How pharma and digital health can create compelling value stories for health insurers

Key Takeaways

1. Health insurers see their role as providing the best quality care possible while controlling for costs, and view all potential partnerships with their specific membership in mind
2. The most common pitfall health insurers see pharmaceutical and digital companies make is an inability to speak to the unique problem their product solves for in a competitive context
3. Pharmaceutical and digital health companies must do their research on health insurers – understand relevant business needs and account for that in their value story

Introduction

Health insurers are focused on ensuring access to quality care for their members. To this end, health insurers see their mandate as going beyond the role of “payor” and into the realm of guaranteeing patient care. But they can’t do that without pharmaceutical and digital health companies.

Ipsos used our new AI-Powered expert recruitment technology, Xperiti, to recruit and conduct expert interviews with key health insurer stakeholders in both the pharmaceutical and digital health space. These interviews allow Ipsos to provide clarity to both pharmaceutical and digital health companies on how health insurers view their role in the healthcare system and what they look for from digital health and pharmaceutical partners.

As investment in digital health solutions and pharmaceutical research and development have reached new heights over the past few years, the increased competition puts them in a precarious position in terms of demonstrating the value of their product. Digital health experienced a significant increase in investment during the pandemic, while pharmaceutical R&D spending has increased to $102.3B in 2021 compared to $83B in 2019.[1] As digital health and pharmaceutical companies continue to grow[2], it is imperative to understand how best to position new products to health insurance companies.

Really, the goal is to provide the best patient care. While also trying to control the cost.” - Vice president of pharmacy, regional health insurer

Health insurers rely heavily on their partnerships with pharmaceutical and digital health companies to reach this goal of quality patient care for their members. However, these companies often miss the mark by failing to align their value stories with health insurers’ perceptions of themselves and their needs. By better understanding the health insurer’s self-perceptions and their desired outcomes, pharmaceutical and digital health companies are better able to position themselves for success when marketing to health insurers.

Understanding the role of health insurers

While it’s commonly understood that controlling costs is in the best interest of health insurers, their role involves considerably more complexity. Across commercial, state-issued, and federal health plans, health insurers must examine value across a wide variety of stakeholders. Health insurers rely on a needs-based approach for evaluating new technologies and products for their health plans. Health insurers are analyzing the needs of their members first and foremost, how to best address those needs, and what solutions offer the best value across all stakeholders – members, employers, and healthcare providers.

Beyond cost-saving measures, health insurers want a partnership that is a good fit for their organization. A good fit from the perspective of health insurers will include alignment between their mission and goals and those of the pharmaceutical or digital health organization, as well compliment their existing offerings and reflect their individual member population. Keeping this foundational knowledge in mind when crafting the value story for a new product, medication, or health solution will increase the odds of success.

When you say cost, cost to me is...inclusive of not just the actual cost of the [product], but also some of the downstream impact.” Director, national health insurer

Crafting a successful value story

Bringing a successful value story to health insurers goes beyond understanding your individual offering. The most common pitfalls health insurers see pharmaceutical and digital companies make is to present a solution without a problem rather than consider health insurers are making decisions using a need-based approach. Insurers are using analytics to identify member healthcare needs and are looking to pharmaceutical and digital health companies to help them close gaps in care.

To create that collaborative partnership that all players want, companies should provide perceptive insights into the business needs of health insurers. The more companies can identify the problems that health insurers cannot solve on their own and provide a way to fill that gap the more impactful your story becomes.

Another crucial layer to a successful value story is the connection to health insurer member populations. For example, a solution for Medicare advantage members is only impactful if those members are a significant cost driver of the overall population of covered lives. Health insurers want to know how your product can make an impact on their members’ lives and in turn allow them to better control costs. Value stories should therefore align with the needs of the health insurer’s specific member demographics.

A one-size fits all approach is not going to create a compelling value story, positioning must be specific to individual insurers and the populations they cover. In addition, companies should look to anticipate potential changes to CMS guidelines, recommendation of medical societies, and advocacy groups’ receptions to their products. Health insurers will often look to these stakeholders to better weigh their decision when taking on new partnerships.

Show me the value, right? Either show me that it's going to improve the quality of our care or what's going to decrease costs… If you can't show either, then there's no justification for it." – Director, national health insurer

Standing out among the crowd

For companies looking to differentiate themselves from the rest of the pack, further considerations can elevate your value story to the next level. Health insurers want to see a thorough understanding of how your offering fits within the larger context of the healthcare system, works within their organization and among their members, and is distinct from competitor offerings. The most important take-away here is do your homework:

• Which quality metrics are most relevant to your targeted health insurer?
• To what extent is the product easy to use? How will it fit into the overall health insurer infrastructure?
• Understand your disease state and anticipate questions that an expert may have. Do health insurers have to read between the lines for understanding?
• What do competitors have in their pipeline? How might their value story differ from yours?

Asking these tough questions, understanding the business needs and care needs of a specific health insurer, and carrying this throughout your value story is necessary to differentiate your product or solution and maximize your opportunity for successful partnerships with health insurers.

I want to be focused … This is the current guidelines. This is the disease … I need the background always even if [it’s diabetes] … This is what you know affects how many members… and these are the agents currently available” – Chief medical officer, national health insurer

Support from Ipsos Healthcare

Ipsos is particularly adept at guiding pharmaceutical and digital health organizations in both understanding the health insurer perspective and intentionally curating meaningful value stories for targeted health insurer organizations.

We partner with you to understand who is the right division/business decision maker for your product (for digital health), what evidence you need to meet their criteria for partnership/reimbursement, and how to develop a compelling value story that speaks to the unique needs of specific health insurers.

Support from Xperiti, an Ipsos company

All buying decisions are emotional decisions and key opinion leaders set the tone for how clients feel about your brand. Understanding the thinking of this influential group has been challenging in the past. Xperiti is innovating the research industry with AI-powered expert recruitment technology so companies can now deeply understand the key opinion leaders that accelerate sales.

Authors:

Ashley Lumpkin
Head of Health Insurance Advisory
[email protected]

Alex Kassan
Analyst, Advisory Services, Ipsos Healthcare
[email protected]

[1] Congressional Budget office, Research and Development in the Pharmaceutical Industry § (2021). https://www.cbo.gov/system/files/2021-04/57025-Rx-RnD.pdf.

[2] Rock Health, 2022 year-end digital health funding: lessons at the end of a funding cycle (2023). https://rockhealth.com/insights/2022-year-end-digital-health-funding-lessons-at-the-end-of-a-funding-cycle/#:~:text=2022's%20total%20funding%20among%20US,deal%20size%20of%20%2427M.