As health plans look for ways to expand their capabilities and grow, one of the key decisions executives need to make is when to buy versus what to build. Growing internal capabilities is not easy; it’s a strategic effort that comes with its own set of challenges and investments. But the effort is likely to pay off in lower risk and higher ROI.
While acquisition is still the right strategy in certain circumstances, health plans can often realize higher ROI, lower risk, and increase employee engagement by growing from within. By maximizing your own capabilities and assets that may not be fully utilized, you can avoid the uncertainties and pitfalls that are often barriers to realizing the full value of an acquisition.
In fact, many health plans are well positioned to grow organically. Turbocharge growth by closely assessing internal assets and capabilities, and how they can be used to meet consumer and market needs. A strategic focus on improving and innovating within the company can create meaningful differentiation in a crowded marketplace and expand a health plan’s role in leading to a holistic, consumer-driven health system. The bottom line: increased value to customers, stakeholders and the business. Another benefit of internal investment is stronger employee engagement, which often suffers from M&A activities. In today’s market,
it’s difficult to replenish lost talent, and high retention is a significant competitive advantage.
As you plan for growth, take stock of your significant latent asset: the best existing set of health data for patient populations of anyone in the health ecosystem. This trove of data has untapped potential to move
the industry from transactions to health.
Making strategic use of this valuable data can help health plans make the transformation from simply executing transactions to advancing holistic health across four key capabilities:
Data-driven capabilities to grow from within
by Lawrence Wood
To overcome historical barriers such as lack of awareness and education, safety stigmas, or fear
of the unknown, what’s needed is a much more proactive, human-centered approach.
Delays can cost sponsors
for each day
that a trial delays a product’s development and launch.
Health plan data enables you to understand who is not getting care that could, and who is getting inpatient care but could
use virtual health — and maybe even prefer it.
of clinical trials
are delayed or closed
because of problems
of potential patients live
more than two hours away
Clinical trial populations typically are not (e.g., ~72 percent white), according to a report from the FDA.
of U.S. adults have ever seen
an advertisement for one.
Growing from Within:
Using Health Plan Data to
Build Strategic Capabilities
As you plan for growth, take stock
of your significant latent asset: the best existing set of health data for patient populations of anyone in the
Guiding members to primary and preventative care
Currently, health insurers provide most care guidance to members with chronic or especially complex-chronic conditions. Going forward, leverage your data in the healthcare ecosystem more broadly and lead the way in guiding members in a significantly enhanced primary and preventive care regimen.
Particularly for longer-term members, the payer’s claims data can serve as a treatment baseline — or more importantly, gaps in treatment baseline. For example, a female member who has no claims for mammogram services can receive a notification or “nudge” to get this preventative service which could include an explanation of the reason as well as a scheduling link. Similarly, a member who has been diagnosed with diabetes but shows no subsequent activity around blood sugar or blood pressure monitoring can receive a communication directing them to a diabetes center and comprehensive treatment program. Health plans can connect this primary and preventive care role into an omnichannel strategy (see below) that makes it easy for members to connect anytime, anywhere to get healthcare guidance tailored to their personal needs.
Building on your wealth of member data and relationships, health plans might take inspiration
from the “safe driver” apps offered by many automobile insurers. These programs are popular with consumers for linking safe driving to rate savings. Drivers adopt behaviors that are a win for members, insurers and public safety. Health plans can develop similar approaches that encourage healthy behavior through branded programs.
Early interventions lead to better long-term health for the individual, while lowering the total costs to the healthcare system, payer, and the payer’s employer clients. For health plans, prompting interventions provides potential patient flow to providers which can foster stronger partnerships and relationships with providers and other organizations. In a holistic healthcare model, you can become a more valued
partner with providers to deliver better health outcomes at lower costs.
An omnichannel strategy is developed from within to gain new flexibility in aligning communications to the needs of members and providers. Omnichannel allows payers to customize and personalize both information and the channel of communication based on member preferences. It can provide a high-touch channel for high-touch needs, while also allowing for efficient and consistent communications across multiple channels. When appropriate, the ability to use simple types of communications can free up high-cost resources to have conversations with members about holistic health. However, we see customers struggling to execute an omnichannel strategy.
There are multiple departments and groups in organizations that influence and drive omnichannel, but we often see omnichannel initiatives that are not fully coordinated, and projects that are not aligned to common goals nor the executive strategy. These individual efforts are sometimes duplicative of other groups, lack tangible ROI, or are simply not an enterprise-level priority.
The need for coordination sounds obvious; however, it’s often lacking in organizations. How does your organization capitalize on or build new capabilities when progress is only happening in pockets? Step above the silos and see how seemingly disparate groups can own and execute pieces of a cohesive strategy.
Improving omnichannel communication tailored to consumers’ needs
The future is filled with growth opportunities for health plans that become increasingly adept with data. Expand the traditional role of an insurer to become a key enabler of a true consumer-driven health system. Enhance and gain advantage in roles of increasing importance such as a navigator to health, aggregator of data to support better informed decisions, and driver of better outcomes.
While health plans must invest to capture these opportunities, those that grow from within avoid the high costs and risks of M&A integration. Achieve a higher ROI by making the most of your internal resources to become a valued health partner to members, prospective customers and providers. And strengthen your internal capabilities by better engaging existing employees to become a strong, sustainable organization. Point B brings health plans and payers the empathy, expertise and focus needed to grow organically by putting people first as they play a lead role in moving healthcare forward.
Over the last two years, COVID-19 dramatically accelerated the use of virtual health, which had been slow to catch on before the pandemic. Since 2020, many people have become familiar with the process, feel comfortable with the online relationship, and appreciate the convenience of “seeing” their providers without leaving home.
Payers can play a valuable role in the continued growth and evolution of virtual health without taking on the risks and expense of buying a virtual company. The possibilities range from partnering with providers to communicate and interact in a virtual manner to internally building the products that virtually expand the provider network particularly in areas with high cost and reimbursement rates.
Again, health plan data enables you to understand who is not getting care that could, and who is getting inpatient care but could use virtual health — and maybe even prefer it.
Improving opportunities for virtual health
Consumer demand and legislative pressure are driving new industry regulations around transparency and outcomes-based care. The No Surprises Act is creating an environment where costs can and indeed must be known and communicated prior to care. While these regulations are complex challenges for multiple stakeholders and aspects may proceed more slowly than others, they are agents of transformative change for health insurers. Benefits consultants such as Mercer and Aon are starting to favor health plans which best implement this new consumer-friendly price transparency environment. Lead this transformation by using your own data in new ways to play a bigger role in this emerging ecosystem.
These recent price transparency laws only go so far in requiring providers and payers to make public their contracted rates for given services/procedures. While a massive data dump may meet the minimal regulatory requirements, it doesn’t provide great value to consumers. Payers looking to transform healthcare into a truly consumer-driven system will go beyond those minimal requirements to provide price information that is easy to understand and tailored to individual needs. An online query system can make it quick and easy for members to get the pricing information they need, when and how they need it.
Delivering consumer-friendly price transparency can be a powerful differentiator that creates goodwill with members, strengthening relationships and retention. It can also strengthen and expand relationships with providers by giving them helpful, personalized information that your patients value. Payers who build optimally for these new consumer price transparency requirements and demands can seize a competitive advantage in the marketplace with end consumers as well as benefits consultants.
Improving price transparency
The Bottom Line
Building on your wealth of member data and relationships,
health plans might take inspiration from the “safe driver”
apps offered by many automobile insurers.
As you plan for growth, take stock of your significant latent asset:
he best existing set of health data for patient populations of anyone
in the health ecosystem.