it’s time for impact - oliver wyman · survey: health leaders from the 2018 ow health innovation...

IT’S TIME FOR IMPACT

Hi De Hi De Hi De Ho

Mission, meet your peer group

prov

ide

achieve

insu

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unity

qual

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indi

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als inno

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empl

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peoplemed

ical

help

patie

nt

better

servicete

ammembers

customers

impr

oveoutcomes

access

solutionsone support

Well-being

possiblepatients

experience

create focu

saffordable

bestcustomer w

ork

finan

cial

Syst

em new

value

deliver right

ever

y

Same side of the table?

Patient Experience (Better Care)

Health of populations

(Better Health)

Reducing per capita cost

(Better Value)

We need a measurable yardstick for impactIHI Triple Aim

Patient Experience (Better Care)

Health of populations

(Better Health)

Reducing per capita cost

(Better Value)

What does greatimpact look like in a measurable way?

Indicators of ‘progress’ do not equal impact

~35MLives in ACOs

~11KUrgent care and

retail clinics

~$10B Annual VC funding for healthcare

<$1KFull genome

profile

60% Providers in at-risk contracts

30%Consumers open to receiving care

via Telehealth

52

39

37

36

34

32

26

14

13

-6

Department stores

Airlines

Credit Cards

Hotels

Banking

Supermarkets

Pharmacies

Health Insurance

Primary Care

Cable & Satellite TV

Avg. and best-in-class net promoter score (NPS) by industry

55

64

28

74

68

68

17

33

Source: Satmetrix 2019 NPS benchmarks; 1. 2017 benchmark

90

71

If NPS is the new EPS, our dividends are hollow

1

Where do we really stand?Life expectancy vs. health expenditure, 1970 to 2015

Source: World Bank. Health Expenditure and Financing - OECDstat (2017) QurWorldlnData.org/the-link-between-life-expectancy-and-health-spending-us-focus CC BY

55

60

65

70

75

80

85

90

0 2000 4000 6000 8000 10000

Life

exp

ecta

ncy

at b

irth,

tota

l (ye

ars)

Health expenditure (2010 int.-S)

Where do we really stand?Life expectancy vs. health expenditure, 1970 to 2015

Source: World Bank. Health Expenditure and Financing - OECDstat (2017) QurWorldlnData.org/the-link-between-life-expectancy-and-health-spending-us-focus CC BY

55

60

65

70

75

80

85

90

0 2000 4000 6000 8000 10000

Life

exp

ecta

ncy

at b

irth,

tota

l (ye

ars)

Health expenditure (2010 int.-S)

We’re lacking confidence in the bigger dialsSurvey: Health Leaders from the 2018 OW Health Innovation Summit

PRIMARY CAREMore virtual visits than office visits for primary careMental health is consistently integrated into primary care

TECHNOLOGY50% of customers will have a portable health record50% of clinical decisions will take genetics into account

VALUE AND COSTHealthcare costs decline as a percentage of GDP50% of provider payments include downside risk

2025 2030 20352020 2040 2050 NEVER

So do we just throw in the towel?

What is really possible?

Key figures reveal a story of big possibilityCurrent U.S. Healthcare expenditure (In $BN)1

40%

10%

50%

0%

60%

20%

100%

90%

80%

70%

30%

3661,184 706 582 399

Net Cost of Health InsuranceDME and Goods

Physician & Clinical SvcsHome Health, Nursing, Residential

Hospital Care

DentalPrescription Drugs

Commercial Insurance

Medicare Medicaid Other payer

Consumer out of pocket

Key figures reveal a story of big possibilityCurrent U.S. Healthcare expenditure (In $BN)1

40%

10%

50%

0%

60%

20%

100%

90%

80%

70%

30%

3661,184 706 582 399

A. Core system transformation: ~$2T in play

C. Redefined health boundaries for the $3.5T

B. Big adjacencies: ~$0.8T in play

Commercial Insurance

Medicare Medicaid Other payer

Consumer out of pocket

Opportunity is massive

RedefinedHealthBoundaries

3BigAdjacencies2Core System

Transformation1

15% 5-10% 10%

30-35% industry-level savings = ~$1 trillion in play

PRICE NORMALIZATION

SITE OF CARE

UTILIZATION MGMT.

OVERHEAD COSTS

CARE MODELSegmented, purpose builtPartnered, scale multipliersTech-enabled ecosystems

Digital first as defaultSelf-guided careNew hubs

Appropriateness of careProactive, personal

AutomationUtilities & new processes

TransparencyComparability

Inno

vatio

n

Diffusion

We know the system transformation levers – we must pull them much harder, faster

Meet FRED

$25k

Need new pyramid principles for pharmacy

POPULATION HEALTH PYRAMID

• 5-15% of people

• 25-50% of cost

• Failure of FFS sick care

Population Percentile

% of totalRx cost

Average Rx PMPY

Top 0.5% 35% ~$122,000

0.5% - 2.5% 30% ~$25,600

2.5% - 7% 17% ~$6,400

7% - 20% 13% ~$1,800

20% - 30% 3% ~$500

30% - 40% 1% ~$250

40% - 50% <1% ~$100

50% - 100% <1% ~$15

PHARMACY PYRAMID MATH SKEWS STEEPER(data is for U.S. commercial population)

Entire structure of demand must change

Extend into the consumer’s daily life

Reconstitute the framework of demand

Achieve real personalization

The full playbook: All levers are critical

Care model

Overhead costs

Site of CarePricing

Utilization mgmt

Cottage industries

Reinventing Pharmacy

Personal-ization

Into daily life

Framework of demand

Core system transformation Big adjacencies Health boundaries

Skeptical?

Renewed impact playbook can stabilize our trajectory for generations

This isn’t about fixing supply OR demand – it’s both Force multipliers are key: new healthcare taxonomy,

reimagined community ecosystems, leadership Full realization has a much bigger halo than 1-time

cost takeout – puts U.S. back squarely on the map