The future of tech and the health benefits industry

After decades of trailing other industries from a technology standpoint, healthcare has undergone a massive transformation in the past year. Providers and consumers that had been lukewarm in their adoption of health tech were forced to embrace it during the COVID-19 pandemic. In one particularly dramatic finding, FAIR Health found that national claims for telehealth increased by more than 4000% from March 2019 to March 2020. In addition, a June report from the McKinsey Institute predicted that $250 billion (or about 20%) of U.S. healthcare spending could become virtual.

Although the pandemic has forced the acceleration of tech adoption in the healthcare space overall, the health benefits industry, specifically, still has a way to go. This is not for lack of consumer interest, however. An Alegeus 2020 pre-open enrollment survey found that 60% of people are paying more attention to their healthcare than in previous years. A health and tech survey deployed by Alegeus found that 76% of consumers trust AI-driven digital solutions to help them make healthcare spending and saving decisions.

The issue – and the opportunity – seems to lie in the promotion of technology to employees by employers and benefit administrators. The Alegeus health and tech survey found that only 28% of people say their employers offer digital health and benefits tools.

I think there's so much more that we can do,” says Nate Maslak, co-founder and CEO of Ribbon Health. “I really feel like we're in the first or second inning of this. I personally believe that employers are going to be one of the core drivers of the shift to a different healthcare model.

Sam Kina, senior vice president of data and economics at Picwell, agrees about the opportunity and adds that, as more employers and administrators push these tools and encourage engagement, the case for them will grow ever stronger. “We’re going to have a huge body of evidence that we can use to really make our case [and] help it proliferate,” Kina says.

Here are a few areas where benefit administrators and employers can begin making an impact.

• Choosing coverage According to an Alegeus survey, only 22% of consumers whose employers provide digital health and benefit tools use them for healthcare benefits enrollment and management/investment. Not taking advantage of decision-making tools can lead consumers to significantly overpay for healthcare coverage that’s not right for their needs. According to the Kaiser Family Foundation, the average annual family premium for a high-deductible health plan (HDHP) is about $2,700 cheaper than a preferred provider plan (PPO), and Alegeus data has found that 65% of consumers would benefit from being on a HDHP. But further data from Kaiser shows that only about 30% of people are enrolled in these health plans. “There’s this big mismatch and a lot of money wasted,” Kina says. “That leads us to think that this is probably irrational behavior” that can be mitigated by decision-support tools.
• Finding care The area of provider selection has the potential for improvement and growth with the assistance of technology, too. Without any search and selection tools, 62% of people choose a new provider based on convenient location. Those who already have a provider often stick with the same person over the years as they build trust and a relationship. Although this method has its advantages, it can be less cost-effective. AI-driven technology can aggregate a multitude of factors to guide consumers to the most affordable care provider for their needs. “Sometimes it actually makes sense for somebody to drive a little bit farther to go to a provider,” Maslak says. “It can be more cost-effective and higher quality for them. But the reason people don’t is they’ve never really had the information. Without any information, you assume that you can only control for that one piece of information, which is how far you have to drive.”
  
  Technology like the Alegeus Smart Account’s Find Care feature, for example, uses personalized information to search for doctors by location, patient satisfaction rating and in-network availability, providing a more comprehensive picture.
• Paying and saving for medical expenses In the Alegeus health and tech survey, 71% of people said that medical costs are the most frustrating aspect of healthcare and health benefits, and 39% said the current biggest gap in healthcare technology is around paying for care. Furthermore, 52% of people still primarily keep track of their healthcare coverage, care and spending needs of their family via paperwork, with only 24% using an online platform. This gulf between the problem and the solution shows an opportunity for benefit administrators and employers to lean on AI-driven tools. The Alegeus Smart Account removes the guesswork (and manual work) around paying and saving for healthcare. Features like the virtual medicine cabinet feed consumers the best deals on prescriptions, and personalized recommendations help them better manage funds in their health savings account (HSA) to build up long-term savings.

To hear more about the opportunities for tech in the health benefits space, listen to episode 2 of the Creating Healthier Futures with Alegeus podcast.