Welcome to our “Innovators Worth Watching” series, spotlighting interesting and potentially disruptive players across a spectrum of industries.
Fueled by Americans’ urgent need for better chronic disease care and insurers’ march from fee-for-service to value-based payments, innovation in population health management is accelerating across the healthcare industry. But it’s hardly new, and CareMore Health, a recent acquisition of publicly-traded insurer Anthem, has been on the vanguard of the trend for over twenty years.
CareMore Health provides coordinated, interdisciplinary care to high-need patients referred by primary care physicians in nine states and Washington, D.C. The care encompasses individualized prevention and chronic disease management services and coaching, provided on an outpatient basis at CareMore’s Care Clinics. It also includes oversight of episodic acute care, via CareMore “extensivists” and case managers who ensure effective coordination across providers and care sites before, during and after patient hospitalizations.
The majority of CareMore patients are covered by Medicare Advantage or Medicaid, and company-reported results, as well as a Commonwealth Fund analysis, indicate that the patient-centered, relationship-based model leads to fewer emergency room visits, specialist visits and hospitalizations for segments of the covered population. They also suggest that it leads to cost efficiencies relative to comparable plans in its markets of operation.
Clearly, CareMore is an innovator worth watching. But does its offering have the potential to disrupt America’s traditional, episodic, acute care delivery model? We put it to the test with six questions for identifying a Disruptive Innovation.
- Does it target people whose only alternative is to buy nothing at all (nonconsumers) or who are overserved by existing offerings in the market?
Yes. Disruptive Innovations often initially take root among nonconsumers or those who are overserved—paying for more functionality in a product or service than they want or need. CareMore is targeting nonconsumers—patients with complex, long-term care needs that traditional primary care providers usually lack the time, money and/or expertise to address. - Is the offering not as good as existing offerings as judged by historical measures of performance?
No; results indicate that it is actually better care for the targeted segment of patients. However, this doesn’t necessarily mean that the care model isn’t disruptive, as not all disruptive strategies improve affordability and convenience at the expense of performance according to traditional standards. - Is the innovation simpler to use, more convenient, or more affordable than existing offerings?
Yes. CareMore’s Care Clinics are conveniently located in neighborhoods where their patients are concentrated, and providers help patients overcome barriers to health ranging from individual behavior to social needs. And as referenced above, the company is apparently able to deliver services in a more cost-effective manner vs. relevant benchmarks. - Does the offering have a technology that enables it to improve and move upmarket?
Yes. For a Disruptive Innovation to transform an industry, it must be able to grow, and profitably. This means it ultimately needs to win over customers who used to be perfectly satisfied with existing solutions. CareMore leverages various technology solutions to improve care, and facilitate care of an expanding patient population, potentially including such customers. These include dashboards synthesizing data from numerous sources to yield unique insights into care improvement opportunities, and applications to facilitate collaboration across providers and care sites. - Is the technology paired with an innovative business model that allows it to be sustainable?
Yes, with caveats. CareMore’s innovative care model, and its profit formula dependent on Medicare Advantage and Medicaid managed care programs, work together to promote sustainability. That’s because those programs are designed to reward precisely the kind of results that the CareMore model is designed to deliver. However, there’s no guarantee that current incentives will remain in place, and material changes could impact CareMore’s sustainability. - Are existing providers motivated to ignore the new innovation and not feel threatened by it at the outset?
It depends. The many existing providers still rooted in traditional care models and fee-for-service profit formulas might ignore CareMore’s innovative model, given it targets consumers they have not historically been able to serve effectively and/or profitably. Still, many other existing providers are actively seeking better ways to address chronic disease, and such players are likely not only to feel threatened, but to fight aggressively to protect their own prospects. This presents a challenge for CareMore in fulfilling its disruptive potential, but not a necessarily insurmountable one.
Verdict: Based on strict application of the Theory of Disruptive Innovation and what we know about CareMore from public information, the company has strong potential to become a disruptive force in the markets it serves. But stay tuned, as innovation in this population health space is accelerating, and therefore so is competition. While that should be a win for consumers in any case, it means the title of ultimate disruptor is still up for grabs.
This post first appeared in The Health Care Blog.
