In 2020 Consumerism Will Steer Payer Decisions in Deals, Spending

Deal-Making As A Tool To Shape Payers’ Image

According to Isgur, consumerism will change the discussions about deal-making in 2020. The country can still expect a high volume of deals, both horizontal and vertical, but the purpose will be different.

In 2016 when major mergers were proposed, payers promoted these deals as ways to improve access and affordability for consumers.

In 2020, payers will instead use these mergers to reform their image in consumers’ minds.

“What we're looking at for 2020 is how to help organizations really set their future identity,” Isgur said. 

“Who are they going to need to merge with, acquire, or partner with to create the identity that they want to go out to the market with? For example, do they want to be known for high consumer satisfaction, or do they want to be known for being the best product leader in the world?”

Technology And Tech-Savvy Workforce Drive Efficiency

Technology will play a significant role in the consumer experience in 2020.

Technology is a driver of determining efficiencies, such as rooting out costly practices. It is critical to fostering seamless navigation of the care experience and is essential to population segmentation, to identify groups of members’ needs.

As a result, 2020 will be a year for payers to bulk up their workforce with technologically skilled workers. Twenty-seven percent of payers in the PwC report said they intend to add new team members with the desired skills to expand their technological bandwidth. 

Once payers recognize the need for technology, however, they face the challenge of where to find workers with the skills to implement these new tools.

Artificial intelligence, app development, data analytics are being used in every industry and workers with skills in these areas are in high demand. Twenty-six percent of payers surveyed by PwC will prioritize upskilling their workforce as part of their workforce management.

“If you're a healthcare company, an insurance company, the reality is you're not going to necessarily be able to hire all of that external, because there's a huge war for talent,” Isgur explained.

Isgur suggested three roles in which payers may need to upskill their teams: users, deployers, and developers.

Technology will continue to be central and indispensable in payer strategies—or it should be, Isgur said.

However, 38 percent of payer and provider executives said that digital solutions are not a piece of their corporate strategy, according to the PwC report.

Isgur responed to this argument by pointing out that even high touch populations like Medicare Advantage members still need technology to connect them to an individual within the payer organization.

“It's technology that's going to give an edge, especially around data analytics,” Isgur said. “But there is some high touch to it as well, which might be backed up by technology in terms of what certain consumer segments want.”

Consumer-Driven Equity and Inclusion As Essential, Not Decorative

Having equal representation of potential consumers in clinical studies, in algorithm development, and across the industry will be crucial in 2020, according to the PwC report. Yet healthcare executives do not recognize the significance that even workforce diversity can have on consumer experience.

The report supports not only diversity in the workplace, but inclusion and equity across the industry. 

Isgur put the necessity for this reform in stark terms:

“People will live and die when the data is not right or when groups are not actually well-represented in our research and in our research and development,” Isgur said.

Underrepresentation in pharmaceutical clinical trials means that pharmaceutical trials may lack the data to know how a drug will affect a certain population of consumers. In care delivery, lack of equity may lead to care disparities along racial, sexual, or other divides for consumers.

Progress has been made. Sixty-eight percent of consumers who work in the healthcare industry said that their company diversity at least somewhat matched the composition of their consumer population, according to the PwC report.

Still, only eight percent of healthcare organizations told PwC that their efforts at workplace diversity, equity, and inclusion were in response to their consumer.

“In 2020, we look at this as being a big watershed year for the healthcare system to really sit up and take notice that this isn't just a nice to have, from a business perspective, to say, ‘Oh, we're a diverse organization.’ But we also have to really get it all the way through our organization so we can help people with their health decisions and get better health outcomes,” Igsur said.

Affordability As Proof of Consumer-Centricity

In 2020, payers will continue to focus on affordability as consumers continue to struggle with high out-of-pocket costs, burdensome deductibles, rising premiums, and higher healthcare spending overall.

“Facing a tsunami of high-priced gene and cell therapies and ever-rising provider prices in 2020, employers, public and commercial payers, and American consumers will seek— and sometimes find—creative ways to finance care, spread risk and ensure that their money is paying for value,” the PwC report states.

In many ways, the payer-employer role is much like the payer-member role in its consumer elements and in 2020 employers will be all about cutting costs.

Employers are looking at narrowing their networks, bringing clinics to the work site, and engaging in bundled payments in order to tackle mounting healthcare costs.

So from employers and members alike, payers will have to have an answer to the same question.

“There's going to be more pressure going back on insurance companies in terms of--what are you doing around prices?” Isgur said.

As consumers demand more from their healthcare experience, the burden of proof will be on the payers to show that they are listening to their members by lowering costs.