In today’s increasingly consumer-driven environment, personalization is not only expected, but a demanded part of the user experience. Online ads are served based on a user’s search history and preferences. What pops up in an individual’s Facebook newsfeed is as unique as their iTunes library. But when it comes to healthcare, personalization has been relatively non-existent. And that’s about to change.
DesrochersThe CDC estimates that roughly half of all adults
in the U.S. suffer from at least one chronic illness, while approximately 86% of all healthcare spending is directed toward treating patients with one or more chronic conditions. These costs are not only unsustainable, but are projected to grow as the population ages.
The industry is essentially reinventing itself to tackle these skyrocketing costs. Instead of treating patients when they are sick, and paying doctors accordingly, we are moving to a value-based care model to keep patients healthy, or healthier, especially those chronically-ill patients who put the most significant burden on our system.
For this shift to be successful, patient care must be personalized, which opens up a tremendous opportunity for health plans—a group that has only just begun to understand the great potential that personalization will have in this new value-based care world. Achieve this, and health plans stand to not only gain a competitive advantage, but also play a key role in bending the healthcare cost curve, especially when managing chronically-ill populations.
The importance of personalized incentives in a value-based world
Health plans must leverage value-based benefit designs—through which plan offerings and incentives are customized and continuously adjusted according to an individual’s changing needs.
Value-based benefits can be used to ensure that both care access and incentives are aligned with a patient’s specific circumstances.
For example, as part of a value-based plan, a patient suffering from a chronic condition could have the appropriate level of supplementary benefits layered on top of current plan offerings (a diabetes patient might have additional wellness visits or access to a nutritionist added to her base-level benefits plan). These types of benefits essentially ensure that the patients most in need of care are matched with the optimal level of benefits designed specifically for their conditions.
Customization can be focused on far more than just a patient’s health status, though. It’s possible—with the right technology infrastructure—to dynamically change a member’s benefits based on behavior and level of care plan compliance. For example, if a diabetes patient uses each of the wellness visits, nutritionist consults and is adherent to the medication regimen offered under the health plan, that patient might receive a premium reduction, or additional “healthy behavior” benefits, going forward.
When incentives are in play, individuals are more likely to engage in healthy behaviors and comply with their recommended care plans. To date, this level of incentive-driven customization has occurred primarily in employer-sponsored plans. However, more targeted incentives and value-based offerings are beginning to pop up in the form of geo-specific Medicare pilot programs
as well, and it’s likely only a matter of time before individual market plans follow suit.
Why? Because incentives work. One study found that employees were 33 times more likely to participate
in health coaching when their employers offered targeted financial incentives.
But people aren’t necessarily motivated by the same things, and simply having incentives available does not guarantee that all members will take advantage. From discounted gym memberships to premium reductions, plans are still fairly early on in the “throw it against the wall and see if it sticks” phase of incentives program building.
When incentives are tied directly to patient behavior, though, health plans can tailor member benefits in the most effective way possible, based upon each member’s individual needs and level of compliance. This level of personalization thereby increases the likelihood of healthy behavior—the end goal for health plans focused on reducing costs without sacrificing care.
Next: The personalization pay off
The personalization pay off
With this level of targeting, plans can ensure that their members have access to the individualized care that they need. Plans leveraging these new models gain a competitive advantage in the market, as their members finally start to see their health insurers as care advisors—not adversaries—under this new value-based construct.
Prompted by the cost burden that chronic care patients are putting on the system, CMS decided to put muscle behind the value-driven health plan framework with the Medicare Advantage (MA) Value-Based Insurance Design Model
, which will allow some MA plans to offer targeted, supplemental services at no cost or reduced costs to patients with certain chronic conditions. CMS designed the model to improve patient health and reduce over-utilization of avoidable care, while also lowering costs for consumers, health plans and the Medicare program as a whole.
It’s been seven years since the passing of the HITECH Act. While providers remain focused on EHR adoption, health plans are still largely at the starting gate when it comes to embracing a digital healthcare system largely due to outdated financial and administrative technology infrastructures that were not designed for a value-based environment. But today’s quality-driven environment requires a digital intervention, and for health plans, the time for technology complacency and stagnation is over.
Whether looking through the lens of payment or benefits, a value-based marketplace is the industry’s new economic reality. Patients’ needs are growing in complexity and their motivating factors are changing—it’s time that their healthcare benefits, and the technology with which they are managed, changed with them.
Ray Desrochers is executive vice president of HealthEdge.