S+B: Do you see alternative financing mechanisms like health loans, health credit, or health annuities coming to the market over the next three to five years?
CORDANI: As people shoulder more responsibility for their health-care choices and go from an entitlement model to an activist model, to an ownership model where consumers decide how much to spend for a particular service, there are opportunities for multiple new financing vehicles. These include consumer health credit and loans, which would allow individuals to borrow against the assets they’ve accumulated in an HSA to pay for high deductibles, an unexpected illness or accident, and other gaps in insurance coverage. Additional annuities and health savings and credit vehicles may be offered to help consumers prepare for future health needs. As the consumer takes on more responsibility, there will also be a blurring between health and retirement savings vehicles.
Role for Advisors
S+B: What will be the ongoing role of the health plans versus that of financial-services plans, and who will own the consumer relationship?
CORDANI: We think there are very few entities that engage health-care consumers as advisors or advocates. Physicians could do it, but they don’t have the resources to accommodate that role. Financial-services entities such as banks and credit card companies have frequent interactions with consumers, but consumers won’t likely go to them for advice on health care. That’s where we come in. We can offer consumers health advocacy based on their medical needs. When a person is in perfect health, the needs are few, but when anything happens — even good things, like the birth of a child — a person’s needs increase substantially, and there are few parties in the marketplace that can serve as a trusted advisor. That’s a sweet spot for us.
Today, most consumers make critical health-care decisions based on the type of health care they’ve had in the past or services available in their immediate vicinity. Many don’t realize they have other options. There is an opportunity to help consumers navigate the health-care system. Our members have told us that they don’t want seven points of contact and they don’t want to be their own aggregator, but they do want a credible party that can aggregate and vet information for them, assist them as they navigate the system, and help them find the best care for their needs.
We currently employ about 3,000 clinicians — more per member than anyone in the industry — who work as health advocates. In most cases, these clinicians are nurses. That means they have a level of medical knowledge that members can trust. We then provide them with a complete picture of an individual, with risk assessment, diagnostic data, diagnostic scores, and so on. They can be very intimate when assisting members in understanding their health alternatives.
S+B: But everyone has different needs when it comes to health care. How will you give each member the right level of service?
CORDANI: Consumers have different needs, methods of processing information, and ways of valuing services received. To better identify consumers’ attitudes toward health, we conducted extensive research, and based on that research we divided the population into four major segments.
The first major segment is assured planners, who represent about 34 percent of the population. They are relatively thoughtful and make sure they have what they need. Price isn’t a driver for them; what matters are comfort, security, and even status. They are also the most affluent.
The second segment, enlightened shoppers, makes up about 16 percent of the population. They do their own research online, read Consumer Reports, and figure out exactly what they want. They then spend time and energy finding the best deal. They’re also likely to experiment with alternative medicine, as well as other new products and services.