As we look ahead to the future state of healthcare, the global prognosis will be guided on two fronts: digital transformation’s effect on the industry and the evolution of personalized care models. Our ability to deliver whole-person care promises to both transform treatment experiences and outcomes and help move consumers from sick care to healthcare.
At ZS, we surveyed health plans and other payers (e.g., pharmacy benefit managers and integrated delivery networks) to learn how they plan to evolve their digital transformation initiatives. Six insights emerged from our research.
To understand how information and technology can accelerate health and wellness gains, ZS polled senior leaders in the U.S. and four other countries (Australia, Germany, New Zealand and the U.K.). The research stemmed from ZS’s partnership in the HIMSS Trust, a consortium of leaders from across the healthcare and technology space who collect, analyze and report on in-depth, data-driven market intelligence.
HIMSS (Healthcare Information and Management Systems Society) is a global advisor, thought leader and member-based society committed to reforming the global health ecosystem through the power of information and technology. Insights gathered by the HIMSS Trust unveiled trends and challenges to help the industry prepare and predict for the next three to five years.
For ZS’s latest report, we surveyed organizations that operate at national, regional, state and community levels and cover more than a million members. Through our benchmark analysis, ZS captured a glimpse of the future state of digital transformation and personalized care models healthcare leaders foresee.
As we look at health plans and other payers—internationally and within the U.S.—we see a common interest in the overall objective of delivering whole-person care but some difference in the approach.
In the United States, current healthcare reform initiatives are guided by social determinants of health. Studies continue to demonstrate that healthcare outcomes stem not only from clinical factors alone but also from social variables such as where patients live, their socioeconomic status and the accessibility, affordability and availability of healthcare services. Particularly during the COVID-19 pandemic, we saw disparate impacts on under-served populations in the United States. Increasing awareness of the need for health equity underscores the commitment we’re seeing from American health plans and other payers to provide for their members’ behavioral, clinical, mental and social well-being.
By comparison, while international efforts are similarly led by integrating clinical, behavioral, mental and social well-being programs, they’re viewed through a preventive care and wellness lens. Collaboration with health technology startups is expected to advance these initiatives.
Globally, health plans and other payers recognize that healthcare must be more affordable and personalized—though affordability is prioritized domestically, and personalization is emphasized internationally. The slight variation seems to reflect American efforts to make care more affordable to close health equity gaps and international well-being-focused programs that leverage technology to lower costs.
As part of the Inflation Reduction Act of 2022, the U.S. capped insulin copays at $35/month for Medicare Part D beneficiaries. In a recent earnings call, UnitedHealth Group announced it will eliminate cost-sharing for insulin and other prescription drugs for its members, starting next year. Although the methods are different, the objective is the same. In the U.S., large national health plans appear better positioned to drive these important affordability and personalized care initiatives compared to regional and local health plans. Regional and local health plans should focus on accelerating their digital transformation journeys to help reduce the overall cost of care by optimizing their administrative expense ratios.
Health plans and other payers worldwide agree that financial, technical and organizational issues are less likely to stand in the way of digital health adoption. And while they also agree that regulatory changes could be a barrier, the perceived impact is significantly higher in the U.S. National plans anticipate new regulations around health equity will limit rather than expand access. If we see interoperability as a facilitator—and not as a barrier—data could be bi-directionally exchanged between providers, health plans and other payers. The system may be about to get the boost it needs to align incentives and advance value-based care agreements and arrangements for high-risk members.
Large technology companies are expected to continue contributing to digital transformation initiatives, particularly as healthcare is integrated across areas ranging from virtual primary care to specialty care, remote patient monitoring and home care. Large health plans and other payers continue to move in this direction as they work to digitally transform their operations and deliver a connected healthcare experience to their members.
These advancements are made possible by interoperability, wherein patient data is owned by members and patients. As such, health plans should look beyond compliance mandates and view interoperability through the lens of gaining a competitive advantage. Healthcare consumers now expect well-designed, omnichannel digital experiences, and health plans can leverage real-time data sources enabled by interoperability to reduce overall healthcare costs and improve treatment experiences. It’s a unique opportunity to activate and engage members where they are in their care journey.
The digitalization we saw in financial services, retail and entertainment and accompanying regulatory changes that removed barriers are what we can expect in the next level of healthcare digital experiences. Payers and providers are collaborating, and the shift away from fee-for-service toward value-based care will help to align incentives. By taking full advantage of these opportunities, health plan leaders can create value for their members and for their organizations.
Health plans and other payers continue their efforts to move the preferred site of care away from the hospital, where treatment costs are the highest. They’re increasingly looking at nontraditional sites of care—most notably the home with remote monitoring. By reducing the cost of care, they can shift resources to fund personalized care initiatives that address whole-person health, including a person’s behavioral, mental and social well-being.
Per our survey, large national plans in the U.S. are expected to lead the way in supporting nontraditional approaches for care delivery. While savings and access-to-care opportunities stand out for national/single-state plans, we see a uniform interest in bolstering mental and behavioral services. Also notable is the shared social approach to care taken by national/federal and local/community plans as whole-person commitments gain traction.
Interestingly, an emerging trend we’re seeing is the development of programs that incentivize members to stay healthy. Changing behavior has been a persistent and difficult challenge, but it can deliver real benefits—especially for people with comorbidities. In treating someone with high blood pressure and diabetes, for example, a physician might first recommend exercise and healthy eating.
To help facilitate that behavior change, health plans and other payers are looking at personalized care models that include incentives such as coupons for healthy food and transportation services for medical appointments and regular checkups. It's happening in both U.S. and international markets, though adoption is much higher in markets outside the United States for the simple reason that the international healthcare ecosystem is not as fragmented. Most of the markets we looked at have single-payer systems; with the government being the healthcare provider, building member incentivization models is much easier.
Domestically, we are moving in that direction. When we achieve true interoperability in our ecosystem, and healthcare data is accessible, we will see much higher adoption of member incentivization here.
With the entire healthcare ecosystem gearing up toward leveraging technology to drive differentiated member and patient experiences, health plans and other payers who aren’t seriously thinking in this direction are at risk. Some of the leading national players are better positioned to provide that experience than are other companies, so senior executives who are not committed to driving these initiatives—or who are having second thoughts—are likely to face significant disruption.
Digital transformation in healthcare is inevitable. In the U.S., it's getting a regulatory boost. The final payer-to-payer data exchange rule put on hold during the COVID-19 pandemic and the timeline to be compliant are expected to be announced soon by the Centers for Medicare & Medicaid Services. As regulators and the administration address issues such as healthcare accessibility and affordability, that’s another step in the direction of interoperability and health equity.
For health plans and other payers, the member and patient experiences they deliver and the personalized care models they offer are going to significantly differentiate them in a rapidly evolving healthcare market. And the companies that adapt and continuously transform themselves will be the winners.