Financial Services
Thought Leadership
When Health and Wealth Collide
Health and Wealth: two sectors where the boundaries will continue to blur as consumers take on more responsibility for saving and paying for their own heath care.
Why Now?
A major force behind this convergence is US legislation (i.e., the Medicare Modernization and Improvement Act of 2003) which created tax-advantaged healthcare savings accounts (HSAs). Providers of these new products include asset managers, banks, insurers and retail financial advisors, many of whom offer savings, investment, credit and/or payment products—in addition to advice—to help consumers plan for and fund health-related expenses. According to analysis by McKinsey & Co, there could be more than 25 million HSAs in the US by 2013, generating $55 billion to $75 billion in revenues.
Some healthcare providers are also getting into the game. Participating Blue Cross and Blue Shield companies, for example, can now deliver consumer-driven health to members through Blue Healthcare Bank—an independent licensee of the Blue Cross and Blue Shield Association. The Bank gives members access to state-of-the-art healthcare savings and payment options, including HSAs, Flexible Spending Accounts (FSAs) and Health Reimbursement Accounts (HRAs).
What’s Next
Such savings and payment options are just one step in helping consumers manage and fund their own healthcare decisions. Many more solutions are needed—especially for retirees. Currently, only one-third of employers offer retirement healthcare benefits, and that number is expected to shrink.
Over the next decade, we expect more financial services organizations to create products for the consumer healthcare market—e.g., debit cards, advisory services, investment accounts and supplemental risk products. We also expect convergence to go beyond the consumer market as employers look for service providers to help with payments, benefits administration and e-healthcare solutions.
The Marketing and Media Backdrop
Fortunately, media coverage of consumer health and financial issues is converging even more quickly than the market. Over the past 5 years, personal finance reporters have started to write more and more about healthcare funding, wellness, long-term care costs and prescription drug coverage. In fact, the Wall Street Journal’s Personal Journal section now covers in almost equal parts financial, health and lifestyle news. As the first wave of Boomers moves into retirement this year, we expect the lines between healthcare and financial coverage to blur even more.
Take-Aways:
- Look for a new class of hybrid financial services and health care products to emerge over the next decade, many of them focused on retirement health/wellness and long-term care.
- The major thought leadership issues in financial services and healthcare—i.e., retirement, long-term care, healthcare reform, social security/medicare, wellness, longevity—are converging, as are the capabilities of many traditional players and new competitors.
- Personal finance and financial reporters have become important gatekeepers for consumer healthcare, wellness and healthcare payment news.
MJW
