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Engage Consumers May 04, 2016

Inside the Marketplace Revolution: Strategies From Vitals CEO Heyward Donigan

Key Takeaway
We partner across industries to make change in #healthcare possible - @vitals CEO Heyward Donigan

In the recently released report The Marketplace Revolution, Oliver Wyman shares insights on next-generation business designs and describes how multiple industries are converging to create the new consumer health, wellness, and better-living marketplace. We have invited Health Market 2.0 pioneers to share their approach to the emerging consumer-centric market. Next up is Heyward Donigan, president and CEO of Vitals, a New Jersey-based health technology company that provides transparency and engagement tools and solutions. Vitals aims to empower people to shop for healthcare. Here, Donigan provides a glimpse “inside the revolution:”

Oliver Wyman Health: Are you working to become a consumer-centric company?  If so, describe your top initiatives.

Heyward Donigan: From our founding, Vitals has been a consumer-centric company. Our Vision is to create a competitive healthcare marketplace for consumers. We’re building better transparency tools and working across industries to bring cost, quality, and access information – the same data that lets us shop for other goods and services – to healthcare. As we create that marketplace, we also need to change behavior. Despite larger financial responsibility, most of us still don’t shop for our healthcare. Sometimes, we forget to ask about cost. Or we don’t know who to ask. Or we might be embarrassed to talk about prices. No doubt, shopping is also time consuming. But by blindly acquiescing when directed to specific locations for healthcare procedures and tests, we’ve been consuming care that causes us to overspend or – even worse – have a bad outcome. Vitals gives people an incentive to shop – cash. We know incentives disrupt the normal referral process, causing people to pause and consider their choices, even when there’s no deductible. Last year, Vitals saved SmartShopper members $11 million – and there’s the potential to save billions more.

OWH: Consumers’ needs often span well beyond a single company’s value chain. How are you connecting the dots for consumers and becoming a multi-chain company?

HD: When Vitals first began, it focused on helping people find doctors. But we soon realized there’s more to choosing the right care than finding a high-quality doctor. People want to know when they can see that doctor, so we’ve added online appointments and made it simpler to book online. They want to know they aren’t overpaying, so we’ve added cost data in order for them to find a better value. They want a simpler way to switch into that better-value provider, so we’ve hired navigators who liaise with providers on the patient’s behalf to rewrite referrals and schedule appointments. And for those who don’t even know they have options, we’ve provided incentives in order to get their attention. We’re focused on providing value throughout the journey that connects people with the right care by removing the old barriers and creating a marketplace that functions the way consumers shop today.

OWH: Being a world-class consumer company these days requires unique DNA and many new competencies. How are you leveraging partnerships to flex your consumer know-how?

HD: We always knew that we weren’t going to change how people shop for healthcare alone. It’s a major task. We partner across industries to make change possible. We work with health plans because they have the most accurate cost data and know where consumers are in their benefit spend cycle. But health plans have a problem: they’re not a well-trusted source of information. So we also partner with employers and brokers to champion the creation of a shopping culture. Employers still pay a significant portion of healthcare costs for their employees and have a vested interest in creating a shopping culture in healthcare. We collaborate closely with every one of our clients to provide communications, incentives, and information to encourage employees to select high-value healthcare.

OWH: Sick care + better living seems obvious when you are a consumer. What are you doing to stop the sick-care only cycle and help consumers live better?

HD: No one wants to get a colonoscopy. But preventative screenings and physicals are key to detecting diseases and conditions early, before they turn into more expensive problems. That’s why many of the procedures and tests Vitals rewards people for are routine, preventative exams. If you pay someone $150, they’re more likely to take action and get that test. In fact, studies have found that only about 48 percent of U.S. women get an annual mammogram, even if they have insurance to cover the test. In comparison, 57 percent of SmartShopper members with open claims for mammograms shopped and saved on that procedure last year. Similarly, another study revealed about 50 percent of people who receive lab orders from their doctor complies. Yet, over 80 percent of SmartShopper members with open claims for lab work shopped and saved on their tests last year. The data clearly shows that incentives can help reduce health spending on sick care by keeping people healthier in the first place.

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