Originally published 10/18/2018 in The Valid Points Newsletter.
Even though high performing health care services may offer strong value propositions, being unconventional makes them still a hard sell. The fixes of legacy health care organizations are in, and their service networks and methods are solidly entrenched. Innovation capable of displacement is never warmly received by incumbents.
Accordingly, approaches that negatively impact the benefits advisor’s revenue stream or that can be seen as chipping away at a health plan’s control of the case, probably will be opposed as threats. Powerful savings may be weighed against even minor disruptions. And then there’s the issue of whether the new service will require the benefits manager to manage a new, separate contract.
Two principles are relevant here. The first is The Godfather Principle, which advises that to increase the probability of being considered, vendors need to make offers that purchasers can’t refuse. A proposal might go something like, “If you agree to work with us, we’ll financially guarantee that your population’s health outcomes will improve and/or your total health care spend will drop by – pick a big number that you’re sure you can achieve – 20-25 percent.” This figure exudes experience with and confidence in your approach, and is so large that if the benefits manager turns it down out of hand and the company’s CFO hears about it, the benefits manager’s job could be in peril.
Which bring us to the second principle: Administrative Simplicity.Promised savings as large as I’m suggesting also imply that more than one risk management approach (or “module”) is necessary to achieve them. Coordinated collaboration between several high performance risk management companies, can work together on a “platform” that, over time, integrates each module’s key functions – e.g. training, communications, analytics, outreach – into a seamless set of capabilities that can be easily accessed by patients and purchasers.
In other words, organizational health care purchasers are already administratively overwhelmed and don’t want additional administrative management responsibilities. They most certainly don’t want oversight of a slew of narrowly focused services – e.g., diabetes management, large case management, care navigation, allergy services – which may, together, deliver better results at the end of the day but that would create a labor intensive hardship to monitor. So the smart money is for high performing vendors to find each other and come together under a set of unified contractual or organizational terms, making it as easy and productive as possible for purchasers to work with them.
Within the spheres that my colleagues and I inhabit, it’s clear that that organizational purchasers are becoming sufficiently fed up with the legacy health care industry’s predatory practices that they’re increasingly willing to consider exciting, high performing new solutions. Even under the most favorable circumstances, the high performers would be well-served to appreciate the magnitude of the challenge, and to begin to optimize their processes to facilitate as rapid penetration of the market as possible.