It’s Time for Consumer-Obsessed Healthcare

Ask nearly anyone who has recently navigated a health insurance prior authorization or sought a reimbursement for a medical expense and they will tell you that our nation’s healthcare system is maddening. Premiums and out-of-pocket costs keep going up; decisions about care are often driven by financial considerations over what is best for the patient; and the consumer experience seems like an afterthought.

In short, the healthcare experience is more like a trip to the DMV than a delivery from Amazon.

What makes all of this even more frustrating is the fact that many healthcare companies like things just the way they are. These are the best of times for big pharmacy chains, health insurers, and traditional PBMs. Profits are up, deal-making is frenzied, and bonuses and dividends are through the roof.

I am the founder of an independent pharmacy benefit management (PBM) and technology company, Abarca. PBMs manage the flow of information and money between the health plan, pharmacy, and drug manufacturer. We have a front-row seat to much of what is wrong with the U.S. healthcare system, and we’ve been spending a lot of time thinking about how to make it better.

Here’s what we have concluded: Healthcare companies have forgotten about the customer. They are driven first by profits and use business practices that are self-serving and complicated by design.

Let’s go back to the Amazon comparison. Amazon is successfully remaking the way Americans buy everything from books to groceries for at least two reasons:

They are obsessed with providing the best customer experience. Easy browsing, one-click purchasing, next day/same day delivery. Hassle-free returns. It’s a delightful experience. They imagine the consumer’s needs before the consumer does.

No guessing is required. Shoppers can read dozens of reviews for most items, see a variety of prices the same product is sold for by various merchants, and are presented with other items they might prefer. In short, you know what they are paying for and you can pretty easily judge if it is a fair price.

In healthcare, the customer is too often viewed as a potential problem — a source of risk. But here’s what should concern us the most: For people to stay healthy, they must be deeply engaged in their own care. Yet we have a system that is so costly and frustrating that it discourages people from going to the doctor, getting their prescriptions refilled, and keeping follow-up appointments.

So what can we do about it? Here are a few good places to start:

Remember whom we are working for. Healthcare is about people. We need to care more about the single mom who needs to keep her kids healthy so they can go to school and she can go to work. We should be concerned for the elderly couple struggling to understand the diagnosis and keep track of medications. We must work every day for the sole earner who can’t get paid, make the mortgage payment or feed his family because of an injury or an addiction? Adopting this kind of thinking would require a big, long overdue cultural shift for one of the largest sectors of our economy.

Be straightforward. Deductibles, copays, formularies, supplemental insurance, reinsurance, catastrophic insurance, prior authorizations, HSAs, donut holes — it’s a Rube Goldberg machine and the people who need it the most understand it the least. Much of this mess was designed to control costs. Instead, it has added crushing administrative burdens that get in the way of people receiving the care they need. It shouldn’t be this complicated.

Rethink the business model. Today, pharma, providers, PBMs, pharmacies, health plans are all about raising prices and restricting choices. Real disruption in the business model from traditional players is so lacking that the federal government has driven many of the significant innovations, such as the Medicare Star Ratings program and bundled payments, among others. Now, to curb some of the obscene profiteering of the PBM industry, the government is contemplating labeling pharmaceutical rebates as kickbacks. That says it all.

Yet elsewhere in the economy, companies continuously innovate and transform themselves to better serve consumers. What vertical will Amazon enter next? What features will the next iPhone or Apple Watch include? What will the next VR headsets or XBox do?

People who use Apple, Yeti, Oakley, and Thule products, among others, are so proud that they put bumper stickers with the logos of these companies on their cars. These are cool, innovative brands that consumers aren’t intimidated or confused by — they want to be associated with them.

Healthcare companies should strive for that same level of engagement, loyalty, and pride. Consumers should be excited about their health and wellness. They should be proud of their choices and eager to share their information knowing that it will be used to improve their lives.

To be sure, there are some bright spots. Take Oscar, a company that is making health insurance simple and user friendly. Oscar is under assault by the regulators and politicians for disrupting the Exchange marketplace, but their consumer-focused approach is catching on. Bright Health and Clover Health are also disruptors that are making headway.

But the industry as a whole has has a long way to go. Entrenched companies, in particular, have taken consumers for granted for too long, but they’d better wake up. Now that Amazon has remade retail, entertainment, food, and other verticals, they recently acquired mail order pharmacy PillPack and sent a clear sign that prescription drugs are next.

— -

Jason Borschow is the President & CEO of Abarca Health, a company that has been challenging PBM industry thinking and conventions for more than a decade. Today, Abarca manages more than $1 billion in drug costs for millions of Americans, with among the highest levels of client satisfaction and retention in the industry.