Speaking at the Economic Club of Phoenix recently, Elizabeth Bierbower — president of the employer group segment for health insurance provider Humana — posed this question: Is the health care industry in America at an inflection point?
If the answer to that question is yes, Bierbower explained, “It is critical that those of us in the industry change our approach. Or we won’t survive.” In fact, she noted, a new approach is critical in any industry faced with major changes like those we’re seeing in health care. “You have to be able to step back and understand what’s really going on.”
What is an inflection point? Bierbower explained the concept with an example. “Who remembers Betamax and VHS?” she asked the audience. They were two competing videocassette technologies vying for prominence in the 1970s. “Anyone who knows anything about technology will tell you that Betamax was superior.” But at the end of the day, it was VHS that consumers latched onto, VHS that became synonymous for videocassette, VHS that VCRs were built to suit. Why? “Because VHS fundamentally altered the way consumers interacted with digital entertainment.”
Today, the health care industry is at an inflection point too, Bierbower said. This inflection is defined by three undercurrents: changing demand, rising digital connectivity, and consumers investing in their own health
Employers have always been able to choose whether or not they will offer health benefits to their employees. But, according to Bierbower, “Now with the Affordable Care Act we have a strategic framework where employers are forced to make a decision: Do I want to pay and get out of offering health benefits or do I want to continue to offer those benefits?” She added, “If employers do want to continue to offer health care benefits they will have to decide how they will do so. Will they continue to offer defined benefits or move to a defined contribution model?”
For the first time ever, consumers are faced with choices, too. “While consumers have always been able to choose whether or not they will buy health insurance, they now must decide if they are going to not be insured and pay the penalty or get health insurance coverage.” Now that the demand for health care is changing on both fronts, Bierbower said, the ways that health care is supplied need to change as well.
Rising digital connectivity
The second indicator of an inflection point in the health care industry, according to Bierbower, is rising digital connectivity — which means anywhere, anytime access to information in the digital universe. For providers in the health care industry, “Digital isn’t a project or an initiative, it is your strategy. If you don’t have digital at the heart of your strategy you’re going to find it very difficult to compete in the future.”
One of the most significant implications of rising digital connectivity, Bierbower said, is that it allows people to engage in ways they never could before. She told the story of the man who founded the online community Patients Like Me. “This parent was frustrated by the care his child was receiving from the doctor. He felt like he didn’t have access to the information he needed to ensure that his child received the best care possible. So he created Patients Like Me to serve as a resource for people like him looking for advice beyond what they got in the doctor’s office.”
Patients Like Me recently conducted a research study into consumers’ interactions within the health care system. The test subjects were Patients Like Me members. “Yes, you could challenge some of the information and say the study wasn’t done scientifically, but I can guarantee you there will be things that come out of that study that will be very useful in the academic and health care community as we move forward.”
As another example of the implications of rising digital connectivity, Bierbower shared that she is the primary caregiver for an aging mother who lives several states away. “I can’t physically be there with her, but because of digital connectivity, I can connect with my mother and her daily caregivers in real time. That allows me to have a pretty full understanding of what’s going on in the home.” And, it allows her mother to stay in the place she’s most comfortable. “Think about the elderly and how desperately they want to remain in their homes. With digital connectivity, many can do that.”
Consumers investing in their own health
The third indication that the health care industry is at an inflection point, according to Bierbower, is that consumers have begun to take charge of their own health.
“Today consumers are looking for the same things in their health care that they look for at Starbucks or Nordstrom’s: customization and experience. When someone walks into Nordstrom’s they expect to receive high quality service. Same thing when they walk into Starbucks. These companies have been able to bring an experience to their consumers nationwide, and that’s why people return.”
“The health care industry as a whole tends to get nervous when you use the word customization because they think cost and complexity,” Bierbower said. But really, “when a consumer desires customization they are saying: Know me, understand me, and don’t make me repeat the same things over and over and over again. Consumers want a plan that fits their needs and desires and they want a smooth and simple health care experience.”
One of the most important underpinnings of these experiences, according to Bierbower, is co-creation. “Co-creation is finding out how individuals interact with your product and service and meeting consumers where they are.” Bierbower described how consumers are creating their own unique support “eco-systems” to improve their health. “We need to figure out how to connect with consumers in their eco-systems; how to be a partner in their health.”
How Humana is adapting to the changing health care industry
With Bierbower and other leaders, Humana is preparing for the coming inflection in the health care industry by moving to an integrated care delivery model. Bierbower explained the three components of that model:
- The care — Humana has always focused on making sure that patients are moving through the system efficiently and effectively, ensuring minimal medical risks, and improving outcomes. Bierbower said that the company is now also focusing more on individuals’ lifestyles, behaviors, and environments in order to help patients get and stay healthy. “Through detection and prevention education we can start to improve the health of our society.”
- The analytics — “Big data is useless unless we can use it to drive changes in behavior and create better outcomes for our population,” Bierbower said. “Take, for example, the traditional trajectory of someone with elevated A1C (diabetes). If, in the beginning, we can work with this individual to lower their A1C, we can completely change their trajectory and not just change their health, but change their life.”
- The members — For Humana, members are the center of everything the company does. “Our goal is to keep our members informed, engaged, and healthy,” Bierbower explained. “We partner with our members to help them achieve optimal health as simply as possible.”
Is the health care industry at an inflection point? Bierbower certainly thinks so, citing changing demand, rising digital connectivity, and consumers’ investment in their own health as indicators of the inflection. For her, and for Humana, the inflection represents an exciting opportunity for change. “We are excited about these times! If we use technology, leverage data, innovation, and social connectivity, we really believe that there is an opportunity in partnership with others to create a better health care system.”