Netflix Model and Health Plans
The Netflix model for healthcare (and other alternative health plan models)
You’ve heard of billionaire Mark Cuban, right?
In the healthcare world, you know him as the guy coming for Big Pharma’s money with his revolutionary low-cost online pharmacy
Well, Cuban recently made an interesting point about how we pay for healthcare.
On the a16z Bio Eats World podcast, Cuban said that healthcare needs to adopt more of a Netflix-like subscription model to “truly work.”
Today, we’re wondering: Should health plans adopt the Netflix Model? And what other innovative payer models are out there?
Stick with us as we explore these three examples and lay out the pros and cons of each:
Annual licensing model
AI-enabled value-based insurance
Simplifying health spending with the Netflix model for health plans
Can a subscription-based model work for a health insurance plan in the U.S. market?
The startup Curative seems to be a great example of how it can.
In this health plan model, individual patients pay a set amount for all-inclusive healthcare—if they schedule a PCP visit within a set amount of time after registering.
Remind me: What’s the alternative?
We’ve got you: Today, patients turning to the health marketplace to purchase affordable healthcare often end up on a high-deductible health plan.
Unfortunately, high deductibles often disincentivize patients from getting care—even if they do cover baseline preventive services.
Of course, an all-inclusive subscription health plan like Curative’s is still out of reach for some lower-income patients.
So, unless state income-based subsidies cover these plans and similar models are adopted by public payers, this model risks further entrenching health inequality, separating those who can afford to participate and those who can’t.
The Netflix model with a twist: Payer licensing agreements
What if we took the idea of the Netflix model for health plans but applied it to one specific area of cost?
Enter: Prescription payer licensing agreements (PLA).
Under this model, patients pay an annual “licensing” fee for their medications, which is sent to pharma companies directly.
The PLA approach to prescription coverage reduces significant costs to payers, allowing them to pass along those savings to patients. Patients also have fewer roadblocks to their prescriptions, allowing them to get treated more quickly.
But as with the Netflix model, this approach to health payments also isn’t perfect.
The biggest con is that this model doesn’t address high costs elsewhere within a patient’s coverage. It assumes that payer savings on prescriptions will be passed on to patients, which may not be the case.
Leveraging AI for next-gen value-based insurance
If you’ve worked in healthcare, you’re definitely familiar with good ol’ VBP.
But in case you need a refresher, value-based payment…
Determines reimbursement based on quantification using standardized clinical quality measures.
Relies on health information exchange (HIE) integration, which can still vary state-by-state.
Primarily applies to care for Medicare patients (at least for now).
But machine learning is bringing value-based payment to a new level.
AI promises to improve the efficiency and specificity of VBP quantification, tracking, and reimbursement.
For one, more specific and effective quality measures will promote a greater focus on social determinants of health (SDoH) goals and data. Using AI will make mining and analyzing this often unstructured data a lot easier.
Overall, this approach to health payments aims to streamline healthcare costs by focusing on prevention and intervention. In the end, this chain of priorities minimizes overutilization.
Of course, the main downside to this approach is the continued reliance on our current system of prior authorization, which can delay patient care.
Any discussion of lowering health costs for patients is exciting.
But for any of these creative approaches to health plans to work in practice, hospitals, health plans themselves, and governments will need to agree on checks and balances.
That way, they’ll ensure they don’t recreate the current system, just dressed up in a hat and trench coat.
We need to make sure patients and providers benefit—not just executives and shareholders.
AI helps us dream bigger with healthcare payment reform because it makes implementation, analytics, and projections much easier and more sophisticated.
Now, we know we have some health insurance connoisseurs reading this.
If that’s you, we’d love to hear what you think! Which of these models are you most interested in? Are there other AI-enabled alternative payment models we should be watching?