23
© Oliver Wyman
© Oliver Wyman
© Oliver Wyman
NEW RULES, NEW ROLES: REDEFINING HEALTH
All that will remain will be high acuity operations.
© Oliver Wyman
THE OLD GAME: LOCAL DENSITY
Highly concentrated healthcare markets
2000 2017
© Oliver Wyman
8%
10%
12%
14%
0 10 20 30 40
THE OLD GAME: NATIONAL SCALEPa
yer A
dmin
Exp
ense
Rat
io
Lives (MM)
© Oliver Wyman
OLD STRATEGIES ARE NO LONGER WORKING
“We expect rapid expense growth tooutpace revenuegrowth.”
- MOODY’S DECEMBER 2017
“About 18% of U.S. hospitals are at risk of closure or performing weakly.”
- MORGAN STANLEY 2018
© Oliver Wyman
DEMOGRAPHICS AND REIMBURSEMENT ARE RELENTLESSLY STRAINING HEALTH SYSTEM ECONOMICSProportion of operating costs covered
100%
150%+
50%-
Med
icai
d
Commercial
Medicare
Revenue
© Oliver Wyman
DEMOGRAPHICS AND REIMBURSEMENT ARE RELENTLESSLY STRAINING HEALTH SYSTEM ECONOMICSProportion of operating costs covered
100%
150%+
50%-
Revenue
Med
icai
d
Commercial
Medicare
© Oliver Wyman
EVERYONE IS NOW A HEALTHCARE CONSUMER…
Deductibles have grown
8 timesfaster than
wages since 2008
Average individual deductible in employer sponsored health plan
400
800
1,200
1,600
2006 2008 2010 2012 2014 2016 2018
Deductible for Single Coverage
© Oliver Wyman
…AND THE REVIEWS LOOK GRIM
Net willingness to recommend, by industry
2018 Oliver Wyman Consumer Survey
-8
2
8
14
20
24
34
1
2
3
4
5
6
7
RUSH FOR CONTROL OF THE UPFRONT RELATIONSHIP
NEW ENTRANTS RUSH IN
Digital health funding
20132012
$5.8B
2014 2017
$4.3B
20162015 1H2018
$1.5B
$2.1B
$4.6B$4.4B
$3.4B
$6.9Bprojected
Source: Rock Health
© Oliver Wyman
Economic Pressure
Technological Pressure
Consumer Pressure
Competitive Pressure
THE MARKET IS PRIMED FOR DISRUPTION
© Oliver Wyman
© Oliver Wyman
FIVE NEW ROLES EMERGE
FIVE NEW ROLES ARE EMERGING
AccessSpecialist
Rules to Win:• Consumer Delight• Simplification• Ubiquity
FIVE NEW ROLES ARE EMERGING
AutomatedAgents
AccessSpecialist
Rules to Win:• Data Intelligence and
Sophistication• Clinical Insight
FIVE NEW ROLES ARE EMERGING
Focused Factories
AutomatedAgents
AccessSpecialist
Rules to Win:• Industrial Discipline• Continuous Improvement• Best in Class Capability
FIVE NEW ROLES ARE EMERGING
FocusedFactories
AutomatedAgents
AccessSpecialist
Unbundled Financiers
Rules to Win:• Product Management
Agility • Consumer Alignment
FIVE NEW ROLES ARE EMERGING
Rules to Win:• Risk and Delivery
Alignment• Ability to Influence
Consumer
FocusedFactories
AutomatedAgents
AccessSpecialist
Unbundled Financiers
Integrated Care Managers
VALUE WILL MIGRATE TO THESE NEW ROLES
AccessSpecialists
AutomatedAgents
FocusedFactories
UnbundledFinanciers
Integrated Care
Managers
Payers
Providers
Other (e.g., Tech, Retail)
© Oliver Wyman
WHICH ROLE WILL YOU PLAY?
AccessSpecialist
AutomatedAgents
Focused Factories
UnbundledFinanciers
Integrated Care Managers
