A new report released by IBM paints a emerging picture of the future for U.S. health insurers. IBM is one of the largest self-insured U.S. employers, bearing financial risk for the health of more than 350,000 employees and their dependants.
Healthcare 2015 and U.S. Health Plans: New Roles, New Competencies asserts that as consumers take on more financial responsibility for their healthcare, they will demand more flexible products, better customer service, more accountability from health insurers and providers, and greater transparency in costs and quality. To compete and differentiate themselves in this emerging, retail-like environment, health plans will be forced to adopt new roles and develop new competencies in such areas as member empowerment and provider collaboration if they are to survive. As key examples of this transformation, a growing field of health "infomediaries" -- health, wealth, and value coaches -- will be called upon by consumers to help them:
Make more informed financial choices, including the selection of health-related financial products such as health savings accounts.
Navigate the healthcare system to better manage their health -- from wellness to acute conditions to chronic care.
Tailor insurance to meet each member's unique needs.
Obtain and interpret available information to derive greater value from their health systems.
"In this emerging environment, consumers will quickly become more motivated to make better health and wealth decisions. Such changing market dynamics will in turn create new opportunities and daunting pressures for health insurers," said Dan Pelino, general manager, IBM Global Healthcare & Life Sciences Industry. "Health plans that recognize the 'retailization' of healthcare and then successfully transform to provide new delivery models and services will prosper, while those that fail to do so will face rapid marginalization."
The IBM report forecasts that health plan differentiation will be driven increasingly by the design attributes of product and services and by equally important factors beyond cost and perceived quality such as trust. Health plans will be asked to deliver more personalized experiences for consumers while earning acceptance as more valuable business partners by healthcare providers and other stakeholders. This will require increasing collaboration between all stakeholders that helps to change consumer behaviors, anticipate care needs, provide and compensate high-value care, and streamline administrative functions.
This will require health insurers to change their leadership, culture, competencies, business models, organizational structures, sourcing strategies, processes, and information technology to meet the changing market and consumer preferences.
The migration toward the "retailization" of healthcare described in Healthcare 2015 and U.S. Health Plans: New Roles, New Competencies has resulted from such factors as:
Increasing U.S. healthcare expenditures, which are 2.3 times higher per capita than in other developed countries and projected to increase 83% in ten years.
Medical errors that, despite increased spending, are causing as many as 98,000 patient deaths each year, with medication errors costing at least $3.5 billion.
As many as 47 million Americans without access to healthcare insurance, plus another 16 million who are underinsured for catastrophic healthcare expenses.
An expected precipitous drop to less than 50% of employers who will offer coverage to working-age adults by 2015.
The decreasing commitment of and increased tightening of eligibility requirements by employers for retiree benefits.
In such an unsustainable environment, IBM says health plans should anticipate the following near-term changes along the road to 2015:
Purchasers of health plans will shift inexorably from employer-based to government-based and individually purchased coverage. The combination of a push for universal coverage, the erosion of employer-based insurance and the aging of populations are all driving the shift.
Consumers of health care will bear increasing responsibility and accountability for their health. They will need help in making better health-related choices, realizing greater value from the healthcare system, and making better financial plans for their future healthcare needs. This, in turn, will put new pressures on health plans to redefine themselves and their relationships with their members, care providers, employers, and brokers.
The healthcare industry will face an increasing array of new healthcare requirements, capabilities, and delivery and reimbursement models. The emphasis of the healthcare system will expand from episodic, acute-care services to include prevention, chronic-condition management, and better care coordination across more types and locations of care venues. Health plans and providers must align incentives and collaboratively innovate to help change consumer behaviors, anticipate care needs for health plan members, provide high-value care, and streamline administrative functions like claims management and payments.
Healthcare 2015 and U.S. Health Plans: New Roles, New Competencies is the culmination of extensive research and interviews conducted over nine months, beginning in January 2007. You can read the complete study.