Payers Refocus Efforts on ROI for Member Engagement

cvrWhat a difference a year has made to the payer market. In late 2012 Chilmark Research published the first version of our Payer Benchmark report — detailing how leading payers were beginning to adopt emerging consumer technologies. We found a market where significant experimentation was occurring, but little if any broad, member wide deployments and a market still trying to understand social media.

This week we are releasing the next iteration of this report – Benchmark Report 2013: Payer Adoption of Emerging Consumer Tech – Payers Continue their Pursuit of the Digital Consumer. Based on the research I conducted for this report, I find it simply amazing to see how this market has shifted over the course of a single year.

For one thing, the traditional health insurance business model continues to erode, as the Affordable Care Act (ACA) has capped medical loss ratios (MLRs) and has completely stripped payers of their ability to underwrite based on health risk.

Meanwhile, payer-provider realignment is ongoing. Hospitals are partnering directly with employers or launching health plans that might compete with payers in the employer market. Likewise, some payers are acquiring providers to more closely align financial interests with healthcare services delivered.  All this bodes well for rising interest in payer-provider-aligned population health management and patient engagement technologies.

In addition, the ACA/Obamacare has come to be seen as inevitable, and Health Insurance Exchanges (HIX) are forcing payers to seek out new places in the minds of consumers and within the broader healthcare ecosystem –  with an increasing focus on engaging and retaining consumers.

Outside of healthcare, the consumer tech space continues to defy our expectations.  It is easy to see how in the past year that emerging, low-cost activity tracking technologies have spread far beyond early adopters.

These and other macro forces are pushing payers toward the digital consumer in ever more multi-faceted ways.  For example, payers have drastically pulled back from their flurry of experimentation in 2012, and are now focusing their efforts into fewer, more precise areas where they foresee strong potential for ROI.

One change from 2012 is the pull-back in creating mobile app versions of member service portals, as have health & wellness app launches. (This makes sense: in general, very few payer-launched or payer-owned mobile apps have gained any kind of significant traction, with iTriage as a notable outlier, and they already had good traction prior to acquisition by Aetna).

iphone_app_launches

While payers may have pulled back from rapid experimentation along certain lines, this does not mean that they have given up on the digital consumer. To the contrary, we continue to see growing investment in payer-owned consumer platforms, biometric tracking initiatives, the next generation of social media, and more… all detailed in the report.

This report profiles an expanded set of payers as compared to the first edition, across commercial, Blues, and provider-aligned categories. These innovative payers are exploring the wild west of digital consumer engagement and learning as they go. The report describes their experimentation in detail, what initiatives are working and why, and where promising new territory might lie. Any organization that is looking to build-out a strategy that leverages consumer tech for member/patient engagement will find this report invaluable.

We hope our subscribers enjoy the read…as much as we enjoyed the research.

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Breaking New Ground

Today is a great day for Chilmark Research and hopefully the world of healthcare IT.

At long last, the much anticipated Market Trends report Clinical Analytics for Population Health (CAPH) has been published. Coming in at slightly more than 100 pages with in-depth profiles on 14 vendors, it is our hope that this report will be instrumental in advancing the discussion of how analytics can be effectively used to drive strategic population health management initiatives.

Our research philosophy at Chilmark Research is relatively simple relying on three dominant criteria:

  • First, target sub-sectors of healthcare IT that have the potential to be truly transformative to the delivery of care.
    Clinical analytics certainly fits that criteria.
  • Second, look for areas where there is a significant amount of turmoil and rapid evolution that thereby make it exceedingly difficult for end users/adopters to make sense of.
    And I thought HIE market was a confusing mess, analytics even more so!
  • Third, is the market potentially large enough (will we be able to sell enough studies to recoup our investment) that it is worth our effort.
    We have been receiving a slew of inquiries from healthcare organizations of all sizes on state of clinical analytics, who is doing good work, who less so. 

If all the above are in alignment, we dig in and dig deep for ultimately we wish to produce a report that will lead to a better, more educated market.

As is the case in this particular report, Cora and I began first mapping out a strategy to address healthcare analytics last summer. Over the ensuing months we continued to refine our thoughts (well it was really Cora refining the thoughts and passing it by me and Rob). Ultimately, we narrowed down the research effort to focus on CAPH as this was the one sector of analytics that best met the criteria above. In the months following, Cora did a tremendous amount of research that has resulted in an excellent report that is on par with our well-respected research on the HIE market and may readily become the defining report on this subject area.

Like the HIE Market Trends Report that we first started publishing several years ago, the CAPH report creates a vendor neutral framework and vocabulary for the industry to adopt and use in their internal discussions and decisions. The report also provides a close look at a number of influential vendors in the market, sizing up their relative strengths and challenges. Lastly, we plan to update this report on an annual basis to insure that the market stays well-informed on the trajectory of the market, the advances taking place and ultimately insure that the market is well-educated on the topic prior to making critical, strategic purchasing decisions.

A big thanks to all organizations and individuals we interviewed over the last year who assisted in developing our thoughts and perspectives on the clinical analytics sector – we couldn’t have done it without your valued inputs.

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ACO Here, ACO There, ACO, ACO Everywhere & Vendor Response

In less than two years we have gone from Accountable Care Organization (ACO) as a concept, to ACO as a new model of care delivery. With the January announcement that there were 106 more added to the Medicare ACO program, we now have 254 ACOs nationwide. David Muhlestein of Leavitt Partners has done some of his own research and puts the total number of ACO-like entities at over 400. And let’s not forget that commercial insurers are putting forth their own contracts with providers to set-up similar accountable delivery systems where there is some element of gain and risk sharing with providers.

Now it is one thing to say you have signed on to become an ACO and quite another to actually execute on the contract. Among the numerous challenges that an ACO model presents, is the need for more sophisticated IT systems that will support distributed care management across a diverse care team that extends from the primary care physician, to the specialists, to the care manager, the patient and others. EHRs today will simply not get you there.

Today, there is no such out of the box solution from any one vendor that will enable an ACO model. But there are several vendors positioning themselves to be that one stop shop to enable your ACO strategy.

Following are some vignettes of several vendors looking to enable an ACO strategy and what they have on offer. (Note: This is our proverbial toe-in-the-water as we’ll be doing a comprehensive report on this market later this year)

Aetna: A commercial payer, Aetna is looking for new high-growth revenue opportunities and has targeted healthcare IT. Shortly after acquiring leading HIE vendor Medicity, and soon after leading mHealth App iTriage the company announced its ACO-enablement suite that combines the two above with analytics/managed care solution Active Health.
Strengths: Strong HIE brand, good consumer/patient engagement tools
Weakness: Predictive analytics and care management tools are not as competitive

CareEvolution: A privately owned HIE targeting the private, enterprise market, the company has built its own analytics engine, Galileo. Galileo provides deep dive capabilities into clinical, operational and claims data contained within a given network of providers.
Strengths: State of art HIE solution, good analytics capabilities
Weaknesses: Consumer/patient engagement tools are almost non-existent, low recognition in market

Cerner: Cerner’s HealtheIntent is part of the company’s broader strategy to move beyond being an IT company to becoming a health company. Like most EHR companies, ability to move as fast as market requirements is a challenge.
Strengths: Leading EHR, strong brand, leading visionary among EHR companies, has a good HIE solution, has broad suite of consumer engagement tools
Weaknesses: Analytics is lagging, resources to respond quickly is a challenge, distributed care management tools still work in progress

Epic: Company has one objective, rule all and do so through a highly proprietary and closed model. With Epic Everywhere, their HIE solution for Epic sites, company is able to provide exchange across entities as long as they are using Epic. Recently signed deal with Surescripts to allow exchange with other EHRs. Epic’s MyChart is the leading patient portal in the market.
Strengths: Growing dominance in market, solution suite is tightly integrated from ambulatory to acute care settings, patient portal is widely adopted
Weaknesses: Epic continues to follow a dated model of highly controlled, closed system that while providing high integrity, will ultimately yield a lumbering dinosaur – think Wang circa 1983

RelayHealth: Part of McKesson, RelayHealth has always been a catchall for various acquisitions that McKesson could not find an appropriate home for. A major reorg occurred a couple of weeks ago that will reposition RelayHealth as McKesson’s ACO-enablement suite.
Strengths: Strong consumer/patient engagement tools, a leading HIE solution in the enterprise market and with the reorg, the addition of new assets including the recently acquired analytics solution, MedVentive
Weaknesses: Still does not have a good story to tell around distributed care management, how MedVentive will be folded in remains to be seen.

This is by no means an exhaustive list of those HIT companies looking to offer an ACO-enablement solution suite, but simply meant to provide some perspective on what is currently on offer in the market.

As we prepare to head to HIMSS a week from Saturday, on the top of our list of things we wish to learn more about is exactly how companies such as those listed above and others not listed are meeting the current and future needs of the 400+ ACOs across the country and more importantly, how they intend to become the leaders in this rapidly developing field.

Thanks to KramesStayWell.com for the image

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At the Intersection of Obesity and HIT

We Americans are on a very terrifying path, health-wise, based on the latest obesity projections from RWJF.

Medical “innovations” around the obesity epidemic are unsettling, to say the least. Most recently, Dean Kamen (of Segway fame) filed a patent for a self-serve Stomach-Pumping Machine.

Disturbing medical devices aside, what does the obesity crisis mean to healthcare IT (HIT)?  Yes, increasing obesity rates means more metabolic syndrome, more intervention, more biometric data,more data stored in EHRs, more HIE to share that data, more clinical analytics and care coordination software, …

Does this sound interesting to you?  In my research I am more focused on how technological innovation can function as a solution to the obesity crisis. First let’s consider the payers — the large, innovative ones who continue to rally for behavior change.

Payer-Sponsored Wellness & Patient Engagement Soldier On

Payer-sponsored behavior change programs have never sustained results in the long term, but this doesn’t stop the early adopters from soldiering on.   For our 2012 Payer Benchmark Report, we profiled several large, innovative payers working to engage their members and the public through low-cost consumer technologies.

Some interesting new developments in this space include:

  • Aetna is looking to make running on a treadmill bearable. Its new ‘Passage’ app (storing data in CarePass), promises to make exercisers feel as if they are travelling within a city of their choosing.
  • Cigna has just released a ‘Healthy Living App Pack’, bundling the extremely popular FoodEducate app with 3 less-popular ones.  (Cigna didn’t develop FoodEducate, but licensed it from founder Hemi Weingarten).
  • Humana has begun offering the HumanaVitality rewards system to a group of Medicare Advantage members. Let’s hope that seniors will take more kindly to this program than to HumanaVille, Humana’s failed attempt at creating an online senior health education community.

Consumer Health Companies Need to Move Beyond Fanatics

If payer apps can’t motivate widespread weight loss, then maybe the consumer space can? Consumer companies are currently busy developing software and testing out motivational models on the fly.  This is not exactly the scientific method but it works for small agile environments…and is definitely something that large payers are less adept at.

There is a belief among many of the quantified-self set that just the act of presenting health data to the consumer affects behavior change.  I seriously doubt this, and believe that consumer health startups have played a miniscule role in affecting real behavior change.  So far, they have provided diet and exercise fanatics better tools to fuel their obsession.

In order to reach the ‘bottom of the pyramid’, must we then dole out dollars for weight loss? I recently spoke with Gregory Coleman, one of the founders of nExercise, which offers a gamified “rewards program” where users randomly accumulate points, similar to a lottery, which can be applied towards real world discounts.

(nExercise is also the driving force behind the recently formed FITco, or ‘Founders In Technology Combating Obesity’. FITco functions as a place for founders to form data sharing/interoperability partnerships, and aggregate marketing dollars).

Talking with Gregory, I found myself better understanding the challenges these consumer companies are up against as they seek to move beyond their core base.  In offering financial incentives, they must spark interest without destroying intrinsic motivation. Framing financial incentives in term of ‘rewards’ and ‘discounts’ helps, but the real goal is to wean users off of them.

Cash, Friends, and Coaching: A Pipe Dream?

Several academic studies have shown that a combination of financial incentives, social support, and coaching from a trusted ally, produced significant behavior change, at least in the short term.

I can imagine a day when I seamlessly upload exercise and diet related data into a CarePass-type platform, where:

  • my insurance carrier’s app notices that I have been working out, maintaining my BMI, and applies discounts to my premium.
  • my doctor’s app (motivated by value-based reimbursement), suggests that I keep my maximum heart rate below 160 BPM
  • I display achievement badges to my friends, and make my data available to health companies in order to receive discounts/free samples

Hmmm, what is that distant feeling of unease, the feeling like I am a pawn in someone else’s Grand Plan?  It might have something to do with the complete loss of privacy around my data.  However, if those premium discounts are steep enough, I can live with that.

Whether we get people sharing their health data or tempt them with financial incentives for weight loss, the systematic nature of the obesity problem remains a force to contend with. In the end it will be up to all of us to push back against the institutions that make us fat. Seeking out motivational consumer solutions is a low cost place to start.

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One Step Forward, Two Steps Back

mHealth12Be careful what you wish for sure did apply to this year’s mHealth Summit, which was held last week in Washington D.C. Of the some 4,000 in attendance, I was one of the 10% or was it even 1% of those present that have attended all four events in succession. It is with that perspective that I came away from this year’s mHealth Summit more disappointed than ever.

At previous mHealth Summits, I often bemoaned the lack of organization of the conference, the often bizarre exhibitors one would find (couple of years back one exhibitor, and I kid you not, was marketing herbal aphrodisiacs) and basic necessities one would find at virtually any event, breaks with coffee, maybe a snack here and there. This disorganized, but charming event was mHealth Alliance Summits of years past. Continue reading

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Humana Jumps into HIE Market, Claims Analytics Turn Sights of Clinical, Med Adherence

CR_brandWebNovember saw the acquisition of yet another HIE vendor by a payer (Humana). An in-depth analysis of this acquisition and its implications was provided to Chilmark Advisory Service (CAS) clients at the end of November. Following are abstracts of the three research notes in our latest Monthly Update.

Humana Leaps Into the HIE Market
The health insurance industry is undergoing massive upheaval. Payers don’t need a crystal ball to see that in the near future, providers will sell services directly to employers, and that insurers need to get creative in order to stay competitive. With its acquisition of HIE vendor, Certify Data Systems, Humana joined two other payers in the HIE market: Aetna and UnitedHealth Group. Yet Humana’s strategy sets it apart from the other payers. On a single day in November, Humana announced not one but three acquisitions: Certify plus two Florida-based managed care service organizations. Humana has clearly articulated its plan to become the preferred Integrated Delivery Provider to Medicare Advantage members and dual eligibles. By adding Certify’s strong HIE capabilities to its bag of tricks, along with the ability to deliver primary care directly to a large Medicare population, Humana has positioned itself to do just that. Continue reading

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