The health plan of tomorrow may be very different from what it is today. In general, we observe that industry transformations occur in three seven-year cycles, and health care companies – and thus health plans – appear to be no different. We predict that the first cycle of transformation in health care will involve a widespread push for stronger standards around data interoperability and demand from consumers to not only access but own their health information. These changes will form the foundation for innovation. In the second cycle, nontraditional players will begin disrupting the insurance market with their data-driven, consumer-centric offerings. While the view of the final cycle is over the horizon still, we predict a radical transformation of business models across the industry, with clear winners and losers emerging.
The health plan of tomorrow
Disruption is picking up the pace
Time is running short, as the pace of disruption will likely only pick up from here. Health plans may need to accelerate their response to evolving market demands: Nontraditional players are entering the insurance market; consumers, employers, and government purchasers are scrutinizing costs; and health care providers are assuming more care delivery risk, while carriers and government sponsors are working to shed risk. In addition, consumers are expecting a better experience, fueled by the ongoing cycle of digital disruption. Thousands of innovative solutions that enable consumer experience have been introduced in the marketplace, some of which are being enabled by digital and consumer giants such as Amazon, Apple Inc., and Google. Indeed, 65 percent of consumers say they are somewhat or very interested in having an online tool to check on their cost of care through their health plan.1 The result: greater competition for shrinking revenue and margins. How will traditional health plans transform, and what choices do leaders need to make now to survive the forthcoming disruption?
To begin answering these questions, the Deloitte Center for Health Solutions conducted crowd-sourcing research with 28 experts. The crowd agreed that to prepare for the disruption, all health plans should and are likely to begin to transform their business models to increase their efficiency and deliver better value to purchasers and members. The experts cited examples of companies that are innovating today even as many others are conducting business as usual.
What will push the remainder of health plans to transform, and what will tomorrow bring as health plans begin to more broadly adopt these innovations?
Our research revealed one vision: Business model transformation will speed up as health plans shift to focus on improving wellness and care using multidimensional data. Products will balance traditional population-level risk with being hyperpersonal and easy-to-understand, based on consumer need. Moreover, health plans will have learned how to engage and influence consumers toward better health through a high-touch experience with digital devices. Data and data interoperability will be the secret sauce in improving wellness and care for members, but consumers will own their data and will need to see and harvest the value in sharing it with health plans. Our research shows that at the end of the three innovation cycles, health plans will be focused on one or more of three fundamental roles that will be the value drivers of the transformed health care industry.
David Biel, Deloitte Consulting LLP, is a principal in the firm’s Life Sciences & Health Care practice with extensive experience in information technology. He has 26 years of experience in health care and digital technologies, 24 of them with Deloitte. He currently serves as the national Consulting Health Care Sector leader. In his role, Biel focuses on driving the strategy, growth, and financial performance of the practice by developing service offering and capabilities, talent, go-to-market strategies, and client relationships with US and global health plans, providers, and ecosystem players. He has served numerous health care clients in multiyear operational and digitally enabled business transformations.
Maulesh Shukla, Deloitte Services LP, is an assistant manager with the Deloitte Center for Health Solutions. For the past eight years, Shukla’s research has covered a wide range of topics in the realm of health plans and hospital and health systems. His recent research has focused on health plan financial performance, patient experience and customer transformation, health care information technology, innovation, and health care reform.
Claire Boozer Cruse, Deloitte Services LP, is a health policy manager for the Deloitte Center for Health Solutions. Her primary research interests are Medicare, Medicare Advantage, payment reform, post-acute care, and the individual health insurance market.
Innovation starts with insight and seeing challenges in a new way. Amid unprecedented uncertainty and change across the health care industry, stakeholders are looking for new ways to transform the journey of care. Our US Health Care practice helps clients transform uncertainty into possibility and rapid change into lasting progress. Comprehensive audit, advisory, consulting, and tax capabilities can deliver value at every step, from insight to strategy to action. Our people know how to anticipate, collaborate, innovate, and create opportunity from even the unforeseen obstacle.
Learn more at http://www.deloitte.com/us/providers