Blueprint for Disruption: Q&A with Imagine Health CEO Chris Cigarran
Imagine Health is a Salt Lake City-based healthcare start-up that candidly rejects the status quo by helping self-insured employers penetrate uncharted healthcare markets. The company’s tri-fold approach is simple: utilize advanced analytics to identify the top performing hospitals; pinpoint the physicians driving that performance across each clinical segment; and regionally leverage employee volume to negotiate the market’s most competitive rates. To learn more, Oliver Wyman Health chatted with Chris Cigarran, CEO of Imagine Health –a speaker at this year’s Oliver Wyman Health Innovation Summit 2017– to dive deeper into how the company’s innovative and proactive approach is helping the healthcare industry turn an entirely new corner. (The next Oliver Wyman Health Innovation Summit will be November 5-7, 2018 in Dallas, Texas.)
Oliver Wyman Health: Your overarching mission is to ensure patients receive high-quality, low-cost care. How are you doing what others in the industry aren’t?
Chris Cigarran: If you think about the general commercial market for self-insured employers, the predominate solution offered by major carriers is the broad-panel preferred provider organization (PPO) – the solution almost every self-insured employer across the country offers to their employees. We have a deep belief this solution is unbelievably flawed because of three things:
First, when you look at any city across the country, these carriers are including 92 to 98 percent of physicians and hospitals in their network. And if you look across all the network carriers like Blue Cross, Cigna, Aetna, or United, they’re all essentially the same.
Second, as The New York Times always jokes, the top three criteria used to design broad-panel PPOs are access, access, and access. But this approach that more access is better has zero to do with cost or quality.
Third, within a broad-panel PPO, it’s up to the member to figure it all out, without information, data, or support. It’s a ridiculous system.
OWH: How do you design your networks to ensure patients receive high quality care?
CC: Well, when a frontline associate at a large employer assesses care, they’re asking, “Who has a marble lobby? Who received a new U.S. News & World Report ranking? Who has the best commercial or valet parking? What does John in Accounting say?” This system makes no sense and has been in place for too long.
When we design our networks, our first criteria is quality – that drives our network design. We compile and use different data sources from multiple places to select our hospital and provider partners. Our networks are generally 25 to 30 percent of the available providers within a market, compared to the 92 to 98 percent you’d find from a large carrier. So rather than depending on the member at the point of care to figure out who to go to, we want to make the quality option the default option.
To do that, we’re using the biggest data set available – the Medicare data set. It’s extremely powerful. We start with six high-level metrics, and then dig down into 37 different clinical categories for every hospital in the country. We can see at a microscopic level what’s happening within a hospital, and rank every hospital in the country using outcomes-driven metrics. Whenever we show this level of detail to employers, they say, “I’ve never seen this before.”
By significantly narrowing the network, we save clients a ton of money by ensuring people get higher quality care and fewer readmissions, unnecessary surgeries, procedures, and tests. And because we’ve taken the network from 100 percent down to between 25 and 30 percent, we can negotiate deeper discounts than are commercially available.
OWH: How is Imagine Health disrupting the healthcare market?
CC: The majority of innovation over the past 15 or 20 years in the “commercial administrative services only” business has revolved around peripheral solutions: wellness, disease management, transparency, engagement, and apps. Data says those well-intentioned solutions haven’t made a difference.
There have been few attempts to create innovation within the network. Cost happens where care happens; care happens in the network. If you want to change the country’s quality and cost trajectory, you have to be willing to upend the current network’s construct and put it back together in a different way. But you can’t put it back together with everybody in it; that’s not how people buy anything – except for healthcare.
We are trying to fundamentally change this self-insured market by saying, “Let’s forget the peripheral solutions for now and focus on the biggest piece of healthcare – where you get care.” We think you can have a bigger impact on the supply side rather than trying to change the demand curve, so that’s where we’re focusing to drive significant innovation.
The majority of employers are going to stay in the healthcare game. They’re realizing the peripheral solutions they’ve attempted over the past 15 years have not had an impact. They’ve accepted a three to 15 percent trend for a long time, and they’ve pushed as much cost as they can to their employees. Now that they’re out of options, they’ve got to be willing to make tough decisions and do something innovative.
OWH: What are you most excited about for the industry moving forward?
CC: Over the past eight to 12 months, we’ve seen a handful of innovative employers approach us and ask to join in this revolution we’re trying to start. As an organization on the edge – whether it’s a bleeding edge or the cutting edge, depending on the day – it’s interesting to get out there. Over the nearly three years I’ve been here, for the first 12 months whenever we talked to employers and consultants, they’d look at us like we were crazy. But over the second 12 months, they’d say, “We still think you’re crazy, but we’re willing to listen.”
And now, we’re seeing a seismic shift in the market. From my experience in the employer market, when you can get one innovative employer to go first and it goes well, they’ll advocate for you. Then you get two or three, then 10 or 20, and then the next thing you know the market starts to shift in a pretty extraordinary way.
We saw this with high deductible health plans in multiple solutions where it took an innovative few to lead the way. We’re now seeing consultants realize this is something they should be looking at, as other employers are now willing to accept risk. The frustration level has reached the point where they’re willing to try a new solution. And we’re really excited about that.
Original interview: http://health.oliverwyman.com/drive-innovation/2017/11/blueprint_for_disrup.html