Going to Market – Dossia’s Numero Uno Challenge

Since it’s founding five years ago Dossia has been able to entice only four companies more to join. Dossia is not exactly setting the world on fire and reeling in the multitude of large, self-insured employers to its ranks, which is particularly disturbing in light of the fact that virtually all employers are struggling with reining in spiraling healthcare benefit costs. This raises the obvious question: Just how viable is Dossia long-term? Following up on our previous post where we provided an overview of the new Dossia Health Manager, we’ll now dig into Dossia’s business model, corresponding market needs and ultimately the viability of this personal health platform (PHP).

Yesterday:
Dossia was founded in 2006 as a consortium of six large, self-insured employers that would invest in the development of a PHP for their employees. In 2007, Dossia chose the Indivo platform to be its future PHP and in 2008, Dossia finally went live with its first employer Wal-mart, albeit as a trial. In this first roll-out, the Dossia platform itself was not much more than a data aggregator bringing together an employee’s claims and pharmacy benefits management (PBM) data together that was then used to populate the WebMD PHR which Wal-mart had chosen. In an effort to get Dossia up and running there were a number of short-cuts taken in this deployment that created less than an ideal user experience. Wal-mart had also made the decision to not provide incentives that would promote employee engagement. A clunky user interface combined with lack of incentives resulted in a less than stellar success for this first roll-out of Dossia.

But this first deployment taught Dossia and consortium members a number of lessons:

1. The system must provide easy sign-on and be intuitive to use.
2. The sponsoring employer needs to have a  robust communications process to educate employees on the platform, its value and why it is in their (the employee’s) interest to sign-up.
3. Financial incentives really do work and are necessary in the first years to gain critical mass of user adoption and ongoing incentives will be needed to promote longer-term behavioral change.
4. Privacy is not as big an issue as one may think. Yes, of course its important, but if there is a clear message to employees that their employers will never ever see their personal health information (Dossia is very adement in support of this) employees are willing to use the service.
5. A data repository with an ecosystem of apps is not enough. Employers want a solution, not something that they have to put together themselves.
6. Ultimately, the PHP must provide the user with functionality that is useful and engaging. This may seem like a no brainer but you would be surprised at just how many PHR-like apps fail to do this well.

With these lessons Dossia moved forward to what we now have today.

Today:
Of the now 10 founding member, six are now live on Dossia and two more will go live later this year. The depth of deployment at individual employers was not revealed to Chilmark during our two interviews with Dossia so one would assume that these deployments are in a wide range of stages. Mike Critelli, Dossia’s CEO though did state that one company has seen 50% adoption among its employees, which is impressive (the power of financial incentives – there must have been some good ones).

With the new Health Manager, which will be released this fall, Dossia has a much more compelling solution to take to market. It will be interesting to see if Dossia will have any success targeting WebMD accounts, an obvious first line of attack. When we spoke to Critelli, we asked him how he intended to take Dossia to market and expand beyond the confines of the original founding membership of ten. Critelli does indeed have a plan.

• They’ll seek-out those companies that have been proactive in the health benefits field; those early adopters of new solutions, new health benefits models.
• Those companies that are targeted will need to have very senior level management engagement (e.g. C-suite, line managers, etc.). Dossia has found that approaching procurement departments or human resources is by and large a waste of time. Not too surprising. In research Chilmark conducted last year on employer trends we found that many an employer CFO is less than happy with HR & procurement in their attempts to rein in healthcare costs and are starting to take direct control.
• Seek out those who support the need to provide financial incentives (small incentives to promote initial sign-on and on-going incentives to promote long-term engagement).
• Ensure the target employer is willing to back a thorough and complete communications process to educate employees on why signing on to Dossia is in their interests as well as that of their employer.

A logical GTM strategy that does align with the employer market.

Tomorrow:
Even with new leadership, a new, redesigned platform that is a more complete solution, Dossia is far from out of the woods. If WebMD is any barometer, (they’ve seen contraction in their employer market for the last couple of years) the employer market may hold such solutions as highly suspect and not a long-term contributor to bending the proverbial healthcare cost curve. Dossia will need actually proof points from existing members as to the value and utility of using this PHP to proactively engage employees in managing their health. To date, Dossia employer members have been reluctant to come forward in support of Dossia, with either anecdotal evidence (percent of employees signing on, level of engagement, etc.) nor hard evidence (bending that cost curve) though it is likely too early for those latter numbers. Bottom-line though is that Dossia founding members need to step-up to the plate in support of Dossia with their own pronouncements, results, press releases and interviews with the press.

Then there are the health benefit consultants that play a very influential role in helping large employers in designing a health benefits strategy. It will be important for Dossia to make in-roads here engaging and educating these influencers to ultimately win their support of Dossia as a viable alternative to similar solutions such as WebMD.

Dossia’s PHP is far from finished and the next critical component needed is an ability to help employees better manage their Health Savings Accounts (HSA). A nice feature of the new Health Manager is the Healthcare Blue Book, which provides procedure pricing transparency. So the next logical step is how do I pay for these health services. With the ever increasing trend towards greater employee cost sharing and use of HSAs, Dossia needs to get that financial management piece in Health Manager in the next version and frankly we’re a little surprised to not have seen it in this version..

Employers today spend on average $8K/yr/employee on healthcare insurance. On top of that, employers spend on average an additional $1K/yr/employee on “discretionary” healthcare-related activities, e.g., a PHR, various health & wellness promotions, incentives, etc. It is that discretionary spend that Dossia will target and this is a potentially rich vein to tap. But getting back to the beginning of this section, Dossia will need to provide employers, who have increasingly become disillusioned by all the various programs they’ve tried before with questionable success, with clear proof points as to the efficacy of the Dossia solution. Dossia would be wise to sit down with those founders, have a heart-to-heart talk and begin the process of collecting those proof points and taking them to market first.