Payers will need to develop engaging digital experiences for consumers in order to generate member loyalty and reduce the burdens of high costs.
Healthcare payers that hope to succeed in 2019’s competitive business environment will need to meet the strong demand for more consumer-centered digital experiences that help members control their spending and understand how to improve their own health, according to PwC.
The nation’s healthcare spending will continue its “unsustainably high” upward trajectory throughout the next 12 months, PwC’s Health Research Institute predicts, putting pressure on payers and their beneficiaries to engage in cost-effective services that produce high-value results.
Digital tools are likely to play a significant part in containing spending as consumers become more comfortable with the idea that the data they produce on a daily basis can be used to create personalized health experiences.
The report found that more than half of consumers are currently interested in using FDA approved applications or online tools to treat or manage a health condition, offering both payers and providers the chance to perform analytics that can help predict and prevent expensive exacerbations of chronic diseases.
“Seamless health data collection and sharing can help patients make positive lifestyle changes and can help physicians intervene to prevent poor outcomes,” the report stated.
“New entrants and technology firms—Apple received an FDA clearance in September for its smart watch ECG and an algorithm for detecting atrial fibrillation—will continue to develop products using their strengths, including user interface, consumer engagement and sensor technology.”
Consumers are eager to embrace the Internet of Things for home monitoring and health maintenance, the report added.
Sixty-two percent of consumers are likely to check their vital signs at home using a device connected to their smartphones, while just over half would be interested in a live telehealth consult using their mobile devices.
Similar numbers would want their pacemaker, ECG, or defibrillator data sent wirelessly to their physicians for monitoring, indicating a strong interest in forging proactive but passive digital relationships with their healthcare providers.
The report suggests that payers seek out partnerships with digital therapeutics companies that can use member data to provide more actionable insights into risk and potential spending.
“Digital therapeutics and connected devices may make it easier to construct value-based contracts and other outcomes-based financial models with payers and providers to drive adoption,” PwC notes.
“Subscription pricing for digital therapeutics or connected device solutions, for example, could make pharmacy spending more predictable and efficient.”
Crafting more engaging digital health experiences will be a key component of creating customer loyalty, even as prices rise, and attracting new members in lucrative market segments, including Medicare Advantage.
Consumers are feeling squeezed by ever-increasing deductibles, which have risen by more than 200 percent over the past decade for employer-sponsored plans, PwC says.
More than three-quarters of consumers are demanding increased price transparency as their out-of-pocket costs continue to creep upwards, putting the onus on payers to design plans – and the accompanying educational materials – that are simple to understand and cost-effective to utilize.
Uncertainty around the Affordable Care Act, which appears to be undergoing a near-death by a thousand cuts, will only compound the financial problems for payers.
The new federal focus on short-term health plans that offer skimpy coverage but low prices is likely to alter the individual market, while new “state flexibilities” for Medicaid will create a patchwork of regulations that may be difficult for payers to manage.
“Anticipating less robust coverage on individual and non-group markets due to the greater availability of insurance plans that don’t conform to ACA regulations, providers and payers should develop plans for triaging patients and members to lower-cost care options, including telehealth or in-home nurse visits,” PwC advises.
“Longer-term strategies should focus on tackling fixed costs, such as replacing certain physical infrastructure with virtual infrastructure and creating a value line of product and service options at different price points for patients.”
Turning to virtual experiences in this manner may produce favorable results for consumers as well as payers. Both payers and patients are likely to see reduced costs, while consumers will also receive the personalized, affordable digital interactions that they crave.
“Consumers with high-deductible health plans, Medicaid consumers and those without insurance all have varying needs for value lines,” the report observed. “They also have varying health needs and preferences that should be considered when creating these value lines.”
Payers that can successfully integrate digital health tools and consumer-friendly, cost-sensitive options into their plan offerings are likely to find success in 2019, PwC concluded.
“Change has come to the US health industry at last. Healthcare is joining other industries, such as financial services, that have aggregated data, cut out middlemen and made it easier for their consumers to engage,” says the report.
“The pressures of adapting to that change and seizing the opportunities it represents are spurring a wave of innovation in business models that hasn’t been seen in a long time. In 2019, these Americans may be one step closer to a system that serves them better and more conveniently at a fair price.”
Date: December 18, 2018