One of the issues that emerged from conversations with industry insiders about UnitedHealth’s deal for Audax Health is that it indicates how payers are trying to change themselves so that they can be more competitive in a post-Obamacare world. One payer source observed that as health plans shift from vertically integrated companies, they are trying to provide differentiators that can make them more competitive, including in how they use consumer technology for engagement.
“Everyone is trying to be that engagement tool. But the challenge is these companies need to fit into a payer’s much larger strategy,” he said.
Jack Young of Qualcomm Ventures and director of the Qualcomm Life Fund pointed out that the medical-loss ratio is one factor that is helping to drive payers to improve engagement. The formula was outlined in the Affordable Care Act with an eye toward regulating value. It also requires them to issue rebates to members if this percentage does not meet minimum standards. It requires payers to show the proportion of premium revenues spent on clinical services and quality improvement, according to CMS’s website.
“The payer market is becoming more consumer-driven,” said Young.
That change has prompted payers to more aggressively look for tools to improve consumer engagement.
Young also observed that although big data was probably not a major factor in the Audax deal, it is a big priority for payers as they try to comply with new regulatory impact of the medical-loss ratio and a bigger insured population. Although payers have been using claims data, data from electronic medical records is of great interest. Although integrated systems (e.g., Kaiser Permanente) have ready access to that data, others are obtaining it through acquisitions such as UnitedHealth’s deal for Humedica last year. Data from social media streams and patient groups are also a growing source of big data.
Although data from tracking devices will be a useful source of population health data in the years to come, it will take some time for payers to develop (or acquire) efficient ways to tap those networks and put the data to use.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
My payer source also predicted that the complex transaction landscape ahead won’t just be limited to payers. “I think it will be complicated going forward as plans figure out what they are going to be. It is not just payers trying to differentiate themselves from each other. There is a fundamental shift going on that will redefine the traditional roles of payers, providers, employers and other parties in the health ecosystem. Payers are trying to redefine their roles, and to figure out what their organizations will look like as the health system evolves.
“We’ll see reorganizations, acquisitions, spin-outs, joint ventures and divestitures. We’ll also see new entrants such as financial services firms and technology companies encroaching on traditional payer and provider turf. It is going to be an interesting 10 years.”
[Photo credit: Metamorphoses from flicker user skippytpe]
