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Introduction

What’s missing in health benefits?

We all suffer from spiraling healthcare costs. Benefits leaders, CFOs, the American people—everyone is affected. Our companies become less competitive globally. Real wages begin to stagnate. Employers today find themselves at the center of this struggle.

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Introduction

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Introduction

Good Benefits, Good Business

Companies that effectively manage healthcare value possess a powerful competitive advantage.

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The Opportunity

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The Opportunity

The Rise of Digital Health

A new wave of apps, devices, and services hold great promise, yet their value remains largely untapped.

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The Future

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The Future

Next Generation Benefits

Employers will harness the digital health marketplace through enterprise technology that fundamentally transforms health benefits.

Running a large enterprise is more complex than ever before. Finance, marketing, sales, manufacturing, and IT have all adapted to growing complexity with platform technology, using solutions like Salesforce.com, Oracle, and many more.

Enterprise-scale platforms give professional managers control over their business. They deliver insights into cost-drivers and opportunities. They bring order to complexity.

But where is the platform for health benefits? It’s missing.

We need a solution that works. We need a solution to manage benefits with the same rigor we apply to every other aspect of the enterprise supply chain. We need a solution that harnesses the power of the digital health marketplace through an enterprise platform to transform benefits.

But where is the platform for health benefits? It’s missing.

Employers shoulder much of the nation’s healthcare burden.

Nearly 50% of the United States population, 150 million people, get insurance through an employer.

The sheer magnitude of costs is staggering. Employer-sponsored health insurance is a $900B per year market. Starbucks spends more on healthcare than on coffee beans; and GM spends more on healthcare than on steel.

In a sense, prioritizing health expenses may be rational, even for cost-conscious business leaders. Competitive advantage today often stems directly from the workforce, rather than historically meaningful differentiators such as intellectual property, capital investments, or manufacturing techniques.

So to remain competitive, companies must treat human capital costs—including compensation and benefits—with the same level of respect as any other essential part of their supply chain, on par with, if not above, coffee beans and steel. The workforce is not just a cost-center; it is a core value-driver. The bottom line is that healthy workers work harder, smarter, and longer.

The goal then for high-performing organizations is not necessarily to minimize healthcare cost, but to maximize value. Companies that effectively manage healthcare value will have a distinct and sustainable advantage over their peers. In short, they can do more with less.

Starbucks spends more on healthcare than on coffee beans; and GM spends more on healthcare than on steel.

More Isn't Always Better

Across the world, there is huge variability in healthcare value. Likewise, Individual companies within the US experience similar variability, suggesting an enormous opportunity for lower performers.

Health Expenditure Per Capita ($USD thousands)
0
2
4
6
8
10
 
United States
United States $8,508
Rank: 1 of 11
 
Norway
Norway $5,669
Rank: 2 of 11
 
Switzerland
Switzerland $5,643
Rank: 3 of 11
 
Netherlands
Netherlands $5,099
Rank: 4 of 11
 
Canada
Canada $4,522
Rank: 5 of 11
 
Germany
Germany $4,495
Rank: 6 of 11
 
France
France $4,118
Rank: 7 of 11
 
Sweden
Sweden $3,925
Rank: 8 of 11
 
Austrailia
Austrailia $3,800
Rank: 9 of 11
 
United Kingdom
United Kingdom $3,405
Rank: 10 of 11
 
New Zealand
New Zealand $3,182
Rank: 11 of 11
Health System Ranking Among 11 Developed Nations
0
2
4
6
8
10
 

1

United Kingdom
United Kingdom $3,405
Rank: 1 of 11
 

2

Switzerland
Switzerland $5,643
Rank: 2 of 11
 

3

Sweden
Sweden $3,925
Rank: 3 of 11
 

4

Austrailia
Austrailia $3,800
Rank: 4 of 11
 

5

Germany
Germany $4,495
Rank: 5 of 11
 

6

Netherlands
Netherlands $5,099
Rank: 6 of 11
 

7

New Zealand
New Zealand $3,182
Rank: 7 of 11
 

8

Norway
Norway $5,669
Rank: 8 of 11
 

9

France
France $4,118
Rank: 9 of 11
 

10

Canada
Canada $4,522
Rank: 10 of 11
 

11

United States
United States $8,508
Rank: 11 of 11

Source: Commonwealth Fund

 
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The Opportunity

The Rise of Digital Health

Digital innovation has dominated the course of business throughout the last decade. The iPhone was first launched only in 2007, and now the mobile internet is everywhere, permeating and disrupting various industries, from transportation to messaging to shopping.

We’ve long-envisioned a world in which consumer-oriented technologies would similarly upend the way healthcare is delivered. But the healthcare industry has always been slow to change.

Still, in the last few years, a new wave of healthcare apps, devices, and technology-enabled services has emerged. By improving the human experience, engaging consumers, and lowering the cost of health delivery, these solutions have the potential to dramatically change the healthcare value equation. Here we categorize them into three major trends.


Virtualization of Care

Care delivery is slowly transitioning from physical settings to virtual settings. For example, video-telemedicine and remote second opinions, digital disease management, group treatment and support.

Consumer Health Technology

User-friendly mobile apps and devices have made it easier than ever for consumers to take a more active role in their own self-management, and adopt positive behavior change. For example, fitness tracking, sensors and wearables, and medication adherence tracking.

Real-time Decision Support

Tools and services that are helping consumers make more informed opinions about care and coverage. For example, care navigation, price transparency, second opinion, and advocacy services.


Compared to tired and traditional corporate wellness programs, the digital health ecosystem is innovating at light-speed. This is the nature of the direct-to-consumer business. Fewer resources are required to go-to-market, due to distribution platforms like the App Store. As a result, great products can scale incredibly fast, from zero to millions of users.

Traditional wellness programs, by contrast, require slow, cautious development, and expensive go-to-market strategies. They will never be able to compete with a living laboratory of thousands of products, all of which live-and-die by the quality of their user experience.

Growth of Digital Health Companies

Digital health now represents a thriving ecosystem of new companies, backed by over $12 billion of dollars of investment in the last 5 years alone.

Total Funding (in billions)
0
2
4
6
 
2011
2011 $1 billion
 
2012
2012 $1.5 billion
 
2013
2013 $2 billion
 
2014
2014 $4.3 billion
 
2015
2015 $4.3 billion

Source: Rock Health

A fractured and fragmented ecosystem.

While each point solution on its own may offer fantastic benefits, collectively, the digital healthcare ecosystem is fractured, fragmented, and utterly disconnected from benefit design and the needs of employers, severely limiting its value to both consumers and employers.

This fragmentation impedes end-user engagement, by creating a number of problems including:

  1. Message fatigue: Each digital health tool requires its own login, and delivers periodic reminders to drive engagement; drowning consumers in a deluge of notifications.
  2. Choice overload: There are literally tens of thousands of apps, devices, and services to choose from, paralyzing consumers with a paradox of choice.
  3. Personal relevance: Healthcare needs, desires, and goals vary radically by individual, yet solutions are presented as one-size-fits-all.
  4. Benefits complexity: Few digital health tools take into account an individual’s benefits design or network options–critical factors for care and coverage decisions.

In addition to low engagement, various challenges hinder employers’ ability to implement, manage, and monitor digital health solutions on an enterprise scale:

  1. Deployment cost: Each program deployment carries overhead related to internal communication, partner management, technology configuration, contracting, complexity, and work-planning process.
  2. Switching cost: Discovering what works is expensive, since it’s so difficult to change programs, or vendors mid-stream, and oftentimes running a pilot costs as much as a full deployment.
  3. Performance management: Point solutions provide limited visibility into key metrics related to program adoption, behaviors, outcomes, and satisfaction, making it nearly impossible to determine what’s working, or compare performance across vendors.

Because of these challenges many employees are poised to miss out on potentially useful, life-altering solutions. And employers only capture a fraction of the potential value available from the new ecosystem of healthcare innovation.

The digital health ecosystem is fractured, fragmented, and utterly disconnected from benefit design.

From the Bazaar to the Enterprise Hub...

If we imagine the digital health ecosystem as a marketplace, right now we find ourselves in an ancient bazaar. It is bustling with energy, color, and crowds of curious shoppers. However, quality varies wildly, vendors lack accountability, and finding what you need requires significant effort.

The digital health ecosystem needs to grow up; instead of a bazaar, we need an enterprise-grade marketplace.

This new-and-improved marketplace will be elegant and efficient, seamlessly connecting diverse employee populations to the full-breadth of available point solutions, through a simple, engaging interface.

It will empower employees to choose among a variety of health programs, based on their own unique needs and desires.

It will provide the right incentives to motivate engagement with the right tools for the right people at the right time.

It will be flexible enough to meet the diverse needs of many employers and populations, while also absorbing changes to the ecosystem, such as new entrants, new solution categories, and even new benefits paradigms.

It will have measures and controls, so that population managers can adapt their strategies based on what works, and get the most out of their limited benefits budgets.

It will eliminate administrative overhead by managing payments and contracts with the complex vendor ecosystem, and by allowing HR to add new vendors with the click of a button.

In short, the marketplace needs an enterprise hub that will mediate the complex, many-to-many relationships between solution vendors, employers, and end-users, bringing order to the chaos.

Instead of a bazaar, we need an enterprise-grade marketplace.
 
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The Future

At Jiff we have very specific vision about how an employer-owned hub will disrupt the current order. Significant change is coming along four key dimensions.

Rapid Learning through Big Data

With access to the benefits hub, employers will have data on millions of employee experiences, across thousands of companies. When analyzed properly, the cycle time between hypothesis, insight, and action will shorten dramatically—from years and months to days and minutes—giving human resources teams powerful tools to manage healthcare value.

Consider for a moment the recent explosion in business intelligence tools and big data. Real-time, self-service dashboards are considered industry standard, with companies like Palantir making sense out of even the largest data sets.

Likewise for health benefits leaders, there is much to learn from the myriad experiences of employees as they interact with the health system leaving behind massive data sets in their wake in the form of digital exhaust.

With an employer-managed hub, we can now capture all that data to build a holistic understanding of each individual. The hub will aggregate data from health claims, point solutions, self-entered information, HR and payroll systems, and more. These data sources—collected from their own employees and from other employees across the world—will help HR teams build profiles of individuals and of populations to understand what types of interventions work for whom.

the cycle time between hypothesis, insight, and action will shorten dramatically—from years and months to days and minutes

Personalized Incentives

The same data that will supercharge rapid learning will also amplify the power of financial incentives by making them more personalized.

Of all the motivational tools available to employers, financial incentives are perhaps the most misused and poorly implemented. Incentives have the potential to focus attention, motivate specific one-time actions, and nudge people towards longer-term, sustained behavior change. However, most health incentive programs have failed to capture these benefits.

The problem lies in the way incentives are implemented. Most employers structure them as “one-size fits all”, that is, they offer all employees the same flat dollar amount for completing a specific action. However, this fails to account for the fact that every employee responds to incentives in their own personal way.

The opportunity of personalized incentives is to understand what you want and what you need. We can then provide each individual with a unique and optimized incentive, one that yields the greatest behavior change at the lowest cost.

Personalized incentives will allow HR leaders to leverage their limited incentives budget to achieve maximum impact. And taken to its logical conclusion, personalized incentives will eventually extend beyond simple payouts to personalized benefits design—including co-pays, deductibles, and coinsurance—-motivating behavior change across all care and coverage decisions.

We can then provide each individual with a unique and optimized incentive, one that yields the greatest behavior change at the lowest cost.

Benefits as a Service

The digital health ecosystem currently lacks any semblance of enterprise-level maturity. Most software-as-a-service (SaaS) companies from Salesforce.com to Oracle offer controls to manage complexity in the enterprise setting, and can scale efficiently. In the same manner, a well-designed hub will work equally well with 1,000 employees or 100,0000 employees, 2 point solutions or 200.

To accomplish this, the hub must provide employers exquisite control over what benefits solutions they deploy and to whom.

With the hub, employers will be able to add and remove new programs, as easily as lego blocks. The hub will possess versatile “connectors” that allow it to link-up with the complex and ever-changing digital health ecosystem. These will dramatically bring down the costs associated with implementing new health programs.

In addition, the hub will make it easy for employers to target specific groups for pilot tests, and then, if desired, scale them up quickly to their full population. Targeting a program to a specific subpopulation will be as simple as selecting a segment from a dropdown menu, toggling a few configuration settings, and clicking “go”. This will take take much of the cost out of pilot testing, and even allow forward-thinking benefits executives to A/B test different types of programs across sub-populations.

Employers will be able to add and remove new programs, as easily as lego blocks

The Expanding Hub

At first, the hub will serve as the epicenter of the digital health point solution ecosystem. But over time, we believe the hub could expand outwards to integrate all aspects of employee engagement, and even to the broader healthcare sector.

The driving force behind this expansion will be the direct and frequent line of interaction between the hub and the employee. Over time, the hub will become the first stop for all benefits, HR, and health related questions, much as Google has become the first stop for searching the internet.

To become fully entrenched as this first-stop, the hub will need to be engaging, addictive, and useful. In other words, it must provide a consumer-grade experience — not the B2B experience delivered by health plans today. To do so it must meet the heightened expectations of modern consumers based on their experiences with smart phones and e-commerce, as well as their interactions with phone support at exemplar companies such as Nordstrom and Zappos.

As the hub expands, it will encapsulate other HR responsibilities, specifically, areas where it is critical to motivate and engage employees—401k participation, engagement ‘pulse’ surveys, and even variable compensation programs. The hub will also appropriate competencies from insurance carriers that are poorly managed—health system navigation, disease management, and network design.

The hub’s potential migration towards both employee engagement and the broader care delivery system would be a boon to employers, giving them one hand firmly on each dial.

The hub will become the first stop for all benefits, HR, and health related questions, much as Google has become the first stop for searching the internet.
 
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Conclusion

Who will own the hub?

Already, several powerful stakeholders have recognized the need for a health benefits hub, and are rushing in with their own platforms.

However, at Jiff, our bedrock belief is that employers should own the hub, meaning they should manage its controls and make major decisions about its operation. This belief is grounded in the fact that employers have the most at stake in managing healthcare value, more than providers or insurance carriers.

Take providers. Despite efforts to the contrary, they are largely compensated on a fee-for-service basis. They get paid more for doing more, not for keeping patients healthy and out of the hospital.

Similarly, insurance carriers don’t beat Wall Street expectations by managing value. Instead, they compete by growing membership, which they accomplish through sales and marketing excellence, not keeping people healthy.

By contrast, employers’ motives are clear: to improve health and lower costs. That is why Jiff exists. We know that employers are at the center of healthcare value, and that the hub belongs in their hands. Jiff was built from the ground-up to make that into a reality.

The future of healthcare in America depends on courageous business leaders—people like you, working in HR, benefits, and finance. You and your colleagues will ultimately decide whether costs continue to spiral, or if something changes. You have the all the tools, motivation, and expertise you need to make it happen.

So what are you waiting for? Let’s get to work.

Our bedrock belief is that employers should own the hub.