A world of possibilities: How should digital health companies partner with healthcare payers to support scale-up?
A series of three perspectives from the Patient Pathways and Pandemics Community of Practice on the ‘NCD Care’ app with PharmAccess in Ghana.
Health systems around the world have been awash with ‘promising’ digital health tools for many years, but few of these manage to scale to real impact. One reason for this is that good technology is rarely matched with an equally strong business model and engagement strategy. Many innovative, but unsuccessful, start-ups have concentrated on their product but naively assumed that if it works well the health system will adopt it. Alas, in healthcare things are rarely so simple.
One of the challenges that digital health developers face is that most of their products need scale – widespread adoption – to become affordable on a per-patient basis. The most obvious route to achieving this is to partner with a national payer (e.g. a public or private insurer) or health ministry, yet many payers have historically been reluctant to get involved in this level of operational service delivery.
In recent years, and especially as a result of COVID-19, this pattern has been changing in many countries. The speed with which health systems had to respond to the pandemic necessitated a burst of partnership activity – with payers playing a more active role in driving digital health adoption, and new models of partnership and payment introduced.
In the wake of this change, members of the Patient Pathways and Pandemics Community of Practice met to consider how emerging digital health tools should engage with payers as they develop their business models (using PharmAccess’ new ‘NCD Care’ app in Ghana as a starting point). Three important trends were highlighted:
First, the available partners for digital health developers in emerging markets are changing. Public and private payers are becoming more active, but so too are ride-hailing apps, banks, lab and pharmacy chains, telecoms companies, and life science firms. There are examples of all of these launching or partnering with digital health tools in emerging markets in the last two years – for a whole variety of different motivations.
Second, and focusing on healthcare payers specifically, it is clear that in this new environment the earlier that developers can engage with the public and private insurers they would like to work with, the better – ideally from the early design stage and certainly long before a final product is developed. A key reason for this is that increasingly healthcare payers are attempting to package different digital health tools into a coherent ecosystem. For example, multi-sided deals in which a general wellness app might be combined with several specific tools for management of specific high-cost conditions, and linked up with a major pharmacy, lab or grocery chain as well as healthcare providers. Understanding this picture will be key if developers are to find their niche and build in the flexibility and interoperability that may be required. It also explains why some are preemptively aggregating among themselves to build up such an ecosystem proactively.
Thirdly, the specific business and payment models that are attractive to payers are likely to be highly dependent on their underlying motivations, which can vary considerably. For private insurers, the trend in emerging markets is towards ‘moving from payer to partner’ and using digital health tools to create brands that are relevant to people’s lives and engage their members as an everyday health companion, beyond simply filing claims when they need care. Reducing the cost of care is a priority too, but equally valuable is helping private insurers to make efficiencies in marketing, commissions and administration, which can make up as much as 50 percent of their costs. These tend to lead to payment models based either on a license agreement or fee for service, with metrics weighted towards strong customer engagement. For public payers, on the other hand, the motivations tend to be around filling critical gaps in access or service coverage and/or lowering the costs of are while rewarding quality. Because of this, and their considerable market power, public payers may choose to support new technologies to scale through accelerator models, direct grants or certifying particular apps as compliant and recommended for providers to adopt – at the same time making adjustments to payment models for providers to ensure these do not get in the way.
One such example is India’s Ayushman Bharat health coverage scheme (targeting some 600 million of India’s poorest citizens). The central payer, the National Health Authority, has launched a Market Access Program (MAP) for digital health innovators. The program worked to attract digital health tools that meet the payer’s vision and strategy – setting standards for interoperability and data use, listing the key priorities for new tools (from claims engines to health promotion) and then supporting those who meet these requirements. Successful developers were invited onto a framework which allows them to be taken up and adopted using a simplified procurement process as well as getting access to capital investment from investors and support from a panel of healthcare and technology experts.
With thanks to Jonty Roland, Niti Pall, Colette Van Montfort, Alex Attachey, GV Ramana Rao, Dharmesh Lal, Javan Waita, Kasarachi Omitiran, Jake Mendales, Esteban Bermudez