Client: Patient Engagement Company
The Problem
This patient engagement company ("PECo") provided a customer relationship management system to assure that colonoscopy patients showed up for their appointments and arrived properly prepped for the procedure. The PECo solved a problem that caused significant lost revenue for gastroenterologists: patients often cancel or fail to show up for colonoscopy appointments or don’t properly prepare for the procedure before they arrive. However the company was not growing sufficiently nor was it realizing enough profit because doctors were not willing to pay sufficiently for this received value. As a result, the PECo developed a modest incremental revenue stream from selling generic prep materials to the patient. The company’s leadership asked Alan to develop an offering and business model that would interest payers instead.
The Approach
Alan interviewed a wide range of participants and thought leaders in the field and discovered that there was an interest among payers in reducing costs and improving quality in the detection of colon cancer. He proposed that the company take a new approach: address the larger problem of the high cost, inefficiencies, and limited engagement in how Americans are screened for colorectal diseases.
Colonoscopies cost between $2,000 and $8,600 each, but Alan found that many of the tests are medically unjustified and therefore unnecessary. In health care markets outside the United States and in some highly regarded health plans, the best practice is to use home-based testing on a yearly basis. Such tests cost roughly $20 and are easy to perform. Physicians can use the tests to discern the minority of patients who need colonoscopies and refer them for that more expensive and unpleasant procedure. From a payer point of view, the current practice with colonoscopies was totally illogical – both clinically and financially - and an alternate solution made a lot of sense.
The Impact
Alan devised a solution that used the PECo’s current capabilities to perform a new function. The company would coordinate care between consumers, primary care physicians and specialists to get patients tested at home and to reduce medically inappropriate colonoscopy screenings. Primary care physicians would then refer only high-risk patients or those who tested positive on home tests for colonoscopies. The result was a new population health offering to be sold to payers that created a 48 percent cost savings and increased rates of screening among patients. In addition, Alan identified both a potential pilot customer and assorted business partners to implement the next step.