among competitors across the system, where everyone has the same shared capabilities and data standards. This may require some individual entities to invest in tools for population management, even if it benefits other organizations in the system. Along the way, members should be at the center of these initiatives and their data should be a tool to move toward value based care.

Ultimately, there will still be winners and losers. Just as in the Giro, leaders emerge and aggressively sprint to the finish to win the stage just ahead of the others in the breakaway. But by working together, they all finish ahead of the pack.


Read the entire Health Care Current here and subscribe to receive weekly updates.


Harry Greenspun, MD, Senior Advisor, Health Care Transformation and Technology, Deloitte Center for Health Solutions, Deloitte LLPDr. Greenspun, director with the Deloitte Center for Health Solutions, Deloitte Services LP,  serves health care, life sciences and government clients on key innovation and clinical transformation issues. He was named one of the “50 Most Influential Physician Executives in Healthcare” by Modern Healthcare, co-authored the book “Reengineering Healthcare” and has served on advisory boards for the World Economic Forum, WellPoint, HIMSS, and Georgetown University. He previously served as the CMO for Dell.

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State Medicaid programs: A tale of two Commonwealths

by Sarah Thomas, Research Director, Deloitte Center for Health Solutions, Deloitte Services LP

I have had the chance to work in state government twice in my career. In fact, I have worked in two Commonwealths: Massachusetts and Virginia. Anyone that has spent time in both knows that the two states are very different. Massachusetts has the Red Sox, while, when I was living in Virginia, I spent a lot of nights going to AAA baseball games. Bostonians celebrate Patriots Day, while Virginia is now known as the Oyster Capital of the East Coast. They also opted into Medicaid at different times—Massachusetts in 1966 and Virginia in 1969.1

Historically, US Centers for Medicare and Medicaid Services (CMS) has given states latitude to tailor their Medicaid programs to the individual populations they serve. CMS set policies like mandatory benefits and minimum standards on what populations need to be covered and the Federal Medical Assistance Percentage, which determines how much federal funding states receive for their program. But, outside of these federal policies, state programs vary along many dimensions. Some states have been innovative, taking advantage of flexibility in the law to “waive” various provisions to run the programs their own way. Others have taken a highly regulatory approach. Some states have relatively generous payment rates for managed care plans, and in other states, many managed care plans struggle to stay above water.

Just a few weeks ago, CMS proposed a rule that would make updates to policies for Medicaid managed care for the first time in more than a decade (see the June 2, 2015 Health Care Current). The proposed rule aims to create more national standards for the Medicaid programs using managed care and to align them with standards for exchange plans. It includes access, quality, managed long-term services and supports and rate-setting provisions and also proposes to cap how much of health plans’ premium dollars should be spent on administrative costs.

When I worked in Virginia, many states were just beginning to develop managed care programs for mothers and children. But today, Medicaid managed care is no longer an experiment. Now, 39 states and the District of Columbia have managed care programs, paying $115 billion to plans which earned $2.4 billion in operating profits last year. Nearly one in four Medicaid beneficiaries are in managed care plans.2 In these states, private plans provide coverage and access with state oversight. Arizona and Tennessee have been pioneers in transitioning their entire Medicaid programs into managed care.

As states show more interest in moving their Medicaid populations into managed care and health plans become more engrained into Medicaid programs, the medical loss ratio (MLR) and network adequacy requirements proposals in the rule are likely to be in focus for these stakeholders. At a high level, these provisions have constructive goals: to make managed care plans more efficient and give enrollees better access to care.

But, two questions come to light around these policies and may get attention over the next several months.

Could setting an MLR for Medicaid managed care penalize health plans that use administrative dollars for programs that aim to reduce health care spending, including fraud and abuse? The proposed regulation would set a standard MLR of 85 percent. This would require managed care plans to spend no more than 15 percent of the premium dollars that they receive on administration and profit. The rest would need to go to medical care. A few years ago, the National Association of Insurance Commissioners, managed care plans, regulators and consumer advocacy groups debated a similar policy for commercial plans and a compromise was reached for these stakeholders. CMS is considering a policy that would differ from that framework a bit. For example, it would create an allowance for fraud and abuse spending.

Should network adequacy requirements be based on time and distance requirements that typically start from current care patterns and get set into regulation? States should continue to have oversight over Medicaid managed care plans to make sure that enrollees have access to care. But, access is more than how far away a provider is. Quality and availability also matter. Policies that allow managed care plans to negotiate with providers may help drive down costs even more. Narrow networks are one tool that plans have to negotiate with increasingly concentrated providers. Non-face-to-face visits (e.g., telephone and video appointments) also have enormous potential to help reduce costs. These visits often leverage care teams that do not always include physicians.

Health plans that can work with providers to drive better health outcomes may see opportunities to expand and increase their market share. Flexible administrative solutions may help organizations to more effectively respond to future changes and opportunities. Health plans can take steps to improve care delivery by creating incentives for providers that reward medical cost containment and improve health outcomes at the same time. States that respond to changes in regulations by maintaining a policy of openness and transparency with health plans may find more opportunities for collaboration in their Medicaid program. Ultimately, flexibility and creativity may be a key to managing this transition.

As stakeholders mobilize around this regulation, I hope they will keep in mind that while a core set of standard measures to evaluate quality can bring out opportunities for improvement and highlight innovations that are bearing fruit, states and managed care plans may need flexibility to continue innovating. Excessively rigid regulation can work against innovation. CMS should consider whether these standards align well with its goal (and states’ goals) to get plans to manage risk effectively and develop innovative ways to do this.


Read the entire Health Care Current here and subscribe to receive weekly updates.


Sarah Thomas, Director of Research, Deloitte Center for Health Solutions, Deloitte LLPSarah Thomas is the director of research for the Deloitte Center for Health Solutions. Sarah has experience in public policy, ranging from reimbursement to addressing issues such as quality in Medicare, Medicaid and the private health insurance market, including health insurance exchanges and marketplaces. She has more than 13 years of government experience.

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1 Kaiser Family Foundation, “A Historical Review of How States Have Responded to the Availability of Federal Funds for Health Coverage,” August, 2012, https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8349.pdf
2 Virgil Dickson and Bob Herman, Modern Healthcare, “New CMS rule could reshape Medicaid managed care,” May 30, 2015, http://www.modernhealthcare.com/article/20150530/MAGAZINE/305309986


US Supreme Court rules in favor of Administration: Tax credits will continue through all ACA Exchanges

by Anne Phelps, Principal, US Health Care Regulatory Leader, Deloitte & Touche LLP

Today, June 25, 2015, the United States Supreme Court ruled 6-3 in favor of the Administration to permit federal premium assistance tax credits under the Affordable Care Act (ACA) to continue to be made available through 34 federally-facilitated Exchanges, in addition to Exchanges established by the states, to help individuals purchase Exchange coverage.

The US Department of Health and Human Services (HHS) operates federally-facilitated Exchanges in states that have not established their own Exchanges under the ACA. Of the 7.3 million people who enrolled via ACA Exchanges in the open enrollment period for 2015 in states with federally-facilitated Exchanges, 87 percent were determined eligible for premium assistance tax credits.1

HHS currently operates federally-facilitated Exchanges in 34 states. Fourteen states (including the District of Columbia) as of 2015 have established their own Exchanges, and three states are considered to have state-based Exchanges but use the HealthCare.gov platform.

Basis for the decision

In the majority opinion, Chief Justice John Roberts wrote that “the Act’s context and structure compel the conclusion that [Internal Revenue Code] Section 36B allows tax credits for insurance purchased on any Exchanges created under the Act. Those credits are necessary for the Federal Exchanges to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.”2

The Supreme Court based its decision on a reading of the statute and Congressional intent to resolve the underlying issue in the case. Thus, the Supreme Court’s decision is not based on the Administration’s regulatory interpretation of the statute.

The path forward

The decision in the case marks the second time that the Supreme Court has ruled on a challenge to a major coverage provision of the ACA. The life sciences and health care sectors have been awaiting the Supreme Court’s decision with great anticipation given its potential impact on the health care marketplace.

In comments in the Rose Garden, President Obama said, “After multiple challenges to this law before the Supreme Court, the Affordable Care Act is here to stay.”3

The Court’s decision could drive some states to take the ACA back into their own hands and work toward establishing their own state-based Exchanges, but the looming 2016 presidential elections could prompt other states to continue to let HHS run their Exchanges while they wait to see what legislative and regulatory changes to the law will be made by a new Administration and Congress.

For more information on the decision and background on the King vs. Burwell case, see the Reg Pulse Blog post, “US Supreme Court rules in favor of Administration: Tax credits will continue through all ACA Exchanges.”

 Read the entire Health Care Current here and subscribe to receive weekly updates.

Anne PhelpsAnne Phelps is a principal with Deloitte & Touche LLP and the US Health Care Regulatory Leader. She has over twenty-five years of health care policy experience having worked in federal agencies, the US Senate, the White House and in consulting firms. She serves as a strategic business advisor to numerous health care stakeholders - including providers, health plans, employers, and life sciences companies - helping them navigate the complex health care regulatory environment and how it will impact their organizations. 
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1 “March 31, 2015 Effectuated Enrollment Snapshot,” Centers for Medicare and Medicaid Services, June 2, 2015.
2 Supreme Court of the United States, King et al v Burwell; Secretary of HHS, et al, Certiorari to the US Court of Appeals for the Fourth Circuit, No. 14-114. Argued March 4, 2015 – Decided June 25, 2015.
3 The White House Blog, “Live Updates: The Supreme Court Upholds A Key Part of the Affordable Care Act.”

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