Analyst Opinion: Health Insurer Transformation is Inevitable

The health insurer industry recognizes that the current way of doing business is not sustainable long term. Insurers either keep shifting more cost to consumers, resulting in consumers directly doing business with care providers, or they kept raising premiums, bankrupting consumers, and eventually causing their own demise—either out of business or government moves in to create a single payer system.

As current thinking goes, insurers want to change their role from a gatekeeper between consumers and their doctors, to a facilitator of better care. It is easier said than done because of plenty of legacy interest in maximizing premium collection and minimizing payout. For some private insurers who experience stagnant business and are fearful of disruption from new breed of health insurers (e.g., Oscar), they want to adapt by diversifying their business model into care services. They try to close the care gap left open by the current fee-for-service payment model, and in a longer-term, complement care providers as their partners. Their investment focus is in the care continuum between visits and before severe health risks take their toll on consumer’s health and this country’s health system. Most doctors today are not trained with such skills, nor are they directly compensated by health insurers for taking on such tasks in a fee-for-service scheme. It is a move that will pay off long-term in a value-based care payment system, a change that will inevitably happen from insurers’ POV. Private insurers also figure that they can become service contractors for CMS to manage the growing Medicare population due to aging demographics. This is a strategy sooner or later most private insurers will adopt, because other options simply won’t work out long-term.

As insurers invest more in everyday health improvement/maintenance programs or helping care providers adapt their practices to take on such roles, what consumers do at home and how to improve their care at home will become a critical area of operation for doctors and their partner, insurers. Collectively, they have to rely on more home health technology to reach and engage their patients, and practice care services in a different way than doing it in their office. Home health technology is thus very much to the core of their transformation.

At our upcoming Connected Health Summit in San Diego, CA on August 29-31, we will have sessions and speakers highlight the significant opportunities ahead for care management service providers. We welcome you to join us and contribute.

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Analyst Opinion: Health Insurer Transformation is Inevitable

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