Healthcare: Survival of The Fittest

According to Levin and Associates, mergers and acquisitions in the healthcare industry totaled over $227 billion, an 11% increase over 2010 and the fourth-largest year of the past decade. Even more interesting, is that the value of healthcare services deals increased 43% while technology decreased 2%. Hospital systems are moving into new communities, integrated health systems are acquiring additional delivery system assets, managed care networks are growing, and specialty care service businesses are expanding their footprint—to be well-positioned for survival in a post-reform world.

This is the type of data we shared with TripleTree’s Health Executive Roundtable–the investment bank’s “think tank” comprised of a diverse group of health industry executives with backgrounds ranging from banking, medical device, education and life sciences; to food services, technology, human capital management, and compliance.

We asked each Roundtable member: “What are the key trends that will emerge from this consolidation?”

Their independent and unique perspectives are published in:

Viewpoint: A Kaleidoscope of Insights Regarding Growth Opportunities amid Consolidation in the Healthcare Industry.

You can view and download the report here.

In addition, you are invited to participate in a webcast on Wednesday, February 29, 2012 from 12-1 pm CST where we will discuss the highlights and key themes from the report. You can register for the webcast at: https://www2.gotomeeting.com/register/771534410. After registering you will receive a confirmation email with information about joining the event.

As a preview. the following are the highlights and key themes from the report:

1. Healthcare costs will increase. It’s all about supply and demand. Market consolidation sets the stage for increasing healthcare costs as fewer, large, hospital and healthcare systems leverage their size and strength during unit cost contract negotiations with payors.
2. Contraction of the delivery system = expansion of demand for meaningful innovation to combat the pressures of #1. However, the only “new new things” that will survive are those that solve real problems with a scalable, cost-efficient solutions that integrate with the existing healthcare infrastructure.
3. B to C solutions require B to B revenue streams. Consumer adoption is critical for demonstrating relevance, but consumers don’t typically fund high growth enterprises.
4. “Health and Wellness” will transition to “Life and Well-Being.” Payers and employers will seek innovations that support life and well-being as the distinction between work, home and health become increasing blurred.
5. Healthcare gaming will emerge–actually, it will explode. Gaming platforms that integrate entertainment, interaction, and achievement will be a transformational solution for driving consumer engagement and behavior change as well as provider education, training, delivery, research and cost containment.
6. Electronic health records will evolve into smart health information technology ecosystems. These ecosystems will (finally) enable the coordination of care and drive shared accountability among healthcare providers.
7. Doctors will be loyal to a single system. (Smart) hospitals and health systems will attract and retain doctors with mobile and wireless software applications that enhance personal income and lifestyle.
8. The most disruptive solutions are likely to come from outside the traditional healthcare industry. The core assets and capabilities that fuel retail, consumer packaged goods, banking, and telecommunications, for example, can be translated into unique and meaningful healthcare solutions by companies and individuals not trapped in parochial “we’ve always done it that way” thinking.

A “perfect storm” is brewing where science and technology have no boundaries, and the convergence of reform and unsustainable medical costs are generating opportunities for change. I can’t think of a more exciting time to be in healthcare.

I look forward to your feedback via blog post comments, personal email, or during the webcast.

Archelle Georgiou

Archelle is a Senior Advisor and Chair of TripleTree’s Healthcare Executive Roundtable, and focused on creating health through innovation.  You can follow Archelle on Twitter, on her blog, or email her at ageorgiou@triple-tree.com.

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Ramping up for HIMSS 2012

It’s hard to believe that HIMSS 2012 is just around the corner.  As we look ahead amid the consolidation and investment opportunities in healthcare, if you are at HIMSS this year and would like to exchange perspectives on the industry or bring us up to speed on your progress for the year, please let us know.

Here is what’s on our radar related to our research and advisor agenda for the year.

• Why ‘consumerism’ is impacting healthcare delivery models at an unprecedented pace
• How mobile applications are key tools for navigating a ‘B2C shift’ in healthcare
• Where innovations are evolving quickly to meet the demographic shift of seniors
• How productivity tied to health is a growing focus for employers
• Why compliance-centric issues ranging from payment integrity to improved patient outcomes are dominating many health care cost debates
• How the shift toward ACOs and Medical homes is radically altering care delivery models
• The impacts of ‘life beyond the EMR’ as more granular clinical documentation will substantially increase risks associated with reimbursement, compliance, and productivity.
• How healthcare is being driven by data and analytics to build a more complete picture of a patient
• Where the pharma market is shifting away from paper-based systems and processes and calling for innovations that reduce cost across the clinical development landscape

Let us know what you’re thinking about…see you at HIMSS in a few weeks!

Chris Hoffmann

Chris Hoffmann is a Senior Director at TripleTree covering ‘consumerism’ and where legacy and edge technologies are impacting healthcare. Follow Chris on Twitter or e-mail him at choffmann@triple-tree.com.

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Wireless Health Innovators…“Where are they now?”

Nominations open next week for the 2012 TripleTree I Award, our annual recognition of innovations in wireless health.  Messaging from new market entrants to physicians, payers, and most notably consumers is fueling a strong venture capital appetite, and looking back at the I Award finalists since 2009, we thought it was useful to list a few notable accomplishments.

Public Markets

• Epocrates – The first mobile healthcare company to successfully go public in early 2011 raising $86m

Funding

• Airstrip Technologies – Received an undisclosed amount of funding from Sequoia Capital
• IntelliDOT – Raised $30m+ from leading investors including Psilos Group, TPG Growth, Camden Partners, Integral Capital Partners, J.F. Shea Ventures, Menlo Ventures and American River Ventures
• Proteus Biomedical – Raised $25m from Medtronic, Novartis, and ON Semiconductor Corp
• TelaDoc – Raised $18m from Cardinal Partners, HLM Venture Partners, Kleiner, Perkins, Caufield & Byers, New Capital Partners, and Trident Capital

FDA Approval

• Calgary Scientific – ResolutionMD^TM  after 23 months received 510(k) clearance from the FDA
• Telcare – Wireless blood glucose meter received 510(k) clearance from the FDA for its device, Telcare BGM

Acquisition

• CellTrak Technologies – Expanded into Canada through its acquisition of MedShare mobile technology for home health care
• Healthagen – Patient access software to providers acquired by Aetna

Since TripleTree’s I Award inception in 2009, one company has gone public, one has been acquired, numerous rounds of funding have been raised, multiple FDA approvals granted, and some businesses have scaled nicely.  As the market continues to mature and awareness and user adoption grow, questions loom…

• Is “connected health” on the verge of a breakout?
• Are wireless health solutions the answer for reduced healthcare costs and improved quality of care?
• Will innovation be driven by non-traditional healthcare vendors (ie device vendors and mobile service providers)?
• How are the ramifications of reform influencing innovation?

As we consider these questions, a few key indicators are influencing the market:

• Four out of five physicians use smartphones, computer tablets, and other mobile devices (Jackson & Coker industry report)
• More than $600m has been invested in the wireless health space since January 2010
• 89% of healthcare decision makers believe telehealth will transform healthcare in the next 10 years (Penn Schoen Berland Study)

Below is the honor roll of past I Award finalists.  Look for more information from TripleTree in the coming weeks as the nomination process commences and we plan for the WLSA Wireless Health Convergence Summit scheduled for May 22-24 in San Diego.

2011 Finalists
BodyMedia*	Wearable body monitoring device
Cambridge Temp Con*	Wireless physiological monitor for infertility
Cardiocom –	Clinical telehealth services
Cellnovo	Mobile diabetes management system
Healthagen	Patient access software to providers
Mobisante	Mobile ultrasound imaging system
Palomar Pomerado Health	Real-time mobile software patient electronic health information
Phreesia*	Touch-screen mobile tablet
TelaDoc	On-demand patient access solution to ERs and urgent care
Telcare	Wireless bloodglucose meter
Vitality	Mobile medication adherence
Wound Technology Network	Telehealth- based wound services
2010 Finalists
AirStrip Technologies	Mobile patient information
Calgary Scientific*	Medical imaging
CellTrak Technologies*	Homecare with GPS cell phones
Corticare	Critical care patient monitoring
Great Connection	Mobile imaging communications
Hopskipconnect	Motivational self management tools
InnerWireless	In-building wireless solutions
Ocutronics	Retinal camera
PerfectServe	Physician and patient care communication
PharmaSecure	Pharmacy brand protection solutions
Zeo, Inc.*	Sleep monitoring
ZMQ Software Systems	Sustainable development
2009 Finalists
BeWell Mobile	Disease management applications via text messaging on cell phone
CellTrak Technologies	Homecare automation with GPS cell phones
Diversinet	Health information transparency in partnership with AllOne Mobile
Epocrates	Rx Drug and formulary reference
GreatCall*	Jitterbug; simple cell phone with 24-hour live service
IntelliDOT*	Workflow manager connecting caregivers with information systems
MedApps	Mobile wireless health monitoring
MicroCHIPS	Continuous glucose management system
PhiloMetron	Passive weight management platform
Proteus Biomedical*	Electronically observed therapy platform
Tagnos	Patient flow management applications
Triage Wireless	Wireless telemetry/vital signs monitoring

*Denotes I Award Winner

 

Joanna Roth

Joanna Roth is a Senior Analyst at TripleTree covering the healthcare and technology industry, specializing in education solutions. Follow Joanna on Twitter or e-mail her at jroth@triple-tree.com.

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Successful M&A Exits in the Consumer Healthcare Device Market

Consumer healthcare devices are everywhere. They help people track physical activity, measure caloric intake, and play a vital role in personal health and wellness achievements.  Driven by consumer engagement, technology proliferation and a billion dollar-plus market opportunity – investors are pouring millions of dollars into this market with the hopes of a big return (see examples below).  Public exits (IPOs) are tough, so the path to liquidity for many of these firms will be acquisition.

• $70 million raised by Bluetooth headset maker to enter health monitoring market.
• $50 million raised by mobile consumer focused diabetes management system.
• Best Buy invests in mobile fitness ear bud technology.

Few companies have yet reached a size and adoption threshold to be deemed a success, but as the winners emerge product design, value proposition, access to customers, defensible intellectual properly and ability to integrate will factor into their strategic paths. Here is a check list for the CEOs who are considering an exit in the next 8-10 quarters:

• Competition – Separating from the pack of consumer health device companies is difficult.  There are dozens of credible companies and scores of wannabes (100+ according to our market definition).  While most of companies in this category are below $15 million in annual revenue, the strongest players have venture backing, cash reserves and relevant consumer and healthcare experience sitting on their Board.

• Customer Adoption – Consumers are tough critics and prone to device abandonment.  Winners in this category with figure out how to provide a consumer health device that is easy to use, convenient, and effective.  Also, given that consumer health devices today attract a narrow user based, successful vendors will figure out a way to expand adoption and find a broader audience of which to market and sell its product.

• Distribution – Signing a big distribution deal can be the best way to gain quick, sustainable market exposure. For these vendors it can be a great way to develop a strong, sustainable partnership that could lead to M&A down the road if the partnership is successful. Especially in the consumer market these major distribution channels can make or break a business in the early innings.  Acquirers will look for devices that can be sold effectively through multiple channels. Winners will maintain a broader sales strategy and not become dependent on a single distributor, which makes the business susceptible to channel risk and unattractive for a premium M&A event.

• Finding the Right Business Model – This is the biggest stumbling block for most consumer healthcare device companies.   In most cases, larger companies are less acquisitive when a business cannot demonstrate a scaleable business model.  Many vendors in this space simply want to achieve user adoption at the expense of a longer-term revenue plan, when they should be thinking about keeping customers over a five year (or longer) period.

• Recurring R&D costs – Companies in this market must continuously re-invent themselves with smaller, sleeker devices.  This can be the most taxing aspect of the market and certainly hurts a company’s chances of becoming highly profitable, especially when they are investing in growth.  Manageable cost structures, vertically integrated manufacturing models, web-based user interfaces and other features are all relevant to a complete product experience.

TripleTree has monitored the consumer health devices space for years and we’re bullish about the prospects for continued innovation and growth.  We’re watching the emerging companies address consumerism in thoughtful and innovative ways and look forward to watching the evolving strategic relationships between these innovators and global players.

Let us know if you have additional thoughts on this market or a different perspective.

Michael Boardman

Michael Boardman is an associate at TripleTree covering the healthcare and technology industries, specializing in clinical software solutions.  Follow Michael on Twitter or e-mail him at mboardman@triple-tree.com.

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When Should ‘Blackberry’, ‘iPhone’ and ‘FDA’ Be Used in the Same Sentence?

The FDA classifies a medical device as “…an implementation, product, apparatus or other component or accessory, which is used in the diagnosis, cure, mitigation, treatment, prevention of disease or effects any structure of the body–that could actually include some information technologies and performance technologies–but usually something that is performed on the patient, touches the patient or is performed between physician and patient.”

By this definition, an iPhone or Blackberry loaded with the proper apps or enabling a key medical service becomes a FDA-regulated device. That is an industry with over 5 billion previously unregulated potential medical devices waiting to be enabled by the 17,000 plus increasingly sophisticated wireless health applications in the market and thousands applications more in active development. Wireless and mobile health researchers at strategy consulting firm CSMG estimate industry revenues to top $4.6 billion by 2014, a stunning figure for an industry that didn’t exist just 5 years ago.

Recognizing the potential regulatory bombshell, the FDA and the FCC convened last July for a meeting on “Converged Communications and Healthcare Devices Impact on Regulation to address the current state of wireless health, innovator perspective, and investor perspective. The agencies’ stated motivation for the meeting was to “clarify and delineate the respective areas of expertise and jurisdiction between the agencies” given the increasing convergence of communications and wireless technologies and medical devices. Emerging from the meeting was a joint FDA-FCC memorandum of understanding to promote collaboration and eventually refine and improve the regulatory processes applicable to wireless-enabled medical devices (and conversely wireless devices with medical applications). While an admirable step towards normalizing government oversight over the mHealth market, neither agency has issued concrete guidance or a path to regulatory approval to date.

The FDA’s lack of clarity is causing uncertainty amongst entrepreneurs and investors. Just last month, the agency finally announced it would issue guidance on mobile medical applications later this year, settling an issue that has had many industry investors cautiously observing from the sidelines and developers nervously eying their own business plans.

Given the day’s current political environment of overregulation, it’s possible that the decision could have severe ramifications on growth in an industry in the midst of considerable upswing.

With the number of mobile subscribers worldwide passing the 5.3 billion mark at the end of the year, over 75% of the global population has a mobile device, and that number is expected to grow thanks to increasing penetration in developing countries and the growing presence of tablet computing.

We are optimistic that the FDA will adjust its need for regulation in harmony with the industry’s need for innovation, creating a set of guidelines that will attract investors and entrepreneurs while protecting the security of consumers and medical data.

Have a great week!

Marc Baudry

Marc Baudry is an analyst at TripleTree covering the healthcare industry specializing in population health management and healthcare informatics. Follow Marc on Twitter or email him at mbaudry@triple-tree.com.

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Health2.0 Event Supports Conversation on Healthcare Consumerism

Last week, my colleague, Ryan Stewart participated as a keynote presenter for a regional Health 2.0 event.  As leading resources for innovative healthcare technology organizations, TripleTree and Health 2.0 are aligned in their belief that the growth of user-generated healthcare will foster a wave of consumerism across the industry. TripleTree has identified “consumerism” as critical for engaging consumers to take a greater degree of control in their own health and breaking down the traditional roadblocks that have caused a disconnect between payers, providers and consumers within our healthcare system.

TripleTree continues its active role in the mHealth (mobile and wireless health) arena and closely follows dozens of innovators who enable a free flow of healthcare information between various systems.  Ryan’s presentation outlines several macro-trends where mHealth is supporting this information flow and facilitating patient access to care information through greater patient participation in health-related decisions. You can view the presentation here.

Joe Long

Joe Long is an analyst at TripleTree covering the healthcare sector, with a focus on the approaches and technologies surrounding health insurance exchanges.  You can email him at jlong@triple-tree.com.

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“The New India”, Consumerism and Wireless & Mobile Healthcare

My brother recently migrated back to India to lead a start-up in the electronics sector.  As he busily builds his business and reestablishes himself, he has introduced me to the concept of “The New India.”

The importance of his remark is wide-ranging as India competitively touches nearly every sector of the U.S. Economy. However, because of my 30+ year career in healthcare, I immediately began to consider where The New India will impact my day-to-day business realities as well.

Much has been written about the impacts of the BRICS (Brazil, Russia, India, China, South Africa) economies on innovation and consumption in many industries; but a recent New York Times article citing how the U.S. medical device sector may be losing some of its competitive edge (thanks to FDA scrutiny) underscores a viewpoint for healthcare.

Scrutiny equals delays, and delays equal costs; and while the FDA has a tough job, at some point it will need to confront (and adapt) to the realities of our globally competitive market.  The company mentioned in the article (Biosensors International) learned this the hard way, like many other emerging healthcare companies, as it was forced to shut down operations due to the lengthy FDA approval process.

The FDA’s high bar on healthcare standards in the U.S. could cloud some observers the reality that superior care also exists in BRICS economies; however healthcare access is another story.  Eighty percent of populations living in non-metro areas are often far from primary care facilities.  Thus, the expense of travelling to a doctor for even the slightest adverse health condition is usually so high that those who need the care most don’t get it.

Wireless and mobile approaches to healthcare can help alleviate this burden, and allow the impoverished consumer access to care at a central facility, freeing up monies for care that otherwise would have been spent on transportation to a distant care center.   This “redirection of discretionary spending” enables “new BRICS consumers” to have better control over their limited funds.

In India and China, 2.2 billion people actively use the web and social sites like Facebook and Xiaonei.  Are the executives of U.S. based medical device companies paying attention to the preferences of these newly empowered consumers?  A few have grasped the reality that wireless and mobile technologies are true enablers of healthcare and despite the infrastructure barriers in the BRICS countries, the pent up user demand from billions of consumers is driving meaningful innovation.

The application of wireless and mobile health solutions in traditional environments is top of mind with government and business leaders and is a central theme to the upcoming Wireless-Life Sciences Convergence Summit in San Diego. Recent research on wireless and mobile health from our friends at TripleTree is here; and we’d welcome a chance to share our latest thinking on this dynamic sector of healthcare.

Ashok Kaul

Ashok is the Vice President of Healthcare Convergence for the non-profit Wireless-Life Sciences Alliance.  You can contact him at akaul@wirelesslifesciences.org.

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Consumer Centric Social Tools Are Impacting Healthcare

A growing number of healthcare industry leaders are using social media tools to support their brand, enhance advertising campaigns, improve consumer communications and proactively address public perceptions.

The social networking landscape is fragmented and confusing for many healthcare organizations.  Just two years ago the vast majority of health plans, pharmaceutical, hospitals and government entities didn’t include social tools or platforms on their marketing roadmap.  In fact many viewed it as likely ineffective and difficult to measure, much less being fraught with legal and regulatory issues.

Things have changed in 2011. A growing number of these firms are now leveraging approaches to social technology and below we’ve posed a few examples:

Health Plans

• Example: Blue Cross Blue Shield (BCBS) of Western New York uses Twitter to advise and coach members interested in healthier lifestyles – the topics range from helping members quit smoking to maintaining work out regiments and nutrition.

• Social media tools for health plans are still in the early stages of adoption and most large / regional health plans have a meager 200 to 800 followers on Twitter.  These enterprising health plans seek to steer their population towards healthier behavior and a properly utilized online social presence can be part of the solution.  But for health plans social tools are not only about coaching and health advice. One major health plan is using social tools to advertise its online care service and recruit new members to sign up online to take advantage of the service.  Health plans can also get instant consumer feedback and address complaints at their source by communicating with members who are unhappy with or don’t understand care options or billing issues.

Pharmaceutical and Life Sciences Companies

• Example: Pfizer, the global drug manufacturer, has dozens of Twitter accounts, organized by country and region to deliver targeted news to specific groups. Pfizer also has Twitter accounts for activist causes such as Pfizer_Beef, which has a stated goal to “…share our passion for animal health and the productivity of livestock”.

• Rather than fueling the perception that drug companies are just out to sell the next pill, Pfizer is aiming to use social media to soften its image and become more visible to consumers for the right reasons, while providing helpful and targeted information across different subject matters, geographies, and languages.

Hospitals and Other Providers

• Example: The VA Maryland Health Care System launched its Facebook page in April 2010 and in less than one year boasts nearly 1,000 Facebook fans. According to its website, being a fan will allow users to share experiences, give “shout outs” to favorite doctors and nurses, and react to and be part of a discussion about topics posted on the fan page.

• Hospitals and other providers are beginning to see that social media tools are an alternative channel to provide quick and easy access to the latest news, telephone numbers, and other important information. These social media tools can provide tangible value to the hospital by facilitating collaboration between themselves and patients, volunteers, family members, and friends. Such a benefit should not be overlooked and could mean a more positive relationship with its surrounding community and more traffic through its doors.

Government

• Example: The Centers for Disease Control (CDC) launched a website called eHealth Metrics Dashboard to provide civilians with up-to-date facts on everything from flu season to salmonella warnings.  CDC disseminates its information through a variety of social channels including YouTube, Facebook and Twitter.

• According to Federal Computer Week, the CDC is seeing some serious traction. Mobile views of CDC social media and websites nearly doubled month-over-month to 263,000 last February and the agency has over 1 million Twitter followers. The CDC’s success serves as a shining example of how the government can improve communication and access to information to benefit the health of our national as a whole.

As the number of healthcare organizations who are establishing an online social presence grows, the positive benefits around real-time feedback and product / service improvements will be hard to ignore.

A focus on social media is impacting our research agenda for 2011, and has a unique role in the agenda for our upcoming Summit www.wlsa2011.com on mHealth in May.  We’ll keep an eye on the range of legal and regulatory issues being discussed in the market as private health information and data management disciplines mesh around social media, marketing, sales and service.

We welcome your feedback on this topic.

Michael Boardman

Michael Boardman is an associate at TripleTree covering the healthcare and technology industries, specializing in clinical software solutions.  Follow Michael on Twitter or e-mail him at mboardman@triple-tree.com.

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Wireless & Mobile Health Taking Center Stage as Reform & Consumer Preferences Converge

As we enter 2011, the topic of wireless and mobile healthcare and its growing public acceptance should be top of mind for every healthcare professional or investor.

According to TripleTree’s most recent mHealth survey, over 43% of healthcare professionals are working with mHealth devices or applications on a daily or weekly basis.  Additionally, over 70% of healthcare professionals surveyed are knowledgeable of their applications and uses.

Physician use of mHealth applications may spur greater adoption amongst the general populace – the “if my doctor does it, it must be a good idea” phenomenon.   Many industry watchers agree that well north of 500,000 physicians are already using iPads (in the U.S.) and this number is growing by the hour!

For patients, increased tablet use may spur them to investigate health monitoring apps for for their phones. And the good news is that they will find over 7,000 apps across the Android and iPhone app markets.  Indeed, over 3 million downloads have been logged for these apps in 2010 on Android alone.

Even if every download of a mHealth app was to a separate user, the mHealth application market of over 33 million users is at most 10% penetrated.

Expect a surge of health and fitness applications in 2011 as developers (and retailers) realize that this market may be poised for a growth surge, barring any regulatory hurdles.

There may be potential roadblocks in adoption, however.  HIPPA overshadows everything health-related in the US, and the mHealth market is no different. Data leaks and the sensitivity of the data recorded may lead some consumers to doubt the security and privacy of mHealth apps. However, once large players such as Google, Microsoft, or Apple enter the market (or endorse applications) consumer doubt will ease.

These market trends are foundational as we approach our sixth annual Convergence Summit to advance the discussion of wireless and mobile innovations in healthcare.  Compliance, seniors and chronic illness and improving access to care are just a few of the topics we’ll assess and discuss.  To learn more click here.

Rob McCray

Rob is the CEO of the Wireless-Life Sciences Alliance and senior advisor to TripleTree.  Follow Rob on Twitter, or email him at rmccray@wirelesslifesciences.org.

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B to C Marketing, Sales and Service: The New Battlefield for Health Plans – 09/17/10

Historically, commercial health plans have leveraged a traditional “B to B to C” model for marketing, selling and servicing health insurance products to their members. The breakdown for this distribution model is as follows – Health plans “B” create a product catalog for their broker network “B”; and brokers in turn sell to employers or groups “C”.

The pressures of a post-reform world are forcing a shift in the sales strategies of payers. Medical Loss Ratio compliance rules for example, are pinching the income statements of health plans so significantly that getting closer to the member (i.e. eliminating the broker) will be table stakes if they choose to remain competitive. Net result? The traditional model will fade and be replaced by a direct-to-consumer (“B to C”) strategy.

This threat to the broker-driven sales model is compounded by consumer “connectedness” (everywhere-WiFi + prolific mobile devices + social applications) where empowered individuals are becoming engaged relative to researching, monitoring, communicating and paying for their own health care.

Around our shop, we’re referring to this shift as ‘consumer engagement’; a concept pioneered by a few BlueCross organizations who successfully cultivated direct-to-consumer messages via TV, radio, print and online media for some time. Early on these consumer-direct campaigns were an anomaly, but we’re now seeing this approach take hold more broadly. This is more than simply educating potential members about “the right health plan” – it’s a 1:1 marketing approach with messaging the places the health plan in a new light as an entity capable of tailoring health and wellness services (bundled inside of health insurance) to individuals.

Consider what UnitedHealth Group did during this summers’ PGA Masters Tournament. The health plan behemoth aired variations of its “Heath in Numbers” television spots to showcase an optimized health experience for their members thanks to uniquely intelligent tools and services.

If Cigna, Aetna, Wellpoint and others haven’t taken note, they will – and rest assured the big ad agencies will be quick to offer them ideas honed from decades long slugfests in industries like consumer retailing and banking. These health plans are stepping onto a new competitive battlefield, and will likely find themselves trying to out-market the likes of Walmart and Target.

TripleTree is way out in front of other strategic advisors on this topic and has strong viewpoints on where the next set of industry inflection points will occur. Principally, we’re convinced that the health plans can’t go it alone successfully – they lack the internal resources and specialized skills to tackle consumerism, much less the turn-key solutions need to support the state health insurance exchanges.

We’d like to know what you think, and have a great week!

We’d also like to invite you to participate in our one question survey:
Given the momentum around consumer engagement, prioritize the five initiatives below relative to your experience as a member of a health plan.

Chris Hoffmann & Michael Boardman

Chris Hoffmann is Research Director at TripleTree covering Cloud, SaaS and enterprise applications and specializes in CRM, loyalty and collaboration solutions across numerous industries. Follow Chris on Twitter or e-mail him at choffmann@triple-tree.com.

Michael Boardman is an associate at TripleTree covering the healthcare and technology industries, specializing in clinical software solutions.  Follow Michael on Twitter or e-mail him at mboardman@triple-tree.com.

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