As Chief Innovation Officer at Humana, Chris Kay says innovation begins when you truly understand your customer.

His passion for anticipating consumer needs began while he was working in the retail sector.

“I’ve always been curious by nature,” explained Kay. “As an M&A lawyer who moved into a retail career, I was interested in understanding how Target had such deep insights about what customers would shop for. It was then I started to dig into unmet consumer needs. If you’re a retailer who wants to deliver value to consumers, you really have to understand them. You have to know them and know what their needs are.”

Kay’s career has focused on efforts to simplify people’s lives and improve the customer experience.

Before he joined Humana, Kay pioneered efforts to streamline the retail banking experience as CEO of Citi Ventures. He graduated magna cum laude with a J.D. from the University of Minnesota and a B.A. in French and economics from the University of Wisconsin-Madison.

Kay now designs products and services for Louisville-based insurer Humana to help improve people’s health and reduce costs of healthcare.

“Fundamentally, disruptive innovation is rooted in new customer experience or in meeting an unmet customer need,” said Kay. “Studies show 90 percent of the dollars spent on innovation are spent on process, systems and product innovation, but they only create 10 percent of the value. The 10 percent of innovation investment in new customer experiences and unmet consumer needs results in 90 percent of the value. That’s business model innovation.”

A focus on improving care

Kay says Humana is focusing on a “return on health.”

“To improve care, we need to have that deep understanding of our consumers and their health. We have to consider fundamental barriers to health like isolation, loneliness and food insecurities,” explained Kay. “As we innovate around health, we want to simplify a patient’s experience in the healthcare system instead of adding another silo or more complexity.”

“If you focus on improving the health of the members you serve, you ultimately reduce costs,” said Kay. “If you focus only on reducing costs, you may or may not improve health.”

In that spirit, Kay believes clinicians hold the keys when it comes to improving healthcare.

“The ability to truly understand the health and clinical needs of our patients and shared customers is imperative. That’s why the healthcare industry needs to continue to have a strong physician voice at the top,” said Kay.

“At Humana, we always have a physician or two involved in every innovation project,” said Kay. “At the end of the day, if improving health is how we want to get to value, then you need to be more in tune with how to improve health, and clinicians are uniquely positioned to do that. We need to consider how we can partner better with physicians as they take leadership positions in the healthcare system.”

Business of Medicine Physician MBA March Lecture Series

In March, as part of the Business of Medicine Physician MBA Lecture Series, Kay discussed a future-back view of the healthcare system based on emerging healthcare trends, consumer needs and technology.

“I believe as senior leaders in the healthcare world, we need to think about areas of opportunity or potential disruption. As we align our strategies and align our path, we have to have a view of where we’re going,” said Kay.

“Our interests at Humana align with physicians,” he added. “We recognize that the trust physicians and patrons build is core to the care of patients, and we also recognize that the job in care is a 365-day-a-year job.

“Many physician leaders see their patients four to five times a year. We have to think about how we will innovate around barriers to health.

“We have to determine how we can support care that goes beyond the doctor’s office, and how do we do that in an integrative way?”

Humana takes care of more than one million people in their homes every day. As the role of the payer evolves, Kay says Humana is working to stay at the forefront.

“Our strategy at Humana is to migrate from the traditional payer, which is largely a transactional model, to more of a relationship-driven healthcare services company,” Kay said.

Addressing challenges as physician leaders

“I think the industry is going through a tremendous transformation,” said Kay. “As you look at the overall shift toward outcome-based medicine, I think physician leaders are going to have to understand how they can facilitate this, and in some instances, they need to make a decision as to how they want to drive that pivot to more of a value-based healthcare model.

“There’s a lot of innovation that can be unlocked as we start to think about the value of healthcare moving away from a fee-for-service model. Physician leaders must understand how to decide on the appropriate investments to continue to accelerate their capabilities around care.”

Another challenge physician leaders must tackle now, Kay says, is incorporating the use of big data and analytics in healthcare.

“New physician leaders need to understand how to deploy, use and accelerate the role of technology and analytics in their practices and in the management of their healthcare businesses. At the end of the day, doctors, pharmacists and nurses will all need to be practicing at the top of their license, and I believe the role of analytics, artificial intelligence and, even, virtual reality, will dramatically change the way doctors practice medicine over the next five to 10 years.”