Rethinking Health Plan Models for the Emerging On-Demand Digital Economy

Article Synopsis :

Even as on-demand healthcare platforms disrupt the industry, they create possibilities for new value propositions, partnerships and business models reshaping the cost and delivery of care. This report from Cognizant explores some of the possibilities, specifically:

On-demand healthcare is coming. What are your options? 

• What the healthcare industry will look like in five years
• The opportunities of digital disruption for health plans
• Where health plans should place their big bets
• How health plans should become future-ready

Consumers will access a wide range of healthcare services via on-demand platforms fueled by “systems of intelligence,” virtual machines powered by AI and machine learning, data and processing power. APIs will enable external players to plug their offerings into the platform.

The on-demand economy will empower consumers to choose healthcare providers and services based on convenience and personal criteria vs. the rules of a third-party gatekeeper or health insurer – accelerating price and quality transparency.

The report outlines four emerging business model archetypes:

1. Become the on-demand C2B healthcare platform provider: As the industry enters the on-demand economy, one business model option for health plans is to leverage existing investments in digital technology assets and platforms to create a game-changing on-demand platform to help power the new digital healthcare marketplace connecting producers and consumers.
2. Insurance powerhouse; back to the future: Some organizations will leverage legacy expertise and become a one-stop shop for all of a customer’s varied insurance needs. These entities will serve consumers and businesses with bundled and unbundled offerings for life, property, health, auto, long-term care and other insurance needs.
3. Integrated delivery model at-scale: On-demand healthcare and integrated delivery are not mutually exclusive. In fact, some of the largest integrated delivery systems (IDS), like Kaiser, are now providing on-demand healthcare at the enterprise level. The combination of IDS and the on-demand healthcare platform economy will fuel integrated delivery at scale and accelerate the viability of national accountable care organizations (ACOs).
4. Health, wealth and lifestyle management: Many health plans are already diversifying into adjacent services (i.e., expanding beyond population health management to address the social determinants of health); moving beyond wellness into lifestyle services and support; and broadening the array of services they provide to help members manage health savings accounts and health finances to include non-health related personal finances.

The report issues the following guidelines for making ‘no regrets’ investments:

• Mobile first
• Minimize assets
• Invest in AI, machine learning and automation
• Collaborate across the Payer, Provider, and Pharma value chains
• Simplify and modernize legacy assets
• Enable real-time transactions

The C2B on-demand healthcare platform economy will reward new value propositions and erode existing ones. With digital health start-ups aggressively challenging industry norms, meeting new digital customer demands is the order of the day for incumbents.

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