Health insurance is in the midst of a dramatic shift, with new players surging into the business of health delivery. The latest step in this evolution came Friday, with reports that Walmart is in discussions to partner with—or perhaps even acquire—Humana, one of the nation’s largest insurers.
If these reports come to fruition, it would represent the latest in a series of new companies showing renewed interest in consumer health—a divergence in the way that the nation has treated health in years past. The move away from sick care to health preservation is built on six trends—and of those, a unifying theme is that the technological acumen and infrastructure is in place to support this shift.
Consumerism
It’s taken a while, but consumer-patients have taken more responsibility for their own care. For a generation now, an increasing number of people no longer rely solely on what they’re told by their medical providers. They’re researching medical conditions on the Internet and wanting to know more about their treatment options. Consumers also are demanding control over their medical information, and seeking to add their own patient-reported data to it.
In addition, consumers are shouldering an increasingly larger share of the cost of their care, through higher deductibles and insurance premiums. With higher payments come higher expectations, greater demands for control and increased standards for quality.
Business migration
New players are casting an eye at healthcare as both opportunity and business imperative. The recognition of the rise of consumerism is reflected in the companies now looking for a place to play within the health industry—Amazon, Apple, CVS, Walmart and Walgreens, to name a few. These companies have the deep experience and data systems necessary for dealing with the customer as a consumer.
Similarly, traditional health insurers see their long-time business approaches changing. For decades, insurers have primarily served as care purchasers—the entities through which patients’ bills were filtered, often in a contentious duel with care providers. Increasingly, health insurers see their roles changing, because they are no longer the only entities taking on the actuarial risk of care. To a greater extent, consumers and providers are taking on those roles. Insurers increasingly want to see their roles morph, providing data and services that improve patient care and optimize consumer health. Hence, they are seeking partners that enable them to take on a broader role in health.
Price frustration
Initiatives intended to slow the rise of healthcare prices over the last three decades have ultimately failed to slow the rise in healthcare expenses. That’s why the U.S. spends more than $3 trillion on healthcare annually, and why it’s no longer acceptable for solutions to aim to only slow the rate of growth. Healthcare currently consumes 18 percent of the gross domestic product, and the trendline is not good, especially as more Baby Boomers retire and are likely to see their medical needs—and costs—increase.
Dollars spent on healthcare are unavailable for spending elsewhere—a truth known to businesses, consumers and the government. With the need rising to spend money on other initiatives, such as business growth or infrastructure redevelopment, it’s becoming crucial for a radical change to occur in care delivery.
Provider disintermediation
Traditional providers—hospitals and physicians—have played lead roles for decades as the prime sources for care in the country. They were the source of most services; they were the unquestioned authorities on medical knowledge; they were both gatekeepers to and sources of care; and they were the location of care—if you wanted to be treated, you had to go to their office or facility.
Providers have tried a variety of combinations, such as mergers and acquisitions to form integrated delivery systems or provider chains, but the resulting of economies of scale have not impacted either the price of care or the efficiency with which it’s delivered. Outside businesses now see opportunity, if not urgency, in attempting to reduce healthcare expenses.
From the litany of names involved in current mergers and combinations in healthcare, noticeably absent are the traditional provider companies. It appears they are losing their central role in the emerging trend of ensuring health.
Health concentration
The notions of population health and value-based care are baby steps in the direction of the new business imperative—ensuring that consumers are as healthy as possible, and engaging them in a pursuit of optimizing their health. Pivoting from the care of sick people, to the optimization of the health of everyone, is a key to ensuring that illness is minimized, health is optimized and the costs of care for the sick are reduced.
This is a radical change from traditional healthcare delivery in the U.S., but a key result of the previous four trends. It is the antimatter of value-based care, because there’s far more value in keeping everyone as healthy as possible for as long as possible, rather than just trying to wring more value out of care for sick people.
Data and technology affirmation
Potential change in healthcare will be built on the ability of organizations to provide, analyze and distribute data and information on patients. This will be true, whether its information from a consumer’s Fitbit or Apple watch or some other kind of wearable, or whether it involves data sharing between insurers and providers.
These six trends point to a new focus on health in our country. It’s no longer just healthcare, defined as giving medical treatment to sick people. The stage is expanding for a wider definition that still in the process of being written.
