With an impact on over 16% of our economy, the issue of healthcare and managing its costs has long plagued public policy and its effects on Americans reverberates from all segments. Most Americans obtain their health care through their private employer and in industries like manufacturing, where the legacy of care-taking for generations of workers carries a legacy load on balance sheets, the results have been definitive and were instrumental in the collapse of GM and Chrysler. The longterm health obligations of the workers of GM and Chrysler reached into the billions and a huge consideration in the restructuring of these companies was how to account for overlooked workers' healthcare and pension benefits. A solution came in the form of a conversion of workers' pension benefits into equity in the then bankrupt companies, a testament to the risk the American worker contributed to the iconic American companies. Earlier this year, GM offered retirees a pension buyout and under a mutually beneficial agreement, GM transferred its pension obligations to Prudential Financial Inc. in a $29 billion deal. Policy argument aside, as issues of pre-existing conditions, treatments, and delivery converge, the essential issue in America is that the insurance industry is how we pay for healthcare.
By financing our healthcare treatments through insurance we essentially create risk management where companies pool customers and manage the risk of payment. In essence, if 100 people pay insurance but only 2 need service at a given time, then if the cost of service is less than the collected payments of 100 customers the companies can operate at a profit. With catastrophic patients or pre-existing conditions, the risk is high for companies so the goal is to mitigate the risk or cap how much expenditure outflows for services rendered by the healthcare professionals.
This here becomes the rub. The services received by majority of Americans is financed by companies and to be profitable they must manage risk. The objective of the PPACA (The Patient Protection and Affordable Care Act) was to ensure a larger pool of healthy paying customers, hence the individual mandate. The flip-side is to also reduce risk of illness which is where wellness and fitness come into play. I had a chance to interview a senior executive of one of the largest healthcare insurance companies, UnitedHealthcare, which boasts over 70 million customers. Our discussion follows.
OI: We would love for you to introduce yourself and kinda give us a little background of your journey at UnitedHealthcare.
NM: ...Thanks for speaking with us...I'm Nick Martin...I'm the Vice President of Innovation and R&D at UnitedHealth Group. We help to facilitate innovation in research and development across all of our business segments from OptumHealth to Ingenix to UnitedHealthcare Prescription Solutions and many others...
OI: ...Talk a little bit about research development. Obviously, when you're talking about apps, you're talking about the next generation of Americans who are using more mobile technology. They're more on the go. They have different lifestyles so talk about some of the R&D and the solutions you guys have to kinda help them manage their health and wellness better using technology.
NM: Sure...At UnitedHealthcare we recognize that not every individual is gonna have a mobile phone or certainly want to interact with their health and well-being via mobile phone, but there is definitely a segment of individuals that do choose to not only manage their health but their life through mobile devices. So we've developed a number of different applications that have helped enable individuals to get access to health information as well as an application...specifically that application, DocGPS allows individuals to search out a facility or a specific physician that's near them or maybe even in a remote city if they were away from home, being able to find a provider that is in-network to help them with their care when they're on the go. That app also allows you to map out how to get to that location, single click to call as well as services at UnitedHealth Premium Designation program, which you know is the quality and cost efficiency of our providers and the application will allow our consumers to make good decisions on not only quality of care which is the utmost important stuff at United, but also the cost as well. So, in addition to that application which is available on a number of different mobile platforms, we recently launched OptumizeMe as a mobile application for encouraging individuals to live healthier lives through healthy challenges. Those challenges could be fitness based. They could be health based. They could be eating based as well, encouraging individuals to eat foods that help them keep their caloric intake down and things of that nature. That app also pulls in a concept of social networking and as certain folks recognize, the social aspect of health is very important. Individuals tend to hang out in groups of individuals of similar health status and so getting people to encourage you in your social network is a very important piece to getting success in the health and wellness type program.
OI: Yeah and that's pretty interesting...Now with social networking, you are able to put a goal there; people could encourage you on the goal. Also, I've seen a lot of interaction with entertainment. For example, there are games such as EA Active, the Wii Fit. So talk about...do you guys have any solutions to integrate gaming with health wellness?
NM: Currently we don't have any in market solutions for gaming. Certainly I'm excited to see some of the products that are out there that are encouraging people to get active and stay healthy and looking forward to the opportunities that may arise from those types of applications and technology that you saw are quite pervasive throughout CES.
OI: Of course, and then I guess another thing that we were kind of curious about, we hear a lot about medical technology, medical records...Can you kind of give us an overview on some of the things that UnitedHealth is doing to be able to aggregate a lot of people's information with medical technology and what are some of the innovations to now be able to provide a more efficient healthcare service for your members?
NM: ...We certainly have one of the largest data structures in our health and wellness through our Ingenix business unit and we have products and offerings that allow us to mine data in an anonymous fashion to find patterns around the Natural History of Heart Disease and those solutions. Not only those solutions, but solutions around clinical trials inside our Ingenix business unit also help – help us gather analytics on what types of individuals are getting types of diseases and how we might take that data and put in clinical care plans around it to help them live a healthier life.
OI: ..The new Census data is going to be coming out. America is getting a lot younger and then it's getting also a lot more diverse and we talk about communication, so kind of give me an idea as these demos are changing - obviously new things are coming into play. You're having new communities coming online and the medical challenges that might be coming online might be different so...what are some of the solutions that you guys have to kind of alert [policy] holders or your members to be able to better manage their own individual health ahead of time, especially with younger people that think they're invincible?
NM: You know...you may not have the right person to go the level of depth that you're looking to explore here...but certainly we have a significant amount of data in our eSync Platform that allows us to do somewhat of clinical surveillance and put in clinical care plans for individuals and via then our nurse channel as well as our portal capabilities, we are able to help individuals, give them information that they want at the time that they want it and allow them to make the decisions about their health based on the mining of the data that we've done in our eSync Platform.
OI: Martin talk about small business then and some of the innovations I guess with the new emphasis on getting small businesses to start using more of the health care plans? Can you kinda give us an overview about the small business angle and some of the solutions that you guys are creating for small businesses?
NM: ...You know and I hate to keep coming back to the same thing over and over but honestly, individuals managing their health and understanding what they can do to make themselves healthier is gonna be a critical component to the overall success of small business health insurance so the OptumizeMe Platform again would be a huge asset for small businesses where they can encourage the members of their employee base to go out and challenge themselves to health and fitness goals and to manage them through their social network and their peer groups to really bring down those costs of health care for small businesses. The individual managing their health and fitness is a critical component to understanding and bringing those costs down for small business in my mind.
OI: Of course, so I guess in short form, ultimately the more people are active in overseeing their health care and being proactive in managing challenges they might have medically, the better it is going to be as far as cost-wise overall for everybody else. So, is that correct?
NM: Absolutely and I think that the key is not...managing clinical issues, it's being engaged in your health and wellness as a whole...I stay fairly fit and keep myself very active and I think preventing health issues is just as much knowing about your health and fitness before you have a clinical issue as it is after you have a clinical issue. And the other thing I think quickly to touch on that it's gonna help enable small businesses, is access to information through our mobile channel, through our myuhc portal as well as through our myuhc mobile channel that allows individuals to be able to view their benefits, allows individuals to be able to pull up their ID card so when they go in and have that visit with a physician, if they don't have that paper ID card which so many physician offices still require they can actually bring up a copy of that ID card on their smartphone as well as be able to look up their account balances in their spending accounts and be able to find a physician or doctor to that application as well. I think those two, our portal and mobile channel are key to helping individuals get access to care.
OI: Now talk about that, too when you're talking about... Also how about questions as whether a certain procedure is covered or not. Is that also gonna be available mobile-wise or be something that they can pull up instantly on their own?
NM: Certainly through our portal channel you can find out what your benefits and coverage information is to a level and we do have some of that available through the mobile channel, being able to view your benefits. Getting down to a specific procedure code is something you would definitely want to view through a portal experience and not a mobile experience. Just given the level of detail that would have to be displayed on a phone might be a little bit overwhelming for an individual.
OI: I guess what you're saying is that there are – you guys have a lot of mobile solutions. You have a lot of solutions that are at their employees' fingertips where they could be more proactive and the more proactive their employees are about their own individual wellness, the easier it would be to manage the overall care for their total solution for that business. Am I correct?
NM: I think that is correct and I think it's correct for the individual as well as the physician that's helping manage that care as well. The healthier you are, the easier it is to manage your health and wellness and the easier it is for your physician to manage your health and wellness as well but certainly, at myuhc.com portal allows individuals to get an enormous breadth of information including benefits coverage, recent claims, and all of that information you need to really get visibility into what your care looks like.
OI: ….I guess ultimately...another thing...we're curious about, there are a lot of solutions now that you can put on your wrist. You could track your heart rate. You could jog. You could track your calories...I saw some solutions where you could see how many calories you would burn walking from your hotel to somewhere as opposed to catching a cab. So there are a lot of these things and I was just curious to see if there was any way that you guys are inviting these people to come in and toss these solutions to you guys to see how you might be able to integrate all these ideas and technologies or even if there is a new developer who might come up with an app that says hey what if this will work. How could a person that...has the technology that they feel would benefit cardholders to approach you guys to kinda get it into your system or network?
NM: ...My first comment that I'd like to make would be...suffice it to say that UnitedHealth Group will continue to expand and enhance not only our mobile solution offering but also our portal offering for not only employers but consumers as well. So you can imagine that those mobile solutions will absolutely be extended in the sense of integration points. They will also be enhanced to reach further, deeper inside of health as well as broader inside of clinical care and broader in terms of the impact of a broader population of individuals that might want to use those mobile applications...
OI: ...These are some of the things people have questions about. I know generally dealing with a lot of small business and enterprise owners...they don't think about health care [until] they have a problem or they have a medical procedure, oh wow I need to get teeth pulled or things of that nature, but a lot of people do live active lifestyles, so seeing how these things can be integrated and how that can enhance their overall experience and actually put them in a better position to join the health care system are some of the things people want to know...more or less...how can I build their awareness of well here's a program. Here's how much it would be for you. Here's how easy it is to get started and here are some of the cool things that you can get credits for. So let's say you go to a gym or...things of that nature. How can people score points or how can they get credits for things they do that's already good for their wellness and show them that there are great benefits to get in the health care program as opposed to I'm not sick right now so I don't need to pay that money?
NM: ...But certainly on that topic I would encourage you to hone into the concept of OptumizeMe and how that helps people live healthier lives. I think that will give you significant amount of content around specifically what you just asked.
NM: Yes sir.
OI: ...I really appreciate your time.
NM: Thanks for your time. Take care.