Healthcare executives share their thoughts on how the next big disruptor will be perceived by the industry and the steps that organization will need to take to succeed.
It was only three years ago that Amazon, Berkshire Hathaway, and JPMorgan Chase joined together to form Haven Healthcare in an effort to improve employee healthcare options. When Haven was initially announced, it was surrounded by media fanfare and many thought the joint venture would disrupt the healthcare payers market.
However, the business giants announced last month that Haven would disband by the end of February. Speculation around why the joint venture failed include lack of traction towards goals, unfocused execution of organizational strategy, a high turnover rate in the C-suite, and the fact that disruption healthcare is not an easy feat.
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Haven is not the first company to attempt to disrupt the healthcare industry and it certainly won't be the last.
Given the likelihood that another company will attempt to be the ‘next Haven,’ HealthLeaders spoke with five healthcare executives about how the next big disruptor will be perceived by the industry and what steps such an organization should take to succeed in this tough endeavor.
‘Absolute and maniacal transparency’
Ashok Subramanian, CEO of Centivo, an employee health plan, says he believes the next Haven, or an organization that self-styles itself as the next Haven, will be "viewed skeptically."
"Given that Haven tried to come out with great fanfare, then was not able to be successful, naturally breeds skepticism," he says.
Subramanian adds that there is growing skepticism among the provider community following a top-down approach to healthcare reform and “declaring that they are going to be successful.”
"What we are seeing is enthusiasm for more bottom-up approaches, employers working with organizations to take matters into their own hands,” he says. “That, like a lot of community driven efforts, will probably be viewed more positively than any organization that would at least label itself as the next Haven."
Subramanian suggests organizations should focus on transparency and the "true spirit of the partnership."
"Nothing in this industry can successfully move the needle without a commitment to absolute and maniacal transparency around financial flows, around data, around understanding that ultimately employers who are self-funded are responsible for their own health plans. And that was one of the greatest failures of the first Haven," he says.
According to Subramanian, organizations should collaborate "community by community” with providers that have committed to move the industry towards value-based care and willing to “collaboratively partner with agents of change." He says these organizations are accepted over "large organizations who feel like they can fix these things on their own."
Haven’s demise breeds caution
Michael Abrams, managing partner and co-founder of Numerof & Associates, a healthcare management consulting company, says he also believes the next big industry disruptor will be viewed with uncertainty.
"In many ways, I think the demise of Haven made it that much more difficult for any organization to claim that same mantle," Abrams says. "They brought so much firepower to their announced mission of more or less fixing healthcare, that now that they've closed their shop, the industry may very well take it as an admission that the problem is just not solvable, because it couldn't be solved by those superstars."
He also says that while obstacles remain, there is no lack of disruptors currently working in the market.
"There is a long list of disruptors that are working to come up with innovations that will make the money, and in most cases, lower the cost of care," he says.
Among those disruptors, Abrams explained, are Amazon, (which was one-third of the partnership behind Haven), and the U.S. government. To disrupt and change healthcare, he says organizations need to look towards those who are making waves in the industry.
"To change the rules of the game will take a level of political will," Abrams said. "That is the closest approximation to a big idea and will actually change healthcare."
Need a uniform strategy
When it comes to healthcare disruptors, Craig Maloney, CEO of Maestro Health, a third-party administrator for employee benefits, says he believes the focus should be on the members served.
"I'm a big believer in starting with the consumer," Maloney says. "So many of the end users, whether it's my 80-year-old mother, the Gen Xers, or even people in healthcare [have] so much confusion. Anybody coming into this space needs to be able to impact that digesting healthcare on a daily basis."
He adds: "You also have to serve the employer groups, since they're the drivers of so much of the healthcare delivery out there today. Anytime you talk about transformation; it comes with risk. You need to be able to digest that risk, and tolerate that risk, to facilitate change."
Maloney says for the next big disruptor to succeed, they should have a uniform strategy, a focus on not only technology but also on "the human side of things" and "the wherewithal to commit” for a long period of time.
"Haven proved out that three years is not a long commitment in terms of disrupting such an established, complex, and even odd industry," Maloney says. "When [I] talk to other organizations who are looking to impact and change healthcare, [they're looking at a 10-, 15-, or 20-year commitment.]"
When organizations are first starting out, Maloney suggests they start small instead of starting big.
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Focus on the customer experience
Mark Nathan, CEO of Zipari, a technology company specialized in health insurance, says the next big disruptor should work in conjunction with payers and providers to succeed in their mission of disrupting the healthcare space.
"Payers and providers have to be part of the equation," Nathan says. "Payers and providers have made huge investments in their systems. There's a lot of regulation and emphasis on keeping everything running efficiently, but not a lot of emphasis on innovation. And so, to build that next generation of disruption for healthcare, they have to be at the table solving the problem."
He also says there should be a focus largely on customer experience to succeed, including consistent communication and messaging.
"The patient at the center of everything," Nathan says. "We have to get that alignment between the payers, the providers, and a patient. No matter where the member engages with the payer, they should get a consistent message that's going to … improve their health. If payers get that message up to their members, then the payer brands will start to improve, their Net Promoter Score will start to improve because they'll be trusted. That's something that's missing in this industry that is critically important."
‘Very pessimistic’ about the next Haven
Steven Goldstein, MD, founder of Houston Healthcare Initiative, a website which offers resources to people and organizations who want to change the current healthcare industry, is not optimistic for disruptors who want to change the current healthcare system through technology and innovation.
"If we go back to first principles, the primary purpose of healthcare is to keep patients well,” Goldstein says. “The secondary purpose is to care for people when they get sick. But our current system is backwards, it primarily cares for the sick, and only secondarily tries to keep the patients well. The current system of managed care frowns on innovation. In my opinion, delivery of medical care lags the technology by about 25 years. They're not innovative, they don't want to change the system, and that's the problem."
Goldstein notes that it is difficult for disrupters to succeed in the current system.
"I'm very pessimistic that we're going to get much innovation, like the Haven ideas, accepted by the healthcare industry in the current way it's set up," he says.
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Melanie Blackman is a contributing editor for strategy, marketing, and human resources at HealthLeaders, an HCPro brand.