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Friday
Jan132017

The Similarities Between Health Plans and Subscription Television

By Clive Riddle, January 13, 2017

 

One can even directly impact if people live or die.  The other merely informs and entertains. Still, as I recently turned on the television to discover my favorite local station currently wasn’t available because of a contract dispute with my satellite television service, it occurred to me that there are significant parallels between health plans and subscription channel services.

 

I must digress to say it isn’t that easy finding the correct, simple mainstream term to refer to all that is subscription cable television, satellite television, and streaming internet services. With devices now delivering an increasing load of channel viewing, should we even use the term “television“ when referring to subscription services?  Wikipedia provides the term Multichannel video programming distributor (MVPD), which doesn’t exactly roll of the tongue.

 

Both health plans and subscription channel services, by their very nature, are based upon the volume of subscribers they amass, the monthly subscription revenue they receive, and the network of providers they contract with (be they health care or channels.) Both are significantly regulated. Both are now dominated by mega companies that emerged from acquisitions. Both now try to distinct themselves by offering enhanced engagement through customer portals. Both are evolving and experiencing disruptive innovations and change. Both are experiencing their providers becoming integrated delivery systems (such as ESPN or HBO.)

 

And both are plagued by contract disputes with their provider networks.

 

Just this month, Hearst Television local channels were pulled from DirectTV over a contract dispute affecting markets across the country including Sacramento, Kansas City and Pittsburgh. DishTV experienced headlines including Dish loses more subscribers and says there’s no deal yet to bring back Fox, NFL, and Tribune Stations Blacked Out On Dish Network In 33 Markets.  Cable fare no better than satellite on this front. Comcast/Xfinity earlier this year had headline including As Opening Day looms, Comcast-YES flap leaves many Yankees fans shut out and Verizon headlines included Verizon Dumps The Weather Channel in Favor of Looking out the Window.

 

Does this sound familiar for health plan subscribers? Consider these recent headlines: Blue Cross to drop Texas Health Resources from its network in 2017 after contract dispute; Humana, Tenet Cut Ties over Contract Dispute; Blue Cross, Fairview network spat could affect 170k patients (Minnesota); or NMHS prepares to drop United as negotiations stall (Mississippi).

 

Is it any wonder that after much ado has been made for health plans investing in “narrow networks”, DISH TV has just introduced its “Skinny Bundle”?

 

The point is, it can be instructive for health stakeholders to consider the experiences and lessons learned in the subscription channel service arena, and vice-versa.

 

But one could argue that a significant dissimilarity between health plans and subscription channel services is that while the uninsured rate was cut in half during the past decade, the trend towards “cord cutting” for subscription channel services is growing, with 21.9% of households having been projected to be cable or satellite free by the end of 2016, while the overall U.S. uninsured rate has dipped below 9%. On the other hand, a material portion of these “cord cutters” have recently ventured into internet subscription services offered via Hulu and others that are still under the radar when cable and satellite subscriptions are counted, and for health plans – it remains to be seen what the percentage of uninsured will look like after “repeal and replace” occurs.

 

But still, it can be interesting to observe the portion of “cord cutters” cobbling together their own network of integrated providers, bypassing an overall subscription service: assembling their own customized collection of HBONow, ESPN, Netflix, Amazon and other channels. Is there a parallel to emerge for the inevitable increased number of post-repeal and replace uninsured?

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