Even though health care has a clear price tag, are we getting what we pay for? – Healthcare Blog
Owen Tripp
Move over, GLP-1. This year's focus in health care is on alternative plan designs. Alternative health plans offer cost transparency and a consumer-friendly shopping experience. But do the features behind the scenes deliver quality and value? While this may not sound like much of a concern, it has the potential to trigger a seismic shift in the commercial insurance market.
After years of disappointing returns and unfulfilled promises from traditional insurance models, innovators and established insurance companies themselves are doubling down on alternative plans aimed at lowering health care costs through prioritized care pathways with transparent pricing. While these plans come in many forms, common features include tiered networks, variable deductibles, care coaching, and an emphasis on primary and virtual care—often packaged in a digital-first (and AI-powered) “shopping” experience.
The alternative plan appears to be a win-win. For consumers struggling with unexpected bills and medical debt, replacing confusing deductibles and coinsurance with predictable copays can provide much-needed peace of mind. For employers facing the highest health care cost growth in 15 years, putting their employees on a path to trustworthy quality seems like a sure bet.
There's a problem, though: Alternative plans aren't much help if they leave people with the same old, broken health care experience. Innovative cost sharing and a smooth front-end experience must be supported by high-quality clinical care, dynamic population health management and personalized engagement, which represents a significant upgrade from what has been delivered to date.
Otherwise, signing up for a replacement plan will be a lot like buying a shiny new smartphone, only to find that its operating system only supports a handful of outdated apps.
Alternative Plans: What Must Be Behind the Scenes?
While cost transparency and a streamlined shopping experience bring immediate benefits to consumers, the deeper capabilities and levers behind alternative programs will drive long-term value and create alternative models worth embracing.
1. Comprehensive medical model led by primary care
Most insurance-led alternative plans build on existing care delivery networks (and existing provider contracts), often steering people toward antiquated pathways and settings, including those that deliver status quo outcomes for people and lowest-cost improvements for employers.
Alternative programs need to create new momentum around primary care, remove barriers to access, create flexibility and incentives, and reorient expectations for provider interactions. Simply doing more of the same is not enough. Programs that are truly primary care-led create new channels and opportunities, invest time in immersive one-on-one discovery, and empower physicians to guide people online to high-quality services based on individual needs—and supported by data, technology, and system-wide connectivity.
Historically, incumbents have not embedded enough clinical expertise and care services into their core products to achieve this goal. Nor do they have strong connections across the ecosystem to enable integrated care or to continually guide and support people.
Unlocking the full potential of alternative programs requires redesigning the care delivery model with a focus on nationwide provider networks, longitudinal care across all settings, fully integrated medical and behavioral health care, sharing of data and insights across care teams, and system-wide navigation. This includes connections to point solutions, centers of excellence and high-quality virtual and Hands-on care.
2. Quality engine
Alternative plan designs must address the quality and affordability crises plaguing employers and consumers. It is not enough to say that we pursue quality. Simply pursuing one quality is not enough either.
When quality is not transparently defined and managed in any plan, consumers and employers need to align themselves with alternative plans based on complex algorithms that rate providers and make recommendations based on hundreds of variables, including physician experience and credentials, patient outcomes, costs, and patient satisfaction scores. Equally important, these recommendations need to be personalized based on factors ranging from medical history to social determinants of health.
It is critical that employers and other plan sponsors carefully review commitments to quality and understand the content of the quality model. Are doctors involved in building the model? Is there governance in place to ensure safety and fairness? Do these models rely solely on public cost and quality data? What feedback loops exist to continually refine these models and inform network design and processes? Most importantly, is quality defined in the best interests of members?
Finding quality care under a traditional health plan used to require a lot of online research and word-of-mouth recommendations, a bit like buying a car. When people find themselves in the right alternative plan design, it should feel more like walking into a driverless taxi—with the destination being quality in-network care that matches your needs.
3. Intelligent participation
An AI-first experience is a major selling point for many alternative plans. But a chatbot’s quick answers aren’t enough to build trust and put people on a better path. AI must drive smarter, more personalized and proactive ongoing engagement.
Like quality models, the effectiveness of AI-led engagement depends on the ability to synthesize data from across the healthcare ecosystem. Successfully anticipating and responding to people's needs requires integrating population health insights and personal data from multiple domains, including medical claims, benefits information and previous healthcare interactions. In the best cases, this intelligence enables AI (with clinicians in the loop) to identify and engage hard-to-reach members, close care gaps, tailor interventions, and identify actionable insights and opportunities.
However, engagement means more than just artificial intelligence. Putting people on a better path requires not only incentivizing them to make smarter health care decisions (e.g., through copays) but also educating them on why it is a smarter decision. Keep Taking people on a better path requires leveraging technology and empathetic humans to reinforce healthy behaviors and build trust.
Quick answers are just a starting point. People also need proactive outreach, personalized nudges and advice, and last but not least – empathetic people to guide and support them.
Learn from the past and look to the future
Alternative plans have huge potential, but we have seen before that well-intentioned efforts to drive value through plan design can go off the rails. HMOs have become too narrow and restrictive. This has helped spawn consumer-driven models like high-deductible health plans (HDHPs), but as costs continue to rise, these plans have actually discouraged people from seeking low-deductible health plans. and High value care.
None of these previous attempts has delivered on the promise of lowering costs and improving outcomes. This is largely due to misaligned incentives and unintended consequences in our fee-for-service system.
Alternative plan designs have a chance of getting it right. Just think about it: if a clever AI-first front-end truly transformed the healthcare experience, we would be on the path to true change. But what’s behind the scenes is where design begins.
Owen Tripp Co-Founder and CEO Contains healtha personalized all-in-one healthcare company.
