FUTURE OF HEALTHCARE
Consumer-Centric Care is Coming
Exponential change is coming to healthcare for employers. New business models are emerging that focus on consumer-centric care to drive improvements in the well-being of employees and dependents (“Members”). Members today interact with the health system only when they are sick or injured. Hospital care makes up about one-third of all current spending and chronic illnesses are tied to over 80% of hospital admissions.
The future of health will revolve around Member engagement, prevention, and personalized, timely, affordable and high-value care when needed. More health spends will be devoted to sustaining well-being and preventing illness while less will be tied to assessing conditions and treating illness. This shift will result in fewer and less severe diseases and a reduction in healthcare spending.
In addition, new technology including sensors, wearable devices, and health education and tracking apps will allow Members to assess and manage their health in real-time. All Member data will be connected online with companies that deliver health benefits for employers. When the Member data gets integrated with past and current health risk, prevention, care delivery, paid claims, incurred claims and reinsurance information, a complete profile of Member well-being will be available to educate, coach and improve the health of Members.
The Current Market
Healthcare in the U.S. is broken. Over the last 15 years, health insurance costs have increased more than 200% while our personal income is up only 57%. Six out of ten adults in the country have a chronic disease, with four in ten having two or more chronic conditions. All of the leading causes of death and disability – heart disease, cancer, chronic lung disease, stroke, Alzheimer’s disease, diabetes and chronic kidney disease – can be prevented or managed. But they aren’t today because the large, traditional health insurers (“Insurers”) control more than 80% of the market with health benefit plans that give little attention or consideration to prevention, accessibility, consumer engagement, cost control and/or quality of care. As a result, most employers don’t have purchasing options, other than these Insurers and some third-party administrators (“TPAs”) to solve the conundrum of healthcare.
Problems Worth Solving
Healthcare for employers, particularly small and mid-sized firms, is plagued by several key problems.
Many small employers cannot afford to provide health benefits to their employees. When health benefit plans are offered, escalating healthcare premium costs reduce company profits. And increases in employee annual deductibles and co-pays are discouraging workforces from seeking appropriate care. Moreover, in the last 10 years, average family premiums have increased by 55%, twice as fast as workers’ earnings (26%) and three times as fast as inflation (17%).
Employers who do provide health benefit plans are forced to offer plans that are very expensive and/or provide minimal health coverage. As a result, a substantial number of employees don’t enroll in those plans. Or the employees sign up for coverage but can’t afford to add the rest of the family because the expense is too high.
Members are ineffective at navigating through the maze of services, providers, and prices, leading to misuse of provider services and excessive costs. Most don’t have the tools, knowledge, and coaching to shop for high quality, less expensive services.
Healthcare quality has become a bigger issue than ever before, now the third leading cause of death in America. Inaccurate diagnoses, medication errors, inappropriate or unnecessary treatment, inadequate or unsafe clinical facilities or practices and/or providers who lack adequate training and expertise result in needless suffering, disability, and death.
The market need for a solution to these problems is huge. There are 30,200,000 small businesses in the U.S., representing 99% of all employers and totaling 58,900,000 employees or 47% of all employees in the country.