For years, my son dreamed of being an officer in the US Army. Today, he is six years into that dream, serving as a Captain in the Armor Division of the First Infantry – Big Red One.
Because of his assignments in the US, Kuwait, and most recently in Iraq, it has been a challenge to get time with him. However, recently my wife and I rendezvoused with him on his way to a new assignment. The time went quickly, but we had a chance to meet his girlfriend, catch up on family, and his career plans. We also helped him make investment decisions with his savings. The Army provides a living allowance for officers while state side, and when he was deployed in theatre, his salary was tax free. It also didn’t hurt that there isn’t much you can spend your money on when you are on a base in Iraq. He had accumulated a nice sum that he wanted to invest.
We reviewed the past performance of his investment portfolio using his investment management company’s website, shopped for different funds, used the tools on the website to balance his portfolio given his age and investment goals, and completed trades and new investments. All of this took about 30 minutes—what once took days or weeks to execute with much less certainty or precision at a much higher cost can now be completed in minutes.
As I worked through this process with my son, I began to realize that the health plan of the future is easy to see. Just look around: the financial services industry has built a customer model that has made the complex simple, with transparency, low cost and the ability to meet each person’s unique investment needs anytime, day or night, and tools and information that guide them through the process.
New customer models that facilitate and enable customers to get the service, product and information they want, when they want it, and in the location they need it are everywhere. They’re becoming very familiar to many of us—and even more so for Millennials. Take Uber as an example. On demand, Uber’s app connects consumers to transportation, in the exact location where they need it and at a cost that meets their budget. It allows consumers to pay without hassle and lets them express their satisfaction (or dissatisfaction) with the service.
I believe the health plan of the future will not just help with the financing but will also be the facilitator and enabler of achieving health through a consumer-focused platform. The future health plan may simplify the complex, helping consumers get the services, products and information they need to achieve their health and wellness goals.
Today, there are many constraints that are holding us back from realizing the great potential these future health plans could deliver. Conventional provider networks, patriarchal ownership of clinical data, lack of transparency, payment complexity, rudimentary telemedicine capabilities, delayed adjudication of consumers’ financial responsibility for services, and little ability to estimate the cost of the health care services are but a few of the roadblocks on this journey.
But, companies seeking to be health plans of the future might use these roadblocks as jumping off points, seeking to turn convention on its head.
For starters, the health plan of the future may not rely on conventional provider networks. While each provider will probably still have an agreement with the health plan, patients would select their provider through an app or online platform that presents options based upon their search criteria, geography, and provider expertise. Then, based on their benefit plan and co-insurance, the member would be able to see how much services will cost. Advanced capabilities in this area would allow health plans to drive patients to providers based on the providers’ total cost of care and value, not just their discount levels. Value-based care payment innovations and delegation of care management would have co-insurance amounts calculated based on a holistic view of value as opposed to a transactional fee-based arrangement.
Future health plans may also leverage technology similar to that of Open Table. Members could book their appointment, review ratings posted by other patients, and confirm pre-visit requirements and payment options in advance. They would then download their electronic passbook coupon for the visit. Members might also give providers access to their cloud-based electronic chart, which could include their dates of availability and sections of their chart that should be kept private. For many visits, the provider practice could offer telemedicine as an option rather than the traditional in-person visit.
Once they complete their visit, members would pay their co-insurance using their account preferences. Service recommendations and programs the member is eligible for would be uploaded to their account, and their health savings account balance would be updated. Alerts – from a request to rate their provider to calendar reminders for follow ups and prescriptions – could all be built into this consumer platform.
In this new operating model, most health care providers would be responsible for managing their patient’s care needs and ensuring that the best possible outcome is achieved. In turn, health plans would provide tools and information to augment the patient’s knowledge and offer incentives and ad hoc programs to support the patient’s own goals for their desired health outcome.
Convenience and simplicity are fundamental to each of these operating platforms. But so is the creation of a marketplace where transparency, choice and reduction in switching costs hold the suppliers of the services accountable for cost, service and quality.
While this may seem too futuristic to drive today’s investments and operating model decisions, technology isn’t the barrier. Nor is it low consumer interest in a simpler, easier way to use the health care system. In fact, Deloitte’s 2015 Survey of Health Care Consumers found that 40 percent of surveyed consumers view the availability of an online tool that suggests the best plan based on their personal information as an important factor for choosing a health plan. This is likely to become even more critical as deductibles increase and consumers take on more of their health care costs.
I believe one barrier to this future state is that many health care market leaders and regulators are not ready to accept these new marketplace dynamics. But they may need to if they want to keep up. Otherwise someone else might do it for them.