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Platform Economy – How Health Insurers can evolve into Integrated Healthcare platforms

Platform Economy – How Health Insurers can evolve into Integrated Healthcare platforms
July 09, 2020

Co-auhtor: Sudhanshu Sethi

A tale of two economies

If the COVID-19 pandemic had any clear telling on our civilization, then it must be the digital manifestation of everyday life. From groceries to classrooms and music concerts, everything that we can experience is being enabled by a digital platform. While these platforms proliferated throughout the last decade, it is in these times that they have become inevitable. Healthcare, being at the forefront of shaping the course of this pandemic ridden economy, is seeing the greatest action in terms of innovation and technology platforms would play the most critical role in enabling this transformation.

China and the USA's healthcare approaches reflect their collective consciousness and individualism respectively.

China has integrated everything on its super-app platform WeChat which allows features starting from scheduling visits to physicians and ordering the prescribed medicines at one’s doorsteps to diagnosis of preliminary symptoms using AI-based chatbots and innovative telemedicine solutions.

Contrast this to the healthcare innovation in United States, where the push for innovation is coming from a distributed network of start-ups that are creating unique propositions in the field of health analytics, value based care, health and wellness, health connect, consumer education, process transformation, and telemedicine. The innovation is multilateral and can address complex challenges with each platform having a distinct focus area. An AMA study revealed that adoption of telemedicine and virtual visits by doctors has doubled from 14% to 28% between 2016 and 2019. The company HealthSparq provides solutions to search providers, understand their medical and treatment-related cost and aggregates reviews of various health services, to let the patients arrive at better decision-making and plan their episodes of care. The company has seen engagements topping 138 million visits, 317 million searches, and 4.4 million cost estimates. Another start-up from San-Mateo, California, has integrated over 28,000 unique health data points cutting across clinical research, health plans, and hospitals. It provides convenient methods for consumers to connect health data with the companies they trust resulting in accelerated healthcare and underwriting processes. Due to its remote-first approach, the company has seen minimal disruption to operations during the COVID-19 outbreak.

In hindsight, these two approaches are truly reflective of the centralized society of China driven by collective consciousness and the liberal democracies of the west driven by individualism.

Despite this specialized focus by individual companies, the patient requires an integrated experience and, thus, all these platforms need to come across as a seamless and unified interface to ensure an ideal healthcare journey. The absence of this integration has created a vacuum in the healthcare space which payors and health insurers have tried to fill by tying up with the platforms that provide analytics, telemedicine, and patient-connect solutions, besides trying to develop a value-based care model of their own.

However, payors are grappling with their own challenges. The post-COVID-19 world will make it difficult to sustain high-cost care at current premiums levels and coverage prices will invariably shoot up. The economic crisis will further complicate the scenario as neither employers nor governments will be able to pay such high premiums and the healthcare providers cannot sustain quality care without adequate compensations. Hence, the traditional approach of acquiring or partnering with small tech startups may not be adequate to deal with the complexities that these challenges poses.

Payors will be at the center of platform-driven integrated healthcare

Healthcare payors are uniquely positioned to transform their current business model that pools risk and cares for the sick, into an integrated healthcare ecosystem. Being at the intersection of care delivery and payment, health insurance companies interface with hospitals, pharma companies, and pharmacy benefit managers. Data is the fuel for the platform economy , the entity which has the best access to data commands the highest surplus in the value chain and none other than the insurance companies have access to the vast swathes of data needed to provide a platform for collaborating and connecting the diverse and specialized innovations across the managed care space. Besides providing sustained market leadership, such models will enable payors to become light on assets, foster a networked value flow, and drive interaction between healthcare innovators to create new streams of revenue.

Integrated Healthcare Platform


Use platform to innovate care models and coordinate care delivery

  • Hospital Networks
  • PHCs
  • MCO and ACOs
  • Health and Wellness Services


Distribute applications through platforms and create a user base

  • Wellness Apps
  • Consumer Education Apps
  • Telemedicine Apps
  • Patient Connect and Patient Services Apps


Use an integrated healthcare services and create a netwok effect

  • Individuals Subscribing For Health Services
  • Employers
  • Government


Faster payment and access to insights on patient behavior

  • Pharma Companies
  • Pharmacy Benefit Managers
  • Diagnostic Labs


Provide health coverage and harness patient data

  • Underwriters
  • Analytics Partners
  • Care Administrators

The presence of an integrated application ecosystem will transform:

While the insurance companies partially and tacitly operate in this model, it would be interesting to see if they can scale to lead integrated health platforms or remain an underwriting entity at the periphery. Scaling to an open architecture for multiple application developers and service providers will provide members the same flexibility that they have in downloading apps from the app-store. Instead of tying with a single partner for a specific service, creating an ecosystem of services fosters innovation, spreads risks, and provides members freedom to choose care options best suited to their healthcare needs and financial conditions. As the model scales, delivering an outcome-based care covering mainstream health networks and pharma companies will become easier through matured process guidelines.

The list below illustrates the values which can be delivered through the platform over time:

Values of an Integrated Healthcare Platform

The greatest challenge in administering such a platform is classically described as the mirroring principle, whereby the platform’s architecture must mirror the organization’s structure. This calls for a huge change from a cultural perspective and may often be the deciding elements between the laggards and the frontrunners. The primary responsibility of the platform owner is to draw an alignment between its architecture and governance through a coordinated change management approach. The features and functionalities are secondary to the structure and interaction between various parties. In fact, the features are part built and the rest evolve as interactions mature within the ecosystem. Some features may vary across different platforms but what ensures stickiness of the user base is the integrated interplay of all functions which should be easy, engaging and achieve the desired healthcare outcomes.

The user journey through this integrated platform

The success of such a platform would lie in enabling real-time customer profile, delivering intelligence into the customer journey, and integrating the experience across diverse touchpoints through use of modular and interoperable applications. To illustrate this, let us take the use case of Joe, who onboards to this platform not by buying a health coverage, but by downloading a health and wellness application available on the platform.

The User Journey Integrated Healthcare Platform

Such services anchoring various managed care organizations and affordable care organizations are already being innovated, but they lack the scale of health insurers. Advocacy of such a platform by the user will increase the patient’s lifetime value, and as populations age, the platform that gets established as the standard will be increasingly in demand for future patient engagements.

The road ahead

As much a paradise a single super-app may sound, advance healthcare is complex in a managed care setup and the healthcare platform economy can unlock value when executed through a distributed, modular, and integrated architecture. Such platforms have a higher capability and are fit for responding to complex business models and dealing associated risk and volatility of the ecosystem. A multilateral approach with decoupled operations and standardized interface is needed for sustainability, innovation, and market dynamism through specialized knowledge.

Traditionally the healthcare suppliers had the greatest power in the value chain, with the shift to affordable and outcome-based care, the payors and providers have a greater command. The platform economy will finally shift this power to the patients and the companies that can facilitate patient-centered data sharing in the value network will emerge as the party to grab the highest surplus from the ecosystem.

  • Members into subscribers who, besides buying illness coverage, subscribe to health, wellness, and care-delivery programs and enjoy rewards and networks through a community and enjoy end-to-end health services

  • Suppliers into partners, who are reimbursed for drugs and pay for data and services in return
  • Providers into smart care organizations through better health insights and superior patient engagements
  • Align health insurers with care administrators and analytics partners to innovate new packages for care delivery

The platform economy will finally shift power to the patients.