The Healthcare Trifecta

As somebody new to the healthcare sector, I was confused when people were talking about customers. It seemed like different people had different customers in mind. But there are indeed different customers in healthcare: patients, providers, and payers. For customer analytics this is key. We need to differentiate between different customer groups since they have different needs, which drive different analytics approaches.

I started using the term "Healthcare Trifecta" to describe these customer groups and their interdependencies (3 Ps of healthcare sounds like a catchy name too). Trifecta describes, by the way, a situation when three elements come together at the same time.

Patients take the medicine or treatment prescribed by the physician. Providers (pharma companies, physicians, hospitals, pharmacists) produce, prescribe, or recommend medicine or treatment plan. And payers, e.g., insurance companies, pay for the medication or treatment. Who is then the key decision maker?

It depends. There are times when a patient comes with a preselected choice of medicine to the doctor and pays directly. Other times the insurance company defines very precisely the medication and its price available to the patient limiting basically what the doctor is allowed to prescribe. And there are times when the physician can recommend treatment that is best for the patient regardless of costs.

Who the decision maker is varies then depending on the situation. It also varies depending on the country and its healthcare system. In Germany, for example, with full healthcare coverage of the entire population and about 90% of that being highly regulated, the payer has significant influence on the options available to both patients and providers. In the US, on the other hand, with little regulatory oversight, providers have more leeway in pricing and can offer broader choice to patients, leading though to higher costs for both insurance companies and patients.

From customer analytics point of view, different healthcare systems and different situations require different analytics approaches, and different data sets. With patients wanting to stay healthy and minimize healthcare expenses, you need to identify how they manage their health or illness and how to help them to be more effective. For payers whose main objective is to maximize profits, analytics may focus on optimizing internal processes. Providers want to help patients while maximizing profits for their business, but they are overwhelmed with new data from patients and payer requirements. Customer analytics needs to focus on identifying which digital and non-digital channels are most effective for providers and which type of content resonates best with them.

Although the trifecta describes the key players in the healthcare systems, there are two more parties involved. Regulators oversee the entire system and, depending on the country, define a strict or a lenient operating mode for the trifecta. And in the past few years there have been more disruptors entering the healthcare space. Many high-tech companies that have built expertise with big data and analytics, e.g., Amazon, Apple, Google, Baidu, or Alibaba, are investing in the healthcare area. They are disrupting the inefficient healthcare market and building new business models with their big data and analytics expertise. Fun times ahead. More on that at some other time.