Consumer Payments

Finding Opportunities In Healthcare’s Retail Revolution

By Pete Rizzo (@pete_rizzo_

Seventy percent of the roughly $2.7 trillion in annual healthcare spending in the U.S. can be directly attributable to one thing – No, it’s not Obamacare or hospital inefficiencies, though both influence the process.

Rather the Centers for Medicare & Medicaid Services estimates that 1.8 trillion is influenced by consumer choice. But, according to Ernie Harris, vice president of strategy and products at Massachusetts-based payment solutions provider Alegeus, U.S. patients are only just beginning to think of themselves as healthcare consumers.

“A large percentage of care is either somewhat or completely voluntary,” Harris told “Being engaged and understanding who provides what type of care, where they are, what type of quality they offer versus [the price] they offer and what is covered and not covered by my various insurance products – all of that information is now able to be delivered to consumers.”

Harris, who will participate in an upcoming webinar on the topic on October 24, calls this consumer awakening the “retail revolution,” and says that it has been catalyzed by the Affordable Care Act (ACA). The ACA, Harris said, is forcing consumers to re-engage with their healthcare providers, and that in the process, it’s opening up new opportunities for financial institutions, benefit administrators and brokers to influence a multitrillion-dollar industry.

Over the next five to 10 years, this transition from employer-controlled healthcare toward retailization will create a market of more than 100 million consumers, according to Alegeus, all of whom have the ability to choose their own health insurance coverage.

However, understanding how the payment industry fits into this transition can be difficult. What are the implications of this market shift and how can benefit administrators, brokers and financial institutions support this transition? spoke to Harris in an exclusive interview to learn more. How is the retail revolution changing the landscape for FIs, benefit administrators and brokers? (Jump to 1:33)

Ernie Harris: There are a number of changes that affect each of those, on the FI side, back in 2003 with the introduction of health savings accounts (HSAs), it was a great opportunity for FIs to be able to get into the healthcare market, but also a great opportunity for individuals to take personal control of their long-term healthcare spending.

On the administrator side, benefit administrators are nicely positioned at the center of the healthcare transaction spectrum to be able to deepen that data access for consumers … Brokers, they’ve really been in the trenches for years, and are typically spending more time with employers, but with the rise of consumerism they’re shifting their attention.

How can FIs, benefit administrators and brokers support this change? (Jump to 4:45)

Starting at the beginning of the value chain, brokers are really going to play a more important role going forward as the facilitator of knowledge transfer. They’re the deep experts in the space. All of them are starting to turn an eye to individual consumer education. Really where brokers can add a lot of value is in the supplementary and ancillary products, such as short-term disability, critical care policies, accident policies and long-term care policies. These are all things that a lot of folks have very little if any exposure to.

Beyond the broker, the benefit administrator, they’re the ones that make it all go at the end of the day. They’re all a valuable, transactional component to this. When you got to a hospital, and you get admitted, people think of it on a retail level as I went to a hospital. But, in reality you’re dealing with multiple delivery channels … FIs on the other, play such a fundamental role, one of financial education, overall health-wealth convergence.

What trends are shaping healthcare’s retail revolution? (Jump to 8:22)

At our upcoming webinar, we’ll be addressing specific data-driven analyses that show these evolving trends and how each of the parties – FIs, benefit administrators, brokers, payers and individuals – are interacting with healthcare.

We’ll also be discussing what the impact of the ACA are on these trends and what we think the trends are going to result in in the next 12, 24 and 36 months.

To learn more about healthcare’s retail revolution in the run-up to Alegeus’ webinar, listen to the full podcast here.


*If you have trouble with the audio player above, click here.

Ernie Harris is VP Strategy & Product Management at Alegeus Technologies.

Ernie is a results-driven executive with experience in business development, product management, operations and marketing. Ernie is a charismatic leader with the ability to build, train, motivate, and mentor successful teams to outstanding performance.

Over the course of his 25-year career, he has served in product management and business development roles for Workable Solutions, Ceridian, Raymond James, Baltimore Gas & Electric and TDAmeritrade. Ernie has earned numerous accolades in the product management field, including designations from the Product Development and Management Association (PDMA) and the Association of Business Process Management Professionals.

He is a proud graduate of the University of Maryland where he earned a degree in Computer Science, and is an active member in several professional organizations and in his community. He currently serves on the board of directors for the Arizona Product Development & Management Association (PDMA) and supports community initiatives and charities focused on environmental protection.


Exclusive PYMNTS Study: 

The Future Of Unattended Retail Report: Vending As The New Contextual Commerce, a PYMNTS and USA Technologies collaboration, details the findings from a survey of 2,325 U.S. consumers about their experiences with shopping via unattended retail channels and their interest in using them going forward.

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