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2015 Health Plans Industry Outlook
Interview with Greg Scott
Greg Scott, U.S. Health Plans leader & vice chairman of Deloitte LLP, shares his perspective on disruptive trends impacting health plans as they respond to the rise of consumerism. In 2015, watch for innovation in new products, better technologies, collaborative business models, and improved consumer experiences.
Where do you see the opportunities for growth in your sector?
We are witnessing unprecedented regulatory, financial and competitive disruption in the health care industry. Roles of players are changing rapidly and strategies that made health plans successful in the past will not likely suffice for the future. While traditional employer group business is atrophying, new opportunities for growth are emerging. The rise of the individual consumer is one example. There are significant opportunities that health plans can capitalize on as consumerism takes shape in the health care industry. Both government (Medicare, Medicaid and dual eligibles) as well as commercial individual insurance are on the rise through public health insurance marketplaces, private exchanges, and off-exchange models. Health plans that understand consumers’ wants and needs, and are able to activate the right behaviors in the right consumers at the right time, will likely prevail and grow in the redefined, consumer-centric health care marketplace. Integration along the value chain also presents opportunities for growth. Collaboration between health plans and providers to drive value-based care and better health outcomes offers tremendous opportunities to expand and increase market share.
In addition to these U.S. opportunities, international expansion also offers potential for growth, even though most health plans are still opportunistic in their global strategies.
In 2015, health plans need fresh ideas and relentless execution of new sources of growth, both organic and inorganic, at home and abroad.
What should businesses be mindful of as they plan for growth?
Capitalizing on new opportunities, either at home or abroad, will require innovation. Health plans have traditionally not been known as innovators. But in the new and redefined health care landscape, those that innovate – in the form of new products, better technologies, collaborative business models, and enjoyable consumer experiences – will position themselves well for the future. Efficient, scalable and rapidly deployable technology and sophisticated analytics will likely be key for health plans to bring their strategies and consumer experiences to life. Today’s health plan technology is incapable of enabling the strategies needed for enterprise growth and margins tomorrow. Like never before, technology will be a differentiator and health plans making the right bets and investments today will be well positioned for tomorrow. As health plans grow, it will also be important for them to manage the increasing regulatory pressures. Compliance, security and privacy will become more challenging but also more important.
What is the next big thing? What markets do you see emerging in the sector?
The much-hyped “rise of consumerism” is finally becoming a reality in the health care industry. The individual consumer insurance market is expected to grow in the coming years.1 Most health plans have placed big bets on this, investing greatly in building out their retail IT infrastructures. We are also seeing greater integration across the health care value chain – health plans entering the world of care delivery, providers starting insurance businesses, new health plan-provider collaboration models, etc. The health care ecosystem is rapidly evolving and these shifts are spawning new innovations and marketplaces. Non-traditional players are entering the marketplace (such as niche technology vendors, private exchange players, etc.). How the marketplace evolves is yet to be seen. But health plans that are able to clearly redefine and establish their value propositions in this new ecosystem will likely be winners.
1Congressional Budget Office, “Updated estimates of the effects of the insurance coverage provisions of the Affordable Care Act,” April 2014, http://www.cbo.gov/sites/default/files/cbofiles/attachments/45231-ACA_Estimates.pdf
2015 Health Plans Outlook – Full Report
The U.S. health insurance sector is undergoing unprecedented regulatory, financial and competitive disruption. Players’ roles are changing rapidly, and strategies that made health plans successful in the past will not suffice in the future. Most health plans are going to have to find new approaches to achieving growth, demonstrating value, developing products, embracing technology, engaging with consumers, and collaborating with providers.
2015 Global Health Care Outlook
Across the globe, governments, health care delivery systems, insurers, and consumers are engaged in a persistent tug-of-war between competing priorities: meeting the increasing demand for health care services and reducing the rising cost of those services. This report examines the current issues impacting the global health care sector, provides a snapshot of activity in a number of geographic markets, and suggests considerations for stakeholders as they look ahead to 2015.