One thing we know for sure is that the “train has left the station” when it comes to healthcare reform. No matter what party you follow, or policy you like to support or ignore, the healthcare industry MUST change to a value-based platform. What that means is that, while the financial infrastructure of receiving healthcare used to be a pay per visit/test/hospital stay, etc., it is moving to a payment system based on outcomes -- or "value," as we like to brand it, because it sounds better.
What that means is a radical change for any associated industry, including, foremost, insurance companies, the ultimate risk bearers. All insurance executives rejoice, right? The idea of offsetting the risk to the providers responsible for the care of the patient sounds like one heck of a business strategy. Is it, and what does this mean to the insurtech conversation? My point of view: A LOT.
Keep reading. I promise I’ll keep it short…who has time for long articles? My goal is to get your thoughts charged around how this affects you and give you an idea or two
It may be relevant to know that I am a long-term provider advocate, having been the chief administrator of a large OB/GYN group while I cut my teeth in healthcare and having served 10 years as the CEO of the then-largest and most prestigious primary care/internal medicine group in the region. I can tell you that this movement is the RIGHT thing to do, and I can also tell you that it is complex, expensive and overwhelming.
See also: U.S. Healthcare: No Simple Insurtech Fix
The days of small practices with time to actually spend with the patient and not face the computer (and be buried in endless paperwork burdens, digital or not) are seemingly gone due to the demands of the system. If you have been to a medical facility as an actual patient in the last year, (and I hope you have been for at least your annual physical), I am confident that you saw this first-hand. Your experience likely included witnessing every staff member from the front desk to the clinical team inputting data of all sorts into the computer, and perhaps not having enough time asking you how you “really” were. (READ: COULD THIS BE A RISK ISSUE?) What you may have also noticed is that you probably had to pay more than you expected. Gone are the days of the $10 co-pay. The movement to high-deductible plans has changed the game completely. So what does this mean to you?
In the March 2017 article by Sam Evans, “The 10 Trends at the Heart of the Insurtech Revolution” #1 was that “Insurance will be bought differently,” (also sold, underwritten, etc.) The demands of the medical community and the patient are under attack with what seems like an endless need to capture and understand data, learn, develop new payment infrastructures and oh, by the way, be transparent so everyone knows exactly what is going down. Dr. Halee Fischer-Wright (the CEO of the national Medical Group Management Association and a physician) rants in her new book, "Back to Balance," about this early and often. She says that “according to the MGMA study, it costs the average practice $40,069 per physician per year to just manage and report quality measures. For a relatively small practice of 10 doctors, that’s more than $400,000 per year. Not to improve on measures--just to report.” WOW- She continues with story after story and urges us to consider how to get a better balance and to put the patient at the front of the conversation. It’s a good read, and I’d recommend it if you have clients in the healthcare space.
Three key points to digest:
- Value-based healthcare is here to stay: It changes everything for every healthcare-related client you have. If you are on the risk side of the business, understanding how the new systems are creating learning opportunities, barriers and downright sinkholes that your clients may fall into is mission-critical. (I didn’t get into it, but clearly the issues with technology and the added complexity of detailed health information is the patient privacy/hacking issues… oh, yes… another policy that healthcare providers need to buy or buy more of to protect their patient information.)
- The pure cost of healthcare is increasing due to many competing factors, and most of that cost is SHIFTING to the patient. This means insurance is being bought differently. This means that new insurance alternatives are popping up, (concierge, direct primary care, employer-sponsored, etc.) and that there are NEW customers for you to understand and educate on the role that insurtech plays in their world. Many of these are NEW AND INNOVATIVE companies that need deep knowledge on these matters.
- Anyone who has physician/hospital clients should be VERY AWARE AND EDUCATED on every aspect from risk assignment, to education, how technology affects patient care and ultimately malpractice, financial pressures- I would say EVERYTHING is up for review and understanding.
