HFS Research, in partnership with Cognizant, studied the impact of vertical integration on health consumers, the payer-provider disconnect, and the potential of generative artificial intelligence (GenAI) with the help of responses from 255 health plans and 105 health systems and hospitals. The study highlighted significant levels of consolidation and vertical integration creating new types of healthcare enterprises. Respondents from healthcare enterprises engaged in vertical integration and consolidation indicated that they do not have a robust understanding of their consumer needs. While health plans and providers are intrigued by GenAI, about 70% anticipate GenAI’s greatest impact will be on health outcomes and member experience. This study anchored an illuminating discussion with 14 health plans and health systems (see Exhibit 1), leading to seven actionable insights.
Exhibit 1: Round table participants from left to right and top to bottom: Steve Dunkerly, Scott Schweiger, Rohan Kulkarni, Melissa O’Brien, Kathy Filkins, Andy Fanning, Justin Brueck, Sabu Bose, Chris Pace, Saurabh Gupta, Patricia Hunter-Dennehy, John Ward, Patricia Birch, Joshua Zalen, Dr. Tamara StClaire, Jahnavi Ravindranath, Jeff Thomas, Pradip Khemani, Vijay Venkatesan, Sanjay Subramanian, Raj Ramaswamy
Health plans and providers listed a critical set of actionable insights
- Focus on the bright spots: Challenges and barriers imposed by healthcare across the ecosystem can feel steep to enterprises and consumers. It is important to persevere to overcome these barriers and replicate what reliably works at least most of the time.
- Proactively address the regulatory impact: Because of their profiles, vertically integrated enterprises straddle regulations across multiple industries, which could be challenging. Consequently, vertical alignment (rather than vertical integration) through creative ecosystems leveraging capabilities across the network could deliver impactful outcomes across the triple aim of care (reducing the cost of care, enhancing the experience of care, and improving health outcomes).
- Transform with vertical integration: Legacy healthcare enterprises are growing and further challenging smaller entities. However, non-legacy enterprises like Amazon, Google, and Walmart bring another flavor of vertical integration, a different mental model, and innovation that will drive transformation at scale.
- Make health consumers (patients, members, customers) first: Enterprises that transcend the narrative of consumer-centricity to develop new processes and enable them with the right tech stack can drive alignment between payers and providers. Solving the payer-provider divide at a microcosm level of a disease condition or a patient cohort could lend building bridges energy and stickiness.
- Make trust a central theme: The marriage of claims data and electronic health records (EMR) could drive end-to-end visibility and engender trust to bridge the disconnect between payers and providers. As evangelized by the California Health and Human Services Data Exchange Framework, this can be manifested through a single health record. In a world where AI and GenAI can drive fake information, trust becomes more essential in addressing the payer-provider disconnect.
- Articulate GenAI value: The value proposition of any new technology requires time to manifest and collaboration to deliver. One construct, resembling television’s Shark Tank, is to interview all stakeholders to identify where value can be extracted. Combining value identification with a strong governance model and stakeholder engagement can ensure the responsible application of technology.
- Experiment with GenAI: Small, team-based, consistent experimentation is critical for testing GenAI, the data model enabling it, and the infrastructure powering it. This experimental approach will help mitigate various challenges, such as deployment at scale and privacy and data protection regulations, while developing the foundation to scale up successful experiments.
The Bottom Line: Health and care require consistent and progressive improvement rather than postponed perfection.
“Pedal to the metal–but with guardrails” is the overarching sentiment with regard to AI and GenAI, given that healthcare is indeed about life and death. Those in the ecosystem, whether clinicians, administrators, or technologists, carry a responsibility toward their fellow humans that they cannot and must not take lightly.
