Is 2019 the Year Healthcare Becomes Consumer Friendly?

The year 2019 will finally be when the healthcare industry, particularly payers and providers, finally begins to catch up to other industries in terms of giving the consumer what they want. Really.

No matter whether you call this trend consumer engagement, consumer centricity, or something else, various forces are combining to make this a reality, even though the topic has been discussed and studied ad nauseum. To complete the transformation to value-based care, payers and other parts of the healthcare industry have to be able to influence the member, patient, or consumer, no matter what label or name they’re given, according to recent interviews looking to the year ahead.

It’s the first time Tom Wicka, chief executive officer of NovuHealth, said he sees the payer marketplace ready to move on these ideas, he said in a recent interview with The American Journal of Managed Care^® (AJMC^®). Plans recognize that if they don’t, it will have negative repercussions for the future

“It seems to be the clay is kind of removed from their eyes,” Wicka said of the payer community. NovuHealth is a healthcare consumer engagement company that offers rewards and incentive programs to enrollees in government health plans—Medicaid and Medicare Advantage—in an effort to both improve health and health plan performance.

Wicka said it’s a matter of economic self-interest as plans realize that “if we don’t really engage our members, getting them to take the behaviors that we require them to take for better health, for better fiscal performance, we could find ourselves out of this marketplace in a few years.”

Likewise, Gurpreet Singh, health services leader at PwC, likens the focus on consumers to “creating the Southwest Airlines of healthcare.” A recent report by PwC looking at forces that will have the most influence in 2019 says “a health industry increasingly pressured to do more with less will take lessons from emerging companies that have figured out how to deliver value to the uninsured and underinsured—traditionally deemed unprofitable—and turn a profit.

In an interview with AJMC^®, Singh said from a “value discipline standpoint,” the Southwest model stands out as one of operational efficiency, followed by customer intimacy. Translated to healthcare, this will involve the twin tasks of lowering the cost of care and delivering it in the most effective way, and then developing the capabilities—by both providers and payers—to enhance patient and consumer experience.

About 75% of PwC’s payers and providers are investing in digital capabilities and creating the position of “chief experience officer,” he said. The report said consumer-wooing methods used by other industries will broaden into healthcare by the end of 2019, even if a “Southwest”-type entity is not created outright.

These so-called “surprise and delight” customer-experience moments will allow a plan or provider to engage with the patient on a consistent basis, Singh said. He described what this might look like with his own personal example of avoiding the emergency room when his son broke his wrist at camp during a workday. They were seen quickly and efficiently, getting a cast and all, within a short timeframe at an urgent care center specializing in orthopedics.

The PwC report said combining improved customer experiences with a “lower-cost value line is an important growth strategy in a healthcare ecosystem in which average deductibles have tripled over the last decade and are now almost $1300 for an individual with employer-based insurance, making healthcare costs a difficult financial decision even for the insured.”

Wicka and Singh also discussed other predictions they expect to see this year, including holding the line on the Affordable Care Act (ACA), social determinants of health (SDOH), digital therapeutics, and private equity deals in healthcare.

Affordable Care Act

Neither Wicka or Singh, nor AJMC^®'s co-editors-in-chief, A. Mark Fendrick, MD, director of the Center for Value-Based Insurance Design at the University of Michigan, and Michael E. Chernew, PhD, director of the Healthcare Markets and Regulation Lab at Harvard Medical School, believe that the December 2018 ruling by a federal judge in Texas declaring the ACA unconstitutional would stand.

The blue-state plaintiffs in the case, led by California, have already filed a notice to appeal the decision to the US Court of Appeals 5th Circuit.

Undoing the ACA would also mean changes to Medicare Advantage rates and payment reform models, Chernew noted on a recent AJMC^® Managed Care Cast podcast.

In his opinion, Fendrick said that while the law is imperfect, the ACA has many popular features, such as allowing young adults to stay on their parents’ health plans until age 26, not to mention the protections from higher premiums due to preexisting conditions.

While Wicka said he usually steers clear of discussing politics and policy, he said no matter what happens, “there’s going to be no stopping…the continued trend for pay for performance and more privatization of Medicaid.”

Social Determinants of Health

While there has been increased recognition by payers, particularly by Medicaid Advantage, to address the factors that affect someone’s health that a provider has no control over, such as poor housing, lack of transportation to appointments or food insecurity, the issue now is connecting programs to clinical need.

In a company blog post about the SDOH, Wicka noted that “the best programs in the world won’t matter if the people who need them most aren’t aware of them or able to take advantage. Plans should identify which members are most in-need and develop a personalized communications strategy to target and engage them.”

“If it’s not tied together neatly or doesn’t make sense to the patient, then we shouldn’t be surprised when there is low participation,” said Wicka, noting the conundrum of plans trying to get their members to adopt certain healthy behaviors, while recognizing that some members have certain challenges in their lives that may prevent them from taking action. “How do you bring those 2 things together so that the member is engaged and so both issues are addressed?

Medicaid patients in particular want to be able to address these issues with their provider, PwC said. And by addressing these issues head on, providers and healthcare systems can lower costs.

Digital Therapeutics

PwC’s 54-page analysis focused on issues common to all healthcare sectors: payers, providers, pharmaceutical firms, and medical devices. Digital therapeutics is 1 area that touches all of those, Singh said. There will be a lot more collaboration between developers and the providers who would be prescribing them, he said.

“Don’t go it alone,” he said. “It’s better to collaborate on that solution prior to launching.”

This is also applicable to the payer side, because figuring out how to finance these therapeutics is important. “Many of these therapeutics drive wellness or cost of care,” he said.

PwC said in 2019 companies will sell digital therapeutics and connected devices targeting atrial fibrillation, hemophilia, substance abuse, birth control, depression, diabetes, epilepsy and other conditions. One company, Akili Interactive, is expected to seek FDA clearance for a video game to treat attention-deficit/hyperactivity disorder.

Investors have taken notice, pouring $12.5 billion into digital health ventures in 2017 and 2018. PwC said. That’s up 230% from 2013, and the average funding deal size grew 67% over the same period.

For instance, last month, Propeller Health, a digital health company that makes sensors to track patient use of respiratory inhalers used for chronic obstructive pulmonary disease and asthma, was bought by ResMed, which makes connected devices for respiratory care.

Private Equity Deals

Private equity investment in healthcare is accelerating, the PwC report noted, with deals numbering more than 600 in 2016, up from over 200 in 2009. Singh said there are “interesting investments” in digital therapeutics as well as health services.

“Traditional healthcare companies will have opportunities to sell all or portions of noncoreassets and double down on their core competencies, or partner with private equity in acquisitions in which they would otherwise be competing against each other or

unable to act on their own,” the report said.

There are opportunities to reduce the cost of care as well as the financing of the care, Singh said, although it remains to be seen how or if the quality of care may change, assuming the core mission of a private equity firm is different than a healthcare firm that started out with a focus to improve care.

These are the same questions the public may have about much larger deals (such as CVS and Aetna) and whether or not costs will truly come down for the consumer, Singh said.

Meanwhile, Fendrick said experts should focus on the costs that matter the most to consumers in 2019.

“Americans don’t care about healthcare costs, they care about what it costs them,” he commented on the podcast. “Out-of-pocket costs are really important to most constituents. We should spend more time looking at out-of-pocket costs in the short term for essential services.”