Your health insurer will be your next doctor. Really.

Health insurance companies are evolving to have a concierge component

It’s hard to imagine calling your health insurer to receive medical tips, much less sympathy for your ailments and ever-increasing premiums. They’re perceived as faceless, paper-pushing middlemen whose role isn’t to inform you on treatments to receive, doctors to see, or whether acetaminophen is better than ibuprofen.

With a child who has juvenile diabetes, my wife and I have spent the last 13 years navigating the complexities of the health insurance industry. The unwanted frustrations of managing the economics of an illness, “Will this get covered?” or accessing the right care, “Is the doctor we want to go to in-network?” were exhausting distractions. It is this personal experience that fueled my personal mission to improve the quality of healthcare for everyone by democratizing professional services by bringing them online; making access to professionals like doctors unhindered by economics, time or geography.  

During this time the healthcare ecosystem has undergone a massive transformation with insurance companies in particular at the center of change. Insurance premiums have doubled since 2013, which is one of the factors driving healthcare expenses to $3 trillion, or 18% of U.S. GDP.  It’s this untenable trend of rising costs that is forcing a reimagining of how healthcare is paid for, provided and administered.

Health care providers and payers are moving toward quality and efficiency vs simply quantity.

Healthcare is a dinosaur

“Doctor Google” is not a momentary fad. Today’s pro-actively calorie-counting, self-diagnosing, consumer wants greater ownership of their own well being. More than a third of U.S. adults go online to self-diagnose and half of all smartphone users have downloaded a mobile health app to track their activity, calories, heart rate and sleep cycles.

While insurance as an industry may have been insulated from market pressures to re-set their approach to their members, smartphones and advances in technology are now forcing these companies to adapt their models to this new mindset. Millennials in particular, and other digital natives, have grown up in an on-demand world where everything is at their fingertips and targeted specifically to them.

“People expect a certain experience. In most major cities around the world, you can open up your phone, press a few buttons and a nice individual in a vehicle will show up in a few minutes and take you wherever you’d like to go. We take that for granted but those types of experiences don’t exist in health care. Compared to the consumer experience in a lot of these other industries, healthcare is a dinosaur,” said John Loser, Chief Risk Officer at Oscar Health, a startup founded in 2014 aimed at redefining the health insurance industry.

“The experience of consuming health care is scary and frustrating and difficult, both because you’re sick but also because every piece of the system conspires to make this as difficult as possible for you. People are less willing to tolerate that, and are surprised that it doesn’t work a certain way.”

We’re starting to see more online options emerge outside of the startup space. Telehealth services which allow patients and doctors to connect via video chat are offered by Oscar and global health service provider Cigna and now used by over 70 percent of physicians.

“In the old model, someone made an appointment; the patient then went to the doctor's office; the doctor provided care, then the patient went home. The doctor might call and might bring them in for a follow-up, but there were a lot of logistics, like travel, that interfered with people’s work schedules, etc. Now, there’s an expectation that much of care may be able to be accomplished virtually,” said Dr. Scott Josephs, National Medical Officer at Cigna.

This virtual interaction is enhanced by data created and tracked to create an entirely new experience for consumers. This new model is not being lost on insurance companies.

Data is huge

The explosion of data now available is creating additional opportunities for personalized interactions but it’s also providing additional opportunities to curate programs that truly reflect the needs of members. This is especially important as growing number of organizations are choosing to internalize risk by self-managing their health populations.   

“Data is huge. It can be used to identify chronic conditions within a population, and employers can figure out where a lot of their high costs are,” said Rebecca Kim, team member of Mercer Health Innovation LABS, a consultant to employers.

“A lot of forward-thinking employers already have data warehouses, but they want more than a data warehouse. There are a lot of startups popping up around being able to actually use data - traditional and non-traditional - to figure out the needs of their population and what kind of programs are working for them and what’s not.”

Unlike stand-alone insurance companies whose goal has been mainly a cost-savings one, self-insured companies have added incentive to be cutting edge. It helps their bottom line to ensure their employees are happy (so they don’t leave) and healthy (increased productivity).

“Employers are in a war for talent -- wanting to attract the best talent and also retain happy and productive employees and so they will look for things that generally add value, convenience, higher quality, more access, lower cost,” said Kim. “These solutions are more personalized, engaging, higher quality, data-driven and drive better clinical outcomes ultimately reducing costs over time.”

We live in a world of big data and an extremely enlightened consumer. Insurance companies already sit at the center of transaction data and claims data. Now it seems they’re realizing that care providers are privy to an entirely new set of data that combined with theirs could result in better care at lower costs.

Health insurance to trusted health services

In the wake of ever-increasing insurance premiums we must think in a  radically different way about care. Some insurance companies are stepping up to do their part by joining the care-giving process. No longer can the insurance company’s role be only to pay claims for sick care.

“We view ourselves as a health service company that provides valued-added services that help people maintain or improve their health,” explains Cigna's Josephs.

“It’s a very, very different mindset and a very different model than just collecting premiums and paying clams. In this new rubric are tools to help patients navigate the system, tools to help doctors take better care of their patients, predictive analytics, so that doctors know which patient they should be focusing more on, who needs to see them. So we’re adding value, not just paying claims for sick care.”

In addition to offering value-added services, the relationship between physicians and insurance companies is changing to a more harmonious relationship where risk and rewards are shared.  

It’s this new relationship paradigm that one of the first principles that defined upstart Oscar Health. Loser explains that joining together by sharing deals with network partners triggers better outcomes overall.

“Our providers are incentivized to provide high-quality care in an efficient manner and share in the rewards if they’re able to do so, rather than the current model where providers and insurance companies are often seen as antagonistic forces on different sides of the table.”  

It also works to reinforce a relationship.

“What if your insurance company was someone that you actually trusted?” Loser suggested.. “What if you could actually feel like your insurer was there for you to help you throughout your healthcare journey, not just as a financial intermediary at the back end? And really was someone that you could trust to guide you through the system.”

People are going to demand better products

What’s pretty clear is that the old model, where insurance companies take a passive interest in consumer healthcare, is no longer viable in a world where consumers have increased insight and control over so many aspects of their lives.

“The sheer fact that the average consumer is, for the first time, paying for a significant chunk of their healthcare cost out of pocket means that people are going to demand better products,” said Loser, adding that traditional companies, whose purpose had been to finance care and not administer any part of it, are struggling to set a new course. Reinvention is essential.

“For them, they have to sort of steer the cargo ship in a completely different direction, across a thousand different areas, and it’s very, very difficult.”

(Image source: Fortune)