Despite having their model overhauled in recent years, private health insurance providers appear to be earning healthy profits these days. In light of the overhaul, they also seem to have turned their focus toward consumers with new apps, cost transparency tools and wellness and fitness incentives.
This has opened up doors for many startups, who are getting new business from and new partnerships with insurers because of the shifting model.
At a recent event, I caught up with Dan Phillips, a vice president at Sandbox Industries, which is the parent company of the Healthbox digital health accelerator and the manager of BlueCross BlueShield Ventures since 2008.
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He shared that the types of companies the insurer is interested in investing in and working with has shifted a bit as President Barack Obama’s healthcare reform policy has rolled out. In the move to ACOs and outcome-based reimbursement, communication and data analysis tools that enable evidence-based care have become more important. BCBS, for example, has invested in Essence Group/Lumeris, which offers a data platform and guidance to help hospitals and health plans transition to ACOs, and InVivoLink, a company focused on capturing, measuring and disseminating data from medical devices.
Then there’s what Phillips hesitantly called the “retailization” of healthcare and insurance, marked by the implementation of insurance exchanges and the need for insurers to market directly to individuals.
Choosing insurance benefits, after all, is apparently the second-most difficult major life decision that Americans make. That’s given rise to companies like Bloom Health, which helps employers and employees find the plans and benefits that meet their needs, and Change Healthcare, whose Transparency Messenger platform educates health plans and employers on healthcare price variation.
Going into a near-dead-heat election, if there’s anything we know it’s that more change is coming for the healthcare industry.
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NPR points out in a piece this morning that a Romney/Ryan victory would result in initial uncertainty among payers as the administration figured out how to make good on Romney’s promise to repeal Obamacare.
But several years down the road, under Romney’s proposed Medicare “voucher” plan, the commercial health insurance industry would expand rapidly and create enormous business opportunities for certain startups working in benefit design, care management, data mining and other areas that help insurance companies, said J.D. Kleinke, a resident fellow at the right-wing think tank American Enterprise Institute.
“For most people with commercial insurance, those plans are trying to find better ways to get us to a good doctor, to help us figure out when we should be taking drugs and which one is the right one to take,” he said.
Even without the Romney Medicare plan, enrollment in Medicare Advantage, a program under which private companies contract with Medicare to provide health plans to seniors, is still expected to grow more than 10 percent next year.
With all of these factors in play, we can expect to see more strategic partnerships like UnitedHealth Group’s with mobile technology companies CareSpeak Communications, Lose It! and Fitbit, and more interest from insurers in working with startups focused on adherence, communication and wellness.