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ONLINE FEBRUARY 18, 2013




BY GIL IRWIN, JACK TOPDJIAN, AND ASHISH KAURA
Putting an I
in Healthcare
The days of the disengaged health consumer are numbered.
Consumerization will transform healthcare systems, involving
individuals as never before in the management of their own care.
I
    Putting an I in Healthcare
    The days of the disengaged health consumer are numbered. Consumerization
    will transform healthcare systems, involving individuals as never before in the
    management of their own care.

    by Gil Irwin, Jack Topdjian, and Ashish Kaura
1
www.strategy-business.com




         n a shopping center on the western outskirts of         health insurers enter the bricks-and-mortar retail busi-
         Harrisburg, Penn., sandwiched among a women’s           ness, including Florida Blue (a licensee of the Blue Cross
         clothing shop, a pet supply store, and a dental clin-   and Blue Shield Association), which operates a chain of
    ic, sits a window into the future of healthcare in the       11 stores stretching the length of its state, and United
    United States: Highmark Direct. Open since 2009, it is       Healthcare, which opened 30 pop-up stores and more
    part of a small chain of nine retail health insurance        than 1,400 kiosks in shopping malls in October 2012.
    stores scattered across Pennsylvania owned and operated      These companies are being driven by a nascent trend
    by Highmark Inc., the fourth-largest plan in the Blue        that is quickly becoming an industry imperative: the
    Cross and Blue Shield Association, which serves 4.9 mil-     consumerization of healthcare.
    lion members in Pennsylvania, West Virginia, and                  Health insurance stores are only one of its manifes-
    Delaware.                                                    tations—other consumerization initiatives are currently
         The retail stores run by Highmark, a US$14.8 bil-       under way among insurers, care providers, and pharma-
    lion, diversified health-services company, are a direct      ceutical companies. Accountable care organizations, for
    channel into the growing market for individual health        example, are beginning to tie physician compensation
    insurance created by reform and by budget-strained           to population health. Healthcare bundles combine
    employers, many of whom are off-loading healthcare cov-      medical care, coverage, and support across a care
    erage decisions and costs to their employees. Consumers      episode or condition—such as a knee replacement or
    walk in or make appointments for consultations with          coronary bypass surgery—at a fixed, risk-adjusted price.
    Highmark’s licensed agents, who help them navigate the       And capitation payment contracts pay providers an
    often confusing world of health insurance and assist them    annual rate per patient, no matter how much care they
    in identifying and applying for coverage. Seniors attend     require. These and other efforts skim the surface of a
    informational seminars that explain their Medicare cover-    game-changing industry transition.
    age and supplemental insurance needs. Plan members                The word consumerization has several meanings,
    learn how to better manage their own health with             but we use it here to describe the transformation of an
    Highmark’s wellness programs, and contact customer           industry from a primarily business-to-business (B2B)
    service via self-service kiosks and videoconferencing.       enterprise to one that focuses on business-to-consumer
          The last few years have seen a handful of other U.S.   (B2C) activities. In today’s B2B health marketplace,
Gil Irwin                        Jack Topdjian                    Ashish Kaura                     Also contributing to this article
                                                                                                   were Booz & Company
is a senior partner with Booz    is a partner with Booz &         is a partner with Booz &         senior partner Gary Ahlquist,
& Company based in New York.     Company based in New York.       Company based in Chicago. He     partner Michael Ruhl, and
He specializes in business       He leads the firm’s North        specializes in the development   senior associate Nate
model and operating model        American healthcare technol-     of growth strategies and new     Holobinko.
transformations in the health-   ogy and operations practice      business models in response
care industry, with a focus on   and global healthcare con-       to market discontinuities for
technology and operations        sumerization practice. He spe-   healthcare and health-services
strategy.                        cializes in large-scale          companies.
                                 transformation and capability
                                 building in the healthcare
                                 industry.




                                                                                                                                       2




                                                                                                                                       www.strategy-business.com
gil.irwin@booz.com               jack.topdjian@booz.com           ashish.kaura@booz.com




business is transacted among large employers, payors,              tion has been intensified by an explosion of “developed
providers, and pharmaceutical companies. The people                nation” diseases. A 2011 study by the World Economic
being insured and treated have little involvement in or            Forum and the Harvard School of Public Health esti-
responsibility for their own care and cost choices. In the         mated that the cumulative costs of noncommunicable
years ahead, healthcare will evolve into a B2C industry,           diseases—including cardiovascular disease, chronic res-
in which consumers will take a much more active role in            piratory disease, and cancer—in low- and middle-
their healthcare decisions and expenditures. And, as a             income countries would surpass $7 trillion by 2025.
result, every healthcare company and organization will             Diabetes is a case in point. Five of the 10 countries with
need to become more consumer-centric. The deck is                  the highest national prevalence of diabetes are in the
being reshuffled, and there will be new winners and new            Middle East. In Mexico, Type 2 diabetes is the leading
losers, depending on how companies play their hand.                cause of death among adults. And there are 92 million
     This shift is both a reaction to and a result of the          people with the disease in China and 63 million in
state of healthcare systems around the world, which are            India, according to the International Diabetes
characterized by high costs, lack of access, and unsatis-          Federation.
factory outcomes. The U.S. system has been in the spot-                 These global healthcare challenges have revealed
light for years because of double-digit cost inflation,            the cracks in the industry’s current operating models,
frustratingly complex patient experiences, and, most               and they demand a new way of thinking. The idea of
recently, the controversial Affordable Care Act. But the           consumer-driven healthcare has been around for years,
much-lauded, publicly funded healthcare systems in                 but now healthcare companies are being forced to act.
nations such as Canada and the United Kingdom are                  The U.S. is the bellwether in this regard, because the
coming under pressure, too, as their foundation in                 Supreme Court’s upholding of the Affordable Care Act
fixed-budget, capitation-based care is strained by rising          and the reelection of President Barack Obama in 2012
healthcare costs and demand. This is creating allocation           have effectively ended the debate on whether to pursue
challenges; for example, the benchmark target wait time            reform and turned the industry’s attention to how to
for a knee replacement in Canada was 182 days in 2011,             achieve it. Thus, U.S. health insurers, care providers,
and 25 percent of patients were not served within that             and pharmaceutical companies are experimenting with
period. It is also creating equity challenges: In the U.K.,        a host of new models and technologies that should be
a secondary healthcare system is developing, which calls           replicable in the healthcare systems of Europe and in
into question the viability of universal healthcare.               countries in other regions.
Private medical insurers, hospitals, and care providers                 Many of these innovative solutions are based on
are springing up to answer the demands of consumers                fundamentally sound ideas for cutting costs and
who want more timely care and can afford to pay for it.            improving care outcomes. But unless and until the con-
     Meanwhile, in developing countries, the struggle to           sumer is positioned at the center of the healthcare
extend basic healthcare to large portions of the popula-           industry, it is highly unlikely that such concepts will
3
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    Influencing Consumer Behavior
    deliver their full potential. Just look at the fate of        & Human Services. In a recent analysis of the financial
    HMOs (health maintenance organizations) in the                effects of five chronic diseases (namely, hypertension,
    United States. In the 1990s, HMOs produced lower              asthma/chronic obstructive pulmonary disease, chronic
    costs and provided care comparable to that of other           back pain, depression, and rheumatoid arthritis) in
    healthcare benefit models. But because HMOs disen-            Europe, Booz & Company and the Bertelsmann
    franchised their members by imposing constraints on           Foundation concluded that national productivity losses
    where they could go to obtain care and placed limits on       associated with a lack of treatment adherence were
    the amount of care they could receive, they created a         €10 billion to €20 billion ($13.5 billion to $27.1
    consumer backlash, and many failed.                           billion) in Germany, €8 billion to €19 billion ($10.8
         The lesson: To successfully cure the systemic ills of    billion to $25.7 billion) in the U.K., and €2 billion to
    healthcare in the U.S. and elsewhere, the industry will       €4 billion ($2.7 billion to $5.4 billion) in the
    have to promote and support more control, awareness,          Netherlands (see “Unleashing the Potential of Therapy
    and responsibility on the part of the healthcare con-         Adherence: High-Leverage Changes in Patient Behavior
    sumer. The digital enablers of consumerization—big            for Improved Health and Productivity,” by Peter Behner,
    data, cloud computing, telemedicine, and social               Ab Klink, and Sander Visser, Booz & Company white
    media—are already at hand, and can be leveraged by            paper, July 2012).
    forward-thinking executives. Eventually, as consumer-              The ramifications of consumer behavior extend to
    focused initiatives multiply and their effects reverberate    choices regarding care options and healthcare insurance.
    throughout the industry, they could bring about a dra-        A 2012 survey by health insurer Aetna Inc. found that
    matic improvement in health and a transformational            Americans rank choosing a health plan as the second
    reduction in costs.                                           most difficult decision in their lives (choosing a retire-
                                                                  ment plan was first). The survey also revealed that 43
                                                                  percent of consumers rarely or never track their out-of-
    A fundamental reframing of the consumer’s role on             pocket care costs. The Consumers Union studied the
    the part of healthcare companies is a prerequisite for        ability of consumers to select a health insurance plan,
    sustainable healthcare systems, because consumer              reporting in January 2012, “Almost all participants were
    behavior has an outsized influence on the demand for          stymied in their desire to identify the best value plan
    care and care outcomes. In the U.S., fully 40 percent of      among those offered. While their concept of value was
    deaths are attributable to behavioral factors—more than       sophisticated, participants had little ability to assess
    factors such as genetics, environment, and socioeco-          the overall coverage offered by a plan.” The Affordable
    nomics. And according to the American Medical                 Care Act is a first step in demystifying the process for
    Association, 25 percent of the United States’ total annu-     consumers, but they will need sustained guidance and
    al healthcare expenditures are the result of behaviors that   support.
    could be changed, such as smoking, lack of exercise, and           Influencing consumer behavior, whether through
    poor diet.                                                    outright incentives or the design of the subtler, suppos-
         Furthermore, once people become ill, their behav-        edly more effective changes in choice architecture advo-
    ior often exacerbates their condition, as many are            cated by economist Richard H. Thaler and legal scholar
    unwilling or unable to complete their treatment. The          Cass R. Sunstein in Nudge: Improving Decisions About
    lack of treatment adherence, such as failing to complete      Health, Wealth, and Happiness (Yale University Press,
    a medication regime or to cut fat or sugar from a diet,       2008), is no trivial task. Certainly, it will require more
    is the cause of approximately 125,000 deaths and 10           than the estimated 4 percent of national health-
    percent of hospitalizations in the U.S. each year, accord-    care expenditures in the U.S. currently devoted to
    ing to a study funded by the U.S. Department of Health        behavioral change.
The Building Blocks of Consumerization




                                                                                                                             4




                                                                                                                             www.strategy-business.com
      1. Insight-powered products and services. As com-
                                                                needs, consumers are struggling to make sense of what
There is no fixed starting point or one-size-fits-all strat-    kind of coverage to buy. In response, the industry has
egy for consumerization. The different healthcare sec-          begun developing more insight-driven offerings, such as
tors and the organizations within each sector will pursue       life stage–based products that are tailored to match con-
it in their own ways. But three building blocks are essen-      sumers’ evolving health and financial needs as they enter
tial to any successful adoption: (1) product and service        the workforce, start families, or prepare to retire. For
portfolios based on insights that are derived from a            example, for budget-conscious young people, insurers
nuanced understanding of consumers; (2) tools and               are offering policies that feature low premiums and cat-
programs that engage consumers in care delivery and             astrophic coverage, while they offer a more comprehen-
influence their behavior, and enable service providers to       sive set of benefits to pre-retirees who seek coverage for
optimize and coordinate patient-centric care; (3) and           preexisting conditions and protection for their nest
end-to-end customer experiences that produce con-               eggs. As insurers draw on ever-expanding data sources,




                                                                      2. Engaging care delivery. Involving consumers in
sumer satisfaction, trust, and brand loyalty. In develop-       we would expect to see more and more of these tailored
ing these products and tools, healthcare companies will         products, perhaps including products that are co-brand-
have to master new capabilities—with all the skills,            ed with hospitals or that give rewards for healthy behav-
knowledge, behaviors, processes, structures, and tech-          ior or offer money-saving coupons for health-related
nology inherent in those capabilities—or risk disinter-         consumer products.
mediation.                                                            To enhance their ability to capture and utilize
                                                                insights, healthcare organizations will need to integrate
panies such as Starbucks and Facebook have demon-               all the data they gather from customer touch points and
strated, if products and services are accessible and can be     meld it with external demographic, behavioral, and atti-
personalized in ways that make them highly relevant,            tudinal consumer data. Then, they will need to artfully
consumers will not just buy them. They will alter their         redesign their processes and systems to optimize their
lifestyles and behaviors to use them (for example, paying       products and services and to affordably bring them to
$4 for a cup of coffee).                                        market. For instance, companies will have to adopt
      Occasionally, such products and services are born of      rapid product design processes and create a tighter
intuition. But in most cases, their genesis is found in         alignment between the product development function
insights about consumers. Such insights come from a             and consumer-facing functions, such as marketing,
deep study of what consumers need and desire, and how           sales, and customer service. In many healthcare compa-
they act. As healthcare companies become more effec-            nies, this will be easier said than done, requiring funda-
tive gatherers of insight, they will seek to study their        mental shifts in how business is conducted, how success
consumer markets in increasingly sophisticated ways.            is measured, and how the corporate culture operates.
They will segment them according to preferences,
health status, care utilization levels and patterns, lifetime   the care delivery process will require the development of
customer value, and propensity to purchase specific             tools and programs that incentivize people to pursue
products and services, whether those offerings are insur-       healthier lifestyles and participate more actively in the
ance plans, medical care, or medications and medical            medical treatment they receive, and enable a new clini-
devices.                                                        cal operating paradigm that coordinates care around the
      We are already seeing the glimmerings of this more        patient.
sophisticated, consumer-centric approach to product                   Consider the advent of healthcare bundles. As more
and service innovation in the health insurance sector. In       and more bundles appear on the market, their cost and
the absence of a clear value proposition, accessible lan-       quality will become more transparent, enabling con-
guage, and a full understanding of their own insurance          sumers to easily shop for them. In turn, this will encour-
5
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    age competition among the providers that offer bundles.      move up to higher levels.”
    In a Booz & Company survey of roughly 1,000 U.S.                   Whole Foods has also established the Total Health
    healthcare consumers in October 2012, 78 percent of          Immersion Program for its least healthy and most at-
    respondents found the concept of bundled care appeal-        risk employees. It is a one-week, medically supervised
    ing. Among the benefits they would expect to reap from       program that provides intensive education about
    bundles are lower prices, greater price clarity and trans-   healthy eating and living. Mackey reports that more
    parency, more integrated care, the ability to provide        than 1,300 employees took advantage of the program in
    input in care processes, and simplified billing.             its first two years, prompting the company to extend the
         Healthcare bundles are starting to drive costs down     program to spouses and partners. In 2013, Whole
    by streamlining, standardizing, and coordinating what        Foods plans to begin offering the program to the pub-
    were formerly discrete and often highly variable process-    lic. “It’s a win-win strategy for all stakeholders
    es and procedures, transforming them into comprehen-         involved,” Mackey told us. “When we have healthy
    sive, patient-centric delivery systems. In October 2012,     team members, they are happier, and happy team mem-
    Wal-Mart Stores Inc. announced agreements with six           bers provide better customer service to our shoppers. It
    leading hospital systems, including Cleveland Clinic,        also leads to the company needing to spend less on
    Geisinger Health System, and Mayo Clinic, for exclu-         healthcare, which is better for investors.”
    sive, fixed-price care bundles for certain heart, spine,           Consumer engagement is also an area where phar-
    and transplant surgeries. This enabled the company to        maceutical companies can make an impact. For exam-




                                                                       3. Compelling end-to-end customer experiences. In
    provide incentives to employees who choose one of the        ple, Biogen Idec and Merck Serono have been making
    six providers. If an employee who requires one of these      impressive improvements in the treatment of multiple
    procedures uses one of the fixed-price bundle providers,     sclerosis. Using Web-based engagement tools and
    the employee’s out-of-pocket expenses are eliminated         patient services that add “beyond-the-pill” value, they
    and other expenses related to receiving the care, such as    show consumers how their behavior can maximize the
    travel, lodging, and food for the patient and a caregiver,   effectiveness of therapies.
    are provided without charge.                                       These consumerization pioneers are not seeking to
         As Walmart’s agreements suggest, employers can          change the behaviors of one patient at a time. Instead,
    play a valuable role in encouraging consumer engage-         they are integrating behavioral cues into a coherent
    ment. Whole Foods Market, which provides its own             therapeutic system that reinforces medical management
    health insurance to its employees, is using several pro-     and improves outcomes. To achieve truly engaging
    grams to build healthy lifestyles into its corporate cul-    delivery, care will have to be coordinated among con-
    ture. In CEO John Mackey’s new book, Conscious               sumers, care providers, and insurers. Simplified and
    Capitalism: Liberating the Heroic Spirit of Business (with   transparent pricing strategies will be needed to help
    Raj Sisodia, Harvard Business Review Press, 2013),           consumers make more informed decisions. Tools
    Mackey describes Whole Foods’ Team Member Healthy            and programs will be needed to help them participate
    Discount Incentive Program. It is a voluntary program        in their own care. And, of course, the technology
    in which employees can go to a mobile lab that will          infrastructure, analytics, and devices that help them
    measure basic biometrics, such as cholesterol levels,        fully engage will need to be ubiquitous within health-
    body mass index, and blood pressure. The healthier           care systems.
    the employee, the higher Whole Foods will raise his
    or her store discount above the standard 10 percent.         healthcare today, customer experiences tend to be pas-
    At the highest level, employees can obtain a 30 percent      sive and fragmented, as the consumer is passed from
    discount. “Within our culture,” writes Mackey, “it           department to department and care provider to care
    has become a matter of pride for team members to             provider. Thus, the quality of the customer experience
6




                                                                                                                           www.strategy-business.com
                                                             Enabled by Technology
can vary widely by touch point, and there is often little    family-friendly policies, and the redesign of facilities to
or no coordination among the many touch points in the        build in directional cues and create calmer, more attrac-
end-to-end process of purchasing insurance or receiving      tive settings.
care. Unsurprisingly, this results in less-than-                  Of course, before a customer experience can be
compelling customer experiences, and correspondingly         improved, it must be understood. This starts with a
low levels of customer satisfaction, trust, and brand loy-   mapping of the current customer experience and a clear
alty. According to the American Customer Satisfaction        understanding of how consumers interact with the
Index, an independent national benchmark based on            brand. Highmark, for example, used a variety of tech-
surveys of more than 70,000 people, U.S. consumers           niques and tools—including research, site visits, con-
rank hospitals just above the U.S. Postal Service in terms   sumer interviews, consumer experience simulations,
of customer satisfaction. They rank health insurers lower    ethnography, and operational data—to understand how
yet, in the company of utilities and wireless service        consumers perceived their experience with the compa-
providers.                                                   ny. Health organizations must then develop the skills
     In the health insurance sector, creating compelling     and tools needed to enhance touch points and deliver
customer experiences that bolster satisfaction, trust, and   information in ways that are accessible to consumers.
brand loyalty will require more personalized approaches
to selecting products, more transparent and comprehen-
sible plan options and costs, and less onerous enroll-       The common thread in nearly all consumer-driven ini-
ment processes. Once customers sign on, a more               tiatives is the digitization of healthcare. Big data and
compelling experience will encourage and support them        new technologies will enable organizations to adopt
in their quest to manage their own health through sim-       new products and services by simultaneously support-
plified claims processes and less complex billing.           ing personalization, superior clinical outcomes, and
     In 2011, Cigna launched its largest brand campaign      affordability. Although some technologies have yet to be
to date, “Go You,” a $25 million marketing effort            widely adopted in healthcare, some companies are
designed to attract consumers with a more personalized       already using new platforms to engage with consumers.
customer experience. Go You is more than an ad                     Healthcare companies have access to untold
campaign. Cigna is supporting it with 24/7 world-            amounts of clinical and financial data. But to make it
wide customer service; a Web portal, www                     actionable, they need to convert this data into readily
.MyCignaforHealth.com; social media apps; tools, such        understandable information. When this information is
as Intuit Inc.’s Quicken Health Expense Tracker, that        made available and accessible to the consumer through
help plan members better manage their medical care           personalized channels, it will affect their behavior—
and costs; and mobile applications that help members         whether the information is a treatment reminder, a
locate nearby pharmacies and emergency rooms. Plan           lifestyle suggestion, or direction to an optimal site of
members are also provided access to health coaches for       care. Some healthcare payors are now using the insights
chronic conditions and wellness programs.                    gleaned to create more effective products and services
     Hospitals have been on the forefront of the effort to   that align their benefit structure with the individual’s
create more compelling customer experiences. Many            needs. For example, Bloom Health, a Minnesota-based
have sent teams to companies that are known for the          private health insurance exchange, uses big data and
world-class customer experiences they provide, such as       analytics to transfer decisions about health benefits from
Walt Disney Company and the Ritz-Carlton hotel               employers to employees. Its website includes a decision
chain, to become more adept at serving customers. One        engine that asks employees a series of questions aimed at
result is the addition of experiential elements such as      guiding them to the policy that best fits their needs,
valet services, streamlined admissions processes, more       financial situation, and risk tolerance. In 2011, a trio of
messaging between patients and           advanced and final phase, “Support
                                            care providers; the integration of       My e-Community,” patient engage-
                                            personal patient data, such as           ment is enhanced with a fully inter-
                                            genetic, behavioral, and medical his-    operable platform that supports
                                            tory information, into the providers’    seamless     information     sharing
                                            electronic records; and patient          between a patient and the entire care
    The National eHealth Collaborative      access to the quality, safety, and       team.
    released its road map in November       experience ratings of care providers.      Today, various players are at dif-
    2012. It begins with “Inform Me,” an    Next, during the “Partner with Me”       ferent stages of the road map,
    initial step during which consumers     step, the penultimate phase of           though most have yet to move
    are provided with standardized          engagement, patients are given con-      beyond “Empower Me.” As compa-
    forms    and   information     about    dition-specific management tools         nies continue the evolution, they will
    advanced directives, privacy, and       and access to care summaries to          not only optimize individual out-
7   specific conditions. The second step,   support their personal health main-      comes, but also enhance health
    “Engage Me,” provides patients with     tenance efforts. Also, patient-gener-    through the analysis of data and the
    access to their electronic health       ated information, such as personal       identification and dissemination of
    records, fitness trackers, and other    preferences and wellness and home        best practices.
    e-health tools. The third step,         health device data, is added to their
    “Empower Me,” includes secure           electronic health records. In its most
www.strategy-business.com



    The Patient
    Engagement
    Framework




    large insurers—WellPoint, Blue Cross Blue Shield of          patients in 2013, and as many as 3 million patients by
    Michigan, and Health Care Service Corporation—pur-           2017. Patient conditions are monitored with remote
    chased a 78 percent stake in the company. The ration-        devices, and patients who have health concerns can text
    ale: They want to learn how to better develop and            their doctors instead of making appointments and trav-
    market benefit plans that will appeal to consumers.          eling to see them.
         Cloud computing will be another key technological            Finally, given their ability to engage and mobilize
    enabler of consumerization, providing, for example, the      people, it should come as no surprise that mobile health
    platform for long-overdue interoperable electronic           (m-health) and social media can support the transition
    health records that can provide seamless transitions for     to consumerization. During epidemics in the U.S., the
    patients and better clinical decision support for physi-     Centers for Disease Control and Prevention (CDC) has
    cians. Nimbus Health, a Seattle-based startup, is using      been a leader in using social media, such as Twitter,
    Amazon’s cloud services as a host for its Breeze Medical     Facebook, and Wikipedia, to distribute information to
    System, software that allows doctors to share medical        the public across multiple channels, including smart-
    records with other doctors and patients. Of course, any      phones. During the 2009 H1N1 swine flu epidemic,
    mention of cloud computing may raise concerns about          for example, the CDC used social media to disseminate
    privacy among consumers, especially when it comes to         information on behaviors for avoiding H1N1 and to
    their medical history. Although industry security stan-      teach people how to recognize its symptoms. The
    dards have made considerable headway, hospitals and          CDC is also tapping into the power of crowds to
    other care providers will need to manage security            encourage people to become “health advocates” who
    requirements and risk carefully.                             pass health information through their own networks. It
         Telemedicine—remote monitoring and diagno-              is expected that m-health and social media use among
    sis—is a third enabler of consumer-centric healthcare. It    healthcare companies will increase, engaging consumers
    promises improved access and lower care delivery costs.      more in their own health and wellness—for example,
    After a successful pilot project with 6,000 patients in      they could use their smartphone to monitor prescrip-
    2011, U.K. health minister Jeremy Hunt announced             tions, track weight maintenance, and get medical
    plans to deliver remote care to 100,000 chronically ill      appointment reminders.
8




                                                              that continuously improves population health. +




                                                                                                                                           www.strategy-business.com
The Path to Consumerization

                                                              Resources
     The digital tools are available and accessible, and      meet today’s challenges. As Aetna CEO Mark Bertolini
organizations such as the National eHealth                    told the participants at the HIMSS Conference in Las
Collaborative (NeHC) are devising strategies and stan-        Vegas in 2012, “The end of insurance companies, the
dards for integrating them into the U.S. healthcare land-     way we’ve run the business in the past, is here.”
scape. The NeHC, a public–private partnership, has            Consumerization is the industry’s future. The work will
mapped out a five-phase framework for guiding the             be hard, but the rewards promise to far exceed the effort:
development of the technological infrastructure that the      a high-quality, cost-effective, and user-friendly system
industry will need to support consumer-centric health-
care. It suggests how the digital components of health-
care may come together in the coming years (see “The
Patient Engagement Framework, page 7).
                                ”


As consumer-driven healthcare spreads, the fundamen-
tal nature of the industry will change—just as in other
industries that have moved from B2B to B2C, such as
banking and computers and electronics. The ultimate           Gary Ahlquist, Minoo Javanmardian, Sanjay B. Saxena, and Brett
                                                              Spencer, “Bundled Care: The Voice of the Consumer,” Booz & Company
goal for insurers, care providers, and pharma companies       white paper, Jan. 2013: According to the results of a recent Booz &
alike is to drive initiatives forward until the industry      Company survey, U.S. consumers are ready for the advent of healthcare
                                                              bundles.
reaches a tipping point. The new healthcare industry
that results will be adept at influencing consumer behav-     Minoo Javanmardian, Ashish Kaura, Sanjay B. Saxena, and Brett Spencer,
iors. It will use sophisticated attitudinal segmentation to   “Healthcare after the Ruling: Let the Work Continue,” Booz & Company
                                                              white paper, June 2012: What the upholding of the Affordable Care Act
design and deliver personalized products and services,        will mean for insurers, care providers, pharmaceutical firms, and other
and its financial performance will be linked directly to      healthcare companies.
care outcomes. Such an industry will motivate con-
                                                              Ashish Kaura, David S. Levy, and Minoo Javanmardian, “Health
sumers to pursue wellness, and will provide them with         Insurance Gets Personal,” s+b, Autumn 2010: Earlier analysis of the
access to healthcare when they need it via the channels       health insurance market’s coming retail era.
that they prefer.                                             Avi Kulkarni and Nelia Padilla McGreevy, “A Strategist’s Guide to
     Of course, this vision will not materialize overnight.   Personalized Medicine,” s+b,Winter 2012: The tailoring of treatments to
It will take years, perhaps decades. And it will require a    specific populations is changing the game for key industry stakeholders.

sustained effort across the healthcare industry, invest-      Ramez Shehadi, Walid Tohme, and Edward H. Baker, “IT and
ment, and the willingness and ability to change. But          Healthcare: Evolving Together at the Cleveland Clinic,” s+b,(online only),
healthcare companies around the world are realizing           Aug. 6, 2012: CIO Martin Harris on how information technology is
                                                              transforming patient engagement.
that their current business models are insufficient to
strategy+business magazine
is published by Booz & Company Inc.
To subscribe, visit strategy-business.com
or call 1-855-869-4862.

For more information about Booz & Company,
visit booz.com



• strategy-business.com
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© 2013 for Booz Allen Hamilton? It can be found at at www.boozallen.com

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Putting an I in Healthcare

  • 1. strategy+business ONLINE FEBRUARY 18, 2013 BY GIL IRWIN, JACK TOPDJIAN, AND ASHISH KAURA Putting an I in Healthcare The days of the disengaged health consumer are numbered. Consumerization will transform healthcare systems, involving individuals as never before in the management of their own care.
  • 2. I Putting an I in Healthcare The days of the disengaged health consumer are numbered. Consumerization will transform healthcare systems, involving individuals as never before in the management of their own care. by Gil Irwin, Jack Topdjian, and Ashish Kaura 1 www.strategy-business.com n a shopping center on the western outskirts of health insurers enter the bricks-and-mortar retail busi- Harrisburg, Penn., sandwiched among a women’s ness, including Florida Blue (a licensee of the Blue Cross clothing shop, a pet supply store, and a dental clin- and Blue Shield Association), which operates a chain of ic, sits a window into the future of healthcare in the 11 stores stretching the length of its state, and United United States: Highmark Direct. Open since 2009, it is Healthcare, which opened 30 pop-up stores and more part of a small chain of nine retail health insurance than 1,400 kiosks in shopping malls in October 2012. stores scattered across Pennsylvania owned and operated These companies are being driven by a nascent trend by Highmark Inc., the fourth-largest plan in the Blue that is quickly becoming an industry imperative: the Cross and Blue Shield Association, which serves 4.9 mil- consumerization of healthcare. lion members in Pennsylvania, West Virginia, and Health insurance stores are only one of its manifes- Delaware. tations—other consumerization initiatives are currently The retail stores run by Highmark, a US$14.8 bil- under way among insurers, care providers, and pharma- lion, diversified health-services company, are a direct ceutical companies. Accountable care organizations, for channel into the growing market for individual health example, are beginning to tie physician compensation insurance created by reform and by budget-strained to population health. Healthcare bundles combine employers, many of whom are off-loading healthcare cov- medical care, coverage, and support across a care erage decisions and costs to their employees. Consumers episode or condition—such as a knee replacement or walk in or make appointments for consultations with coronary bypass surgery—at a fixed, risk-adjusted price. Highmark’s licensed agents, who help them navigate the And capitation payment contracts pay providers an often confusing world of health insurance and assist them annual rate per patient, no matter how much care they in identifying and applying for coverage. Seniors attend require. These and other efforts skim the surface of a informational seminars that explain their Medicare cover- game-changing industry transition. age and supplemental insurance needs. Plan members The word consumerization has several meanings, learn how to better manage their own health with but we use it here to describe the transformation of an Highmark’s wellness programs, and contact customer industry from a primarily business-to-business (B2B) service via self-service kiosks and videoconferencing. enterprise to one that focuses on business-to-consumer The last few years have seen a handful of other U.S. (B2C) activities. In today’s B2B health marketplace,
  • 3. Gil Irwin Jack Topdjian Ashish Kaura Also contributing to this article were Booz & Company is a senior partner with Booz is a partner with Booz & is a partner with Booz & senior partner Gary Ahlquist, & Company based in New York. Company based in New York. Company based in Chicago. He partner Michael Ruhl, and He specializes in business He leads the firm’s North specializes in the development senior associate Nate model and operating model American healthcare technol- of growth strategies and new Holobinko. transformations in the health- ogy and operations practice business models in response care industry, with a focus on and global healthcare con- to market discontinuities for technology and operations sumerization practice. He spe- healthcare and health-services strategy. cializes in large-scale companies. transformation and capability building in the healthcare industry. 2 www.strategy-business.com gil.irwin@booz.com jack.topdjian@booz.com ashish.kaura@booz.com business is transacted among large employers, payors, tion has been intensified by an explosion of “developed providers, and pharmaceutical companies. The people nation” diseases. A 2011 study by the World Economic being insured and treated have little involvement in or Forum and the Harvard School of Public Health esti- responsibility for their own care and cost choices. In the mated that the cumulative costs of noncommunicable years ahead, healthcare will evolve into a B2C industry, diseases—including cardiovascular disease, chronic res- in which consumers will take a much more active role in piratory disease, and cancer—in low- and middle- their healthcare decisions and expenditures. And, as a income countries would surpass $7 trillion by 2025. result, every healthcare company and organization will Diabetes is a case in point. Five of the 10 countries with need to become more consumer-centric. The deck is the highest national prevalence of diabetes are in the being reshuffled, and there will be new winners and new Middle East. In Mexico, Type 2 diabetes is the leading losers, depending on how companies play their hand. cause of death among adults. And there are 92 million This shift is both a reaction to and a result of the people with the disease in China and 63 million in state of healthcare systems around the world, which are India, according to the International Diabetes characterized by high costs, lack of access, and unsatis- Federation. factory outcomes. The U.S. system has been in the spot- These global healthcare challenges have revealed light for years because of double-digit cost inflation, the cracks in the industry’s current operating models, frustratingly complex patient experiences, and, most and they demand a new way of thinking. The idea of recently, the controversial Affordable Care Act. But the consumer-driven healthcare has been around for years, much-lauded, publicly funded healthcare systems in but now healthcare companies are being forced to act. nations such as Canada and the United Kingdom are The U.S. is the bellwether in this regard, because the coming under pressure, too, as their foundation in Supreme Court’s upholding of the Affordable Care Act fixed-budget, capitation-based care is strained by rising and the reelection of President Barack Obama in 2012 healthcare costs and demand. This is creating allocation have effectively ended the debate on whether to pursue challenges; for example, the benchmark target wait time reform and turned the industry’s attention to how to for a knee replacement in Canada was 182 days in 2011, achieve it. Thus, U.S. health insurers, care providers, and 25 percent of patients were not served within that and pharmaceutical companies are experimenting with period. It is also creating equity challenges: In the U.K., a host of new models and technologies that should be a secondary healthcare system is developing, which calls replicable in the healthcare systems of Europe and in into question the viability of universal healthcare. countries in other regions. Private medical insurers, hospitals, and care providers Many of these innovative solutions are based on are springing up to answer the demands of consumers fundamentally sound ideas for cutting costs and who want more timely care and can afford to pay for it. improving care outcomes. But unless and until the con- Meanwhile, in developing countries, the struggle to sumer is positioned at the center of the healthcare extend basic healthcare to large portions of the popula- industry, it is highly unlikely that such concepts will
  • 4. 3 www.strategy-business.com Influencing Consumer Behavior deliver their full potential. Just look at the fate of & Human Services. In a recent analysis of the financial HMOs (health maintenance organizations) in the effects of five chronic diseases (namely, hypertension, United States. In the 1990s, HMOs produced lower asthma/chronic obstructive pulmonary disease, chronic costs and provided care comparable to that of other back pain, depression, and rheumatoid arthritis) in healthcare benefit models. But because HMOs disen- Europe, Booz & Company and the Bertelsmann franchised their members by imposing constraints on Foundation concluded that national productivity losses where they could go to obtain care and placed limits on associated with a lack of treatment adherence were the amount of care they could receive, they created a €10 billion to €20 billion ($13.5 billion to $27.1 consumer backlash, and many failed. billion) in Germany, €8 billion to €19 billion ($10.8 The lesson: To successfully cure the systemic ills of billion to $25.7 billion) in the U.K., and €2 billion to healthcare in the U.S. and elsewhere, the industry will €4 billion ($2.7 billion to $5.4 billion) in the have to promote and support more control, awareness, Netherlands (see “Unleashing the Potential of Therapy and responsibility on the part of the healthcare con- Adherence: High-Leverage Changes in Patient Behavior sumer. The digital enablers of consumerization—big for Improved Health and Productivity,” by Peter Behner, data, cloud computing, telemedicine, and social Ab Klink, and Sander Visser, Booz & Company white media—are already at hand, and can be leveraged by paper, July 2012). forward-thinking executives. Eventually, as consumer- The ramifications of consumer behavior extend to focused initiatives multiply and their effects reverberate choices regarding care options and healthcare insurance. throughout the industry, they could bring about a dra- A 2012 survey by health insurer Aetna Inc. found that matic improvement in health and a transformational Americans rank choosing a health plan as the second reduction in costs. most difficult decision in their lives (choosing a retire- ment plan was first). The survey also revealed that 43 percent of consumers rarely or never track their out-of- A fundamental reframing of the consumer’s role on pocket care costs. The Consumers Union studied the the part of healthcare companies is a prerequisite for ability of consumers to select a health insurance plan, sustainable healthcare systems, because consumer reporting in January 2012, “Almost all participants were behavior has an outsized influence on the demand for stymied in their desire to identify the best value plan care and care outcomes. In the U.S., fully 40 percent of among those offered. While their concept of value was deaths are attributable to behavioral factors—more than sophisticated, participants had little ability to assess factors such as genetics, environment, and socioeco- the overall coverage offered by a plan.” The Affordable nomics. And according to the American Medical Care Act is a first step in demystifying the process for Association, 25 percent of the United States’ total annu- consumers, but they will need sustained guidance and al healthcare expenditures are the result of behaviors that support. could be changed, such as smoking, lack of exercise, and Influencing consumer behavior, whether through poor diet. outright incentives or the design of the subtler, suppos- Furthermore, once people become ill, their behav- edly more effective changes in choice architecture advo- ior often exacerbates their condition, as many are cated by economist Richard H. Thaler and legal scholar unwilling or unable to complete their treatment. The Cass R. Sunstein in Nudge: Improving Decisions About lack of treatment adherence, such as failing to complete Health, Wealth, and Happiness (Yale University Press, a medication regime or to cut fat or sugar from a diet, 2008), is no trivial task. Certainly, it will require more is the cause of approximately 125,000 deaths and 10 than the estimated 4 percent of national health- percent of hospitalizations in the U.S. each year, accord- care expenditures in the U.S. currently devoted to ing to a study funded by the U.S. Department of Health behavioral change.
  • 5. The Building Blocks of Consumerization 4 www.strategy-business.com 1. Insight-powered products and services. As com- needs, consumers are struggling to make sense of what There is no fixed starting point or one-size-fits-all strat- kind of coverage to buy. In response, the industry has egy for consumerization. The different healthcare sec- begun developing more insight-driven offerings, such as tors and the organizations within each sector will pursue life stage–based products that are tailored to match con- it in their own ways. But three building blocks are essen- sumers’ evolving health and financial needs as they enter tial to any successful adoption: (1) product and service the workforce, start families, or prepare to retire. For portfolios based on insights that are derived from a example, for budget-conscious young people, insurers nuanced understanding of consumers; (2) tools and are offering policies that feature low premiums and cat- programs that engage consumers in care delivery and astrophic coverage, while they offer a more comprehen- influence their behavior, and enable service providers to sive set of benefits to pre-retirees who seek coverage for optimize and coordinate patient-centric care; (3) and preexisting conditions and protection for their nest end-to-end customer experiences that produce con- eggs. As insurers draw on ever-expanding data sources, 2. Engaging care delivery. Involving consumers in sumer satisfaction, trust, and brand loyalty. In develop- we would expect to see more and more of these tailored ing these products and tools, healthcare companies will products, perhaps including products that are co-brand- have to master new capabilities—with all the skills, ed with hospitals or that give rewards for healthy behav- knowledge, behaviors, processes, structures, and tech- ior or offer money-saving coupons for health-related nology inherent in those capabilities—or risk disinter- consumer products. mediation. To enhance their ability to capture and utilize insights, healthcare organizations will need to integrate panies such as Starbucks and Facebook have demon- all the data they gather from customer touch points and strated, if products and services are accessible and can be meld it with external demographic, behavioral, and atti- personalized in ways that make them highly relevant, tudinal consumer data. Then, they will need to artfully consumers will not just buy them. They will alter their redesign their processes and systems to optimize their lifestyles and behaviors to use them (for example, paying products and services and to affordably bring them to $4 for a cup of coffee). market. For instance, companies will have to adopt Occasionally, such products and services are born of rapid product design processes and create a tighter intuition. But in most cases, their genesis is found in alignment between the product development function insights about consumers. Such insights come from a and consumer-facing functions, such as marketing, deep study of what consumers need and desire, and how sales, and customer service. In many healthcare compa- they act. As healthcare companies become more effec- nies, this will be easier said than done, requiring funda- tive gatherers of insight, they will seek to study their mental shifts in how business is conducted, how success consumer markets in increasingly sophisticated ways. is measured, and how the corporate culture operates. They will segment them according to preferences, health status, care utilization levels and patterns, lifetime the care delivery process will require the development of customer value, and propensity to purchase specific tools and programs that incentivize people to pursue products and services, whether those offerings are insur- healthier lifestyles and participate more actively in the ance plans, medical care, or medications and medical medical treatment they receive, and enable a new clini- devices. cal operating paradigm that coordinates care around the We are already seeing the glimmerings of this more patient. sophisticated, consumer-centric approach to product Consider the advent of healthcare bundles. As more and service innovation in the health insurance sector. In and more bundles appear on the market, their cost and the absence of a clear value proposition, accessible lan- quality will become more transparent, enabling con- guage, and a full understanding of their own insurance sumers to easily shop for them. In turn, this will encour-
  • 6. 5 www.strategy-business.com age competition among the providers that offer bundles. move up to higher levels.” In a Booz & Company survey of roughly 1,000 U.S. Whole Foods has also established the Total Health healthcare consumers in October 2012, 78 percent of Immersion Program for its least healthy and most at- respondents found the concept of bundled care appeal- risk employees. It is a one-week, medically supervised ing. Among the benefits they would expect to reap from program that provides intensive education about bundles are lower prices, greater price clarity and trans- healthy eating and living. Mackey reports that more parency, more integrated care, the ability to provide than 1,300 employees took advantage of the program in input in care processes, and simplified billing. its first two years, prompting the company to extend the Healthcare bundles are starting to drive costs down program to spouses and partners. In 2013, Whole by streamlining, standardizing, and coordinating what Foods plans to begin offering the program to the pub- were formerly discrete and often highly variable process- lic. “It’s a win-win strategy for all stakeholders es and procedures, transforming them into comprehen- involved,” Mackey told us. “When we have healthy sive, patient-centric delivery systems. In October 2012, team members, they are happier, and happy team mem- Wal-Mart Stores Inc. announced agreements with six bers provide better customer service to our shoppers. It leading hospital systems, including Cleveland Clinic, also leads to the company needing to spend less on Geisinger Health System, and Mayo Clinic, for exclu- healthcare, which is better for investors.” sive, fixed-price care bundles for certain heart, spine, Consumer engagement is also an area where phar- and transplant surgeries. This enabled the company to maceutical companies can make an impact. For exam- 3. Compelling end-to-end customer experiences. In provide incentives to employees who choose one of the ple, Biogen Idec and Merck Serono have been making six providers. If an employee who requires one of these impressive improvements in the treatment of multiple procedures uses one of the fixed-price bundle providers, sclerosis. Using Web-based engagement tools and the employee’s out-of-pocket expenses are eliminated patient services that add “beyond-the-pill” value, they and other expenses related to receiving the care, such as show consumers how their behavior can maximize the travel, lodging, and food for the patient and a caregiver, effectiveness of therapies. are provided without charge. These consumerization pioneers are not seeking to As Walmart’s agreements suggest, employers can change the behaviors of one patient at a time. Instead, play a valuable role in encouraging consumer engage- they are integrating behavioral cues into a coherent ment. Whole Foods Market, which provides its own therapeutic system that reinforces medical management health insurance to its employees, is using several pro- and improves outcomes. To achieve truly engaging grams to build healthy lifestyles into its corporate cul- delivery, care will have to be coordinated among con- ture. In CEO John Mackey’s new book, Conscious sumers, care providers, and insurers. Simplified and Capitalism: Liberating the Heroic Spirit of Business (with transparent pricing strategies will be needed to help Raj Sisodia, Harvard Business Review Press, 2013), consumers make more informed decisions. Tools Mackey describes Whole Foods’ Team Member Healthy and programs will be needed to help them participate Discount Incentive Program. It is a voluntary program in their own care. And, of course, the technology in which employees can go to a mobile lab that will infrastructure, analytics, and devices that help them measure basic biometrics, such as cholesterol levels, fully engage will need to be ubiquitous within health- body mass index, and blood pressure. The healthier care systems. the employee, the higher Whole Foods will raise his or her store discount above the standard 10 percent. healthcare today, customer experiences tend to be pas- At the highest level, employees can obtain a 30 percent sive and fragmented, as the consumer is passed from discount. “Within our culture,” writes Mackey, “it department to department and care provider to care has become a matter of pride for team members to provider. Thus, the quality of the customer experience
  • 7. 6 www.strategy-business.com Enabled by Technology can vary widely by touch point, and there is often little family-friendly policies, and the redesign of facilities to or no coordination among the many touch points in the build in directional cues and create calmer, more attrac- end-to-end process of purchasing insurance or receiving tive settings. care. Unsurprisingly, this results in less-than- Of course, before a customer experience can be compelling customer experiences, and correspondingly improved, it must be understood. This starts with a low levels of customer satisfaction, trust, and brand loy- mapping of the current customer experience and a clear alty. According to the American Customer Satisfaction understanding of how consumers interact with the Index, an independent national benchmark based on brand. Highmark, for example, used a variety of tech- surveys of more than 70,000 people, U.S. consumers niques and tools—including research, site visits, con- rank hospitals just above the U.S. Postal Service in terms sumer interviews, consumer experience simulations, of customer satisfaction. They rank health insurers lower ethnography, and operational data—to understand how yet, in the company of utilities and wireless service consumers perceived their experience with the compa- providers. ny. Health organizations must then develop the skills In the health insurance sector, creating compelling and tools needed to enhance touch points and deliver customer experiences that bolster satisfaction, trust, and information in ways that are accessible to consumers. brand loyalty will require more personalized approaches to selecting products, more transparent and comprehen- sible plan options and costs, and less onerous enroll- The common thread in nearly all consumer-driven ini- ment processes. Once customers sign on, a more tiatives is the digitization of healthcare. Big data and compelling experience will encourage and support them new technologies will enable organizations to adopt in their quest to manage their own health through sim- new products and services by simultaneously support- plified claims processes and less complex billing. ing personalization, superior clinical outcomes, and In 2011, Cigna launched its largest brand campaign affordability. Although some technologies have yet to be to date, “Go You,” a $25 million marketing effort widely adopted in healthcare, some companies are designed to attract consumers with a more personalized already using new platforms to engage with consumers. customer experience. Go You is more than an ad Healthcare companies have access to untold campaign. Cigna is supporting it with 24/7 world- amounts of clinical and financial data. But to make it wide customer service; a Web portal, www actionable, they need to convert this data into readily .MyCignaforHealth.com; social media apps; tools, such understandable information. When this information is as Intuit Inc.’s Quicken Health Expense Tracker, that made available and accessible to the consumer through help plan members better manage their medical care personalized channels, it will affect their behavior— and costs; and mobile applications that help members whether the information is a treatment reminder, a locate nearby pharmacies and emergency rooms. Plan lifestyle suggestion, or direction to an optimal site of members are also provided access to health coaches for care. Some healthcare payors are now using the insights chronic conditions and wellness programs. gleaned to create more effective products and services Hospitals have been on the forefront of the effort to that align their benefit structure with the individual’s create more compelling customer experiences. Many needs. For example, Bloom Health, a Minnesota-based have sent teams to companies that are known for the private health insurance exchange, uses big data and world-class customer experiences they provide, such as analytics to transfer decisions about health benefits from Walt Disney Company and the Ritz-Carlton hotel employers to employees. Its website includes a decision chain, to become more adept at serving customers. One engine that asks employees a series of questions aimed at result is the addition of experiential elements such as guiding them to the policy that best fits their needs, valet services, streamlined admissions processes, more financial situation, and risk tolerance. In 2011, a trio of
  • 8. messaging between patients and advanced and final phase, “Support care providers; the integration of My e-Community,” patient engage- personal patient data, such as ment is enhanced with a fully inter- genetic, behavioral, and medical his- operable platform that supports tory information, into the providers’ seamless information sharing electronic records; and patient between a patient and the entire care The National eHealth Collaborative access to the quality, safety, and team. released its road map in November experience ratings of care providers. Today, various players are at dif- 2012. It begins with “Inform Me,” an Next, during the “Partner with Me” ferent stages of the road map, initial step during which consumers step, the penultimate phase of though most have yet to move are provided with standardized engagement, patients are given con- beyond “Empower Me.” As compa- forms and information about dition-specific management tools nies continue the evolution, they will advanced directives, privacy, and and access to care summaries to not only optimize individual out- 7 specific conditions. The second step, support their personal health main- comes, but also enhance health “Engage Me,” provides patients with tenance efforts. Also, patient-gener- through the analysis of data and the access to their electronic health ated information, such as personal identification and dissemination of records, fitness trackers, and other preferences and wellness and home best practices. e-health tools. The third step, health device data, is added to their “Empower Me,” includes secure electronic health records. In its most www.strategy-business.com The Patient Engagement Framework large insurers—WellPoint, Blue Cross Blue Shield of patients in 2013, and as many as 3 million patients by Michigan, and Health Care Service Corporation—pur- 2017. Patient conditions are monitored with remote chased a 78 percent stake in the company. The ration- devices, and patients who have health concerns can text ale: They want to learn how to better develop and their doctors instead of making appointments and trav- market benefit plans that will appeal to consumers. eling to see them. Cloud computing will be another key technological Finally, given their ability to engage and mobilize enabler of consumerization, providing, for example, the people, it should come as no surprise that mobile health platform for long-overdue interoperable electronic (m-health) and social media can support the transition health records that can provide seamless transitions for to consumerization. During epidemics in the U.S., the patients and better clinical decision support for physi- Centers for Disease Control and Prevention (CDC) has cians. Nimbus Health, a Seattle-based startup, is using been a leader in using social media, such as Twitter, Amazon’s cloud services as a host for its Breeze Medical Facebook, and Wikipedia, to distribute information to System, software that allows doctors to share medical the public across multiple channels, including smart- records with other doctors and patients. Of course, any phones. During the 2009 H1N1 swine flu epidemic, mention of cloud computing may raise concerns about for example, the CDC used social media to disseminate privacy among consumers, especially when it comes to information on behaviors for avoiding H1N1 and to their medical history. Although industry security stan- teach people how to recognize its symptoms. The dards have made considerable headway, hospitals and CDC is also tapping into the power of crowds to other care providers will need to manage security encourage people to become “health advocates” who requirements and risk carefully. pass health information through their own networks. It Telemedicine—remote monitoring and diagno- is expected that m-health and social media use among sis—is a third enabler of consumer-centric healthcare. It healthcare companies will increase, engaging consumers promises improved access and lower care delivery costs. more in their own health and wellness—for example, After a successful pilot project with 6,000 patients in they could use their smartphone to monitor prescrip- 2011, U.K. health minister Jeremy Hunt announced tions, track weight maintenance, and get medical plans to deliver remote care to 100,000 chronically ill appointment reminders.
  • 9. 8 that continuously improves population health. + www.strategy-business.com The Path to Consumerization Resources The digital tools are available and accessible, and meet today’s challenges. As Aetna CEO Mark Bertolini organizations such as the National eHealth told the participants at the HIMSS Conference in Las Collaborative (NeHC) are devising strategies and stan- Vegas in 2012, “The end of insurance companies, the dards for integrating them into the U.S. healthcare land- way we’ve run the business in the past, is here.” scape. The NeHC, a public–private partnership, has Consumerization is the industry’s future. The work will mapped out a five-phase framework for guiding the be hard, but the rewards promise to far exceed the effort: development of the technological infrastructure that the a high-quality, cost-effective, and user-friendly system industry will need to support consumer-centric health- care. It suggests how the digital components of health- care may come together in the coming years (see “The Patient Engagement Framework, page 7). ” As consumer-driven healthcare spreads, the fundamen- tal nature of the industry will change—just as in other industries that have moved from B2B to B2C, such as banking and computers and electronics. The ultimate Gary Ahlquist, Minoo Javanmardian, Sanjay B. Saxena, and Brett Spencer, “Bundled Care: The Voice of the Consumer,” Booz & Company goal for insurers, care providers, and pharma companies white paper, Jan. 2013: According to the results of a recent Booz & alike is to drive initiatives forward until the industry Company survey, U.S. consumers are ready for the advent of healthcare bundles. reaches a tipping point. The new healthcare industry that results will be adept at influencing consumer behav- Minoo Javanmardian, Ashish Kaura, Sanjay B. Saxena, and Brett Spencer, iors. It will use sophisticated attitudinal segmentation to “Healthcare after the Ruling: Let the Work Continue,” Booz & Company white paper, June 2012: What the upholding of the Affordable Care Act design and deliver personalized products and services, will mean for insurers, care providers, pharmaceutical firms, and other and its financial performance will be linked directly to healthcare companies. care outcomes. Such an industry will motivate con- Ashish Kaura, David S. Levy, and Minoo Javanmardian, “Health sumers to pursue wellness, and will provide them with Insurance Gets Personal,” s+b, Autumn 2010: Earlier analysis of the access to healthcare when they need it via the channels health insurance market’s coming retail era. that they prefer. Avi Kulkarni and Nelia Padilla McGreevy, “A Strategist’s Guide to Of course, this vision will not materialize overnight. Personalized Medicine,” s+b,Winter 2012: The tailoring of treatments to It will take years, perhaps decades. And it will require a specific populations is changing the game for key industry stakeholders. sustained effort across the healthcare industry, invest- Ramez Shehadi, Walid Tohme, and Edward H. Baker, “IT and ment, and the willingness and ability to change. But Healthcare: Evolving Together at the Cleveland Clinic,” s+b,(online only), healthcare companies around the world are realizing Aug. 6, 2012: CIO Martin Harris on how information technology is transforming patient engagement. that their current business models are insufficient to
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