Editor’s Note: The following is an adapted excerpt of a whitepaper called “Leading the Way: Employer Innovations in Health Coverage”, published by Oliver Wyman’s sister company, Mercer, and the American Benefits Council.
Rapid advances in technology, along with changing consumer preferences and higher expectations, have led to an explosion of new entrants to the healthcare system. Embracing disruption means leveraging constant changes in the system — with internal stakeholders and external partners — to the best advantage of your employees and your organization.
Likewise, transformation can no longer be the province of a small subset of trendsetters. The US healthcare market is in a state of flux — the changing roles of the market stakeholders and new entrants to the market are leading to increased complexity, new opportunities, and both potential savings and potential new costs.
Budding carrier and pharmacy benefit manager (PBM) consolidations and the entry of nontraditional organizations (such as Amazon) could disrupt the pharmaceutical market as we know it. Meanwhile as healthcare vendors are joining forces to gain efficiencies and leverage, so are some employers — most notably with the recent announcement that Amazon, JPMorgan Chase and Berkshire Hathaway will create an alliance dedicated to improving the health and healthcare experience of their employees. At the same time, new technologies and the rapidly increasing adoption of telemedicine services by health plans are affecting how care is delivered (see infographic below). And though the direction of healthcare reform at the national level remains uncertain, employers clearly need to continue their efforts to keep cost growth at sustainable levels. All of these together will require bold — sometimes disruptive — action, which the below case study of PepsiCo showcases.