Consumer-Centered Business Designs

The second 2013 ideation session of the Oliver Wyman Health Innovation Center (OWHIC) pushed beyond patient-centered care to focus on consumer-centered business designs. Our Roadmap to 2025 helped us understand the massive gaps in the consumer experience and the necessity of a bridge between the patient-centered world and the consumer-centered world.

On day one, a fantastic line-up of speakers – including senior executives of a national retail pharmacy and a highly visible wellness and personal biometric feedback/mobile company – helped us understand the 360-degree view of the consumer and what it takes to thrive in a consumer-centered marketplace. On day two, our attendees along with many of our advisors (some 25 senior leaders from nearly 10 health sectors) worked together to define the consumer market and build two or three new consumer-centered business designs with the potential to redefine the market and consumer expectations for value. The full agenda for the ideation session can be found here.

For more on the ongoing work of OWHIC and
its bold vision, see Clinical Innovation + Technology's
July 2013 cover story "All Rise With Innovation."

The Rise of the Consumer Market

For decades health plans, health systems, and physician organizations have interacted with consumers through their unique role and been guided by their profit model – an insured member with a risk profile, or a symptomatic patient with a reimbursable diagnostic code. The industry has developed sophisticated business designs, process flows, and information systems to optimize performance (and profits) as a health plan or as a physician organization. These models have created value and shareholder return – but they are not consumer-centered. Web 2.0, Obama-care, mobile/social apps, cost sharing, and consumer awareness are all playing a role in changing consumers' expectations for value. Which organizations and new business designs do you think are most likely to redefine consumer value and ultimately own an increasing share of the consumer relationship?

1After your session on consumer-centered business designs, what are you most optimistic about?

Consumers expect a personalized, anywhere/anytime, social/mobile experience, and healthcare has long lagged behind. But now there's a tidal wave of tech and retail-based solutions and investment addressing massive unmet consumer needs across a broad demographic. Our attendees from traditional healthcare companies were seriously considering how to truly engage and empower consumers, develop high-trust relationships, and open up their B2B models.
2What advantages and challenges emerged in the discussion?

Here are two. While traditional healthcare companies sit on a mammoth pool of benefit dollars, their leadership, profit models, cultures, and systems are all oriented toward diagnostic codes, benefits, provider contracts, and risk arbitrage. They have a hard time seeing the consumer as consumer. On the flip side, the new tech players clearly see consumers and are winning their hearts and minds. But few have found an appropriate profit model or a path to large-scale commercial success.
3How will market structure and the basis for competition change?

We anticipate market and organizational convergence – sick care with wellness, bricks-and-mortar with virtual, care delivery with financing, benefits with discretionary spend, and so on. We expect to see a new recipe card that mixes traditional companies and innovators, with each player bringing to the table only a portion of the necessary skills, expertise, and assets. The pace of innovation will be faster, shattering the incumbent paradigm for year-over-year value improvement.
4Give us a glimpse of some things we could expect from this new converged economy?

New models will make healthcare simpler, personalized, more available, and less expensive – in addition to delivering better results. Amazon-like players could reshape how consumers access and purchase services. Or, retailers could become consumers’ new health and better living partner. Imagine your pharmacy offering healthy meals, care coaching, medication management, home services, and help navigating the system. The race is on for which players will organize the market.