An assessment of how consumerism and innovation in healthcare are redefining how consumers engage with the healthcare system.

1. Empowering
Individuals To Be Better
Healthcare Consumers
A n ass ess m e nt o f h ow con s um eris m an d in n ovation
i n h e a lt h c a r e a r e r edef in in g h ow con s umers
e n g ag e wit h t h e h e a lt h care system.
Q1 / 2013
Industry Perspective
UNCOMMON CL ARITY
1

2. Founded in 1997, TripleTree provides independent, research-driven advisory
services on mergers and acquisitions, recapitalizations, divestitures and raising
growth capital for innovative companies in healthcare.
We are continuously engaged with decision makers across the sector including
best-in-class companies balancing competitive realities with shareholder objectives,
global companies seeking growth platforms, and financial sponsors assessing
innovation investments or first mover opportunities.
2
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3. Q1
INDUSTRY PERSPECTIVE
4 / EVOLUTION OF CONSUMERISM IN HEALTHCARE
4 / WAVE 1: RISE OF CONSUMER-DIRECTED HEALTH
Table of Contents
5 / WAVE 2: INITIATING TRANSPARENCY AND ENGAGEMENT
6 / WAVE 3: ENABLING A “FULLY RETAIL” INDUSTRY
8 / HOW STAKEHOLDERS ARE SOLVING FOR THE EMPOWERED CONSUMER
8 / PAYER MARKET
8 / DISTRIBUTION
10 / CONSUMER ENGAGEMENT
15 / PROVIDER MARKET
15 / Provider-Led Care Coordination
16 / Patient Experience
20 / WHERE PAYERS AND PROVIDERS GO FROM HERE
21 / NEW APPROACHES BEYOND THE PAYER-PROVIDER PARADIGM
23 / LOOKING AHEAD

4. INTRODUCTION
Consumerism in the healthcare industry has been steadily building
them in the management of their own healthcare. Initial employee
for more than a decade with the consumer increasingly placed at the
uptake was slow, but increasing healthcare costs have persisted and
center of the care delivery and decision-making process. Viewed
continue to influence employer and health plan strategies to help
through the lens of many healthcare product and pharmaceutical
consumers make better decisions about how to navigate the healthcare
companies as well as select services providers (e.g., Weight Watchers)
system and manage their own care and conditions. Despite continued
that have been addressing the health needs of consumers through
growth in adoption of CDH plans and the accompanying significant
business-to-consumer (B2C) and direct-to-consumer (DTC) models
shift in financial liability to consumers, the impact to date on getting
for considerably longer, consumerism is already here. For payers and
consumers to manage their health has only been modest. Today, CDH
providers however – and for the technology and service companies
is one important part of the consumer equation, but evolving market
they rely on – consumerism is new, and the change is having a
forces, including the blurring of lines between payers and providers
significant impact on the industry.
(e.g., payers vertically integrating with providers; and providers taking
on risk and becoming more like payers), are further complicating the
This change originated largely through the introduction of consumer-
landscape by redefining who the consumer engages with as he or she
directed health (CDH) plans as a vehicle for employers to shift a
navigates the healthcare system.
greater portion of total healthcare costs to employees and engage
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5. The shifting of the healthcare cost burden to consumers has
These macro forces are creating demand for a more “retail”
impacted not only who pays for care but also how treatment options
environment across an industry that has previously resisted these
and care experiences are evaluated. This new role is changing how
levels of consumer transparency and control. If successful, this
consumers are being marketed and communicated to. As a result,
transformation would eliminate the historical barrier between
new tools designed for consumers to better manage their own health
the healthcare system and the consumer, paving a path for a
and care options have emerged. Today, the market is focused on
more retail-oriented healthcare market as B2C and business-to-
improved transparency, quality, and customer experience through
business-to-consumer (B2B2C) models penetrate the system.
tools and services more akin to the financial services and retail
While the impact of consumerism may be top of mind for many
sectors than healthcare.
organizations, it’s still early and true consumer platform solutions
are unique. Healthcare organizations know that a failure to promote
Marketplace demand for more dynamic consumer focus is also being
transparency and increase consumer engagement going forward
accelerated by health reform. For payers, the expansion of insurance
will challenge their business models. As a result, constituents
coverage coinciding with the implementation of insurance exchanges
across the system are focused on developing and maintaining
is creating new distribution channels where direct linkages with
points of intersection with consumers in order to maintain
consumers can be established. Providers are facing new consumer
engagement and influence decision making.
realities as well, as reform has initiated and accelerated the
development of accountable care organizations (ACOs) and value-
Numerous research pieces have focused on the opportunity to activate
based reimbursement models, which require providers to think about
the healthcare consumer through B2C and DTC business models; this
consumers in new ways as patients, members, and consumers whose
report predominately focuses on the B2B2C models that are pervasive
experience, satisfaction, and outcomes needs must be addressed.
in healthcare.
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6. EVOLUTION OF CONSUMERISM IN HEALTHCARE
The evolution of consumerism in healthcare can be defined by three
Wave 1: Rise Of Consumer-Directed Health
waves, as outlined in Figure 1 below. The initial wave was in part
Early CDH strategies were largely product-driven, with health
initiated by the introduction of CDH, which helped incite consumer
plans and employers collaborating to educate the market on health
interest in how they access and navigate the healthcare system as
savings accounts and the convergence of healthcare and financial
well as manage their own health. The persistent cost shift has led
services. A key assumption for CDH products was consumer
to new demands on healthcare organizations to enable transparency
willingness to accept additional financial responsibility for their
and engagement through a second wave of consumerism. This
healthcare in exchange for greater control over how and where to
evolution will likely persist through a third wave as consumers now
pay for it. Early employer-driven efforts to drive CDH adoption were
demand a degree of control and decision support in healthcare that is
focusing on making management of CDH more straightforward for
on par to that of other industries – that is, a fully retail experience.
employees; this led to significant adoption, as employers sped to
THREE WAVES OF CONSUMERISM
Figure 1: Three Waves Of Consumerism In Healthcare
1st Wave:
Rise of Consumer-Directed Health
2nd Wave:
Initiating Transparency and Engagement
3rd Wave:
Enabling a “Fully Retail” Industry
• Transition driven by introduction of CDH plans
and various cost-sharing mechanisms
• Consumers learn to “shop” and navigate the
healthcare system
• Need for a “retail” approach as balance has
shifted toward the consumer
• Early CDH plans had minimal success in
getting consumers to manage their health
• New demand for resources to support
consumer decisions and provide transparency
• Personalized approach need to address
individual needs and drive engagement
CDH Plans
Introduced
4
Growth in Outof-Pocket
Spending
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Tax-Exempt
Savings Plans
Introduced
Integration
with Financial
Services
Acceleration of
ConsumerFocused Tools
Web Adoption
and
eCommerce
Value-Based
Purchasing
Cost
Transparency
Tools
Retail
Distribution
and Exchanges

7. CDH alternatives to address their growing healthcare cost burdens.
As outlined in Figure 2, healthcare organizations were relatively
However, as CDH plans have required consumers to assume a
unprepared for this development, primarily as a result of their
growing financial responsibility for their healthcare costs, a major
legacy B2B business models and historical investment focus around
weakness has been the lack of transparency and information
improving administrative efficiency: most B2B models were built
provided to consumers, which has had a detrimental effect on
to solve for the needs of large groups or employers with efficient
consumer engagement.
cost models, not to establish and leverage points of interaction
with healthcare consumers. Ignoring (or avoiding) these valuable
Despite growing consumer interest in their healthcare spending and
consumer touch points left many organizations poorly prepared to
coverage decisions as result of the cost shift, the adoption of CDH
understand consumer wants and needs.
plans has not demonstrated significant success in driving consumers
to manage their health. While CDH is still very much part of employer
and payer strategies to manage healthcare costs, it is clear that there
is more to be done in order to enable sustained engagement with
Figure 2: Historical Barriers To Consumer Engagement
consumers as they navigate the healthcare system.
Wave 2: Initiating Transparency And Engagement
The major byproduct of CDH has been the emergence of the
empowered consumer, who is just beginning to learn to shop
and navigate the healthcare system and gain a similar degree of
autonomy to what he or she is able to experience in other industries.
However, while costs were shifted to consumers, healthcare
organizations were not prepared to support the empowered consumer
whose expectations for information and tools exceeded the ability of
the system to deliver.
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8. Figure 3: Shifting Power Paradigm – Stakeholders Aligning
Around The Consumer
result has left consumers with a host of newfound resources and
tools to manage their own health, healthcare organizations are
consistently challenged to ensure consumers actually use these tools
when making healthcare choices.
In many ways, CDH adoption was a catalyst to healthcare’s
newfound appreciation for consumerism and brought several
underlying dynamics to light, most notably how much work was
needed to support the empowered consumer. New B2C and
B2B2C models have established direct linkages between healthcare
organizations and consumers that previously did not exist. In
order to maintain momentum, healthcare organizations will need
to prioritize future investment in further eliminating the barriers
that limit positive healthcare experiences for consumers as well as
Healthcare organizations have realized the need to accommodate
driving engagement beyond enrollment and annual renewal – rather,
the changing needs of consumers and create environments where
across the consumer lifecycle.
consumers can shop and navigate the healthcare system in a
similar fashion to other industries. As indicated in Figure 3, much
in the way that Amazon democratized consumer purchasing for
The demand from consumers to successfully shop and navigate
everything from books to auto parts, healthcare is undergoing a
the healthcare system has been accelerated by healthcare reform,
similar transformation as healthcare organizations strive to address
which is shifting the industry towards greater individual orientation:
the reality that consumers are at the center of their marketplace and
the number of consumers making individual coverage and benefit
that winners will become trusted, convenient resources for consumer
decisions is set to grow substantially. While this is already the
healthcare lifestyle management and decision making. While the
6
Wave 3: Enabling A “Fully Retail” Industry
status quo in Medicare following the 1997 establishment of Medicare
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9. Advantage plans (then referred to as Medicare+Choice plans), the
(CAHPS) for both payers and providers. These new models provide
senior marketplace will expand dramatically as baby boomer lives
consumers with resources to evaluate their options across both health
transition to Medicare over the next 20 years.1 The under-65 individual
insurance coverage as well as care options based on these metrics.
marketplace is set to grow rapidly following the introduction of
This evolution has empowered consumers and established a market
government-funded public exchanges; these are expected to serve
for tools to help them with their benefit, coverage, and care decisions.
as the primary vehicle for over 30 million people gaining coverage.
2
Furthermore, an anticipated shift of employers to defined contribution
The primary end goal of this effort is to provide consumers with a
benefit programs will provide additional consumers with control
“retail” experience that is similar to other consumer product and
over their coverage decisions. Early evidence suggests that a shift to
service markets that maintain meaningful consumer engagement.
defined contribution could be significant, with over 25% of employers
However, the early efforts of healthcare organizations to develop
considering this new approach.3 This will fuel the evolution of private
the needed support tools have been largely unsuccessful given
exchanges and decision tools to support employee coverage decisions.
their inability to address individualized needs and preferences (e.g.,
Collectively, these developments point to tens of millions of people
patient-specific risk factors, communication preferences, and cultural
purchasing healthcare on an individual basis, highlighting the need
differences). In order to establish a lasting link with consumers, it is
for healthcare industry constituents to solve for the needs of these
clear that more personalized approaches will need to be developed
consumers in a more retail-oriented, B2C marketplace.
in order to enable consumers with a customized and transparent
experience as they shop and the navigate the healthcare system.
While this shift to the individual is underway, the evolving care delivery
and provider reimbursement environment is heightening focus on
improving quality, performance and consumer experience across the
system. Reimbursement is transitioning towards models where payers
and providers are rewarded across various quality and performance
measures such as the Five Star Quality Rating System for payers
and Consumer Assessment of Healthcare Providers and Systems
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10. HOW STAKEHOLDERS ARE SOLVING FOR THE EMPOWERED CONSUMER
The transition to viewing members and patients as consumers has
around improving interactions and engagement while also driving
not been easy as healthcare organizations have been unprepared to
greater efficiency around care coordination and cost containment.
address the rising consumer expectations that have developed.
While many early consumer-focused investments left much to be
desired, there appears to be a consensus among payers that more
Payer Market
targeted and personalized solutions are needed in order to sustain
In response to the empowered consumer, payers are prioritizing their
engagement across the entire consumer lifecycle.
efforts to accommodate consumer needs and orient business models
around a consumer-driven world. Payers were caught relatively
Distribution
flat-footed by consumerism as their historical investments, which
One area of considerable payer-led innovation has been within health
were focused on improving workflow automation and decreasing
insurance distribution, where retail-oriented sales and distribution
unit cost, left them unprepared to address consumer needs. These
capabilities more consistent with other insurance sectors such as
investments, rooted in payers’ traditional B2B models, intentionally
property and casualty are emerging. To maintain top-line growth
created barriers to the consumer – for instance, requiring consumers
amid growing competition and consolidation, payers are learning to
to interact with call centers and interactive voice response (IVR)
better manage consumer interactions in an effort to improve member
systems. As a result, payers were left with minimal understanding
acquisition, retention, and cross-selling initiatives. A range of vendors
of consumer needs across their critical business drivers, such as
have developed expertise to support payers in these areas. As
distribution, care management, and care delivery.
demonstrated in Figure 4, by applying analytics to better summarize
consumer data and preferences, these specialized vendors –
Payers have realized the need to better accommodate consumers
(or members) and create an environment where they possess
(through their ConsumerEdge™ and Plan Advisor tools) – have allowed
the resources to manage their own health and benefit options. As
payers to address loyalty and retention issues through a series of more
consumer demands increase, payers have prioritized investments
8
highlighted by HealthPlan Services, Connextions, and Connecture
targeted and personalized member interactions, which have plagued
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11. health plans historically.4 Additionally, they are able to utilize data
Looking forward, the distribution of health insurance is likely to be
from everyday consumer interactions to improve sales and distribution
transformed by the advent of exchanges. The driving force behind the
by establishing more effective communication methods for payers,
in-development public exchanges is to make coverage more affordable
achieved through an improved understanding of individual consumer
through expanded risk pools (supported by various mechanisms to
preferences and lifestyle characteristics. In a sense, these vendors
offset risk assumed by exchange participants) and to make distribution
have extended the payer-consumer sales relationship from a once a
administratively efficient. Exchange products will be largely
year enrollment process to continual, year-long engagement.
standardized, making it difficult for payers to compete on product
alone – as a result, payers will need to find other ways to compel the
Figure 4: Outlining An Integrated Approach To Insurance Distribution
HealthPlan Services (HPS) provides sales and distribution, benefits
administration, and customer service solutions to the individual,
small group, and voluntary markets. HPS’s platform extends across
the consumer lifecycle, beyond member acquisition and renewal,
providing payer clients with an end-to-end solution to influence
member experiences across distribution, purchasing, and benefits
administration. Its approach integrates clinical, financial, and
personal data from across the consumer lifecycle to provide clients
a more transparent view of their member population, which fuels
their member acquisition, retention, and service administration
efforts. This is important to not only drive revenue for payers
Integrated, analytics-driven approach to member acquisition, retention, and
service establishes unique touch-points that drive value across the member
lifecycle and “redefine” the payer-consumer relationship
but also to “redefine” the relationship with members through a
personalized engagement approach.
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12. Spotlight: Payer-Led Retail Initiatives As insurance distribution
individuals shopping on exchanges. Many of the specialized sales and
becomes increasingly individual oriented, several payers have
distribution support vendors highlighted above will also be increasingly
launched retail initiatives designed to establish a direct channel
relevant to payers in this area as a robust understanding of consumer
to consumers to extend their product distribution and customer
preferences and purchasing behavior is needed to define payer marketing,
service capabilities. UnitedHealthcare has introduced retail
pricing, and branding strategies for the individual consumer.
stores in local shopping malls, where consumers can compare
and buy insurance products as well as learn more about their
existing benefit and coverage options. Many of these stores are
intended as temporary locations focusing on servicing Medicareeligible beneficiaries during their annual open enrollment period.
However, the company also offers permanent locations in eight
locations across Queens, Manhattan, Philadelphia, and Los
Angeles. Similarly, Highmark and Florida Blue operate retail
locations in Pennsylvania and Florida, respectively. Florida Blue
is pursuing a unique strategy to maximize the benefit of their
retail footprint by incorporating a customer service element in
addition to the distribution touch point, as well as adding on-site
clinics at several retail locations. Aetna has made a unique play
by recently forming a partnership with Costco to sell individual
health insurance products in their stores across several states.
Time will tell if any of these models transform the landscape of
insurance distribution, but they clearly show another example of
payers’ acceptance of the empowered consumer and their need
to innovate.
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Consumer Engagement
The challenges payers face in engaging consumers extends far
beyond enrollment and renewal, as their ability to influence consumer
behavior and lifestyle decisions is still limited. This is imperative not
only to improve the health of their member base, but also to maintain
profitability going forward, as poor engagement can lead to costly future
consequences when health risks remain unknown and / or not addressed.
Payers have traditionally offered a static, one-size-fits-all consumer
experience in which their interaction was limited to such examples
as a provider network directory or call center encounter. Payers have
introduced a host of new tools and solutions to establish more effective
consumers interactions around healthcare education and content;
however, consumer adoption has been somewhat challenging for many
payers. Early tools possessed little appreciation for individual-specific
needs and preferences and were quickly dismissed by consumers. As
consumer demands have persisted, payers have begun to accommodate
individual needs and preferences into these tools to provide consumers

13. with more effective resources to manage their benefit, coverage,
and care plan adherence as well as communicate plan-specific
and care decisions. Some of the most innovative tools have come
information. While solutions like these are still early in their evolution,
from third-party vendors, such as Healthline Networks, which has
the ability to sync patient-specific care information with personalized
created solutions that allow a payer to deliver patient-specific content
messages and consumer education tools via multiple communication
based on a member’s individual health data drawn from medical and
channels creates a more effective medium in which payers can
pharmacy claims as well as clinical data from the electronic medical
successfully communicate with and engage their membership base.
record (EMR). Continued innovation of these consumer-friendly
solutions has come from vendors such as Silverlink and Eliza, which
A central theme in engaging the empowered healthcare consumer
deliver personalized, targeted messaging solutions to consumers via
is providing transparency into the cost and quality of treatments
multiple communications channels (email, web, automated voice, mail
and providers. The lack of transparency that exists in the current
and SMS text) that allow payers to influence an indvidiual’s medication
system, combined with the ever-growing financial liability faced by
consumers, makes this an imperative for the entire industry, with an
enormous gap between consumer needs and available tools. This
Healthline Networks uses a unique, medically-guided taxonomy
need has been recognized by industry and government alike, with over
engine that incorporates over two million semantic relationships
30 states passing transparency-related legislation and the increasing
to normalize large volumes of structured and unstructured
prevalence of all-payer claim databases that are intended to inform
content from disparate sources. This taxonomy allow healthcare
cost transparency efforts. Significant commercial momentum has
organizations to unlock the full value of massive amounts of
been focused on creating cost transparency, with the importance of
siloed and disparate health content and data by personalizing this
the space highlighted by the attraction of capital to Castlight Health.
information to improve decision-making, outcomes, and the overall
health experience. Payers, for example, use the technology in
their consumer portals to improve the health and wellness of their
members by individually personalizing both search results and
engaging content that are tailored to a member’s constantly-evolving
health profile and benefit coverage.
INDUSTRY PERSPECTIVE Q1 / 2013
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14. A range of approaches to cost transparency has emerged, with most
estimated “fair price” representing a payment level that providers
solutions initially focused on providing the average total cost of a
would accept from insurance companies, as well as a solution for
particular high cost service based on national or regional average
plan sponsors that customizes pricing data based on historical
data (e.g., all payer claims or CMS data). Solutions are evolving
claims. (A more broadly defined transparency landscape – including
and becoming more personalized – to estimate the out of pocket
provider search, provider quality / ratings, and similar solutions
cost an individual should expect to pay when utilizing healthcare
– would expand the list of competitors to include vendors such
services or consuming prescription drugs based on his or her health
as Vitals and Healthgrades.) Many health plans are pursuing
plan, provider of choice, network, benefits design, and remaining
transparency using homegrown tools, typically providing the service
deductible, as applicable.
to customers and members for free, but many plans still recognize
an advantage in “plugging in” 3rd party solutions to consolidate
Solution vendors face two particular challenges in providing
data from multiple medical carriers, pharmacy benefit managers,
this information:
and dental providers in one location and to create a consistent
experience for all employees with a higher degree of customization.
1: The first is the data analytics and data integration capabilities
required to estimate a consumer’s financial liability for a service, as
the data resides with the payer or employer (through their payer).
information easy to use such that individuals actually choose to
Analytic capabilities are then required to predict how a service
engage with such solutions and become healthcare consumers.
will be billed to the health plan (for example, the cost of a knee
Accomplishing this would translate transparency into the larger
replacement surgery will consist of a numerous separately billed
issue in healthcare – consumer engagement – which health
CPT codes). The leading competitors in pure cost transparency
plans and employers have struggled to drive. Consumers are not
through robust data analytics and data integration are Castlight
familiar with “purchasing” healthcare services – engagement with
Health, Change Healthcare, and Truven Health Analytics. Additional
consumers around transparency is a critical step in transforming
approaches to the market include that of Healthcare Blue Book,
consumer behavior. Most transparency solutions are focused on
which provides both a free solution to consumers that delivers an
12
2: The second challenge has proven more formidable: making the
clarifying the cost of high cost elective and scheduled procedures
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15. (such as the knee replacement example above) because these
elevating the relationship with the consumer to build fundamentally
services offer opportunities for significant savings to the consumer
different healthcare purchasing behavior and extend solutions into
(and even more so to the plan sponsor) through smarter shopping.
other decision support capabilities, such as plan selection and health
However, these services are typically very low frequency events,
program engagement. Transparency solutions are thus at an early
which makes it a challenge to create engagement with a consumer
stage and continue to evolve. TripleTree sees several requirements
who may not need the transparency service for months or even
for future success in this space, as seen in Figure 5.
years from initial sign-on. Furthermore, the early experience from
self-insured employers indicates that if a beneficiary tries to use a
cost transparency service and finds the information insufficient or
otherwise not helpful, the level of engagement from that consumer
is dramatically reduced – they may never attempt to use the service
Figure 5: Critical Success Factors For Transparency Solutions
+
again. For these reasons, solutions are evolving to incorporate
proactive messaging and alerts to make healthcare purchasing
decisions more meaningful and actionable to consumers. Change
Healthcare highlights an innovative approach through its Ways
to Save™ alerts, which are personalized messages that introduce
specific opportunities for savings based on each individual’s
purchasing history with communications that are tailored to the
individual’s preferences and user profile and are designed with
behavioral science principles to maximize engagement.
By orienting the consumer around personal savings instead of purely
cost, and by driving broad engagement that is initiated through use
of a transparency solution, vendors are increasingly focused on
Access to a broad set of applicable health plan network prices
or claims data applicable to a specific population
+
Consumer friendly and ease of use
+
Personalized and proactive messaging
+
Technology and analytics that drive broad engagement
+
Broad service offering including quality and comprehensive
+
Ability to integrate and work within a health plan’s or
medical cost categories (e.g., medical, pharmacy, specialty)
employer’s portal and coordinated member communications
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16. In fact, consumer engagement should extend far beyond transparency
Health Advocate delivers a suite of advocacy solutions designed to
as consumers require additional support to navigate an increasingly
provide consumers with a greater understanding of their care and
complicated healthcare system. This is particularly the case when
coverage options. Administrative support services assist consumers
a patient faces a complex and serious diagnosis, which could
in navigating their benefits, resolving claims, and negotiating and
require expensive treatments from multiple providers, or when an
paying medical bills. Clinical support services are led by a team
individual or family faces substantial and confusing bills. The vast
of Personal Health Advocates trained to provide around-the-clock
complexity that the healthcare system presents to some individuals
assistance across a range of issues, including identifying optimal
at their most vulnerable and confused times has led to navigation
treatments and providers, and assisting with care coordination
and advocacy services that in many ways function as the “help desk
through scheduling, securing second opinions and assisting with
for your health” to consumers. Several vendors, such as Health
complex medical conditions. These Personal Health Advocates also
Advocate and Accolade, have gained significant market momentum
deliver coaching services to consumers to help them understand their
by serving as support resources to consumers in managing a
medical conditions, address questions related to common procedures
wide range of clinical and administrative issues in their healthcare
and treatments, and prepare them for medical appointments. In
coverage. Common administrative support includes areas such
addition, Health Advocate delivers a suite of complementary solutions
as claims resolution, appeal processes, and bill settlement, while
designed to support employee health and well-being. These range
clinical services often involve providing critical decision support to
from wellness and work-life support services such as a nurse line
consumers to guide them through care decisions and to measure the
that provides healthcare advice and information, to personalized
costs associated with various care alternatives.
health messages that promote prevention to the general population
and chronic care “best practices” to those with specific diseases, to
advanced tools that gauge benefits utilization or estimate medical
costs and savings opportunities.
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17. Provider Market
blurring lines between payers and providers create an increasing
Evolving market forces and the blurring lines between payer and
need for providers to solve for many of the same aspects around
provider have caused providers to view consumers in a new light
consumer experience and engagement as payers.
– not only as patients but also as members and consumers. To
varying degrees, providers are increasingly assuming risk that
Provider-Led Care Coordination
more closely ties their financial performance to their performance
Providers that function essentially as payers have many of the
on dimensions of cost, quality, and outcomes. At one end of the
same incentives to engage members holistically in order to manage
market, many providers assume fully-delegated risk for their patient
healthcare costs, patient experience and care outcomes. This
population – essentially functioning as payers given they possess the
is well established in markets like Southern California in which
identical incentives of a traditional health plan to manage the total
certain providers have managed fully-delegated risk relationships
cost associated with caring for a population. This is accelerating
at scale for some time. In these environments, providers have
rapidly through the experimentation and proliferation of ACOs,
widely adopted various tools and solutions to support engaged
an important result of healthcare reform. At the other end of the
care management and care coordination efforts. These tools allow
market, most providers remain largely risk-free (under fee-for-
providers to analyze clinical and financial outcomes as well as
service reimbursement arrangements), but are increasingly under
practice medicine in accordance with best practices. Vendors such
pressure to assume some degree of risk through reimbursement
as CERECONS have been among early market movers in supporting
models that incorporate performance on various measures, including
providers in fully-delegated risk environments, serving as the link
patient satisfaction and quality of care. Regardless of any connection
between at-risk provider organizations or ACOs and their distributed
between clinical performance and reimbursement, all providers now
provider networks along the care continuum to continuously monitor
pay much more attention to these performance measures, as their
and improve clinical and financial outcomes.5 These solutions
bottom line is still directly impacted in a consumer-driven world.
are delivered through a platform that engages the provider and is
Consumers increasingly possess the tools and resources to evaluate
embedded in the clinical workflow – in this sense, the individual
providers on a number of dimensions and are beginning to use this
care provider is the “consumer” who engages in a new and more
information in their care decisions. In all of these situations, the
meaningful way.
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18. Beyond full-risk bearing entities, the vast majority of other
Phytel operates as an extension of the physician or care team outside
providers increasingly care about managing cost, quality, and patient
of the provider setting. Phytel’s unique software automates routine
experience as this all has the potential to impact their sustainability
care management functions, delivering physician reminders and
over time through continued evolution of reimbursement models,
alerts as well as patient outreach and notifications. The software
reputation (through the consumer lens, informed by widespread
platform leverages up-to-date clinical information and evidence-
access to quality, satisfaction, and other performance measures),
based guidelines to allow providers to actively manage care
and payer network status. Early provider-led efforts to improve care
effectively and improve care outcomes across all phases across the
quality and coordination led to investments in EMR technologies,
care continuum. In addition, Phytel has established care protocols to
which improved the acquisition of valuable clinical data. However,
identify care gaps and track overall performance across key quality
these investments created limited capability to analyze clinical
measures. This allows providers to identify appropriate intervention
outcomes and push actionable information back to providers,
opportunities to maintain proper patient adherence and avoid costly
or to manage care outside of the facility setting following an
care episodes.
encounter through consumer engagement – all of which limited
the effectiveness of these early solutions. As value-based or riskbased reimbursement models evolve, advanced solutions that
support provider decision making, improve care coordination, and
facilitate consumer engagement will become increasingly relevant to
providers. As this occurs, solutions that allow physicians to identify
As consumers become more aware of their treatment and provider
areas for necessary intervention and coordinate care before and
options, providers have become more market and consumer-focused
after each encounter will be critical. The solutions of Phytel, which
in their efforts to grow and retain revenue. Providers are not only
offer physicians the ability to appropriately identify and connect with
trying to address gaps that exist within their own care coordination
patients as well as monitor their responses and compliance with care
efforts but also to drive exceptional patient experience and help
protocols, highlight sophisticated approaches to this type of provider-
consumers manage their journey through the healthcare system
led care coordination.
16
Patient Experience
more freely.
TRIPLE-TREE.COM

19. While not immediately obvious, key aspects of the patient experience
MedData delivers a suite of outsourced revenue cycle management
are the financial and transactional elements. As consumers become
solutions to physician offices and hospitals, including billing, coding,
responsible for ever larger total healthcare costs, providers are
collections, and patient satisfaction services. MedData has emerged as
faced with a new reality of managing consumer healthcare debt:
a leading vendor in managing the self-pay portion of the billing process
gone are the days in which providers could manage their financial
for providers. Among MedData’s core differentiators include patient-
performance while only capturing pennies on the dollar of patient
centric billing and communications that address the convergence of
receivables. This is important to providers not only to manage bad
consumer engagement and satisfaction with provider reimbursement.
debt, but also to enhance the patient’s overall satisfaction with the
MedData’s approach to self-pay account resolution begins by
experience, which ultimately influences attraction and retention
connecting patients with a specialist prior to the patient receiving a bill.
of patient volume. The billing and collections experience is often
The specialist serves as a timely, hands-on reference to educate and
a provider’s final touch point with a patient following a care
engage the consumer around various aspect of their bill. This strategy
encounter and can wield a disproportionate influence on patient
identifies “at-risk” patients in need of specialized communication and
satisfaction. Of note, billing issues can create unwarranted “patient
education both prior to and throughout the billing process, avoiding
friction” and are a key source of unnecessary administrative hassle
confusion as well as identifying early patient payment issues. This
for physician groups as they prolong the billing process and reduce
patient-first revenue cycle management approach yields timely
collection volume.
and accurate reimbursement in a more transparent manner, which
aims to improve patient satisfaction. In addition, these personalized,
To support an improved billing and collections experience,
introductory communications serve as valuable data points to gain
considerable innovation has occurred around the development of
insight into patient satisfaction throughout the care encounter and
tools to assess and manage patient financial responsibility. Provider-
billing process. MedData is unique in that its solution avoids high stress,
focused revenue cycle management vendors now offer proactive
facility-based patient intervention points in favor of pre- and post-bill
and targeted communications to support patients as they complete
communications, in order to identify potential payment issues early on
the billing process. MedData has been among the early vendors to
as well as eliminate some of the more intrusive collection efforts that
market a patient-centric billing approach in which patient satisfaction
have plagued similar patient pay billing efforts.
INDUSTRY PERSPECTIVE Q1 / 2013
17

20. Figure 6: Convergence Of Patient Satisfaction, Engagement And Billing
PATIENT LOYALTY AND RETENTION (MEDDATA)
Physician Disruption
• Multiple bills from known
(e.g., hospital) and
unknown providers (e.g.,
ED, hospitalist, etc.)
• Billed / gross charge vs.
normal discount
complexity
• Clunky on-boarding with
new billing company
impairs cash flow
Hospital /
Health System
Patient
• Financial burden beyond
current means
• No clear options for
payment beyond 100%
settlement
Physician Group
PatientFirst
RCM
• Limited pre-coding data
verification
• No reconciliation against
hospital activity logs
• Poor demographic
information capture
• Inaccurate coding creates
reimbursement and
compliance risk
Industry Pain Points
Industry Pain Points
Patient Disruption
Patient-Centric Capabilities
Segment patients and
customize outreach to
optimize engagement
Connect with patients prior
to them ever receiving their
first bill
Capture and update any
missing demographic or
insurance information
Conduct physician-focused
patient satisfaction survey
and communication are closely aligned, as outlined in Figure 6. The
data within the context of the revenue cycle workflow. Experian,
company’s differentiating capabilities support pre-bill engagement
seeking to apply their expertise from other verticals in healthcare,
and the early identification of “at risk” patients who are most likely
acquired SearchAmerica in 2008 in what has now become Experian
to need specialized communication and education during the billing
Healthcare.6
process. This predictive analytics component of MedData’s offering
is reminiscent of solutions from an earlier wave of consumer
bad debt management, such as SearchAmerica, which developed
service offerings both within and outside the facility in order to meet
predictive algorithms and screening methodologies to assess the
escalating customerE needsPropertyenhance Not Forproviders’ consumer
and of TripleTree. the Distribution.
7
CONFID NTIAL
likelihood that individual patients would pay their medical bills,
value propositions. As a prominent example, providers can now
incorporating healthcare-specific consumer credit and demographic
18
Providers have made numerous additional efforts to expand their
choose to offer their own versions of cost transparency tools to allow
TRIPLE-TREE.COM

21. Passport Health Communications (Passport) delivers a range
delivering cost estimation and payment collection tools that allow
of administrative, clinical and financial tools via real-time and
consumers to assess their financial responsibility prior to or at point
integrated technology to improve the efficiency and accuracy of
of service. These solutions can verify eligibility, confirm plan details,
the revenue cycle process. Passport’s offering extends across the
and calculate patient financial responsibility within the hospital
provider revenue cycle, including insurance eligibility and benefit
setting as well as assess and collect the patient responsible portion
verification services as well as medical necessity validation and
of standard medical bills prior to service or while at the facility.
other claims management services. This includes a patient-friendly
A second notable example is the advent of new patient education
payment management solution that provides price transparency and
tools that provide consumers with greater awareness of their
enables payment collection at the point of service. The usefulness
condition at all phases of the care continuum. Vendors such as Emmi
of this solution to provider organizations is rooted in its ability to
Solutions and PatientPoint seek to improve patient engagement
assess patient liability based on price information in the facility’s
chargemaster, payer contracted rates, and patient eligibility and
benefits information, enabling them to collect payments at the point
of service.
PatientPoint offers a suite of solutions that enable sustainable
patient and physician engagement along the entire continuum of
care—pre-visit, at the point of care, and post-visit. Through a set of
consumers to estimate the cost of treatment ahead of a scheduled
communication products available via web portal or facility-based
appointment as well as compare the cost of treatment options on a
display screens that facilitate adherence, education and coordinated
facility-by-facility basis. However, achieving pricing transparency
communications, PatientPoint’s products aim to drive improved patient
has not been an easy task given the non-uniformity and complexity
engagement at the point of care and between care visits, which is vital
of patients’ clinical needs along with significant variations in care
to improving the quality and efficiency of care delivery. The solutions
practices among physicians. Vendors such as Recondo Technology
have use across provider and payer channels by providing a real-time,
and Passport Health Communications automate the registration and
interactive tool to manage patient populations as well as monitor for
eligibility functions at the front-end of the provider revenue cycle.
gaps in care or adherence that can significantly impact overall clinical
In addition, these vendors also address key consumer needs by
performance and financial success.
INDUSTRY PERSPECTIVE Q1 / 2013
19

22. and adherence to care protocols through the delivery of web-
Where Payers And Providers Go From Here
based patient education programs that support patients as they
Payers and providers are aligned in their efforts to improve how
manage their care. These types of solutions also play a role in care
consumers view their healthcare experience and to play a larger
coordination as providers are able to monitor whether patients have
role in supporting consumers’ everyday lifestyles and health
adhered to care protocols.
improvement. One area of continued innovation will be around the
consumer experience, as it has a direct impact on the ability of
healthcare organizations to enable consumer engagement. To that
end, healthcare organizations have grown increasingly aware of
their Net Promoter Score (NPS), which measures how end users
assess their overall experience using various products and services.
Organizations view this ranking as important to measuring and
improving customer loyalty as well as driving health improvement. As
healthcare has lagged behind other industries in levels of consumer
engagement and satisfaction, attention to improvement in NPS will be
a key focus area going forward as healthcare organizations attempt
to play a greater role in supporting consumers as they navigate the
healthcare system.
20
TRIPLE-TREE.COM

23. NEW APPROACHES BEYOND THE PAYER-PROVIDER PARADIGM
Outside of the standard payer-provider paradigm, a range of
are also delivered through a B2C channel. Consumers must pay the
stakeholders have introduced a new wave of direct-to-consumer
full cost of these products and services – a break with the traditional
products and services designed to address consumers unmet needs
payer-provider paradigm. Wellness services offer a good example.
and concerns. Some forward-thinking product distributors have moved
Driven by consumers’ desire to manage their health status, several
beyond traditional B2B distribution strategies in favor of DTC marketing
vendors that offer consumer-directed wellness management tools
approaches that allow these products to be distributed in a timelier,
have successfully penetrated the consumer market. For instance,
convenient manner. One example is Simplex Healthcare (Simplex),
WellnessFx has been an early market mover in the B2C wellness
which focuses on diabetic testing supply distribution. Simplex offers
market through its web-based health management tool, which allows
members a “club” experience in which members are able to interact
consumers to track and manage their actual health condition based
through the Simplex website as part of a community of individuals with
on data generated through the results of a personal health screening.
similar conditions. Simplex is able to leverage this “community”, along
with targeted television advertising, to penetrate their core customer
Similar to consumer-oriented wellness, another area that has
segments with timely, targeted advertising directed towards critical
significant B2C momentum is the preventive health screening
areas of need or intervention. Using this approach, Simplex is able
market where Life Line Screening has emerged as a clear
expand beyond their role as a distributor and reposition themselves as
market leader. Life Line Screening has focused on solving for the
a resource to their customers. This is relevant to payers and providers
consumer experience, as evidenced by their NPS, which exceeds
as they seek approaches to better understand their patient populations
that of Facebook and Google. The ability of Life Line Screening
as well as how to identify timely points of intervention to influence
to incorporate consumer preferences into their direct marketing
decisions or provide necessary support.
efforts has been critical to their success in initiating engagement and
establishing a presence in each local market the company enters.
A host of new consumer-focused products and services that fall
This serves as another valuable example to payers as they seek to
outside of standard health insurance benefits have emerged that
establish brand recognition at the community level or to providers as
INDUSTRY PERSPECTIVE Q1 / 2013
21

24. they seek to extend their presence outside of their facilities. Life Line
Innovative B2C strategies have proven to be effective in motivating
Screening’s marketing approach has proven to penetrate various
consumer behavior and decision making. These approaches are
consumer segments effectively as well as establish high-touch
relevant to payers and providers as they seek to expand consumer
interactions with consumers and influence decisions through their
relationships and establish longer-term member relationships
screening results.
in order to eliminate the typical churn that complicates care
management and health improvement efforts.
Life Line Screening provides on-the-ground preventive health
screenings to identify health problems that might otherwise go
undetected. Life Line Screening’s services focus on identifying
key risk factors for conditions such as stroke, peripheral arterial
disease, diabetes, heart disease and osteoporosis. Life Line
Screening serves over 1 million consumers annually across over
16,000 screening events, providing a key resource to consumers
in managing their health risks. Life Line Screening utilizes a
nationwide, community-based approach, establishing their shortterm, local bases in community centers, churches, and other
community sites nationwide. Key to the approach is the company’s
highly recognizable fleet of buses that sit outside of their screening
locations, which serves as a highly visible branding to notify
consumers of their presence in the community.
22
TRIPLE-TREE.COM

25. LOOKING AHEAD
As healthcare spending continues to rise and consumers assume
Despite significant innovation across the payer and provider markets,
a greater share of costs, their demands will influence how the
healthcare organizations are still challenged in understanding who
industry brings forth new solutions that help consumers manage
the consumer is, what they want and how they want it. Much
their healthcare and help improve the consumer experience.
progress is being made, particularly as healthcare continues to
These solutions will also allow healthcare organizations to align
take cues from sectors like retail and financial services that have
their consumer strategies with care coordination and quality
developed much deeper consumer engagement capabilities. The
improvement efforts to address the relentless increase in spending
market leaders that emerge will be those who are able to close
that has defined the industry’s shift to consumerism.
the information gap between buyers and sellers and act more
like these leading retailers and financial firms in their ability to
The historical focus of healthcare technology investments
understand and meet unique consumer needs and preferences. At
around administrative efficiency and workflow had positioned
this point in the evolution of healthcare consumerism, the industry
most healthcare organizations elsewhere as consumer demands
lacks clear end-to-end platforms that fully satisfy end market
shifted as a result of CDH. The “consumer ignorance” that has
demands within consumer engagement, communications, support,
resulted has plagued many early consumer-directed efforts by
and other critical areas of need. However, we have illustrated
failing to establishing consistent and effective interactions and
numerous emerging and incumbent solutions that are closing
engagement with the consumer. We believe that these organizations
the gaps between consumer demands and industry constituents’
face dwindling alternatives to sustainability without a concerted
capabilities, and which may serve as broader consumer-oriented
consumer engagement strategy – one that can influence healthcare
platforms in the future.
decision making. The urgency is real – the healthcare cost burden
placed on consumers is reaching its limits, and consumer demands
continue to grow.
INDUSTRY PERSPECTIVE Q1 / 2013
23

26. end notes
1
Kaiser Family Foundation, Medicare: A Primer, 2010.
2
Congressional Budget Office, Effects of the Affordable Care Act on Health Insurance Coverage – February 2013 Baseline, 2013.
3
Employee Benefit Research Institute, Private Health Insurance Exchanges and Defined Contribution Health Plans:
Is It Déjà Vu All Over Again?, 2012.
4
Disclosure: TripleTree was the exclusive advisor to Connextions in their sale to Optum in 2011.
5
Disclosure: TripleTree was the exclusive advisor to CERECONS in their sale to Medecision (a subsidiary of Health Care
Services Corporation) in 2013.
6
24
Disclosure: TripleTree was the exclusive advisor to SearchAmerica in their sale to Experian in 2008.
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