FREE SAMPLE CHAPTER:

The DIGITAL HEALTH REVOLUTION

by Kevin Pereau

CHAPTER ONE
OUR SYSTEM IS BROKEN, BUT WHO CARES?

Have you ever had a friend who constantly asked why things are done the way they are done? I was definitely that kid. When I first shifted my professional focus from technology and management consulting to health care, I was a nonstop “But Why?” machine.

I must have driven my poor wife crazy. She has logged more than 30 years in the health care industry, where she came up through the ranks. There isn’t an aspect of how insurers intersect with our lives that she can’t go into the weeds to discuss. She started in underwriting, later moved into account management, then did sales and before long, moved into management and was running regions. Okay, I glossed over quite a bit there because she is a woman and it took her twice as long and she had to work twice as hard as her male counterparts to finally become president of a multibillion-dollar region, and then CEO. If her name were Bob, we would probably be living on an island already. But you get the picture. She knows the health care industry backwards and forwards, inside and out. Forget the fact that she is only one of a handful of women in leadership roles. That is a story for another day. She has given me an insider’s perspective into all things health care and C-level connections any digital health startup would covet. From health care consumption to servicing, I have seen it all—and it isn’t always pretty.

AN EARLY VENTURE I MADE IN HEALTH CARE

When some former tech colleagues approached me about an idea they had about starting a health scoring company, I was intrigued. I had

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long asserted to my wife that one of the reasons we have such runaway costs in health care was that nobody measures anything.

How can you manage something you don’t measure? Seems like a logical question.

In coming up with a way to measure an individual’s health, we borrowed a concept from the financial industry and applied it to health care. We started with a simple score, something that anyone could track and understand. It was amazing how closely it tracked like a credit score. We used a sliding 0-1000 scale. At zero, well, you were probably dead. At 1000, you were taking the leading role in Superman movies. In between, anything above 600 was good; about 700, excellent; and above 800, exemplary. We put an arrow by your score to show whether you were trending up or down.

Yet there are some significant differences between your health and your credit score. For starters, your credit score only tells half the story. It shows how much you owe and how well you service your debt. It doesn’t list wholly owned assets or how much money you make. How
do you account for similar factors when expressing the status of somebody’s health? We knew that would be challenging, and realized we had to get it right. After all, you aren’t automatically healthy the day after you quit smoking, just as you aren’t at risk for a heart attack or diabetes because you skipped a day of working out.

Starting in 2011, a cornucopia of data-collecting devices, ranging from the Fitbit to the Nike Fuelband, were already exploding onto the scene. Withings had introduced scales that could capture and store your weight, body fat and BMI for later analysis. Welcome to the Quantified Self movement. We decided to be agnostic about what devices we would use to fuel the data that would drive your score. Garmin, TomTom, even your phone, were just fine. Your score would reflect who you were, what you did, and how you felt. We measured incrementally how daily lifestyle choices affected overall health.

We were going to change health care. Measure it, manage it – thrive. Boy, did we have a lot to learn.

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While we got much of it right, we didn’t see the incredible headwinds coming, coming from the entrenched incumbents who profited from fixing folk when they became broken. We quickly realized that not many in the industry were financially incented to keep people
healthy. Sure, they talked a great game, but at the end of the day if we didn’t get sick, nobody made any money. Not the doctor anyways. How could we get their oars rowing in the same direction if it meant cannibalizing their core profit centers?

The first pushback from early innovators in digital health came from the insurers. When presented with a value proposition that engaging the consumer would alleviate strain on the entire system, they responded with a consensus . . .

“Good luck, we have tried. Consumers are the problem. They won’t engage, they won’t share, and they won’t take responsibility for their own health.”

That, I thought, was a total sack of hooey. With my typical energy and enthusiasm, I dove headfirst into fixing health care. We would show the world how to engage consumers, capture and analyze data to better understand what was really causing our health care problems.
We were pioneers in the digital health movement.

We thought it all started by getting consumers to know their health score. If we could engage people and get them to sustain their interest in taking better care of themselves, we were on the right path.

We learned incredibly insight-filled lessons along the way. While it’s a fair call to say that all people are different, it is equally fair to say that there are many things we share. For sure, there will be a stubborn demographic that simply will not engage. No amount of coaxing
seems to work—or does it?

One simple truth? We are all social, and we all seem to respond when gaming principles are properly applied.

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ADDRESSING THE BIGGER ISSUES

Let’s focus on how to best leverage social principles first. When we first came to market, we were looking for any path to the consumer we could find. We thought selling through partnerships with insurance companies would accelerate our market adoption. Insurance companies would sell health scoring through their broker channel to employers who would provide it to their employees as a benefit.

A whole new lexicon developed around this very convoluted and, as it turned out, challenging route to market. The business-to-business-to-consumers model (B2B2C) meant our business would sell to your business, who in turn would provide it to the consumer. Per Employee Per Month pricing became the norm. What PEPM are you getting? Questions like that dominated the conversation at health care tradeshows.

A health score alone was never going to be compelling enough by itself to get anyone to bite, so we reinvented our messaging. Since we allowed our users to track more than 100 activities, we developed ways to create challenges around anything that can be tracked with a device.

We then fit into an emerging category called the “Wellness Market.” Our elevator pitch was now about a health score that utilized a B2B2C business model and heavily leveraged social and gaming principles to influence people toward healthier lifestyle choices—whew, what a mouthful! To our delight, it proved right on the money. Companies were biting. They were implementing our health score and developing corporate challenges for walking, running, cycling and burning the most Metabolic Equivalent of Task, or, METs, in a month. If you could track it, you could harness a rewards program to it.

While pretty exciting, I thought we could do better. Early push back from employees was, “Oh great, big brother is watching.” I realized that our co-workers might not be the best source of social agitation for keeping our interest and sustaining engagement. Maybe my co-worker doesn’t like me? Maybe she wants my job?

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Maybe he resents our VP of HR being able to look over his shoulder at his nonwork activities as much as I do?

Maybe those employees weren’t accepting of our company’s intent to provide a tool that their employer could use to watch them at all times. Hey, argue all you want that it’s not fair, or that any company with enough forward-looking vision to be investing in you like this should be applauded. But I promise you that people are skeptical, and you can’t change human nature.

I thought back to some early lessons I had learned in the tech sector. At Cambridge Technology Partners, we did something innovative and daring. We created the Cambridge Information Network (CIN). It was a website created specifically and solely for CEOs and CIOs. We created something we didn’t expect—we created a sense of community. With that came incredible insight into how the executives we were selling management and technology consulting to thought about their problems. We never let our sales teams anywhere near the site, and we were always careful about applying lessons learned from what was shared on it. In other words, it wasn’t a lead-generation tactic.

We developed what we called a Lyceum Program around CIN, run by one of the tech sector’s consummate thought leaders, Thornton May. For one glorious summer, I got to work with him hosting lyceums all over the USA. For those of you who don’t speak Greek, lyceum is a place of learning. It was eye-popping. We never once presented those attending with corporate overviews or followed up about specific problems they had shared with us. Instead, we would pack the room with CEOs and CIOs who would bare their souls to one another about what was and wasn’t working in aligning technology with their corporate missions. I was flabbergasted. Here was the CIO of Praxair sharing with other executives the things I had flown about 1,000 miles to specifically discuss with him. In a safe environment, he was telling others about how he had failed, and was asking them for ideas on how to right his wrongs. His peers were doing the same. Collectively, they were banding together to solve the most difficult of their problems.

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Poor Thornton probably put on about 40 pounds that summer zig-zagging across the USA, eating very bad chicken dinners while form-fitting his bottom into seat 4E on Delta. Why am I telling you about this? Because as you apply these lessons learned to digital health, you realize a couple of things.

One is that in a safe setting, people share. They open up. Maybe interacting with co-workers isn’t the best venue for helping people feel safe enough to share? As if my co-worker could secretly give a bloody rip about my blood pressure and body weight – who does? I’ll tell you who does care: your spouse cares, your children care, your family and friends care. If you only remember one thing, please let it be this. It is worth the price of admission. Whether you are managing a chronic condition or you are active and healthy, you can derive great benefit from tools that allow you to build your own social network.

I mentioned there were a couple of lessons learned. Here is the other one. People behave differently when they think someone is watching, and that is especially true if that someone is somebody they care about.

We developed a tagline, “It’s Better Together,” and used it in all our product messaging. Incredibly, the early blowback we got from employers was amazing. “We don’t want spouses involved in our employees’ health challenges,” they told us. “These are private challenges and outsiders aren’t eligible to participate.”

Really? We just showed you how to influence your employees to be more active, and now you don’t want to do it? Welcome to the early innovators’ dilemma. We had to do controlled pilots to demonstrate that employees would be more responsive to health care challenges when they were working with their spouses than they would be if they were working with their co-workers.

Spouses or co-workers—guess which group responded better? This is what I like to call the Cheers Bar principle in action. Blasphemous, I know, but you are more likely to show up and use a tool in a setting where everybody knows your name.

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Another lesson learned had to do with gaming. We originally thought that to leverage gaming principles, we would constantly have to do challenges that offered rewards. There is nothing wrong with that. In fact, it helps keep things fresh.

My most memorable challenge was a walking challenge I entered. There were participants from Europe, Asia, South America and the United States. I targeted a goal of 1,200 miles walked for the year. That averaged out to about 100 miles a month. It was a bit aggressive, but I thought doable. I won the challenge but fell a little short of my goal. I think my total for the year was 1,143 miles walked on four continents. My nearest challenger was a 73-year-old professor from Switzerland who doesn’t like to finish second in anything. I realized when tabulating the results at year-end that a 60 year old and a 73 year
old man finished first and second in the challenge. So much for our demographic not representing!

A couple of surprising things about being in this challenge remain with me. One was how supportive we old fellows were of one another. Judging from the smack talking from some of the women in the challenge and the younger fellows as well as the regional participants, this wasn’t uncommon. Support groups formed along natural lines and provided motivation to help us keep one another going. My nearest competitor would sometimes ping me when I was inactive, inquiring if all was well.

The subtler lesson was the effect our personal scores had on us as individuals. At a certain point in the challenge, it was clear that nobody was going to catch the 60 and 73 year old men that were leading. Yet, everyone stayed engaged. I circled back with some of the participants and found they all hated to see that dreaded down arrow show up next to their score. It meant they weren’t active and their score was trending down. They were competitive with themselves, and found they were striving to be the best version they could be. I probably should have seen that coming. I have a buddy I golf with all the time and I realized, sure we enjoy bragging rights but

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more than anything else, we just want to beat the golf course. On any given day, one of us might play out of his mind and take home the trophy but over time, if we focused on becoming the best we could be, we were satisfied.

But with so much that is broken in the world of health care, where do you start? Let’s start by looking at how our health care system is oriented today . . .

And let’s next look at how the health care system will look like in the future:

Our current system is built like a solar system where the physician

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is at the center, with insurance companies occupying a close second place in the hierarchy. What is wrong with that? Consumer health care should occupy the central position. Health care payers, providers, insurance companies and the rest should revolve around the consumer. Judging from the comments offered by many of the experts who contributed to this book, this is already happening – larger structures are reforming around the consumer. In a sense, that is what this book is about – how we need to reorient health care’s value chain. That sounds simple in concept, but the change from the old to the new will require nothing short of a massive transformation.

A ROADMAP FOR CHANGE

Let’s first take a look at where we are now. I find it helpful to conceptualize the changes of digital health disruption in terms of three phases.

DIGITAL HEALTH 1.0

This is where we dispelled the popular myth that people won’t engage or share. Thousands of health care apps appeared overnight, and marketplaces
flourished. The first wave of health tech innovation designed from the ground up to treat health care like a shopping experience came from outside of the industry!

“We just can’t get people to engage” has become yesterday’s battle cry. If anything, there seems to be a growing appetite among consumers to become more involved in their health care. Health care consumers are donning Fitbits, buying bathroom scales that keep ongoing data about their daily weigh-ins, and taking other steps to gather and monitor their data.

People are more engaged in their own health care and wellbeing. This explosion of digital health apps dispels the popular myth that people won’t engage or be held accountable. Surprise! They will engage . . . they already are.

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DIGITAL HEALTH 2.0

Welcome to the quantified self movement – and a device for everything. Big Data dominates top-of-mind thinking as analytics platforms for benchmarking and predicting better outcomes emerge. The smartest men in the room are looking backwards and explaining everything that just happened, but believe data isn’t actionable–it’s for analyzing.

DIGITAL HEALTH 3.0

Welcome to connected health. We are on the cusp of this now. Consumers are engaged and collecting data that is being fed to analytics platforms. The focus shifts from understanding what just happened to how to manage better outcomes.

This will be the tipping point when the consumer will move into the center of the health care universe. It will represent the biggest opportunity that we have ever seen to revolutionize health care and enhance patient wellbeing.

This will be where we, as medical consumers, make our data actionable by connecting it to the stakeholders who help keep us healthy. This future health care will center on coordinated care teams who will use the data captured by digital health assets to keep consumers well, not treat them after they become ill.

You see, in the past, the term “health care” has been a misnomer – it has really been “sick care.” But because of the coming consumer-driven digital health care revolution, this is now changing.

MARKERS ALONG THE WAY

The Affordable Care Act is already transitioning us from a “fee for service” model (a patient pays for a service) toward a value-based care model. But more steps need to be taken.

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SHIFTING THE PARADIGM FROM CURING DISEASES TO KEEPING PEOPLE HEALTHY

Like many daunting challenges, fixing our health care system is a complex problem with a pretty simple solution:

We need to reorient our way of conceptualizing health care.

We should stop expecting our system to cure people after they have become sick and start thinking of it as a way to prevent people from becoming ill.

Presently, care providers take very few steps to help patients who are not standing right in front of them. At best, they give those patients tracking tools they can use to know better when something is going wrong, and when it is time to call to make an office appointment. It is still a “give me a call when you are broken” mentality.

That will change. There will be disruption, a very positive disruption. To get to the place where we need to be, we need to question many of the operative assumptions that have taken hold in our health care universe.

Providing easier and faster access to physicians, while a huge step forward, will not move the needle enough. And sad to say, simply revamping insurance, while essential, will not go far enough either. Even the most miraculous technologies like the sharing of medical records across computerized telemedicine platforms, although essential, will be only a component of tomorrow’s miraculous medical world, but not its salvation.

WHAT ARE THE DANGERS OF NOT FIXING OUR BROKEN SYSTEM?

The greatest danger could be complacency. Or perhaps more accurately, a kind of torpor in which we become tone deaf to chronic conditions – something that can happen if we allow our brains to become

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so buried in the idea that chronic conditions and diseases of the past are still incurable today. It is time to accept the simple fact that many of the problems that face health care today are more in our control than we realize.

We could have lost our way because so much has changed, so quickly. We are absorbing so much new information about health and medicine. Our way of framing problems often lags and fails to absorb the new realities that lie right in front of us.

We’ve just started living in a new millennium, and we sometimes fail to notice that the problems we are dying from today are not the same illnesses we were dying from a century ago. Back then, we were dying from diseases like tuberculosis, the flu or polio, and they decimated us.

Many of the most widespread ailments in those days were diseases that people contracted when they left their homes. A patient went out into the world and got a viral infection, and there wasn’t too much he or she could do to keep that from happening, or to cure it once he or she did. Today, we are becoming ill from a smaller number of diseases that we contract as a result of our daily lifestyle choices. Although there are still cancer, AIDS and a handful of other diseases, we are mostly dying from things that we do to ourselves.

We gain weight, eat the wrong foods, fail to exercise and fall into bad habits that result in adult-onset, type 2 diabetes, heart disease, circulatory problems, and a number of other issues. The fact is, we can control these variables, and we are living in a time when we can prevent a larger percentage of diseases by taking preventative steps that are proactive, proven, and very, very doable.

In the past, people couldn’t prevent today’s most common ailments because they didn’t know how. Today, the health care industry can show consumers what to do. And consumer appetite to do the right things is already there.

When you layer data collection and monitoring on top of those trends, you can see that the stage has been set for Digital Health 3.0.

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CASE IN POINT: A PATIENT WITH TYPE 2 DIABETES

Chances are you know someone who has developed type 2, adultonset diabetes. This disease has become so prevalent today, it is a certainty that you do.

Let’s take a moment to consider how that person you know is approaching different options for treating his or her condition.

Under the old “wait until a patient becomes ill and then treat them” paradigm of years past, few care providers thought about preventing this disease before it emerged. After the patient developed troubling symptoms that demanded a diagnosis – fatigue, sleep apnea, circulatory problems, sexual dysfunction, vision problems or worse – a range of treatments was suddenly started. The patient was put on a diet, given a list of starchy and sweet foods to avoid, given prescriptions, perhaps assigned a nutritionist, and started on a program of exercise. And of course, he or she got a stack of pamphlets and books to read about how to manage the condition.

That might all be to the good, but there is a better, preventative way to administer health care. If that same patient had been monitored by a physician and other care providers who were watching for weight gain, fatigue, lack of exercise, poor eating habits and other factors that can reliably predict the onset of type 2 diabetes, that patient might never have become ill at all.

This is more than theoretical, as you will learn when you read the contribution that Sean Duffy of Omada Health made to this book. Omada is at the forefront of helping pre-diabetic people never get the full-blown disease. And they are using digital tools to do it.

WHY DID THE OLD WAY DEVELOP?

I don’t mean to be cynical, but couldn’t the underlying problem be that in the past, physicians, hospitals, insurance companies and

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other entities in the health care universe only profited when patients became ill?

I am happy to observe that that paradigm is changing. A growing number of health care providers who focus on preventative medicine are finding their place in the health care landscape. Providers like nutritionists and exercise therapists are growing in number. But the core principle, even today, is that most providers only make money when people get sick. And that must change.

WHY TECHNOLOGY ALONE IS NOT ENOUGH

We live in a time when diagnostic testing has reached new levels of effectiveness. A growing number of ailments – aneurisms, blocked arteries, colon cancer and more – can now be discovered before they cause major damage to patients.

Similarly, medical informatics and telemedicine have brought a new level of effectiveness to medical care. If you are admitted with a stroke to a small, remote hospital, for example, your case can be reviewed by specialists who work far away. Or if you suddenly fall ill while you are on vacation far from home and are admitted to a hospital, chances are that your records will be immediately available to the physicians who are treating you there.

There is a very real “wow” factor when we see modern technologies like those at work. They make us think that the quality of our medical care is already miraculous. And in many ways, it is. But I would like to submit my opinion that technologies – even the greatest and most powerful among them – do not have the power to revolutionize today’s dominant approach to health care or bring consumers into the epicenter of that solar system which we discussed
at the start of this chapter.

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Technology, even powerful technology, will not move consumers to that central place. We need a fundamental reordering of priorities and a complete shakeup.

CASE STUDY: A MODERN PROVIDER OF ADVANCED SURGICAL PROCEDURES

I do not want to name the service provider I am about to describe. Let me just say that it is a chain of surgery centers that offers an advanced, immediate surgical solution to a medical problem that is common among tens of thousands of medical consumers who live in all areas of our country and the world.

This provider offers a vastly improved, minimally invasive surgical option to patients, many of whom travel long distances to undergo this company’s advanced surgery, which promises dramatically shorter recovery times and a quicker return to work and normal living.

That sounds like a major step forward, doesn’t it? And for many patients, it is. This company aimed to make its services available to a dramatically larger number of patients who pay very high fees for the surgery. They increased the number of patients they treat, and optimized the procedure itself. However, they did not necessarily improve post-procedure results for patients or educate them on how to avoid injury in the first place. In my opinion, their motivation has been to build a company that has the potential to earn a staggering amount of money, not to transform the way we care for people with back problems.

Now, I am not saying that people are not being helped by their surgeries. In many ways, what the company offers is a win/win for both the company and the patients. It is just that this provider is not doing much to teach people how to avoid having their medical problems in the first place. It is not saying, “here is what you need to do today to avoid becoming one of our patients tomorrow.”

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Today, providers specialize to better maximize profits and streamline operations. In the future, health care will be all about detecting, anticipating, and preventing by using advanced digital techniques.

WHAT CAUSED OUR SYSTEM TO VEER OFF COURSE?

The desire to help and cure patients is the reason many people choose to become physicians and enter other curative professions.

But where do those idealistic people end up? What roles are thrust upon them when they begin delivering health care? Regulation, the need to be a profitable network provider within their districts, the necessity of qualifying for insurance repayments and other factors constrain them to take on different, less idealistically motivated roles.

Lots of tensions and conflicts enter the picture. There are tensions between payers and care providers, between patients and insurance companies, and between other entities within the mosaic of health care. Medical care becomes a fungible good that providers want to sell to consumers. Physicians and other care providers are part of networks, and therefore are limited – or at least, directed – to recommend in-network care providers to their patients. Consumers,
who are called “patients” (and who are relegated to that role), are within insurer-mandated networks and, therefore, are part of a captive audience who can pick and choose from only a limited number of providers.

I think that is all changing. But I also believe that it will take a highly disruptive process to move to a system that puts the consumer at the epicenter of it all. This process is not going to happen overnight, but many of the thought leaders who have made contributions to this book are driving that change.

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EXPERT OPINION: DAVI D C. EDELMAN, CHIEF MARKETING OFFICER, AETNA

In the minds of patients and consumers, insurance companies once seemed to occupy a secondary position in healthcare. Consumers visited physicians, hospitals, testing centers and other care-providers and thought of them as the enablers of their care.

If you asked those customers what they thought of their insurance companies, most would have said, “They are there to process my medical claims.” The notion that an insurance company cared about their wellbeing or wanted to keep them healthy was simply not on anyone’s radar.

But while customers were looking the other way, a seismic change has taken place in the role that insurers are playing in their wellness journey. And even bigger changes are coming.

When Aetna hired David C. Edelman as Chief Marketing Officer in October 2016, the company was looking for someone to refocus Aetna’s marketing on the individual customer.

“I was hired to transform Aetna’s marketing organization, creating meaningful consumer experiences and new initiatives to unlock growth,” Dave told Kevin Pereau recently.“ We are only at the beginning.”

But what a beginning. Dave and his team are succeeding by applying both proven ways of marketing insurance and thinking that is new to the insurance industry. Perhaps that is not surprising, given his background. Before joining Aetna, Dave co-led the Global Digital Marketing and Sales Practice at McKinsey, where his crossfunctional team focused on digital marketing, analytics, and process redesign. Prior to McKinsey, Dave was executive vice president for the Strategy and Analytics practice at Digitas. Earlier still, he helped to build the Boston Consulting Group’s “Segment-of-One Marketing” and “E-commerce” practices.

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I am delighted that Dave agreed to discuss with me some insights on what is going on at Aetna, and to share some of his keen insights on the changing world of healthcare too. Let’s hear what he has to say.

HOW AETNA IS REFOCUSING ITS MARKETING

Marketers, and digital marketers in particular, have developed and perfected tools to optimize and measure the effectiveness of their marketing. The strategies are to develop marketing programs, test their effectiveness, and then optimize them to improve results.

In Dave’s words, those skills are “fundamental to our day-to-day work. We continue to work closely with our business partners to raise the bar on the traditional marketing to support our sales force.

Yet things are changing. At Aetna, Dave and his associates are shifting the focus toward finding the right creative ways of connecting with individual consumers – not to just sell to them, but to support the goal of helping them take better care of themselves.

Dave explains that there are two sides to how Aetna is reshaping its marketing. One is engagement, which Dave defines as “Using marketing techniques to get people involved.” The other side is experience, which Dave summarizes as, “Making people’s experience with us something that’s distinctive, branded, and worthy of sustaining over time.”

The success of that process will mean getting people to become more engaged in managing their care, in becoming more aware of the decisions that they can make and the tools that they can use to take greater control over their own healthcare.

“We need to bring marketing discipline into the actual care management process,” Dave summarizes. On the surface of things, that might sound  straightforward. But when I take a moment to think about it, I realize that Dave is talking about a change that is profound.

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REINVENTING THE AETNA BRAND

Dave and his colleagues have launched a new brand positioning that is simpler, more direct, more active, and livelier.

“We’re not just about sick care; we want to be about healthcare and helping people realize the joy of achieving their health ambitions, whether that’s running a marathon or attending a family wedding” Dave explains. “ So we dedicate every ounce of our energy to helping people reach their health goals, big and small, at every stage of life.”

That new emphasis is reflected in the new tagline that is central in the marketing programs that Dave has begun at Aetna . . .
“You don’t join us. We join you.”

To make that brand promise come authentically alive, it is critical to understand and support individual consumers’ individual health ambitions. It is a process that will require rethinking the entire member experience.

“In some ways, you might say we are not the marketing department, but `the office of the consumer,’” Dave explains, “even though that is not our title.”

TURNING THE INSURANCE INDUSTRY ON ITS EAR

In years past, helping insured customers become healthier was something that just kind of happened because they had insurance coverage. Now that is changing to a new paradigm in which the individual customer’s health journey will move to the very center of what insurers do.

“There is a growing realization that for health insurers to survive, they cannot just pay claims,” Dave states. “The old model was insurers would get a bucket of money from an employee or an employer or from the government, and they would spend some of that to pay claims, and whatever they could keep was profit.”

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Predictably, the insurer’s ability to be profitable depended on spending as little as possible to cover claims. And other unfriendly practices took hold, such as making customers expend lots of effort to find in-network care providers, to avoid certain costly procedures – and worse.

“But there should be more to our business than just being parsimonious about paying claims, which often didn’t help the consumer very much” Dave states, noting that today’s consumers are increasingly interested in assuming more responsibility to manage their conditions, to manage costs, and to make very informed decisions about their care.

Can this increased customer involvement create a more efficient, more profitable way of providing insurance? Dave believes that it will. “There were, in fact, enormous costs involved in doing business in the old way,” he states, “because people were just bouncing around like bumper cars or balls in a pinball machine, finding different care providers in the healthcare system. There has been no one place to coordinate that care within the clinical complex, and beyond the clinical complex.”

When an insurer can understand informed consumers’ concerns and partner with them to make the best decisions regarding the care of chronic and other conditions, both better care and reduced costs can result. Both those goals can be reached by shifting the emphasis to helping customers stay healthy instead of paying claims to help fix them when they become ill.

THE ROLE OF DATA

In the past, Dave points out, insurers collected data about customers’ care not only to increase profits, but to be responsive to employers who were providing coverage, or to the government, which might have been paying Medicare expenses.

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“Insurance companies’ systems were not originally crafted to gather and use individual data to the benefit of the consumer,” Dave explains. “They were mostly gathering information on instances of ER use, on this, on that . . . and just basically reporting back, and using data to make some decisions on where to focus more on utilization reviews, things like that.”

Was useful data being gathered? Yes, but the purpose of the gathering was not to help individual consumers proactively deal with their health concerns.  Now that is changing. Aetna is developing systems that are acting as smart, cognitive databases that alert customers to ways to improve the quality of their care.

Dave summarizes, “We are re-architecting our systems in ways that provide customers with constant, optimized messaging that leads them to engage in smarter ways to help themselves. And we have actually gotten quite far in that process.”

DATA FROM DAY ONE

As soon as a new Aetna customer comes on board, Aetna asks “just a few questions” to make sure that the company understands their conditions, concerns, the health options they are utilizing – and can suggest appropriate care options they might not be utilizing.

“And then from that,” Dave says, “we can decide about what level of support they will need, and what kind of support. And then within that support, we’re going to track certain things to see if somebody is on track. If somebody who is a diabetic has not had their A1C checked in a while, we want to immediately get on that and trigger them to go into a clinic someplace and get their A1C checked. We want to translate this data into active triggers that we can use to
help people.”

There are wider ways to use that data too. If Aetna suddenly sees a surge of flu claims in a region, for example, “we are going to

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work across the company to encourage members in that area to get flu shots,” Dave says.

The objective, which Aetna is already meeting, is to use data as something active that can be used to help keep members healthy.

Do members sometimes worry about sharing their data? “There are privacy concerns.” Dave says, “and they are valid. But our intent is to focus on achieving positive health outcomes for the member. That’s the standard that we are using. They choose it because of care, because of health.”

BRANDING TO BUILD LOYALTY

Aetna foresees that those points of contact will provide opportunities to build durable loyalty and affinity for its brand.

For example, Dave believes that as they move forward in their lives and their careers, younger consumers will have more opportunities to choose their insurers. “More employers are offering not just one, but many healthcare options, “he states, “and so people have choices. We want to be the brand that is preferred, and for reasons that go beyond the basics about cost and network coverage. We want it to be about the experience and what we do to help people’s care.”

In part, opportunities will arise from what insurers in the past have seen as concerns. In the increasingly complex world of insurance, individuals will have more responsibility to decide how they will pay for care. “There will be more interaction because consumers are getting more bills,” Dave explains. “They need more help, so they can make smarter decisions for themselves. On one level, they need help to stay in network, to manage costs, and to find their way to the right care. The result is that they are expecting much more from their insurance companies because they, as individuals, have more responsibility and need more help.”

But underlying those complications and concerns, Dave sees an opportunity to make consumers feel more intimately connected with

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Aetna, and more loyal. That connection is the key to Aetna’s evolving future.

BREAKING DOWN THE CLINICAL/INDUSTRIAL COMPLEX

“I think that one important trend is the breakdown of what I call the clinical/industrial complex,” Dave comments, “It is very easy for people to get lured into big, high-tech medical complexes when what they really might need is just a really good massage therapist, or other forms of alternative support. Maybe they need a nutritionist at a Safeway store who can guide them toward the right foods when they are in the store. I think we’re going to see, and are already building at a community level, extended networks that go beyond the clinical complex to include other forms of support that help people in their care – and in their health. We’ll also see more of those networks formally becoming parts of networks in a more rigorous way. It’s just starting. I see us doing it. I think others will too.

“It will go beyond just saying, `You’ll get a few dollars off a gym membership as an Aetna member.’ It’s going to be more explicit interconnection to new, more extensive, alternative forms of health support.”

IMPORTANT TRENDS

Exercise clubs, pharmacies, exercise clubs, nutritionists and more will all be brought into that matrix. And in their marketing, insurance companies will move beyond talking about coverage and fees paid and tell more of the stories about how they helped individual people in their health journeys.

But perhaps the biggest trend will be that the emphasis in insurance will move from paying bills to partnering fully and actively with consumers to build wellness . . . to build health.

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“Everything in the past was about transactions and driving down the cost of those transactions,” Dave said as our talk came to a close. “I think you’re going to see a re-centering of the entire business around driving outcomes which can be summed up simply as, ‘health.’”

EXPERT OPINION: CHRISTINE PAIGE, PHD, SENIOR VICE PRESIDENT

MARKETING & DIGITAL SERVICES, KAISER PERMANENTE

If you ask people what Kaiser Permanente is, chances are they will say, “I’ve heard it’s one of the very best health insurance providers in the United States.”

That is correct, because Kaiser is deeply committed to delivering top-notch plans and service to its members. But Kaiser is much more than that. It is, in fact, a unique nonprofit organization that offers not just health insurance, but a network of top-quality clinics and hospitals that are staffed by Kaiser-affiliated physicians and caregivers. Kaiser, which was founded in 1945 by industrialist Henry J. Kaiser, has grown to be the largest managed-care provider in the United States. Kaiser currently has more than 12 million health plan members, more than 22,000 physicians, and more than 55,000 nurses who provide services in more than 40 medical centers and about 700 Kaiser medical facilities. Kaiser Permanente is, in fact, a completely unique organization that brings unique excellence to everything it provides.

Christine oversees advertising and brand management, marketing content and communications, direct and digital marketing, consumer and customer insights, customer value reporting, and proposal development. Paige is also responsible for leading Kaiser Permanente’s consumer strategy, focused on building excellent consumer experiences. She has also led the development of e-commerce capabilities and web and mobile clinical features for Kaiser Permanente members.

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In these capacities, Christine has been at the forefront in establishing Kaiser Permanente as an international leader in the use of personal health records and informatics to enhance and expand affordable, high-quality care and service. She was instrumental in developing the landmark “Thrive” brand advertising campaign, now in its fifteenth year. The award-winning campaign embodies Kaiser Permanente’s commitment to total health, through an integrated health care delivery system, focusing on preventative care and the empowerment of members to maximize their total health — mind, body and spirit.

After joining Kaiser Permanente in 1988, Christine has served in a variety of roles, and has led the organization’s marketing functions nationally since 1999. She is a frequent speaker on the topics of technology, consumer engagement, and marketing.

Prior to joining Kaiser Permanente, Christine was a political science professor at the University of Notre Dame and Southern Methodist University, specializing in comparative political development, and Italian politics.

Christine received a Bachelor of Arts degree from the University of Southern California and master’s and doctoral degrees in political science from the University of California, Berkeley.

CHRISTINE PAIGE ON KAISER’S INCENTIVES AND ORIENTATION

We stay focused on the health outcomes and satisfaction of our members, rather than on factors like our transaction volume. And to me, that orientation is the key to everything. It keeps our people focused on what matters, rather than on simply what is doable. And it makes it easier to focus on the patient care experience, because considerations like transactional activity and financial data fade completely into the background and become invisible to the people who are in the system.

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That orientation was easier for us, because we were an early believer in maintaining electronic records for our patients. Because we were an early mover, it was easier for us to make the patient experience central to what we do. We understood that the benefits of investing in patient data would accrue back to us.

And globally, we got that right as an organization. Whereas for the rest of the industry, the barriers to early investment were often about who was going to put up the dollars to invest in technology, and what the benefits would be. As a result, for those companies there were all kinds of aspects of the care experience that never became integrated.

ON HOW TECHNOLOGY RELATES TO DIFFERENT POPULATIONS

I think there are several different dimensions to thinking about how technology relates to populations and their health management. With the right technology enabled, screening for preventative health became a bedrock of our operations. It is how we are able to catch cancer early, prevent heart attacks, and make very significant improvements in people’s lives.

It depends on making sure patients are screened, making sure we know what their risk factors are, so we can intervene earlier with them. We have a digital backbone to our operations.

We have numerous stories of people coming in to get their eyes checked, for example, but the receptionist reviews their records and says, “Did you know you are really overdue for your mammogram?” And the patient will say, “yes I know, I will get to it.” But and the receptionist says “Well, can we make that appointment, I’ll pull it up right now . . .”

We save lives that way. That’s the importance of having disciplined execution tied to data and preventive care. We can cover an entire population in a way in which digital tools help the provider, and help everyone in the system execute on that. So that’s a very important point.

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ON PATIENT ENGAGEMENT

In The Digital Health Revolution, you point out that in years past, it was difficult to engage people to become involved in managing their data and their health. Yet there are some segments of the population that are active in self-management. We call them health-seekers or informationseekers. They will read everything, and they will research everything, right? And you know, that is 20% maybe 30% of the population. But the rest of folks also want their care experience to be simple and easy.

In the early days when we were simply offering information online, we learned that it was difficult to engage with people. Then we began to offer transactions, time-saving opportunities. People could manage their prescriptions online, make appointments and message with their physicians. As a result, we have grown to the point where 73% of our members are registered online with us, which leads the industry by a very big margin.

MEASURING THE RESULTS OF ONLINE ENGAGEMENT

We are a very evidence-based, research-oriented organization. One thing we investigated early on was the question of whether patients who are engaged online actually become healthier.

In one study, we investigated whether our members who are online have diabetes have better blood sugar control than members do who are not online. When we investigated, our data showed very clearly that patients who are engaged online have much better blood sugar control than patients who are not online.

Why would that be? It is because they are more likely to make appointments with their physicians, more likely to keep up with their medications, and more likely to engage in a whole range of healthier behaviors. So we certainly see clinical benefits as well as higher satisfaction levels for people who are engaged online.

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Another thing our research has found is a business benefit, because the people who are engaged online are more loyal to Kaiser. We have higher retention among those members then we do with people who don’t engage.

ON DEVELOPING TECHNOLOGY IN-HOUSE VS. OUTSOURCING

One example of sharing technology is that we use Epic 4’s services for electronic medical record-keeping. That company provides the underlying functionality that is part of what’s on our member portal. Our digital health monitoring modules come from Johnson & Johnson. Some of our health content comes from Healthwise, and we have a long-running relationship with American Specialty Health. We have worked cooperatively with Omada Health to provide some of their diabetes options for our members.

How do we decide what to bring in from the outside and what to develop ourselves? We go through a technology evaluation process that is essentially like our pharmaceutical and therapeutic evaluation process.

ON HOW POTENTIAL PARTNERS COME TO KAISER’S ATTENTION

When companies contact us with an interesting technology that might be good for us, we engage in what is essentially a process of gap analysis. In other words, does what they are offering help us better meet a specific need of our members? We know, for example, that some of our members could use help
with transportation they need to get to their appointments. So when someone comes to us with an Uber-like app that could potentially be

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incorporated in plans, we might consider that from the perspective of whether it improves our capabilities, or introduces a new option that would be meaningful to our membership.

ON SOCIAL DETERMINANTS

Social determinants have been a major area of focus for us for seven or eight years now. Because we are a not-for-profit organization, we have a mission around community health and a long history of making investments in programs that promote health, through nutrition, community health clinics, a wide range of things.

In the last few years, we have focused on a wider range of activities like making sure that our lower income members are signing up for programs that will benefit them. We have just announced a $200 Million investment in addressing homelessness through impact investing. So it is fair to say that we want to improve health at both the individual and the community levels.

I am sure you have seen studies that show that people who live in specific Zip Codes often suffer from the same conditions. We look at patterns like that and see that addiction or other factors within a specific area could be improved with the right kind of initiatives from us.

For more than a decade, we have seen opportunities that we have been able to take advantage of because we have been part of the digital world.

ON RESULTS IN FIGHTING SMOKING

Our members have among the lowest smoking rates of any health organization.

A big reason is that it is virtually impossible for members to get through any interaction with us without being asked whether they are

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still smoking. It is a question we focus on as part of our basic intake procedures, but it something we ask in virtually all points of patient contact. We ask about alcohol use. We ask about exercise, which we call a “vital sign.”

And incidentally, thanks to our data, we have among the lowest rates of opioid abuse among our members. Our patient records are critical there. We can look at patients’ prescription records to evaluate whether patients have been overusing painkillers. And our data assures that our members cannot get their prescriptions filled at multiple pharmacies, or visit several different physicians to get refills.

Many people and organizations have data that is really robust. But the issue is really how you use it, right? And how you turn it toward solving problems.

ON HOW KAISER WILL BE USING DATA IN FIVE OR 10 YEARS

There are thousands of apps out there that are meant to do the right kind of tracking, issue reminders and do more, and they will continue to grow in number and scope. We’ve done some work with telephonic health coaching around nutrition, stress, and so forth. But for us, the major focus with data has always been the individual health of our members. And I think we are going to continue to innovate around that. I envision that even more powerful opportunities will emerge from that focus.

What we are working on around digital innovations is the question of how we can continue to make the user’s experience just that much better. We already have an organization where our members, from the moment they open their phones, can make a face-to-face or a telephonic appointment, or can get real-time advice.

We’re moving into a world that is much more preference-sensitive, where our members can shape their own experience, and where

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there are more modalities to choose from. Overall, the experiences that our members can have, either in a physical environment or on their phones, are merging.

When you arrive at a physician’s office, a clinic, or a hospital, you will be able to register on your phone instead of at a desk. You will use your phone to connect to the pharmacy, to pay, and to take advantage of all the benefits of connectivity, period. And that’s the sort of future state we are working on now. We have high digital engagement rates now and are really, verifiably improving the health of our members.

But in the future, I believe the experience of healthcare we are moving toward will be one that is highly personalized and utterly convenient.

EXPERT OPINION: RAJEEV RONANKI, SVP AND CHIEF DIGITAL OFFICER, ANTHEM INC.

Rajeev Ronanki is Senior Vice President and Chief Digital Officer of Anthem Inc., a Blue Cross Blue Shield company that is dedicated to providing consumers with affordable, high-quality health care. Anthem currently provides more than 74 million people with health care, about 40 million of whom are enrolled through family health plans administered through Anthem’s affiliated companies.

Rajeev has spent more than two decades in health care. Prior to joining Anthem in 2018, he spent a decade at Deloitte Consulting, where he led Deloitte’s Cognitive Advantage (Markets and Technology) and Health Care Innovative practices. While there, he focused on implementing solutions for personalized consumer engagement, intelligent automation, and predictive analytics.

Kevin Pereau: I’m wondering what Anthem has been up to with developing new solutions for connecting with health care consumers. We hear a lot of buzzwords in health care today, words like seamless,

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consumer this, consumer that. If you will drill down into it with me, what do those terms mean? And what do they really mean for individuals who are Anthem clients, either individually or through employer and other plans?

Rajeev Ronanki: I’ll use the words technology, analytics, artificial intelligence and digital—probably all part of a spectrum. We’re going to be using a combination of those technologies for our stakeholders. But if you look at that packet of technologies, I think I’ll use those terms generically to be able to simplify our conversation.

The heart of it? At the end of the day, I think Anthem is a data, analytics and AI company. It just so happens that insurance is the business model that presents our value proposition to the market.

Let’s think about Google for a minute. Search is the core technology that Google has. But at the bottom of it all, Google is offering advertising and marketing and a matching set of services that are part of the overall value to consumers. So we think of insurance in sort of the same way, and we offer insurance products.

Apart from the individual market and Medicare and Medicaid, for the most part insurance is still largely a B2B business. And flowing from that, our focus and intent are to serve our employer groups. That’s who we’re contracting with. And the members are somewhat incidental to that, ultimately the consumers of the services we are creating in conjunction with our employer groups.

But the consumer experience needs to be much more than that, because no one is happy living in that model. Consumers feel like they can’t really navigate the complex ecosystem between providers and life sciences companies, or paying for insurance, or a number of other processes. There’s no transparency for consumers about what the real costs are and who is really paying.

One significant change is that consumers are starting to take a more active interest and asking questions like, “Well, what am I paying for? What am I getting in return for it? And why is my experience in health care so poor, compared to, let’s say, Uber and Amazon or

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Apple, or other consumer-oriented companies that provide worldclass service, at seemingly no cost to the consumer?”

And therefore to survive and thrive as a business, we have to orchestrate the entire suite of services around the consumer, even if there is an underlying B2B model. It has to be consumer first. And then the solutions come from there, instead of putting consumers somewhere toward the end of that spectrum.

Does that make sense as a frame to explain why we are orienting technology toward the consumer?

Kevin Pereau: It does indeed, and it gives us a great framework to discuss. We’re probably eight years into the investment explosion into health care. But when you put your thinking cap on, how do you decide whether to partner with a company like VIM, or with an Omada? And when do you decide, “Instead of working with one of those companies, we are going to build this functionality ourselves?”

Rajeev Ronanki: That’s a fair question. If you look at the Apples and the Amazons and the Googles, you see that like them, we are not ultimately building everything in-house. We are in a broader community and a broader ecosystem that connects a common data fabric. How each of those companies automates is different. But there are some very common patterns you can apply to a platform business. And then the economics that follow from that can be compelling.

So think of Anthem as being a data platform. Which means that we will certainly build things that are absolutely essential to the member experience. Anthem will obviously address other entities and stakeholders as well, but at the moment, the focus is on the consumer. We want to create an optimal experience for members by first asking, “Well, what would that experience consist of?” And then to ask, “Do we have the data to do it justice?”

If the answer to questions like that is yes, we will build it. As an example, let’s look at scheduling, a core consumer activity. Improving it is going to require us to cooperate with all the other providers and their practice management systems and their scheduling systems. The

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question is, how can we simplify the task of making an appointment? Making an appointment online is easy. But it might not be something that we would want to build a system for ourselves. So we may say, yes, let’s partner with a certain company, rather than building a scheduling system ourselves.

But for other things like core engagement, we are asking, “How do I continually know the consumers better and start to create a more transparent and personalized experience for them?” And we might find that is something we’d want to build.

Think about what Amazon has, that kind of shopping experience. You log into Amazon, you discover something you want to buy, and you buy it. That’s pure Amazon IT. But for shipping and for other things, Amazon is working with a number of partners. What we are doing is very similar to that.

Kevin Pereau: That makes total sense. In my book, I’ve been writing about how we are hurtling toward a world of connected health and making data actionable. It sounds like Anthem is moving in that direction as well.

Rajeev Ronanki: Oh, absolutely. I think data is our primary asset. And we’re using it in a way that is very responsible. I don’t know if this has come up in any of your other interviews, but we are taking steps to make sure that we promise data privacy. Responsible use of our algorithms is one of our core values and orientations. We eliminate biases in our algorithms—how we make decisions with data. It’s very transparent. As the systems that are built on them become more and more sophisticated, we are able to trace back and say, “Well, why is it that we’re making these recommendations?” And it is important to have that information available so the consumers, the members, the providers, all can peer into that and decide if that’s what they want to do. It’s aligned to the  collective interest of all parties, not just Anthem’s.

Kevin: Pereau: I’m an ecosystem guy. I was a Cambridge Technology Partner, where we were all about ecosystem and leveraging

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the greater sum of our parts. But how do you get all the parties in the ecosystem to share your mission and participate in the value creation?

Rajeev Ronanki: That’s the curation part. In our case, we want to be very thoughtful about who we choose as partners. And we go through a significant amount of alignment from the perspectives of privacy, data rights, usage and more, to make sure values are in synch. And then, we obviously build our agreements with the goal in mind to make it financially viable, so all parties benefit from the relationship.

But let me stress, that doesn’t mean that we are not going to work with third parties. More and more, the companies we are working with are aligned around making sure that the data relationship resides with the consumers. We want to be able to very transparently and very openly communicate how we use their data. As long as that common Bill of Rights, so to speak, is in alignment with our ecosystem, we will absolutely work with them.

We are not going to work with companies that want to take that data and drop it into third party sources. That might be part of their business model, but in cases where we can’t control where the data ends up or how it gets used, we will not become involved. We need to assure our members that there will be no malicious use of their data by some party downstream. So we’re building in a lot of data governance, to be sure the partners that are coming into our system share the same goals.

Kevin Pereau: What is Anthem doing, and what is its activity on the investment and venture capital fronts?

Rajeev Ronanki: We do have an internal venture capital department. We are not scaled to be a traditional VC kind of company. But we are able to say, “We like these two or three bets here. So let’s go ahead and make an investment in them.” We’ll continue to expand that. Because we see that as a critical shift. Again, building all the resources ourselves is unrealistic.

Kevin Pereau: I’m sensing that the industry can’t remain focused on the low-hanging fruit of finding solutions for diabetes and hypertension

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and similar ailments that affect broad segments of the population. It seems the industry is turning a corner on recognizing that there’s a whole untapped market segment they’re beginning to take a look at. Are there any populations that you particularly want to focus on?

Rajeev Ronanki: I’m not sure if it’s a segment of the population that we’re focusing on, as much as focusing on whole health, from physical to emotional wellbeing. And financial wellbeing.

We believe we have to deal with the whole person. Much of that will involve how we deal with incentives and rewards, get to the biometrics where appropriate, and create a feedback loop for the physical wellbeing and emotional wellbeing, which is getting more traction these days.

Financial wellbeing is another sort of thing that is closely tied into the social determinant. We had a case recently where a member was unfortunately diagnosed with cancer. That’s one big life event. But at the same time, the consumer is stuck with a huge medical bill as well. That starts to impact the family life. It is time to start thinking in new ways about kids and all. There’s an entire spectrum of issues that we need to piece together in order to serve the member well. That’s where we’re going.

The population of health care consumers is very diverse, and we’re not excluding anyone. We’ve got people who are gig economy workers, people who are aging into Medicare, people with chronic conditions, and others. But you’ve got to look at overall health to serve any segment well.

Kevin Pereau: Do you think we’re turning a corner so that larger healthcare insurers and other businesses will be better able to serve people from a variety of populations who have different health concerns?

Rajeev Ronanki: I certainly hope so. We’re still in the early stages. I’d say the major players in the ecosystem are all recognizing that is the end goal, just to get there.

Kevin Pereau: And where is Anthem heading next? What are the priorities?

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Rajeev Ronanki: If you look at our net assets, the data assets, we’ve done a lot of work in the provider network optimization space. We’ve got a huge library of algorithms and we’re doubling down on creating even more. And there are some really innovative ways we may be able to match providers to their  members, much like how Netflix matches movies to consumers. We want to get to that next generation of being able to match providers and consumers, focusing on cost and quality. That’s going to be a core piece of what we’re going to do.

Member engagement, as we’re calling it, is going to have a lot of personalization built into it. And what I mean by that is, we take a longitudinal view of our members’ health data that includes social determinants, that includes claims obviously, and that includes a lot of clinical data. And increasingly, a lot of biometric data from devices too. So if you put that all together, there’s a kind of rich view that gives us all kinds of insights.

That is going to get built into a very tailored data set that leads to proactive outreach that enables us to say to consumers, “Here’s what we think you ought to do next.” If in fact members want to be communicated to in that fashion. Not all people do. For those people, there will simply be a kind of digital breadcrumb that invites them to the next thing they ought to be able to do as they manage their care. And built into the system is what they can choose to do, and what happens afterwards—medications, specialists they need to see. Our vision is to be able to serve as a guide to seamlessly make all of that happen.

Kevin Pereau: That’s really exciting. It’s great to see you evolving a framework and a strategy around that. As you think about the vetting process and all that you just laid out, what’s the best way for technology partners to approach Anthem? How do they land on your radar?

Rajeev Ronanki: We have the capability to ingest a lot of data from VC firms, from our network, and elsewhere. As you would imagine, literally hundreds of ideas and solutions come our way. We organize that information into what you could call a taxonomy of solutions. They could be anything from care coordination to virtual care,

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to telehealth, to condition-specific apps like VIM. We sort them into one or more of those categories. We’ve got a sensing algorithm that enables us to go through opportunities that other companies offer and say, “This looks like it fits a need that is open, should we look more into it?” And then we do. And if we find it interesting, we might reach out and have a discussion with the company.

An example of that is a recent filing that we’re doing with a company that wants to do personalized clinical trials. So clinical trials are one of the categories that we really didn’t have any near-term needs for, but this company approached us to say, “We’ve got this going on. Would it be of interest to Anthem?” One deeper interest of ours was the architecture and how they use AI and blockchain as a safe way to use consumer data to match them up to appropriate clinical trials.

So we decided to look more into it. And that led to a decision to move forward. So we’re piloting that with Anthem in-house, with our employees. And then based on the results of that, we might conclude that it works, and we’ll throw it out to a broader population. Or we might learn something from it. And based on all of that, they might become one of our ecosystem partners.

Kevin Pereau: Rajeev, where do you see the industry going in four or five years. Where does Anthem fit as a driver of disruption? If you’re successful, what will the world look like?

Rajeev Ronanki: I think where we’re headed is that Anthem will be a creator of an ecosystem that creates solutions for consumers. And in so doing, what we’ll do in five, maybe push it out to a seven-year horizon, I would envision us being able to dynamically create an ecosystem based on real consumer data and deeper needs.

That level of dynamic creation using the resources is technically possible today, but there’s no business model that requires it. If everything unfolds in the way that I think it will, that’s where we’re headed. It will perhaps be a world where you can essentially configure a set of assets on the fly, and people can either opt in or opt out. And that’s probably how health care is going to work.

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EXPERT OPINION: BRAD FLUEGEL, FORMER SENIOR VICE PRESIDENT, CHIEF HEALTH CARE COMMERCIAL MARKET DEVELOPMENT, WALGREEN COMPANY

In years past, most people viewed drugstores as nothing more than prescription-fillers. Patients took in handwritten prescription requests from their doctors, came back a day or two later to pick up their bottle of pills, and never visited again until it was time to refill the prescription or fill a new one. Perhaps that model was not entirely accurate, because customers also bought bandages, braces, deodorant, and maybe the odd bottle of witch hazel.

Today as you know, all that has changed. People are going to large pharmacy chains to not only get their prescriptions filled, but get flu shots, blood pressure checks, and advice from pharmacists. And those changes, while highly visible to anyone who has visited a pharmacy recently, are only the beginning. Retail pharmacies, which once occupied a position on the sidelines of health care innovation, are moving to play a wider and more important role in helping people lead healthier, more connected, lives.

Brad Fluegel recently retired from his position as Senior Vice President and Chief Health Care Commercial Market Development Officer for the Walgreen Company, where he was responsible for all commercial health care activities, including sales and contracting, biopharma relationships, retail clinics, clinical affairs, new service development and market planning. Walgreens currently operates more than 8,000 stores in all 50 states as well as the District of Columbia, Puerto Rico and the U.S. Virgin Islands. Sales in calendar year 2017 exceeded $87 billion.

Prior to joining Walgreens in 2012, Brad was an executive in residence at Health Evolution Partners. He also worked at WellPoint, where his responsibilities included long-term strategic planning, government affairs, corporate communications, corporate marketing, corporate development, international expansion, innovation and 

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new business ventures. Earlier, Brad was Senior Vice President of National Accounts and Vice President, Enterprise Strategy at Aetna, Inc. where he was responsible for developing and executing strategies that expanded Aetna’s position as a leader in the large employer market. Brad earned a master’s degree in public policy from Harvard University’s Kennedy School of Government and a Bachelor of Arts in business administration from the University of Washington. He is currently a lecturer at the University of Pennsylvania’s Wharton School of Business and serves on the boards of many organizations,
including the Metropolitan Jewish Health System (New York) and Performant Financial.

Kevin Pereau: How would you summarize your experience for our readers?

Brad Fluegel: I was at Walgreens for a little more than five years. I joined in October 2012. And before that, I spent most of my career working in health plans and health insurance. I headed strategy for Aetna, I ran strategy and external affairs for Anthem. I also was with the Harvard Community Health Plan, and then before joining Walgreens, I spent a year and a half or so in private equity.

Kevin Pereau: What big trends have you seen emerge over the course of your career?

Brad Fluegel: I think one of the things that is definitely a trend, but which has taken longer to be adopted than I would have expected, is the movement to focusing first on the patient as part of the health care journey. Historically, the focus has been built around physicians and their needs. It now needs to be built around patients.

That helps explain one of the reasons I joined Walgreens. I believe that the ability of consumers to have more convenient access points to care is a trend that people have been watching—one that everyone realized was going to happen everywhere. It is taking a bit longer to materialize than I anticipated, but I think that having patients served in convenient locations is a trend that is accelerating. That is why a

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number of pharmacies, including Walgreens, are becoming places that allow customers to do much more than just pick up pills. Regarding other trends, let me mention telemedicine. People’s ability to access care using their phones, laptops and tablets has been around for quite some time. I would have thought that it would have taken off earlier than it has. But it is now definitely accelerating.

Kevin Pereau: Do you think that thanks to telemedicine and other tools, individuals now feel they are more in control of their care—more in the driver’s seat?

Brad Fluegel: Yes, I think that’s true for most people. Customers’ ability and interest in reading certain symptoms, in having access to more transparent information online, and to research their conditions is accelerating. And increasingly now, customers will be able to use their phones to schedule physical appointments and perform other functions. At Walgreens, we have a Pharmacy Chat function; if people have questions about any medications they are taking, they can chat with our pharmacy staff.

Kevin Pereau: How is a company like Walgreens using the growing amount of individual data that is available?

Brad Fluegel: There are a few issues to mention. We need to better aggregate the data that we have, the pharmacy data that we have, with other data related to what’s happening with that patient.

When a customer comes into our store, for example, we know what medicines they are taking, whether those medications were purchased from Walgreens or from another pharmacy. But there are other things about the patient that we don’t know. We might know that he or she has a chronic condition, because we know what drugs are taken. But if the customer is, say, diabetic, we don’t know their glucose scores or A1C test results. And we don’t know if they are having other medical issues that the pharmacy might be able to help with.

That is consistent with one of the questions that is being asked everywhere in the larger health care system, which is, how can we get and use a view of everything that is happening with that patient, so

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that any care provider, including the pharmacist, will be able to help that patient take better care of him or herself? 

Kevin Pereau: Are we on the cusp of connecting patient data to pharmaceutical companies who make the drugs?

Brad Fluegel: Currently, I don’t think that everybody in the system – whether it’s an insurance company or a doctor or a pharmaceutical manufacturer – has enough information to know what’s happening with a patient who is using a particular drug.

There are a fair number of programs, typically around specialty medications, that gather and relate information back to the manufacturer about what is happening for patients who are taking their drugs. I think that represents an opportunity for everyone in the chain of care to have more information about how those drugs are impacting on individual patients. But overall, I don’t think that gathering that kind of information is something that’s of great enough interest to health plans and manufacturers.

Kevin Pereau: Do you think we are moving toward a time when people and their insurers might not have to pay for drugs that have not helped them? That’s kind of a thunderbolt.

Brad Fluegel: At first it will start with payers and insurance companies, but ultimately it may get down to individual patients as well. If I am dealing with a thousand-dollar deductible for a drug that doesn’t work for me or my insured members, why should I be paying for it?

Kevin Pereau: Boy, that’s a wonderful thing to say. To turn the discussion back to what Walgreens is doing, can you tell me how you are helping customers in the increasingly competitive environment of retail pharmacies?

Brad Fluegel: Both we and other retail pharmacies are going to become more full-service health care destinations where people can have a variety of things taken care of. We now have retail clinics in approximately 400 of our stores, and we are setting up urgent care clinics in about a dozen locations with  physicians and nurse practitioners

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on staff. Lab services are being tested in our stores, so people can have blood drawn or urine samples taken.

Kevin Pereau: Patients’ ability to go to Walgreens and have diagnostic tests taken is a very big thing.

Brad Fluegel: Our advantage is that we are already located close to where people live, work, and drive. We are better integrating delivery of medications to the end consumer, and to the health plan. The result will be an integrated experience, so patients will receive better care.

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