At our recent Discovery Client Council meeting, we had the pleasure of hosting Wheeler Coleman, CEO and Executive Partner of EC-United and a member of our Strategic Advisory Board. In this guest blog, Wheeler summarizes the key takeaways of his presentation on the healthcare digital revolution.
Survive or thrive
The digital revolution has been a game changer for all industries, and health payers are not immune. Startup companies are creating new business models and blending existing and emerging technologies to leap-frog and disrupt well-established companies and business protocols. There are also well-established companies in other industries that are entering the healthcare industry to the same end—to change the model and dislocate the existing players.
A few good examples of this are Amazon, Google, and Microsoft. These companies see healthcare as an industry ripe for an operational and administrative transformation that they can deliver through their powerhouse of technological capabilities and expansive digital footprint. To survive, payers must take this threat seriously. They cannot take their leadership position or their iconic name for granted. Resting on their laurels will very likely result in a slow death spiral.
Look at a company like Kodak. They were a market leader with a great brand. Did you know that they created the digital camera? But they were so happy with their position that they refused to make changes and ignored the red flags:
- Hitting a revenue plateau
- Competing on price / no differentiation
- Big on data and short on analysis and actionable information
- Neglected table stakes
- Too much pride
- Too deep in their comfort zone
Healthcare payers need to make sure they don’t fall victim to the same pitfalls. They are enjoying large revenues now, and too many are unwilling to reconsider their business models and leverage technology to maximize efficiency.
We’ve seen how this plays out in other industries. The following well-known companies were able to leap-frog the competition and disrupt well-established businesses by creating new models and leveraging existing and emerging technology.
Uber disrupted the taxi and limousine business models and, in many markets, expanded the demand for service by leveraging GPS, e-commerce, and mobile technology.
Netflix disrupted the cable and movie industries and recently their stock increased 20 percent due to increased subscriptions. This happened when 4G was introduced and movies could be streamed to individual homes. They quickly pivoted from shipping DVDs to digitally streaming movies. The outcome has been the end of the video rental business and a cable industry trying to play catch-up.
Airbnb disrupted the hospitality market and transformed how people approach travel accommodations worldwide by allowing people to lease their homes electronically.
These three different companies in three different industries each changed the playing field and caused disruption by using new and emerging technologies, redesigning how services were delivered, and lobbying for new rules and regulations. So, the question for us is not if, but when will this happen to healthcare payers? Those who are reluctant and slow to adopt emerging technology or work with new technology partners could soon find themselves like the Kodaks of the world.
How does this apply in healthcare?
The companies we’ve already mentioned, and so many more, have reset consumer expectations across the board. In healthcare, we must keep up with the evolving demands of the new “digital patient” by harvesting actionable information from all the data that is being generated by the internet of things. To do this, our options must be instant, seamless, and insightful:
Instant—Information is now in all our pockets and consumers demand information in real time. Historically, our industry has taken advantage of batch processing, but we need to change our processes and our information systems to allow for real-time processing.
Seamless—The relationship between payer, provider, and member needs to become real-time. Payers and providers must be able to exchange information in real time without impacting the member experience. The member does not want to know what’s happening behind the scenes.
Insightful—Consumerism and social networks are generating an unprecedented amount of data that we need to be able to harvest and transform into actions. The new generation of analytics (advanced analytics, ML, AI, robotic technology) will allow us to discover noncompliance and fraud more easily than ever before, but only if data is converted to information that triggers action by the payer, provider, or member.
The digital revolution is upon us!
To catch up and better serve consumer demands and stay ahead of competition, companies will need:
Strategic partnerships—Companies must seek non-traditional employees and partners.
Operational excellence—Companies must reduce costs and increase efficiencies.
Emerging technology—Companies must rapidly adopt and embrace new technology.
Healthcare has historically been a slow mover in this regard, but some progressive healthcare organizations have already begun differentiating themselves by providing a more customer-friendly, tech-enabled experience. Still, it’s not too late for those companies contemplating their next moves. The companies that make this a priority and quickly adapt to this inevitable change can survive and rise to the top of their sectors. But the clock is ticking, and for those organizations that continue with business as usual, time is running out.
To learn how Discovery Health Partners can help you advance into the future of payment integrity, contact us today.