TEDMED #GreatChallenges: Can Consumers Change the Business of Health Insurance?

consumers business of insuranceWith the right tools and access to technology, consumers can advocate for their own health while helping to drive the greatest changes in health care. The vast array of health care options available in today's marketplace can be daunting, even for the most engaged patient. From treatment and plan categories to services offered by their providers, consumers are seeking to play a more active role in their own health care decisions. More than ever before, they want to advocate for themselves and their loved ones. What can the industry do to ensure that the choices consumers make are informed and beneficial? Many experts point to the need for more health care innovation accompanied by tools and information that will ultimately put the consumer in the driver's seat. The TEDMED Great Challenges Program invited a diverse panel of experts to discuss this new paradigm: "Can Consumers Change the Business of Health Insurance?". The panelists examined the consumerization of health care, how it will change delivery and payment, its impact on employers and employees, and how technology and innovation will change the future of the industry. Sponsored by the Robert Wood Johnson Foundation, the Great Challenges of Health and Medicine Program sheds light on complex and persistent problems that affect millions of Americans.

Panel Participants

    • Vinay Gidwaney is co-founder and chief product officer at Maxwell Health, creator of the Health as a Service platform, an operating system for employee benefits. Prior to Maxwell Health, he was the chief technology officer and co-founder of Control-F1, an IT-support automation software maker. 
    • Dr. Tal Gross is an assistant professor of health policy and management at the Mailman School of Public Health at Columbia University, as well as a faculty research fellow at the National Bureau of Economic Research. He focuses on the intersection of health insurance and consumer finance.
    • Consumer advocate and former litigator Jennifer Sclar is the CEO of Clear Health Analytics. Her company's software, which recently won Robert Wood Johnson Foundation's Plan Choice Developer Challenge, helps consumers to make smarter and faster decisions about their health care purchases.
    • Abir Sen is the CEO and co-founder of Gravie, a consumer market for health care services. His new startup helps individuals and businesses comparison-shop for health care in the private market. Prior to founding Gravie, he founded four health care startups and worked as an adviser to Fidelity Investments Health and Welfare Businesses.
    • The panel was moderated by reporter, podcaster, author and TV contributor Jayne O'Donnell. A health care policy journalist for USA Today, her area of expertise is the Affordable Care Act and other consumer-oriented health issues. The Association of Healthcare Journalists and the Commonwealth Fund recently awarded Jayne a fellowship to examine the inner workings of Medicaid on the state level.

Key Takeaways

For many years, employer-sponsored health insurance has been business-to-business (B2B). Most health insurance was bought and sold between employers and insurers, and patients were essentially removed from the negotiations for price and services. Recently, however, the Affordable Care Act (ACA) has forced the industry to become more consumer-focused. This shift allows for more of what the panelists call "insurance independence" wherein consumers make their own choices and are freed from the headaches that often accompany complex health care decisions.

In a consumer-driven marketplace, the patient can choose to use an application or service that best meets their needs. For example, Vinay Gidwany touched upon the many concierge services available to consumers, where a patient pays an annual fee or retainer for the services of a primary care physician, and the opportunity to receive a higher level of personal interaction. This option may be attractive to those who currently believe that the quantity of patients a provider sees supersedes the quality of care received.

"[A concierge service] will actually be an advocate for you, they will get on the phone with your doctor, with your health care payer, your insurance carrier, and talk about the best way to solve the problem," he said.

This example of consumerization may be beneficial in many respects, but it also has downsides, especially when it comes to the quality of data and technology available to the consumer. Jennifer Sclar warns that, in taking health care into their own hands, consumers could be giving up continuity or quality of care.

"Without good tools and good information, it's going to be very hard for consumers to wade through the marketplace and assess tradeoffs in terms of price, quality and outcome," she said. "It will have a real impact on health care pricing as well, with routine care becoming much cheaper, and more catastrophic care becoming more expensive." Customer demographics are also changing. With the ACA, the so-called "young invincibles" are seeking consumer-driven plans with high deductibles.

"There's a large number of people who are relatively young, very healthy and compelled to buy insurance," says Tal Gross. "They are complying with the ACA mandate and they want a type of insurance that typically hasn't been that common because they have not been in the market."

How will high-deductible plans affect health care costs down the road? Gross points to a small set of consumers, mainly the elderly and those with chronic conditions, who would be hurt by high deductibles.

"We want to make sure that the people who are vulnerable don't have to quit going to the pharmacy to save money," he explained. "But on the other hand, for the people that are healthy, we have to make sure we don't provide too much care, or wasteful care."

Ultimately, the panelists agreed that while the ACA comes with challenges, it is proving to be an exciting time in health care. They hope consumers will be inspired to think about their health and the delivery of their health care in a new way. With the use of the right tools and more access to data, consumers will be able to create their personal roadmap for better health, while helping to change the business of health care delivery in this country.

MHA@GW is proud to support the Great Challenges Program at TEDMED, funded by the Robert Wood Johnson Foundation. Through weekly dialogues with TEDMED's intellectually diverse community, we move toward a more meaningful understanding of the great challenges of health and medicine. Click here to learn more about the Great Challenges Program. To share your ideas, join in the discussion at #GreatChallenges.