The New York Times wrote in April 2017 that the U.S. was in the throes of an epidemic for which there was not only a cure, but one that would cure every single adult suffering from it.
The disease: medication nonadherence.
According to data from the National Association of Chain Drug Stores, as many as 30 percent of prescriptions are never filled, and 50 percent of those prescribed for chronic diseases don’t take their medication properly. The result is 125,000 deaths and 10 percent of all hospitalizations, accounting for as much as $289 billion in additional — yet totally preventable — healthcare costs every year.
Additionally, new data suggests that as many as 30 percent of doctor’s appointments result in no-shows and as many as 900,000 deaths per year — or roughly 40 percent of the U.S. mortality rate — are the result of “preventable causes,” such as smoking, alcohol use, drugs, obesity, poor diet, physical inactivity and conditions that could have been addressed earlier through routine screenings. It’s clear the healthcare epidemic as a result of nonadherence is now being measured in the rising costs of our healthcare system in the U.S. as well as in the quality of — and even the loss of — life.
The problem, Group Executive of TSYS Healthcare Trey Jinks told Karen Webster in a recent conversation, is that healthcare spend is a function of utilization. Healthy people spend less on doctors, cost their employers less in lost productivity and generally lead more productive lives because they feel better and are able to be more active.
But getting there is harder than it should be. Having spent the better part of the last 10 years managing healthcare payments, both through health plans and third-party administrators, the weakest link, Jinks said, is getting consumers on board.
It’s why it’s become a high priority across the industry to get consumers more invested in leading a healthier lifestyle by creating incentives that reward healthy behavior.
He believes it’s a problem that’s tailor-made for the card industry — a segment that’s mastered the art and science of rewarding consumers for using various card products at various merchants. It’s also the genesis of the latest piece of TSYS card technology: TSYS Advanced AuthControlSM, which takes the concept of rewards to another level by rewarding patients for going to the doctor and following their physician’s wellness plan by giving them money to spend at merchants on products that reinforce a healthy lifestyle.
That system, Jinks noted, makes it possible for healthcare insurance companies and administrators to establish and distribute rewards to those patients who “do the right thing” by keeping up with tests and screenings. For example, that might mean rewarding a pregnant woman who makes it to every monthly fetal health checkup or a diabetic patient who cuts refined sugar from his or her diet and successfully conducts blood tests each day.
The point, Jinks said, is to offer consumers an appropriate nudge to get them in line with the appropriate behavior — and to sustain it.
“If you can tailor the reward back to the behavior, you both see better customer usage and loyalty — not to mention much stronger reinforcement,” he said.
That means, for example, the pregnant woman who makes it to her checkups is given rewards that can be used to buy baby clothes or formula, while the patient with diabetes who does the same is given a reward to purchase healthy food options.
To make a reward, well, rewarding, patients need a place to reliably redeem that reward. As of last week, they got one, when TSYS launched its new wellness incentives processing solution in partnership with Walmart and Sam’s Club locations nationwide.
Why Walmart Was a Fit
Walmart’s interest in healthcare is far from new. For the last decade, the retailer has focused on bringing better healthcare opportunities to its approximately 1.5 million employees in the U.S.
The company’s new partnership with TSYS, Walmart’s VP of Emerging Payments Jamie Henry said, allows Walmart to take its healthcare focus to the next level by branching out to their customer base in greater degree.
Moreover, he noted, TSYS’ Advanced AuthControl technology is a natural complement to Walmart’s Directed Spend platform, which was released about a year ago.
Directed Spend is a rules engine that can be used to create purchase restrictions down to the category “and even SKU” level so third parties can easily customize what kind of purchase can be included, and what must be excluded, Henry explained.
A simple example of a use of this outside healthcare, he noted, is with the Red Cross, which wants to be able to arm customers with spending cards during times of emergency so they can get things like food, water and laundry detergent — but doesn’t necessarily want to give them access to everything Walmart sells.
“What we can do with Direct Spend is really scan the entire basket and understand which items are eligible for which program. From there, really almost infinite design options are possible,” Henry said — options which give the insurance companies TSYS brings to the table flexibility to design rewards that fully speak to the customer by allowing those insurance companies to offer rewards applicable to specific categories, even down to specific products.
And those options, he noted, are all compatible with Walmart Pay, so customers can manage everything digitally through a single checkout platform.
“From all sides, this has to be designed around ease of use,” Henry said, “because complexity does not engage consumers at all.”
Ease of Use
Critical to ease of use, all parties agreed, is ease of access.
Of course, in the United States, you don’t get much more accessible than Walmart, which has a location within 10 minutes of nearly 90 percent of the U.S. population and a weekly customer base exceeding 150 million. If one is a health plan looking to offer a wide variety of wellness-related products and incentives, it would be hard to find a place better stocked than the average Walmart Supercenter.
“We have a lot of things people want and need, and I think it is impossible to underestimate the importance of ease of use here or how simple and one-stop this needs to be,” Henry said.
Healthcare in the U.S. — Henry and Jinks agreed — is expensive because it’s reactionary. The customer “does what they want,” and then they pay, via insurance and out-of-pocket, for all those unhealthy choices with medical tests and procedures to mitigate the damage.
“The point is, make it easier to be proactive, so that all those procedures … can be avoided,” Henry noted. Walmart can push people toward health and wellness products, but they also sell an awful lot of fresh fruits and vegetables.
The beauty of the combined systems that TSYS and Walmart bring to the table is one that allows a level of granularity to be built into the offering for health plan members.
Motivating people toward proactivity has been a historical challenge for insurance companies and employers, Jinks said, because it requires member engagement — which has not been a historical strength of the industry.
People typically call their insurance company when they have a problem with the bill, he noted. Other than that, there’s a lot of radio silence. Walmart, on the other hand, is a weekly point of interaction for most Americans.
“The point is [to] create more [of] a continuum of engagement when it comes to healthcare in the U.S.,” Jinks emphasized.
Will It Work?
It’s too early to tell, as the program has been up and running for a little under a week and the data is not quite in yet. But, Jinks noted as the conversation wound down, customers undeniably respond to being rewarded — particularly when it’s done right.
“I think in the past people haven’t thought as much about how to make healthcare rewarding, because health is rewarding on its own. But we can — and with Walmart’s help we are — making it a lot [easier] to offer people not just the general benefits of a healthy lifestyle, but actual tangible, visible benefits for trying harder to live one,” Jinks said.