Tom Main on the Myth and Reality of Health Transformation

In the new report The Marketplace Revolution, authors Tom Main, partner and founder of the Oliver Wyman Health Innovation Center, and Adrian Slywotzky, partner emeritus, challenge readers to reconsider their approach to innovation. Embracing advances in health tech, consumer tech, personalized medicine, and population health models is important; but focusing solely on the benefit-based sick-care market is a flawed approach, they say. No single tech advance or delivery model innovation can reform our health system and get us to Health Market 2.0. Instead, it is consumers themselves – powered by consumer tech – who will reshape our healthcare marketplace and reward the innovators who finally reset health and wellness services in consumer terms.

Main and Slywotzky illustrate how consumer-tech companies have harnessed consumer power to reshape everything from media to navigation to shopping, and they build a compelling case for why now it is healthcare’s turn. The decades-old business-to-business supply chain models have run their course at great cost to consumers. The authors present a vision for how the new consumer-driven health-and-wellness market will work and spell out top imperatives for the incumbents.

Here, Main summarizes key insights of the report and explains how 40 percent better value and 100 times better experience are possible in Health Market 2.0:

As people’s lives have become more digitally connected and enabled, it is increasingly apparent how not seamless, coordinated, or digital their healthcare experience is. Consumers are weary of trying to connect the many disparate parts of the complex sick-care system. And they are angry and frustrated by the widening gap between their financial responsibility and the absence of tools needed to get the most for their healthcare dollar.

At the same time, they don’t understand why providers who meter out our healthcare are largely insulated from performance-based transparency and can prosper almost independent from their quality. Nor do they understand why health plan rule books feel so arbitrary and are nearly impossible to decode.

There are many solutions designed to address these frustrations; but most of them are rooted in making the existing supply-side system better. For example, while ACOs and PHMs are building complex integrated health systems, consumers are thinking about easy, frictionless, coordinated interactions, and better living. Consumers don’t really understand the details of narrow networks, complex plan designs, clinically integrated networks or ACOs; they just want health and wellness made easy and on their terms.

Today, the true innovation is focused on creating a consumer marketplace and shifting the model from supply to demand driven. This means empowering consumers to have health and wellness on their terms – personalized, always on, curated, and relevant in real-time context. This same revolution has already happened in nearly every other industry – as once disparate industries converged to meet consumer needs and put these new marketplaces on consumer terms; powerful stuff. Look no further than media, entertainment, shopping, transportation, navigation, and travel.

Today, the true innovation is focused on creating a consumer marketplace and shifting the model from supply to demand driven.

Some might think healthcare is immune to this type of revolution. After all, this is a market where providers have traditionally known-all and payers have long set the “play-by” rules. Yet the revolution is already underway. A new wave of 2.0 innovators are seeking to build something new and different – a health and wellness  business design that actually focuses on health and meets consumers’ needs via a highly personalized when-how-and-where-they-want-it model. They are not applying single innovations to Health Market 1.0 business designs. Nor are they constrained by provider CPT codes or payers’ plan-of-benefits.

Health Market 2.0 doesn’t look anything like 1.0. It is defined by the following three characteristics:

1. Sick care codes are in the back seat; consumer demand drives the new health market.
   The current healthcare market operates on providers’ terms and according to the health plans’ rules. Not so in Health Market 2.0. The new market will empower consumers to engage with the health and wellness marketplace on their terms, not in a start-stop manner that is driven and defined solely by sick-care needs. The old-school B2B supply-chain models will take a back seat, as providers are forced to compete on a level and transparent playing field where consumers determine who wins.
2. The reshaped market will (finally) connect the dots.
   The new, restructured market will merge adjacent markets and – in the process – connect the health-and-wellness dots for consumers. Sick care meets well care, but also health benefits, financing, self-esteem, food, exercise, social connection, self-esteem, affordability, transportation, safety, and more. The new health ecosystems don’t stop where the sick codes and benefits stop. Rather, they understand the vast diversity of consumer needs and align the market to meet the full spectrum of consumers’ health, wellness, and better-living needs. The new market is always on, personalized, transparent, intuitive, curated, relational, contextual, and highly accessible.   
3. Entirely new health models rule the day.
   A massive wave of digital, wireless, mobile, web, and device technologies is enabling a reinvention of the age-old health-delivery models – shifting the focus upstream, into the consumer’s daily living and not waiting for consumers to become symptomatic. For example, the near-constant stream of error-free clinical and health information coming from implantable devices and biometric monitoring will allow the next generation of health service models to prevent acute events. Consumers will expect their care team to be always-on and to predict and prevent avoidable flare-ups. Mobile platforms will completely change how consumers think about access – as consumers happily pick FaceTime over the clinic. Precision medicine is quietly rising. Consumer-level apps based on whole-genome sequencing will redefine how we think about prevention, personalized therapeutics, disease understanding, and better living.   

The emerging new 2.0 “ecosystems” are focused on defined markets and opportunities that improve consumers’ lives. They bring the world to individuals on their terms, in their language and life context. They connect previously disconnected value promises, and will help create a more effective marketplace and a vastly improved consumer experience, with 40 percent better value and 100 times improved consumer experience.