By OWEN TRIPP
Move over, GLP-1s. This year the healthcare spotlight is on alternative plan design. Alternative health plans offer cost transparency and a consumer-friendly shopping experience. But can the capabilities under the hood deliver on quality and value? Though it may not sound buzzworthy, it has the potential to trigger a seismic shift in the commercial insurance market.
After years of disappointing returns and unmet promises from traditional insurance models, innovators and big-name insurers themselves are doubling down on alternative plans aimed at reducing healthcare costs through preferred care pathways with transparent pricing. Though these plans come in many flavors, common features include tiered networks, variable copays, care steerage, and an emphasis on primary and virtual care — often packaged in a digital-first (and AI-powered) “shopping” experience.
Alternative plans seem like a win-win. For consumers struggling with surprise bills and medical debt, replacing confusing deductibles and coinsurance with predictable copays offers much-needed peace of mind. For employers facing the highest increase in healthcare costs in 15 years, getting their workforce on a trusted path to quality feels like a sure bet.
There’s a catch, though: Alternative plans won’t help much if they lead people to the same old, fragmented healthcare experience. Innovative cost-sharing and a slick front-end experience must be backed by high-quality clinical care, dynamic population health management, and personalized engagement that represent a significant upgrade from what’s been delivered to date.
Otherwise, signing up for an alternative plan will be a lot like buying a shiny new smartphone, only to discover that its operating system only supports a handful of outdated apps.
Alternative plans: what must be under the hood?
While cost transparency and a streamlined shopping experience offer immediate benefits to consumers, it’s the deeper capabilities and levers under the hood of alternative plans that will drive long-term value and create an alternative model worth embracing.
1. A primary care-led integrated care model
Most insurer-led alternative plans are built on top of existing care delivery networks (and existing provider contracts), often leading people to well-worn pathways and settings, including those that have produced status-quo outcomes for people and minimal cost improvement for employers.
Alternative plans need to create new dynamics around primary care, removing access barriers, creating flexibility and incentives, and repositioning expectations for provider interactions. Simply doing more of the same is inadequate. A true primary care-led plan is one that creates new channels and opportunities, dedicates time for immersive one-to-one discovery, and empowers physicians to lead people to quality across the network based on individual needs — supported by data, technology, and system-wide connections.
Incumbents have not historically embedded sufficient clinical expertise and care delivery services in their core offering to make this a reality. Nor have they created robust connections across the ecosystem to enable integrated care or to consistently guide and support people.
Unlocking the full potential of alternative plans will require redesigning the care delivery model with a focus on nationwide provider networks, longitudinal care across all settings, fully integrated medical and behavioral health care, shared data and insights across care teams, and system-wide navigation. This includes connections to point solutions, centers of excellence, and high-quality virtual and in-person care.
2. The quality engine
Alternative plan design must address the quality and affordability crisis plaguing employers and consumers alike. Just saying that you drive to quality is not sufficient. Nor is it sufficient to drive to one flavor of quality.
At a time when the definition and management of quality within any plan is opaque, consumers and employers need to align themselves with alternative plans grounded in sophisticated algorithms that rate providers and surface recommendations based on hundreds of variables, including physician experience and credentials, patient outcomes, costs, and patient satisfaction scores. Just as important, these recommendations need to be personalized based on factors ranging from medical history to social determinants of health.
It’s critical that employers and other plan sponsors scrutinize commitments to quality and understand what goes into quality models. Are physicians involved in building the models? Is there governance in place to ensure safety and equity? Do such models rely solely on public cost and quality data? What feedback loops exist to continuously refine these models and inform network design and flow? Most importantly, is quality being defined in the best interest of the member?
Finding high-quality care under a traditional health plan used to involve lots of online research and word-of-mouth recommendations, kind of like shopping for a car. When people find themselves in the right alternative plan design, it should feel a lot more like stepping into a driverless taxi — where the destination is top-quality, in-network care that matches your needs.
3. Intelligent engagement
An AI-first experience is a chief selling point for many alternative plans. But fast answers from a chatbot aren’t enough to build trust and put people on a better path. AI has to drive ongoing engagement that’s smarter, personalized, and proactive.
As with quality models, the effectiveness of AI-led engagement depends on the ability to synthesize data from across the healthcare ecosystem. Successfully anticipating and responding to people’s needs requires integrating population health insights and individual-level data from multiple domains, including medical claims, benefits information, and prior healthcare interactions. At its best, this intelligence enables AI — with clinicians in the loop — to identify and engage hard-to-reach members, close gaps in care, tailor interventions, and identify actionable insights and opportunities.
Engagement means more than AI, however. Getting people on a better path involves not only incentivizing them to make smarter healthcare decisions (through copays, for instance), but also educating them as to why it’s a smarter decision. Keeping people on a better path requires using technology and empathetic humans to reinforce healthy behaviors and build trust.
Fast answers are just a starting point. People also need proactive outreach, personalized nudges and recommendations, and — last but not least — empathetic humans to guide and support them.
Learning from the past, looking toward the future
Alternative plans have tremendous potential, but we’ve seen before how well-intentioned efforts to drive value through plan design can veer off course. HMOs became overly narrow and restrictive. That helped bring about consumer-driven models like high-deductible health plans (HDHPs), but amid rising costs, these plans have actually deterred people from seeking low- and high -value care.
None of these previous attempts have delivered on the promise of reducing costs and improving outcomes. This is largely the result of the misaligned incentives and unintended consequences rooted in our fee-for-service system.
Alternative plan design has an opportunity to get it right. Just imagine: If a slick AI-first front end actually leads to a transformed healthcare experience, we’re on the path to real change. But what’s under the hood is where the design starts.
Owen Tripp is the co-founder and CEO of Included Health, a personalized all-in-one healthcare company.
