A for-profit company based on the idea that health plans should spend pennies to save dollars has a new leader.

The board of SeeChange Health has named Bryce Williams to succeed Martin Watson as the company’s president and chief executive officer. 

Martin Watson — a former executive at Aetna Inc. (NYSE:AET) and UnitedHealth Group Inc. (NYSE:UNH), and the founder of Cardtronic, an early personal health account payment card company — started SeeChange in 2008 to create a company embodying the concept of “value-based insurance design” (VBID).

A VBID plan uses out-of-pocket costs, networks, covered drug lists, and other health plan features to encourage people to spend more money on blood pressure control, weight-loss, tobacco cessation, diabetes control and other measures that may sharply reduce spending on expensive hospital care.

SeeChange has been trying to offer both VBID-based insurance and VBID-related services, such as services designed to analyze plan enrollees’ use of care and persuade the enrollees to get the right kinds of preventive care.

The drafters of the Patient Protection and Affordable Care Act (PPACA) borrowed from the SeeChange playbook when they included a provision that requires non-grandfathered major medical plans to pay for many basic preventive services, such as checkups and flu shots, without imposing out-of-pocket costs on the enrollees.

But the insurance arm of SeeChange ran into turbulence earlier this year. What does the change there mean for health insurance agents and brokers out in the field? Read on.

Market

 

1. The change could give a boost to use of VBID concepts at private exchange plans.

One of the knocks against use of VBID strategies in the commercial insurance market is that insurers or self-insured employer plans may have to spend much-needed pennies today to reduce medical bills that will come in years, or decades, in the future.

Williams was the organizer of Extend Health, a private exchange company acquired by Towers Watson. More recently, he has been the managing director of exchange solutions at Tower Watson, one of the big players in the private exchange business. One division at Towers Watson runs the biggest private Medicare plan exchange in the country.

Williams has also been a senior vice president at eHealth Inc. (Nasdaq:EHTH) — the company that has been running the kind of popular, smoothly functioning, Web-based health insurance marketplace that the managers of the PPACA public exchange system hope to have on the Web when their exchange programs grow up.

Williams’ ties to the big-data crunchers and the private-exchange managers might help him give the value-based approach more sizzle.

The exchange managers may have even more of a stake in value-based design than the insurers and self-insured plans have, because one of the big risks facing public and private exchanges is anti-selection — the risk that the higher-risk users will prefer some of the product providers than others. Offering solid value-based programs might be a way for exchanges to reduce and manage anti-selection risk. Some private exchange systems court agents and brokers, and those exchanges might need boots on the ground to help with selling and servicing value-based programs.

Note taking.

 

2. The news might make venture capitalists take another look at health plan services firms.

Overhauling a company is not easy, but the news organizations covering the story got the company’s name right. Other venture capital-backed firms have gone through course changes and survived to earn the investments back.

SeeChange has pointed that use of its consumer engagement and health improvement system has been growing quickly. Red Herring recently gave the company its Top 100 Innovation award.

Low-risk investments in the United States are earning a return of about 0.000001 percent. Maybe some investors will read about the SeeChange and think about other ways to profit from all of the changes in the health care and health insurance markets. At some point, some of those investors may recognize that many of the people who know how the markets actually work are agents and brokers.

Networking

 

3. The SeeChange change could increase the appeal of social media among people who would like to run companies themselves.

Twitter underwhelmed Wall Street when it announced its earnings this week — but Williams has been tweeting actively, and interactively, under the handle @brycewatch. Maybe the tweeting and the new job are entirely unrelated, but maybe somehow, at some level, they’re related. Many health brokers already tweet, but maybe the SeeChange hire will make tweeting a little more interesting.