Empowering Individuals to Be Better Healthcare Consumers

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An Assessment of how consumerism And innovAtion in heAlthcAre Are redefining how consumers engAge with the heAlthcAre system.

Empowering Individuals To Be Better Healthcare Consumers

uncommon clArity

Q1 / 2013

Industry Perspective

TRIPLE-TREE.COM2

Founded in 1997, TripleTree provides independent, research-driven advisory

services on mergers and acquisitions, recapitalizations, divestitures and raising

growth capital for innovative companies in healthcare.

We are continuously engaged with decision makers across the sector including

best-in-class companies balancing competitive realities with shareholder objectives,

global companies seeking growth platforms, and financial sponsors assessing

innovation investments or first mover opportunities.

Tabl

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Con

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Q1industry PersPective

4 / EVOLUTION OF CONSUMERISM IN HEALTHCARE

4 / WAVE 1: RISE OF CONSUMER-DIRECTED HEALTH

5 / WAVE 2: INITIATING TRANSPARENCY AND ENGAGEMENT

6 / WAVE 3: ENABLING A “FULLY RETAIL” INDUSTRY

8 / HOW STAKEHOLDERS ARE SOLVING FOR THE EMPOWERED CONSUMER

8 / PAYER MARKET

8 / DISTRIBUTION

10 / CONSUMER ENGAGEMENT

15 / PROVIDER MARKET

15 / PROVIDER-LED CARE COORDINATION

16 / PATIENT ExPERIENCE

20 / WHERE PAYERS AND PROVIDERS GO FROM HERE

21 / NEW APPROACHES BEYOND THE PAYER-PROVIDER PARADIGM

23 / LOOKING AHEAD

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INTRODUCTION

Consumerism in the healthcare industry has been steadily building

for more than a decade with the consumer increasingly placed at the

center of the care delivery and decision-making process. Viewed

through the lens of many healthcare product and pharmaceutical

companies as well as select services providers (e.g., Weight Watchers)

that have been addressing the health needs of consumers through

business-to-consumer (B2C) and direct-to-consumer (DTC) models

for considerably longer, consumerism is already here. For payers and

providers however – and for the technology and service companies

they rely on – consumerism is new, and the change is having a

significant impact on the industry.

This change originated largely through the introduction of consumer-

directed health (CDH) plans as a vehicle for employers to shift a

greater portion of total healthcare costs to employees and engage

them in the management of their own healthcare. Initial employee

uptake was slow, but increasing healthcare costs have persisted and

continue to influence employer and health plan strategies to help

consumers make better decisions about how to navigate the healthcare

system and manage their own care and conditions. Despite continued

growth in adoption of CDH plans and the accompanying significant

shift in financial liability to consumers, the impact to date on getting

consumers to manage their health has only been modest. Today, CDH

is one important part of the consumer equation, but evolving market

forces, including the blurring of lines between payers and providers

(e.g., payers vertically integrating with providers; and providers taking

on risk and becoming more like payers), are further complicating the

landscape by redefining who the consumer engages with as he or she

navigates the healthcare system.

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INDUSTRY PERSPECTIVE Q1 / 2013 3

The shifting of the healthcare cost burden to consumers has

impacted not only who pays for care but also how treatment options

and care experiences are evaluated. This new role is changing how

consumers are being marketed and communicated to. As a result,

new tools designed for consumers to better manage their own health

and care options have emerged. Today, the market is focused on

improved transparency, quality, and customer experience through

tools and services more akin to the financial services and retail

sectors than healthcare.

Marketplace demand for more dynamic consumer focus is also being

accelerated by health reform. For payers, the expansion of insurance

coverage coinciding with the implementation of insurance exchanges

is creating new distribution channels where direct linkages with

consumers can be established. Providers are facing new consumer

realities as well, as reform has initiated and accelerated the

development of accountable care organizations (ACOs) and value-

based reimbursement models, which require providers to think about

consumers in new ways as patients, members, and consumers whose

experience, satisfaction, and outcomes needs must be addressed.

These macro forces are creating demand for a more “retail”

environment across an industry that has previously resisted these

levels of consumer transparency and control. If successful, this

transformation would eliminate the historical barrier between

the healthcare system and the consumer, paving a path for a

more retail-oriented healthcare market as B2C and business-to-

business-to-consumer (B2B2C) models penetrate the system.

While the impact of consumerism may be top of mind for many

organizations, it’s still early and true consumer platform solutions

are unique. Healthcare organizations know that a failure to promote

transparency and increase consumer engagement going forward

will challenge their business models. As a result, constituents

across the system are focused on developing and maintaining

points of intersection with consumers in order to maintain

engagement and influence decision making.

Numerous research pieces have focused on the opportunity to activate

the healthcare consumer through B2C and DTC business models; this

report predominately focuses on the B2B2C models that are pervasive

in healthcare.


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The evolution of consumerism in healthcare can be defined by three

waves, as outlined in Figure 1 below. The initial wave was in part

initiated by the introduction of CDH, which helped incite consumer

interest in how they access and navigate the healthcare system as

well as manage their own health. The persistent cost shift has led

to new demands on healthcare organizations to enable transparency

and engagement through a second wave of consumerism. This

evolution will likely persist through a third wave as consumers now

demand a degree of control and decision support in healthcare that is

on par to that of other industries – that is, a fully retail experience.

Wave 1: Rise Of Consumer-Directed HealthEarly CDH strategies were largely product-driven, with health

plans and employers collaborating to educate the market on health

savings accounts and the convergence of healthcare and financial

services. A key assumption for CDH products was consumer

willingness to accept additional financial responsibility for their

healthcare in exchange for greater control over how and where to

pay for it. Early employer-driven efforts to drive CDH adoption were

focusing on making management of CDH more straightforward for

employees; this led to significant adoption, as employers sped to

Figure 1: Three Waves Of Consumerism In Healthcare

EVOLUTION OF CONSUMERISM IN HEALTHCARE

THREE WAVES OF CONSUMERISM

1 C O N F I D E N T I A L Property of TripleTree. Not For Distribution.

1st Wave: Rise of Consumer-Directed Health

3rd Wave: Enabling a “Fully Retail” Industry

2nd Wave: Initiating Transparency and Engagement

•  Transition driven by introduction of CDH plans and various cost-sharing mechanisms

•  Early CDH plans had minimal success in getting consumers to manage their health

•  Consumers learn to “shop” and navigate the healthcare system

•  New demand for resources to support consumer decisions and provide transparency

•  Need for a “retail” approach as balance has shifted toward the consumer

•  Personalized approach need to address individual needs and drive engagement

CDH Plans Introduced

Growth in Out-of-Pocket Spending

Tax-Exempt Savings Plans

Introduced

Acceleration of Consumer-

Focused Tools

Integration with Financial

Services

Web Adoption and

eCommerce

Cost Transparency

Tools

Retail Distribution

and Exchanges

Value-Based Purchasing


CDH alternatives to address their growing healthcare cost burdens.

However, as CDH plans have required consumers to assume a

growing financial responsibility for their healthcare costs, a major

weakness has been the lack of transparency and information

provided to consumers, which has had a detrimental effect on

consumer engagement.

Despite growing consumer interest in their healthcare spending and

coverage decisions as result of the cost shift, the adoption of CDH

plans has not demonstrated significant success in driving consumers

to manage their health. While CDH is still very much part of employer

and payer strategies to manage healthcare costs, it is clear that there

is more to be done in order to enable sustained engagement with

consumers as they navigate the healthcare system.

Wave 2: Initiating Transparency And EngagementThe major byproduct of CDH has been the emergence of the

empowered consumer, who is just beginning to learn to shop

and navigate the healthcare system and gain a similar degree of

autonomy to what he or she is able to experience in other industries.

However, while costs were shifted to consumers, healthcare

organizations were not prepared to support the empowered consumer

whose expectations for information and tools exceeded the ability of

the system to deliver.

As outlined in Figure 2, healthcare organizations were relatively

unprepared for this development, primarily as a result of their

legacy B2B business models and historical investment focus around

improving administrative efficiency: most B2B models were built

to solve for the needs of large groups or employers with efficient

cost models, not to establish and leverage points of interaction

with healthcare consumers. Ignoring (or avoiding) these valuable

consumer touch points left many organizations poorly prepared to

understand consumer wants and needs.

Figure 2: Historical Barriers To Consumer Engagement

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Healthcare organizations have realized the need to accommodate

the changing needs of consumers and create environments where

consumers can shop and navigate the healthcare system in a

similar fashion to other industries. As indicated in Figure 3, much

in the way that Amazon democratized consumer purchasing for

everything from books to auto parts, healthcare is undergoing a

similar transformation as healthcare organizations strive to address

the reality that consumers are at the center of their marketplace and

that winners will become trusted, convenient resources for consumer

healthcare lifestyle management and decision making. While the

result has left consumers with a host of newfound resources and

tools to manage their own health, healthcare organizations are

consistently challenged to ensure consumers actually use these tools

when making healthcare choices.

In many ways, CDH adoption was a catalyst to healthcare’s

newfound appreciation for consumerism and brought several

underlying dynamics to light, most notably how much work was

needed to support the empowered consumer. New B2C and

B2B2C models have established direct linkages between healthcare

organizations and consumers that previously did not exist. In

order to maintain momentum, healthcare organizations will need

to prioritize future investment in further eliminating the barriers

that limit positive healthcare experiences for consumers as well as

driving engagement beyond enrollment and annual renewal – rather,

across the consumer lifecycle.

Wave 3: Enabling A “Fully Retail” IndustryThe demand from consumers to successfully shop and navigate

the healthcare system has been accelerated by healthcare reform,

which is shifting the industry towards greater individual orientation:

the number of consumers making individual coverage and benefit

decisions is set to grow substantially. While this is already the

status quo in Medicare following the 1997 establishment of Medicare

Figure 3: Shifting Power Paradigm – Stakeholders Aligning Around The Consumer


Advantage plans (then referred to as Medicare+Choice plans), the

senior marketplace will expand dramatically as baby boomer lives

transition to Medicare over the next 20 years.1 The under-65 individual

marketplace is set to grow rapidly following the introduction of

government-funded public exchanges; these are expected to serve

as the primary vehicle for over 30 million people gaining coverage.2

Furthermore, an anticipated shift of employers to defined contribution

benefit programs will provide additional consumers with control

over their coverage decisions. Early evidence suggests that a shift to

defined contribution could be significant, with over 25% of employers

considering this new approach.3 This will fuel the evolution of private

exchanges and decision tools to support employee coverage decisions.

Collectively, these developments point to tens of millions of people

purchasing healthcare on an individual basis, highlighting the need

for healthcare industry constituents to solve for the needs of these

consumers in a more retail-oriented, B2C marketplace.

While this shift to the individual is underway, the evolving care delivery

and provider reimbursement environment is heightening focus on

improving quality, performance and consumer experience across the

system. Reimbursement is transitioning towards models where payers

and providers are rewarded across various quality and performance

measures such as the Five Star Quality Rating System for payers

and Consumer Assessment of Healthcare Providers and Systems

(CAHPS) for both payers and providers. These new models provide

consumers with resources to evaluate their options across both health

insurance coverage as well as care options based on these metrics.

This evolution has empowered consumers and established a market

for tools to help them with their benefit, coverage, and care decisions.

The primary end goal of this effort is to provide consumers with a

“retail” experience that is similar to other consumer product and

service markets that maintain meaningful consumer engagement.

However, the early efforts of healthcare organizations to develop

the needed support tools have been largely unsuccessful given

their inability to address individualized needs and preferences (e.g.,

patient-specific risk factors, communication preferences, and cultural

differences). In order to establish a lasting link with consumers, it is

clear that more personalized approaches will need to be developed

in order to enable consumers with a customized and transparent

experience as they shop and the navigate the healthcare system.

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The transition to viewing members and patients as consumers has

not been easy as healthcare organizations have been unprepared to

address the rising consumer expectations that have developed.

Payer MarketIn response to the empowered consumer, payers are prioritizing their

efforts to accommodate consumer needs and orient business models

around a consumer-driven world. Payers were caught relatively

flat-footed by consumerism as their historical investments, which

were focused on improving workflow automation and decreasing

unit cost, left them unprepared to address consumer needs. These

investments, rooted in payers’ traditional B2B models, intentionally

created barriers to the consumer – for instance, requiring consumers

to interact with call centers and interactive voice response (IVR)

systems. As a result, payers were left with minimal understanding

of consumer needs across their critical business drivers, such as

distribution, care management, and care delivery.

Payers have realized the need to better accommodate consumers

(or members) and create an environment where they possess

the resources to manage their own health and benefit options. As

consumer demands increase, payers have prioritized investments

around improving interactions and engagement while also driving

greater efficiency around care coordination and cost containment.

While many early consumer-focused investments left much to be

desired, there appears to be a consensus among payers that more

targeted and personalized solutions are needed in order to sustain

engagement across the entire consumer lifecycle.

Distribution One area of considerable payer-led innovation has been within health

insurance distribution, where retail-oriented sales and distribution

capabilities more consistent with other insurance sectors such as

property and casualty are emerging. To maintain top-line growth

amid growing competition and consolidation, payers are learning to

better manage consumer interactions in an effort to improve member

acquisition, retention, and cross-selling initiatives. A range of vendors

have developed expertise to support payers in these areas. As

demonstrated in Figure 4, by applying analytics to better summarize

consumer data and preferences, these specialized vendors –

highlighted by HealthPlan Services, Connextions, and Connecture

(through their ConsumerEdge™ and Plan Advisor tools) – have allowed

payers to address loyalty and retention issues through a series of more

targeted and personalized member interactions, which have plagued

HOW STAKEHOLDERS ARE SOLVING FOR THE EMPOWERED CONSUMER


health plans historically.4 Additionally, they are able to utilize data

from everyday consumer interactions to improve sales and distribution

by establishing more effective communication methods for payers,

achieved through an improved understanding of individual consumer

preferences and lifestyle characteristics. In a sense, these vendors

have extended the payer-consumer sales relationship from a once a

year enrollment process to continual, year-long engagement.

Looking forward, the distribution of health insurance is likely to be

transformed by the advent of exchanges. The driving force behind the

in-development public exchanges is to make coverage more affordable

through expanded risk pools (supported by various mechanisms to

offset risk assumed by exchange participants) and to make distribution

administratively efficient. Exchange products will be largely

standardized, making it difficult for payers to compete on product

alone – as a result, payers will need to find other ways to compel the

Figure 4: Outlining An Integrated Approach To Insurance Distribution

HealthPlan Services (HPS) provides sales and distribution, benefits

administration, and customer service solutions to the individual,

small group, and voluntary markets. HPS’s platform extends across

the consumer lifecycle, beyond member acquisition and renewal,

providing payer clients with an end-to-end solution to influence

member experiences across distribution, purchasing, and benefits

administration. Its approach integrates clinical, financial, and

personal data from across the consumer lifecycle to provide clients

a more transparent view of their member population, which fuels

their member acquisition, retention, and service administration

efforts. This is important to not only drive revenue for payers

but also to “redefine” the relationship with members through a

personalized engagement approach.

Integrated, analytics-driven approach to member acquisition, retention, and service establishes unique touch-points that drive value across the member

lifecycle and “redefine” the payer-consumer relationship

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individuals shopping on exchanges. Many of the specialized sales and

distribution support vendors highlighted above will also be increasingly

relevant to payers in this area as a robust understanding of consumer

preferences and purchasing behavior is needed to define payer marketing,

pricing, and branding strategies for the individual consumer.

Consumer EngagementThe challenges payers face in engaging consumers extends far

beyond enrollment and renewal, as their ability to influence consumer

behavior and lifestyle decisions is still limited. This is imperative not

only to improve the health of their member base, but also to maintain

profitability going forward, as poor engagement can lead to costly future

consequences when health risks remain unknown and / or not addressed.

Payers have traditionally offered a static, one-size-fits-all consumer

experience in which their interaction was limited to such examples

as a provider network directory or call center encounter. Payers have

introduced a host of new tools and solutions to establish more effective

consumers interactions around healthcare education and content;

however, consumer adoption has been somewhat challenging for many

payers. Early tools possessed little appreciation for individual-specific

needs and preferences and were quickly dismissed by consumers. As

consumer demands have persisted, payers have begun to accommodate

individual needs and preferences into these tools to provide consumers

Spotlight: Payer-Led Retail Initiatives As insurance distribution

becomes increasingly individual oriented, several payers have

launched retail initiatives designed to establish a direct channel

to consumers to extend their product distribution and customer

service capabilities. UnitedHealthcare has introduced retail

stores in local shopping malls, where consumers can compare

and buy insurance products as well as learn more about their

existing benefit and coverage options. Many of these stores are

intended as temporary locations focusing on servicing Medicare-

eligible beneficiaries during their annual open enrollment period.

However, the company also offers permanent locations in eight

locations across Queens, Manhattan, Philadelphia, and Los

Angeles. Similarly, Highmark and Florida Blue operate retail

locations in Pennsylvania and Florida, respectively. Florida Blue

is pursuing a unique strategy to maximize the benefit of their

retail footprint by incorporating a customer service element in

addition to the distribution touch point, as well as adding on-site

clinics at several retail locations. Aetna has made a unique play

by recently forming a partnership with Costco to sell individual

health insurance products in their stores across several states.

Time will tell if any of these models transform the landscape of

insurance distribution, but they clearly show another example of

payers’ acceptance of the empowered consumer and their need

to innovate.


with more effective resources to manage their benefit, coverage,

and care decisions. Some of the most innovative tools have come

from third-party vendors, such as Healthline Networks, which has

created solutions that allow a payer to deliver patient-specific content

based on a member’s individual health data drawn from medical and

pharmacy claims as well as clinical data from the electronic medical

record (EMR). Continued innovation of these consumer-friendly

solutions has come from vendors such as Silverlink and Eliza, which

deliver personalized, targeted messaging solutions to consumers via

multiple communications channels (email, web, automated voice, mail

and SMS text) that allow payers to influence an indvidiual’s medication

and care plan adherence as well as communicate plan-specific

information. While solutions like these are still early in their evolution,

the ability to sync patient-specific care information with personalized

messages and consumer education tools via multiple communication

channels creates a more effective medium in which payers can

successfully communicate with and engage their membership base.

A central theme in engaging the empowered healthcare consumer

is providing transparency into the cost and quality of treatments

and providers. The lack of transparency that exists in the current

system, combined with the ever-growing financial liability faced by

consumers, makes this an imperative for the entire industry, with an

enormous gap between consumer needs and available tools. This

need has been recognized by industry and government alike, with over

30 states passing transparency-related legislation and the increasing

prevalence of all-payer claim databases that are intended to inform

cost transparency efforts. Significant commercial momentum has

been focused on creating cost transparency, with the importance of

the space highlighted by the attraction of capital to Castlight Health.

Healthline Networks uses a unique, medically-guided taxonomy

engine that incorporates over two million semantic relationships

to normalize large volumes of structured and unstructured

content from disparate sources. This taxonomy allow healthcare

organizations to unlock the full value of massive amounts of

siloed and disparate health content and data by personalizing this

information to improve decision-making, outcomes, and the overall

health experience. Payers, for example, use the technology in

their consumer portals to improve the health and wellness of their

members by individually personalizing both search results and

engaging content that are tailored to a member’s constantly-evolving

health profile and benefit coverage.

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A range of approaches to cost transparency has emerged, with most

solutions initially focused on providing the average total cost of a

particular high cost service based on national or regional average

data (e.g., all payer claims or CMS data). Solutions are evolving

and becoming more personalized – to estimate the out of pocket

cost an individual should expect to pay when utilizing healthcare

services or consuming prescription drugs based on his or her health

plan, provider of choice, network, benefits design, and remaining

deductible, as applicable.

Solution vendors face two particular challenges in providing

this information:

1: The first is the data analytics and data integration capabilities

required to estimate a consumer’s financial liability for a service, as

the data resides with the payer or employer (through their payer).

Analytic capabilities are then required to predict how a service

will be billed to the health plan (for example, the cost of a knee

replacement surgery will consist of a numerous separately billed

CPT codes). The leading competitors in pure cost transparency

through robust data analytics and data integration are Castlight

Health, Change Healthcare, and Truven Health Analytics. Additional

approaches to the market include that of Healthcare Blue Book,

which provides both a free solution to consumers that delivers an

estimated “fair price” representing a payment level that providers

would accept from insurance companies, as well as a solution for

plan sponsors that customizes pricing data based on historical

claims. (A more broadly defined transparency landscape – including

provider search, provider quality / ratings, and similar solutions

– would expand the list of competitors to include vendors such

as Vitals and Healthgrades.) Many health plans are pursuing

transparency using homegrown tools, typically providing the service

to customers and members for free, but many plans still recognize

an advantage in “plugging in” 3rd party solutions to consolidate

data from multiple medical carriers, pharmacy benefit managers,

and dental providers in one location and to create a consistent

experience for all employees with a higher degree of customization.

2: The second challenge has proven more formidable: making the

information easy to use such that individuals actually choose to

engage with such solutions and become healthcare consumers.

Accomplishing this would translate transparency into the larger

issue in healthcare – consumer engagement – which health

plans and employers have struggled to drive. Consumers are not

familiar with “purchasing” healthcare services – engagement with

consumers around transparency is a critical step in transforming

consumer behavior. Most transparency solutions are focused on

clarifying the cost of high cost elective and scheduled procedures


Figure 5: Critical Success Factors For Transparency Solutions

Access to a broad set of applicable health plan network prices

or claims data applicable to a specific population

Consumer friendly and ease of use

Personalized and proactive messaging

Technology and analytics that drive broad engagement

Broad service offering including quality and comprehensive

medical cost categories (e.g., medical, pharmacy, specialty)

Ability to integrate and work within a health plan’s or

employer’s portal and coordinated member communications

(such as the knee replacement example above) because these

services offer opportunities for significant savings to the consumer

(and even more so to the plan sponsor) through smarter shopping.

However, these services are typically very low frequency events,

which makes it a challenge to create engagement with a consumer

who may not need the transparency service for months or even

years from initial sign-on. Furthermore, the early experience from

self-insured employers indicates that if a beneficiary tries to use a

cost transparency service and finds the information insufficient or

otherwise not helpful, the level of engagement from that consumer

is dramatically reduced – they may never attempt to use the service

again. For these reasons, solutions are evolving to incorporate

proactive messaging and alerts to make healthcare purchasing

decisions more meaningful and actionable to consumers. Change

Healthcare highlights an innovative approach through its Ways

to Save™ alerts, which are personalized messages that introduce

specific opportunities for savings based on each individual’s

purchasing history with communications that are tailored to the

individual’s preferences and user profile and are designed with

behavioral science principles to maximize engagement.

By orienting the consumer around personal savings instead of purely

cost, and by driving broad engagement that is initiated through use

of a transparency solution, vendors are increasingly focused on

elevating the relationship with the consumer to build fundamentally

different healthcare purchasing behavior and extend solutions into

other decision support capabilities, such as plan selection and health

program engagement. Transparency solutions are thus at an early

stage and continue to evolve. TripleTree sees several requirements

for future success in this space, as seen in Figure 5.

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In fact, consumer engagement should extend far beyond transparency

as consumers require additional support to navigate an increasingly

complicated healthcare system. This is particularly the case when

a patient faces a complex and serious diagnosis, which could

require expensive treatments from multiple providers, or when an

individual or family faces substantial and confusing bills. The vast

complexity that the healthcare system presents to some individuals

at their most vulnerable and confused times has led to navigation

and advocacy services that in many ways function as the “help desk

for your health” to consumers. Several vendors, such as Health

Advocate and Accolade, have gained significant market momentum

by serving as support resources to consumers in managing a

wide range of clinical and administrative issues in their healthcare

coverage. Common administrative support includes areas such

as claims resolution, appeal processes, and bill settlement, while

clinical services often involve providing critical decision support to

consumers to guide them through care decisions and to measure the

costs associated with various care alternatives.

Health Advocate delivers a suite of advocacy solutions designed to

provide consumers with a greater understanding of their care and

coverage options. Administrative support services assist consumers

in navigating their benefits, resolving claims, and negotiating and

paying medical bills. Clinical support services are led by a team

of Personal Health Advocates trained to provide around-the-clock

assistance across a range of issues, including identifying optimal

treatments and providers, and assisting with care coordination

through scheduling, securing second opinions and assisting with

complex medical conditions. These Personal Health Advocates also

deliver coaching services to consumers to help them understand their

medical conditions, address questions related to common procedures

and treatments, and prepare them for medical appointments. In

addition, Health Advocate delivers a suite of complementary solutions

designed to support employee health and well-being. These range

from wellness and work-life support services such as a nurse line

that provides healthcare advice and information, to personalized

health messages that promote prevention to the general population

and chronic care “best practices” to those with specific diseases, to

advanced tools that gauge benefits utilization or estimate medical

costs and savings opportunities.


Provider MarketEvolving market forces and the blurring lines between payer and

provider have caused providers to view consumers in a new light

– not only as patients but also as members and consumers. To

varying degrees, providers are increasingly assuming risk that

more closely ties their financial performance to their performance

on dimensions of cost, quality, and outcomes. At one end of the

market, many providers assume fully-delegated risk for their patient

population – essentially functioning as payers given they possess the

identical incentives of a traditional health plan to manage the total

cost associated with caring for a population. This is accelerating

rapidly through the experimentation and proliferation of ACOs,

an important result of healthcare reform. At the other end of the

market, most providers remain largely risk-free (under fee-for-

service reimbursement arrangements), but are increasingly under

pressure to assume some degree of risk through reimbursement

models that incorporate performance on various measures, including

patient satisfaction and quality of care. Regardless of any connection

between clinical performance and reimbursement, all providers now

pay much more attention to these performance measures, as their

bottom line is still directly impacted in a consumer-driven world.

Consumers increasingly possess the tools and resources to evaluate

providers on a number of dimensions and are beginning to use this

information in their care decisions. In all of these situations, the

blurring lines between payers and providers create an increasing

need for providers to solve for many of the same aspects around

consumer experience and engagement as payers.

Provider-Led Care Coordination Providers that function essentially as payers have many of the

same incentives to engage members holistically in order to manage

healthcare costs, patient experience and care outcomes. This

is well established in markets like Southern California in which

certain providers have managed fully-delegated risk relationships

at scale for some time. In these environments, providers have

widely adopted various tools and solutions to support engaged

care management and care coordination efforts. These tools allow

providers to analyze clinical and financial outcomes as well as

practice medicine in accordance with best practices. Vendors such

as CERECONS have been among early market movers in supporting

providers in fully-delegated risk environments, serving as the link

between at-risk provider organizations or ACOs and their distributed

provider networks along the care continuum to continuously monitor

and improve clinical and financial outcomes.5 These solutions

are delivered through a platform that engages the provider and is

embedded in the clinical workflow – in this sense, the individual

care provider is the “consumer” who engages in a new and more

meaningful way.

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Beyond full-risk bearing entities, the vast majority of other

providers increasingly care about managing cost, quality, and patient

experience as this all has the potential to impact their sustainability

over time through continued evolution of reimbursement models,

reputation (through the consumer lens, informed by widespread

access to quality, satisfaction, and other performance measures),

and payer network status. Early provider-led efforts to improve care

quality and coordination led to investments in EMR technologies,

which improved the acquisition of valuable clinical data. However,

these investments created limited capability to analyze clinical

outcomes and push actionable information back to providers,

or to manage care outside of the facility setting following an

encounter through consumer engagement – all of which limited

the effectiveness of these early solutions. As value-based or risk-

based reimbursement models evolve, advanced solutions that

support provider decision making, improve care coordination, and

facilitate consumer engagement will become increasingly relevant to

providers. As this occurs, solutions that allow physicians to identify

areas for necessary intervention and coordinate care before and

after each encounter will be critical. The solutions of Phytel, which

offer physicians the ability to appropriately identify and connect with

patients as well as monitor their responses and compliance with care

protocols, highlight sophisticated approaches to this type of provider-

led care coordination.

Patient ExperienceAs consumers become more aware of their treatment and provider

options, providers have become more market and consumer-focused

in their efforts to grow and retain revenue. Providers are not only

trying to address gaps that exist within their own care coordination

efforts but also to drive exceptional patient experience and help

consumers manage their journey through the healthcare system

more freely.

Phytel operates as an extension of the physician or care team outside

of the provider setting. Phytel’s unique software automates routine

care management functions, delivering physician reminders and

alerts as well as patient outreach and notifications. The software

platform leverages up-to-date clinical information and evidence-

based guidelines to allow providers to actively manage care

effectively and improve care outcomes across all phases across the

care continuum. In addition, Phytel has established care protocols to

identify care gaps and track overall performance across key quality

measures. This allows providers to identify appropriate intervention

opportunities to maintain proper patient adherence and avoid costly

care episodes.


While not immediately obvious, key aspects of the patient experience

are the financial and transactional elements. As consumers become

responsible for ever larger total healthcare costs, providers are

faced with a new reality of managing consumer healthcare debt:

gone are the days in which providers could manage their financial

performance while only capturing pennies on the dollar of patient

receivables. This is important to providers not only to manage bad

debt, but also to enhance the patient’s overall satisfaction with the

experience, which ultimately influences attraction and retention

of patient volume. The billing and collections experience is often

a provider’s final touch point with a patient following a care

encounter and can wield a disproportionate influence on patient

satisfaction. Of note, billing issues can create unwarranted “patient

friction” and are a key source of unnecessary administrative hassle

for physician groups as they prolong the billing process and reduce

collection volume.

To support an improved billing and collections experience,

considerable innovation has occurred around the development of

tools to assess and manage patient financial responsibility. Provider-

focused revenue cycle management vendors now offer proactive

and targeted communications to support patients as they complete

the billing process. MedData has been among the early vendors to

market a patient-centric billing approach in which patient satisfaction

MedData delivers a suite of outsourced revenue cycle management

solutions to physician offices and hospitals, including billing, coding,

collections, and patient satisfaction services. MedData has emerged as

a leading vendor in managing the self-pay portion of the billing process

for providers. Among MedData’s core differentiators include patient-

centric billing and communications that address the convergence of

consumer engagement and satisfaction with provider reimbursement.

MedData’s approach to self-pay account resolution begins by

connecting patients with a specialist prior to the patient receiving a bill.

The specialist serves as a timely, hands-on reference to educate and

engage the consumer around various aspect of their bill. This strategy

identifies “at-risk” patients in need of specialized communication and

education both prior to and throughout the billing process, avoiding

confusion as well as identifying early patient payment issues. This

patient-first revenue cycle management approach yields timely

and accurate reimbursement in a more transparent manner, which

aims to improve patient satisfaction. In addition, these personalized,

introductory communications serve as valuable data points to gain

insight into patient satisfaction throughout the care encounter and

billing process. MedData is unique in that its solution avoids high stress,

facility-based patient intervention points in favor of pre- and post-bill

communications, in order to identify potential payment issues early on

as well as eliminate some of the more intrusive collection efforts that

have plagued similar patient pay billing efforts.

and communication are closely aligned, as outlined in Figure 6. The

company’s differentiating capabilities support pre-bill engagement

and the early identification of “at risk” patients who are most likely

to need specialized communication and education during the billing

process. This predictive analytics component of MedData’s offering

is reminiscent of solutions from an earlier wave of consumer

bad debt management, such as SearchAmerica, which developed

predictive algorithms and screening methodologies to assess the

likelihood that individual patients would pay their medical bills,

incorporating healthcare-specific consumer credit and demographic

data within the context of the revenue cycle workflow. Experian,

seeking to apply their expertise from other verticals in healthcare,

acquired SearchAmerica in 2008 in what has now become Experian

Healthcare.6

Providers have made numerous additional efforts to expand their

service offerings both within and outside the facility in order to meet

escalating customer needs and enhance the providers’ consumer

value propositions. As a prominent example, providers can now

choose to offer their own versions of cost transparency tools to allow

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Figure 6: Convergence Of Patient Satisfaction, Engagement And BillingPATIENT LOYALTY AND RETENTION (MEDDATA)

7 C O N F I D E N T I A L Property of TripleTree. Not For Distribution.

Patient Disruption •  Multiple bills from known

(e.g., hospital) and unknown providers (e.g., ED, hospitalist, etc.)

•  Billed / gross charge vs. normal discount complexity

•  Financial burden beyond current means

•  No clear options for payment beyond 100% settlement

Physician Disruption •  Clunky on-boarding with

new billing company impairs cash flow

•  Limited pre-coding data verification

•  No reconciliation against hospital activity logs

•  Poor demographic information capture

•  Inaccurate coding creates reimbursement and compliance risk

Patient-First RCM

Patient Hospital / Health System Physician Group

Ind

ust

ry P

ain

Po

ints

Patient-Centric Capabilities

Segment patients and customize outreach to optimize engagement

Connect with patients prior to them ever receiving their

first bill

Capture and update any missing demographic or insurance information

Conduct physician-focused patient satisfaction survey

Ind

ust

ry P

ain

Po

ints


consumers to estimate the cost of treatment ahead of a scheduled

appointment as well as compare the cost of treatment options on a

facility-by-facility basis. However, achieving pricing transparency

has not been an easy task given the non-uniformity and complexity

of patients’ clinical needs along with significant variations in care

practices among physicians. Vendors such as Recondo Technology

and Passport Health Communications automate the registration and

eligibility functions at the front-end of the provider revenue cycle.

In addition, these vendors also address key consumer needs by

delivering cost estimation and payment collection tools that allow

consumers to assess their financial responsibility prior to or at point

of service. These solutions can verify eligibility, confirm plan details,

and calculate patient financial responsibility within the hospital

setting as well as assess and collect the patient responsible portion

of standard medical bills prior to service or while at the facility.

A second notable example is the advent of new patient education

tools that provide consumers with greater awareness of their

condition at all phases of the care continuum. Vendors such as Emmi

Solutions and PatientPoint seek to improve patient engagement

Passport Health Communications (Passport) delivers a range

of administrative, clinical and financial tools via real-time and

integrated technology to improve the efficiency and accuracy of

the revenue cycle process. Passport’s offering extends across the

provider revenue cycle, including insurance eligibility and benefit

verification services as well as medical necessity validation and

other claims management services. This includes a patient-friendly

payment management solution that provides price transparency and

enables payment collection at the point of service. The usefulness

of this solution to provider organizations is rooted in its ability to

assess patient liability based on price information in the facility’s

chargemaster, payer contracted rates, and patient eligibility and

benefits information, enabling them to collect payments at the point

of service.PatientPoint offers a suite of solutions that enable sustainable

patient and physician engagement along the entire continuum of

care—pre-visit, at the point of care, and post-visit. Through a set of

communication products available via web portal or facility-based

display screens that facilitate adherence, education and coordinated

communications, PatientPoint’s products aim to drive improved patient

engagement at the point of care and between care visits, which is vital

to improving the quality and efficiency of care delivery. The solutions

have use across provider and payer channels by providing a real-time,

interactive tool to manage patient populations as well as monitor for

gaps in care or adherence that can significantly impact overall clinical

performance and financial success.

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and adherence to care protocols through the delivery of web-

based patient education programs that support patients as they

manage their care. These types of solutions also play a role in care

coordination as providers are able to monitor whether patients have

adhered to care protocols.

Where Payers And Providers Go From HerePayers and providers are aligned in their efforts to improve how

consumers view their healthcare experience and to play a larger

role in supporting consumers’ everyday lifestyles and health

improvement. One area of continued innovation will be around the

consumer experience, as it has a direct impact on the ability of

healthcare organizations to enable consumer engagement. To that

end, healthcare organizations have grown increasingly aware of

their Net Promoter Score (NPS), which measures how end users

assess their overall experience using various products and services.

Organizations view this ranking as important to measuring and

improving customer loyalty as well as driving health improvement. As

healthcare has lagged behind other industries in levels of consumer

engagement and satisfaction, attention to improvement in NPS will be

a key focus area going forward as healthcare organizations attempt

to play a greater role in supporting consumers as they navigate the

healthcare system.


Outside of the standard payer-provider paradigm, a range of

stakeholders have introduced a new wave of direct-to-consumer

products and services designed to address consumers unmet needs

and concerns. Some forward-thinking product distributors have moved

beyond traditional B2B distribution strategies in favor of DTC marketing

approaches that allow these products to be distributed in a timelier,

convenient manner. One example is Simplex Healthcare (Simplex),

which focuses on diabetic testing supply distribution. Simplex offers

members a “club” experience in which members are able to interact

through the Simplex website as part of a community of individuals with

similar conditions. Simplex is able to leverage this “community”, along

with targeted television advertising, to penetrate their core customer

segments with timely, targeted advertising directed towards critical

areas of need or intervention. Using this approach, Simplex is able

expand beyond their role as a distributor and reposition themselves as

a resource to their customers. This is relevant to payers and providers

as they seek approaches to better understand their patient populations

as well as how to identify timely points of intervention to influence

decisions or provide necessary support.

A host of new consumer-focused products and services that fall

outside of standard health insurance benefits have emerged that

are also delivered through a B2C channel. Consumers must pay the

full cost of these products and services – a break with the traditional

payer-provider paradigm. Wellness services offer a good example.

Driven by consumers’ desire to manage their health status, several

vendors that offer consumer-directed wellness management tools

have successfully penetrated the consumer market. For instance,

WellnessFx has been an early market mover in the B2C wellness

market through its web-based health management tool, which allows

consumers to track and manage their actual health condition based

on data generated through the results of a personal health screening.

Similar to consumer-oriented wellness, another area that has

significant B2C momentum is the preventive health screening

market where Life Line Screening has emerged as a clear

market leader. Life Line Screening has focused on solving for the

consumer experience, as evidenced by their NPS, which exceeds

that of Facebook and Google. The ability of Life Line Screening

to incorporate consumer preferences into their direct marketing

efforts has been critical to their success in initiating engagement and

establishing a presence in each local market the company enters.

This serves as another valuable example to payers as they seek to

establish brand recognition at the community level or to providers as

NEW APPROACHES BEYOND THE PAYER-PROVIDER PARADIGM

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they seek to extend their presence outside of their facilities. Life Line

Screening’s marketing approach has proven to penetrate various

consumer segments effectively as well as establish high-touch

interactions with consumers and influence decisions through their

screening results.

Innovative B2C strategies have proven to be effective in motivating

consumer behavior and decision making. These approaches are

relevant to payers and providers as they seek to expand consumer

relationships and establish longer-term member relationships

in order to eliminate the typical churn that complicates care

management and health improvement efforts.

Life Line Screening provides on-the-ground preventive health

screenings to identify health problems that might otherwise go

undetected. Life Line Screening’s services focus on identifying

key risk factors for conditions such as stroke, peripheral arterial

disease, diabetes, heart disease and osteoporosis. Life Line

Screening serves over 1 million consumers annually across over

16,000 screening events, providing a key resource to consumers

in managing their health risks. Life Line Screening utilizes a

nationwide, community-based approach, establishing their short-

term, local bases in community centers, churches, and other

community sites nationwide. Key to the approach is the company’s

highly recognizable fleet of buses that sit outside of their screening

locations, which serves as a highly visible branding to notify

consumers of their presence in the community.


As healthcare spending continues to rise and consumers assume

a greater share of costs, their demands will influence how the

industry brings forth new solutions that help consumers manage

their healthcare and help improve the consumer experience.

These solutions will also allow healthcare organizations to align

their consumer strategies with care coordination and quality

improvement efforts to address the relentless increase in spending

that has defined the industry’s shift to consumerism.

The historical focus of healthcare technology investments

around administrative efficiency and workflow had positioned

most healthcare organizations elsewhere as consumer demands

shifted as a result of CDH. The “consumer ignorance” that has

resulted has plagued many early consumer-directed efforts by

failing to establishing consistent and effective interactions and

engagement with the consumer. We believe that these organizations

face dwindling alternatives to sustainability without a concerted

consumer engagement strategy – one that can influence healthcare

decision making. The urgency is real – the healthcare cost burden

placed on consumers is reaching its limits, and consumer demands

continue to grow.

Despite significant innovation across the payer and provider markets,

healthcare organizations are still challenged in understanding who

the consumer is, what they want and how they want it. Much

progress is being made, particularly as healthcare continues to

take cues from sectors like retail and financial services that have

developed much deeper consumer engagement capabilities. The

market leaders that emerge will be those who are able to close

the information gap between buyers and sellers and act more

like these leading retailers and financial firms in their ability to

understand and meet unique consumer needs and preferences. At

this point in the evolution of healthcare consumerism, the industry

lacks clear end-to-end platforms that fully satisfy end market

demands within consumer engagement, communications, support,

and other critical areas of need. However, we have illustrated

numerous emerging and incumbent solutions that are closing

the gaps between consumer demands and industry constituents’

capabilities, and which may serve as broader consumer-oriented

platforms in the future.

LOOKING AHEAD

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END NOTES

Kaiser Family Foundation, Medicare: A Primer, 2010.

Congressional Budget Office, Effects of the Affordable Care Act on Health Insurance Coverage – February 2013 Baseline, 2013.

Employee Benefit Research Institute, Private Health Insurance Exchanges and Defined Contribution Health Plans:

Is It Déjà Vu All Over Again?, 2012.

Disclosure: TripleTree was the exclusive advisor to Connextions in their sale to Optum in 2011.

Disclosure: TripleTree was the exclusive advisor to CERECONS in their sale to Medecision (a subsidiary of Health Care

Services Corporation) in 2013.

Disclosure: TripleTree was the exclusive advisor to SearchAmerica in their sale to Experian in 2008.

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