Industry Trends: Emerging Health Care Innovation

Industry Trends: Emerging Health Care Innovation

Traditional health plans have not been able to offer consistent quality and affordable health care, so innovators are at work attempting to change the traditional health model.  In January 2018, three corporate giants – Amazon, Berkshire Hathaway, and J.P. Morgan – announced that they wanted to solve the problem of rising health care costs for their employees.  A number of key executives and experts were hired with the goal of analyzing data on performance, cost, and other factors and building a network of doctors and hospitals based on that criteria.  This enables employers to steer their employees to the appropriate type of care for their condition based on quality outcomes and lower costs.  This ‘steerage’ could benefit both employers and employees by preventing workers from seeing doctors that over-charge and under-perform.  This bold and innovative way of looking at health care gets to the heart of managing appropriate health care – the right care, at the right time, at the right cost.

However, the traditional health care system still reigns supreme.  A doctor’s cost and quality extends far beyond their direct services.  If the doctor is unable to perform a service, he or she will refer the patient to another doctor and that referral is typically based on a relationship. The relationship could be based on friendship or from the doctor or practice being part of the referring doctor’s health system. Data shows doctors are very predictable.  Some doctors consistently deliver great quality and great outcomes and refer to physicians who do the same.   Others may deliver poor quality, poor outcomes, and higher costs and may refer others to physicians who do the same. There is a strong correlation between health care providers that deliver the highest quality, drive the best outcome and therefore deliver the lowest cost.

The ‘Amazon effect’ has spawned other new and creative entrepreneurial insurance plans that are emerging that will assess performance and cost data to ensure the highest quality, best outcome, at the best cost. These new, emerging options disrupt the way we think about health care. It is identified that a large portion of people making health care decisions don’t understand quality, and this new option can push or motivate a population to high-quality, low-cost health care.

Transparency is key in this new health plan environment.  It all starts with quality, appropriate care.  Health care providers race to drive higher quality to gain patient steerage.  In this ‘Amazonian’ world, higher quality ratings will drive a challenge to deliver more appropriate, cost effective and high quality care.  In today’s environment, there is little correlation between high quality and high cost in health care.  That will change as these new models take hold and drive behaviors that will drive efficiencies into the system.

As your benefits partner, our job is to help you manage your Health and Welfare benefit responsibilities and find the right benefits and tools to support your employees.  Your KTB agent and/or Account Executive are prepared to discuss your full benefits package and help guide you through the health and wellness maze.