Tackling the challenge of health-care innovation

In late 2015, a Canadian advisory panel on health-care innovation declared the health-care system wasn’t ready for rising costs, quality concerns, accessibility, consumerism and advances in digital technology.

The system might not be ready, but organizations can tackle the challenges today and differentiate themselves from the competition. If they don’t, they risk alienating a growing consumer-oriented workforce that expects value, user-friendly interfaces and health benefits that meet their personal needs and lifestyles.

Employees love their health benefits and see them as a major element of their employment deal. In a 2015 survey, 82 per cent of Canadian workers agreed that getting health benefits at work was just as important as getting a salary.

Read: Consultants seeking solutions amid disruption, competition

Against that backdrop, employers are in a difficult spot. If they cut benefits, employees may leave or become disengaged. If they continue with the same level of traditional benefits, employees still may leave while costs continue to rise. It’s a predicament that has opened the way for the tremendous growth in new startups offering innovative solutions that not only help manage costs but enhance employee engagement, modify behaviours and increase access to care.

Many organizations have become quite frustrated with the changing health-care landscape and the impact on talent and finances. There are, however, tremendous opportunities available through innovation. The following are four of the biggest challenges organizations face today and some ways to address them:

1. The changing employment deal

In today’s diverse workforce, the current health-care model is out of date, but employees still expect personalized, accessible and affordable health benefits. In response, there has been a surge in startup companies that use state-of-the-art technology to allow consumers to conduct health screenings, diagnose what they have, ensure adherence to treatments of chronic health issues, quickly access medical professionals, manage their health through incentives and rewards and select what’s important to them.

Read: How League is rethinking traditional workplace health benefits

Some health benefits plans are introducing new components and trading out other pieces by assessing their workforce demographics, employee health risks, costs and trends and surveying staff for their anonymous feedback.

2. The changing nature of risk

Risks are growing and the ways to manage them are becoming much costlier.

Health-care innovation plays an important role in mitigating employer risk by targeting an organization’s specific issues. For example, in many plans, a small percentage of participants account for most of the health-care spending. Employers can reduce costs and materially improve engagement and productivity by better understanding their workforce, health risks and cost drivers.

Read: Healthy Outcomes: Getting a better handle on chronic disease

From there, they can develop a strategy and plan that makes use of more targeted solutions to address some of the major sources of expenses, such as mental health or diabetes. Those chronic conditions, if not controlled through prevention, screenings and improved treatments, can severely weaken a health plan. Consider that, according to the Public Health Agency of Canada, 67 per cent of all health-care costs are due to chronic disease. In addition, three out of five Canadians older than age 20 have a chronic disease, while four out of five are at risk of developing one.

3. Rising power of the consumer

Employees do expect more today, but at the same time, they’re willing to trade benefits for what fits their wants, needs, price points and lifestyles. In a 2015 survey, 61 per cent of employees said they’d reduce the value of some benefits they receive and increase others.

The health-care industry doesn’t have a reputation for its advanced digital prowess or customer service, but that will have to change as employees will expect the same level of service wherever they shop. That includes shopping for health services, whether through the public or private system.

Read: Is it time for employee consumerism?

Employers can accept the status quo and risk alienating the already hard-to-retain talent or they can embrace change and build an industry-wide reputation for their employment brand.

4. Explosion of technology

As consumer expectations rise, they’ll also expect enhanced technology to access their care, make appointments and diagnose their conditions. Unfortunately, the health-care industry has been slow to adapt. Only three years ago, a Benefits Canada article stated that “technology will continue to transform Canada’s health-care landscape, but . . . certain innovations — including some that have already permeated other aspects of modern life — remain underused in the country’s medical field.”

Read: Tech innovations underused in Canadian health care

The article lamented the industry’s reluctance to use even email and web portals, but the situation has improved dramatically since then. However, the tools are a tremendous opportunity for an organization to differentiate itself from the competition by embracing digital innovations and the resulting impact on access, records, prevention and predictive health care.

Read: Time for plan sponsors to embrace digital innovations in health care

The health-care landscape is changing, as are the expectations of today’s employees when it comes to the benefits they receive. An employer that embraces innovation when it comes to health benefits can seize the opportunity to differentiate itself from the competition, engage talent and get a better handle on costs. But to be successful, organizations need to take the time to understand the business challenges and realities.

Ready to innovate? Here are five questions to help organizations prepare:

1. What’s your workforce picture? Understand your workforce, the labour market and demographics through workforce analytics and predictive modelling.

2. What are your cost drivers? Again, through analytics and third-party expertise, plan sponsors can understand how costs may change over time under a number of scenarios.

3. How can you respond better? Plug into the new vendor landscape and see how the latest developments in technology, customer service, preventive medicine, specialty care, health and well-being could provide your employees with enhanced care at minimal or no cost increase.

4. Do something. Innovation is fast, but companies are often slow to act. Be prudent, but don’t take so long that you’re missing tremendous opportunities.

5. Evaluate, assess, recalibrate. Change is happening at ever-increasing rates, and today’s best-in-class vendor may not be a market leader in two or three years. You can’t make significant moves every year but you can carefully select the best vendors for your company’s needs and periodically reevaluate their service, responsiveness, quality, cost savings and impact on health and wellness.