BLOG STARTUPS, VENTURE AND THE TECH BUSINESS

Startups Are Rebuilding The Healthcare User Experience

[This post first appeared at blogs.forbes.com/toddhixon on March 2, 2015]

A senior exec of a big health insurer recently returned from a company offsite dedicated to becoming “customer centric”. I asked if they talked about making EOBs (Explanation of Benefits) understandable? “Not really”, he said. For me that sums up the state of healthcare customer care: becoming top-of-mind, but the incumbents have a long way to go.

The big players struggle to overcome equally big inertia. Since World War II, U.S. healthcare has been mainly business to business (“B2B”): most healthcare was bought by employers or the government. Insurers and providers organized to serve those paymasters. They never acquired consumer DNA.

And, the culture of healthcare is fundamentally paternalistic. Customers receive subsidized or free care, and they expect to be told what to do. Doctors heal with near-magical powers; who needs customer service when you can do that? Since consumers are not decision-makers and not paying the bill, they put up with a lousy experience.

In fact the healthcare industry calls its customers “patients”, to this day. Any business that thinks of its customers as “patients” (with all the attitude that implies) will never achieve excellence in customer care. And it is highly vulnerable to a competitor who brings the arsenal of modern consumer-facing business to bear.

Customers are now gaining power, and patients are becoming impatient.

•  Over the next five years the public health exchanges will shift a large fraction of health insurance purchases from employer-managed to a direct business-to-consumer (B2C) marketplace. McKinsey forecast that 30% will shift.

•  Consumers are now paying a significant part of care costs out-of-pocket, often almost all of the first $1,500-$5,000 per year. With real skin in the game they are starting to ask questions, shop for better value, and expect a decent customer experience.

•  Major consumer facing companies are moving into higher value health services aggressively. CVS has opened 960 MinuteClinics in its stores, rebranded itself as CVS Health, and stopped the lucrative sale tobacco products to show its commitment to healthcare. Walgreens is on a similar course. And Walmart is expected to make a strong play for healthcare dollars. These companies do not think of customers as “patients”.
So the healthcare incumbents need to catch up, and they have a lot to learn. This leaves room for start-ups to fill gaps and bring cutting edge technologies and business models to bear, especially in areas where the new markets are developing, or the existing processes are badly broken. And that is happening. Start-ups are rebuilding the consumer interface for healthcare*.

•  Two companies, Gravie and Benefitter, are creating the dashboard for employees who have been shifted to the public exchange by their employer. Managing the transition from employer sponsored health insurance to the public exchange is their core offering, but the consumer need is really much bigger: managing all of benefits and related financial transactions in one place in a consumer-centric way. These companies can become for health and related benefits what Quicken and Mint are for personal finances: the single portal where all the information is gathered and managed, and where products can be offered. The huge share of consumer wallet spent on healthcare makes owning the portal quite lucrative.

•  HealthSherpa is building a consumer-friendly user interface for the federal healthcare insurance exchange. They compare it to Intuit’s TurboTax tax preparation product: a clean and pleasant interface, simplification of huge complexity, error checking, avoiding rework, and speeding up the process by collecting the consumer inputs offline and putting the time-consuming process of submitting to the federal exchange in the background.

•  Hale Health is building the on-line user interface for primary care: a mobile app that supports a dialogue with one’s primary care practice and provider. An established patient can ask questions about symptoms and perhaps even receive a prescription without the need for an office visit or even a phone call. The founders came out of leading edge consumer tech companies such as Apple.

•  1EQ is creating a monitoring app for pregnant women and their doctors. Using mobile technology and wireless sensors (i.e., a scale and blood pressure cuff), 1EQ monitors health more closely while reducing the need for in-office visits.

•  RxNetwork improves medication compliance with a smartphone app. It reminds customers what meds are due, asks if they have been taken, and offers small rewards that can be surprisingly effective. It links to the pharmacy computer to download medication instructions and trigger refill reminders when the customer’s supply is running short (versus the usual programmed reminders that are often ignored because the med is not needed yet).

•  Senscio follows recently discharged hospital customers. It collects medical biometrics (weight, blood pressure, pulse, etc.) and asks customers how they feel and specific condition-related questions. Hospitals that discharge customers with chronic conditions to distant homes are using it to reduce relapses and re-admissions.

•  Constant Therapy uses mobile technology to deliver targeted exercises to people recovering from traumatic brain injury. This extends the weekly therapist visit into a continuous process and dramatically improves the chance and rate of recovery.
Every top healthcare leader that I hear speak acknowledges that change is happening. There’s a lot of good work to do to fix the healthcare user experience, making use of the tech tools that work so well in other industries. I look forward to playing my part as a consumer and an investor.

Notes:

*NAV is invested in several companies of this type, however, Forbes’ rules of ethics prohibit contributors from writing about companies in which they have investments.

COMMENTS

March 27 2015
by Kevin Tung

A new company I invested in is working on this problem.

http://www.healthcare.com

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