Report: B2B, B2B2C models win as healthcare moves toward a “fully retail experience”

Shopping for health care (side view)

The cost burden placed on healthcare consumers is reaching its limits, and the historical “consumer ignorance” of payers and providers isn’t cutting it anymore. And as a result, empowered and increasingly demanding patients are driving growth in business-to-business and business-to-business-to-consumer healthcare organizations.

So says Minneapolis investment bank Triple Tree in a new report called Empowering Individuals to be Better Healthcare Consumers. In the report, Triple Tree proposes that we are in the second of three waves driving healthcare in the direction of consumerism.

The first wave began with consumer-directed health plans, characterized by high deductibles and a personal health savings account. Those plans put more financial responsibility in the hands of the policy holders, but their overall engagement with their healthcare was limited because payers and providers were not prepared to provide them with the appropriate decision-making tools and services. That demand on healthcare organizations gave rise to the second wave, in which payers and providers started to establish and leverage more points of interaction with healthcare consumers.


“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,” the report says.

In the third wave, Triple Tree proposes that consumers will essentially demand a full retail experience in which they can shop and navigate the healthcare system on their own.

The emergence of health insurance exchanges will largely standardize the “products” of health insurers, so they need to find creative ways to innovate outside of that product. And as employers continue to shift to defined contribution plans, even those consumers who have health benefits through their employers will also be empowered with more choice and control over their spending.

But because the traditionally B2B health insurance model of the past, these payers generally don’t have a great understanding of consumer needs. So they’ve had to prioritize their investments around improving interactions with customers and encouraging care coordination.

Some payers are ahead of the curve on this. United Health, for example, is opening a slew of retail stores in malls across the country, and Aetna struck a deal with Costco that lets members of the store buy health insurance there.

They’re also turning to third-party vendors for help on creating more targeted and personalized interactions with members, which is why so many companies emerging today are hinged on a B2B2C business model. Healthline Newtorks, for example, which allows companies to deliver patient-specific health content to customers, lists Aetna, UnitedHealth Group and Optum Health among its users. Accolade and HealthAdvocate lets employers and plan sponsors offer their members personal “health assistants” to help them make informed health choices.

But insurers aren’t just giving business to these companies; they’re investing in them and acquiring them. Connextions Inc. , for example, a technology and service provider that helps health companies build strong relationships with consumers, was acquired by Optum Health in 2011. Later that year Aetna acquired Healthagen, the developer of the mobile app iTriage. BlueCross BlueShield Ventures, the investment arm of the insurer, was one of the top investors in digital health companies last year, investing in cost transparency company Change Healthcare, health rewards provider EveryMove and billing company PatientCo.

Providers are feeling the same kind of pressures and are partnering with companies that provide tools to improve customer service, starting with administrative processes. MedData, which helps providers manage the self-pay portion of the billing process, has emerged as a leading vendor in this area, according to the report.

Meanwhile, providers are also assuming more financial risk with patients as their reimbursement hinges on their outcomes, so they’re looking for tools that will promote sustainable patient engagement. That includes patient portals like those offered by PatientPoint and VisionTree.

B2B models are also having continuous success with providers, who are looking for decision-support predictive analytics tools to tell them who the highest-risk patients are and what kind of interventions they will need. With the implementation of electronic medical records and the proliferation of accountable care organization, they’re also turning to companies with IT platforms that enable care coordination, like CERECONS and Medecision.

“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,” the report says in closing. “At this point […] the industry lacks clear end-to-end platforms that fully satisfy end market demands.”

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