Benchmarking Payers Adoption of Consumer Tech

Awhile back, a large health insurer (payer) commissioned Chilmark Research to do a market scan on how payers across the country were using emerging consumer technologies to engage their members. We found this project to be quite interesting and rather than have much of that research sit on the shelves forevermore, we decided to build upon it.

Today we are releasing the results of that effort.

Our latest report: Benchmark Report: Payer Adoption of Emerging Consumer Technologies takes a close look at over 40 payer (health insurers) initiatives that are using a wide variety of consumer technologies (apps, social media, games, etc.) for member engagement. Here’s the PR announcing the report’s release.

Now it is well-known that payers have had a very mixed record in engaging their members. Part of the problem has been trust as members are justified in taking a cautious approach when sharing their health information with payers for fear of future denials. Secondly, many payer initiatives have been half-baked wherein payers have not been fully engaged themselves in the concept of member engagement.

But as we pointed out in a post earlier this summer, this is all beginning to change. Numerous market forces are now pressing down upon payers and payers are increasingly coming to the realization that they need to deploy member engagement solutions that work. Payers are now going to where consumers already are seeking to engage their members via a variety of consumer-based technologies. This report is our initial effort to gain a greater understanding of what payers are doing today and provide some guidance as to how their efforts will evolve overtime.

One thing we have learned in the course of our research is that despite all the talk, the majority of these efforts are in their infancy and that the vast majority of payers have not even begun to venture down this path. Therefore, we intend to update this report on a periodic basis to benchmark payer adoption of consumer tech in support of member engagement and gain an even deeper understanding of what works and just as importantly, what does not.

Thanks to the many that we have interviewed over the course of the last several months to compile this report as your inputs have been invaluable.

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Forecast and Ramifications of Payers in the HIE Market: Part Two

(Note: This is the second of a two-part post.)

Keeping it Local

This is most representative of the status quo and the most realistic path forward for the vast majority of payers who typically operate at the local level. In this scenario, one or more health plans in a regional market partner with other community stakeholders to co-fund and sustain a regional HIE. These stakeholders typically include large corporations with a large local employee base and/or provider organizations. Successful examples of such multi-stakeholder HIEs include the Louisville HIE (Humana, Anthem, Ford, Yum! and Kroger), and the Rochester RHIO, where payers (Aetna, BCBS, MVP) and hospitals share a 2/1 split of all operating expenses on a transaction model.

The benefit to payers in participating and most often funding the majority of such an HIE is three-fold. First, partnering with other organizations in the region contributes to a greater “fabric of trust” between the HIE and physicians within the region leading to greater physician participation. Secondly, by partnering with others, the payer is able to share HIE operating costs with other stakeholders. Third, physicians actively exchanging patient data can prevent some hospital readmissions and decrease duplicative lab and imaging tests, thereby lowering a payer’s total coverage cost in the region.

Conclusion: As HIE’s unfold at the community scale, local and regional stakeholders will share the operating costs and governance. As far as payer support for HIE’s goes, Chilmark predicts continued growth of these types of HIEs, particularly in less urban communities. We also predict that there will be significant growth in enterprise HIEs that are partially funded by payers, ultimately in support of a payer-provider partnership to establish an ACO. (Again, look to the recently announced NaviNet-Lumeris deal wherein three regional payers also played a role. For those payers, it’s all about making the provider transition to ACO/PCMH models as frictionless as possible.)

Real Challenges Remain

Despite a seemingly straightforward path for payers to get involved with HIE’s, there remain a number of challenges. These are two-fold in nature: Regulatory and Marketplace. On the regulatory front, the list of challenges is long and familiar: ICD-10 (while it seems like there will be another delay, much to the chagrin of the AMA this isn’t just going to go away) and HIPAA 5010, health insurance exchanges and other health reform mandates. (On the plus side, health information exchange-related spending counts favorably towards new medical loss ratio (MLR) rules).

However, the marketplace is where the true challenges lie, as there is hardly a guarantee that payers and provider groups will play nice with each other. Nowhere is this more evident than in the Western PA market, where a sort of fisticuffs have been going on between Highmark BCBS and UPMC.  Without going into the sordid details, Highmark (who just bought Pittsburgh’s second largest hospital network, West Penn Allegheny) and UPMC are now building competing HIEs in the same region because of a longstanding spat over contract negotiations. To hospitals who are now faced with participating in two separate HIE’s, this does not make much sense.

For the payers however, it does make sense when cast against the backdrop of rising competition. (Chilmark noted this challenge after attending the AHIP confab last summer.) Insurers are fighting with each other to keep their networks competitive. Providers are fighting with each other to secure preferred referral status, i.e. patient volume. Introducing an HIE in the middle of this environment has wide reaching implications for where patients are sent as well as who accrues and shares the savings. Throw in the variable of different reimbursement rates for commercial, Medicare and Medicare Advantage patients and you can see why partnering up to set up an information network is more than simply writing a check.

2012 and Beyond

So what does this all mean for a huge guest who’s seemingly unwanted at the party? Ultimately, payers’ involvement boils down into a few categories:

  • In the light of the tighter margins imposed by health reform, insurers who can afford it will diversify their business. The national health plans will be looking to acquire their own platform ala Aetna and UHG, with the additional hopes of squeezing cost savings out provider users and building a more favorable MLR. The main considerations in predicting this shift include vendor consolidation and the readiness of existing provider networks to collaborate.
  • Regional Insurers, such as the Blues and other statewide or multistate networks, have the wherewithal to setup and license their own platform for exchange either through payer-payer partnerships or on their own. The recent NaviNet deal seems to be more of an ACO play, but indicative of the business strategy of this class of payers who are willing and able to be flexible in how they approach their role as stakeholder in information networks.
  • Local Insurers who have fewer resources and who operate directly in the tides of market competition will opt for a ‘safer,’ multi-stakeholder approach in their communities. Partnerships will be heavily influenced by network dynamics, reimbursement channels and existing arrangements, such as burgeoning accountable care communities.

So, as rosy as information exchange seems on paper, it is permanently changing the way that provider and payer groups do business. From where Chilmark stands as an observer of the market’s evolution, it is all too clear that payers and providers ultimately have little choice but to work together. Payment reform and millions in IT incentives have already begun to influence the way that the delivery and payment markets work; the future of accountable care, proactive population health management and ‘smart’ health care delivery all depend on willing and trusting partnerships.

Unfortunately, as is too often the case, patients and other stakeholders get left out of the decision calculus. Pittsburgh residents will hardly benefit from the competitive business posturing there. We hope the folks deploying HIE’s over the coming years will put as much of an emphasis on leadership and governance as they do on technology and of course, the health of their business.

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Humana Breaks the Mold

freeSlowly getting the hang of Twitter and while cruising around the TwitterSphere yesterday looking for updates from the WHIT’08 conference in DC came across a guy providing live tweets from the event.  Looking more closely at his profile, it turns out he works in a “skunk-like” innovations group at Humana, called Humana Innovations.

Like a dog on the scent of something interesting followed the trail to their idea factory, CrumpleItUp.  Very nicely done and gives one a sense of what may be possible, from a Web presentation stand point, if you start thinking beyond columns of text and smatterings of graphics.  Honestly, one of the best sites I’ve come across in sometime.

But I really fell in love with this little group and what they are trying to do when I learned that they are the brainchild behind Freewheel!n.  Freewheel!n is all about providing bicycles to consumers to encourage them to get around via bikes, thus contributing to health (big objective for Humana), goodwill (another Humana win – great PR), eco-friendly, (we all win) and the list goes on.

Freewheel!n made its grand intro at the Republican and Democratic conventions.  Following are some stats off of the Freewheel!n site (stats were cumulative over the 8 days of these conventions).
• 7,523 bike rides
• 41,724 miles ridden
• 1,293,429 calories burned
• 14.6 metric tons of carbon footprint reduction
What’s not to like?

Maybe that Freewheel!n is not in Boston yet, that is still in prototype mode, that we will have to wait to see it arrive in our own fair cities and towns.

Plenty has been written here and elsewhere about various initiatives of payers to encourage healthy behaviors.  Sorry Aetna, CIGNA, United Health, WellPoint, all of the BCBS plans, none of your initiatives have captured my imagination like CrumpleItUp. Humana has broken the mold in reaching out to consumers.

Take a look and learn.

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