Advancing Self-Medication and Optimizing Healthcare Costs Through Receipt Data and E-commerce: An Interview with Yoshiki Hirai of White Healthcare

In recent years, social issues such as the financial deterioration and dissolution crisis of health insurance associations (hereafter referred to as "health insurance associations") have become a hot topic due to soaring medical costs. About 80% of corporate health insurers are facing financial deficits, and an increasing number are approaching 'dissolution reserve' status, with premium rates exceeding the 10% threshold set by the Association Health Insurance. Between fiscal 2008 and 2021, 111 corporate health insurers were dissolved¹, and some estimates suggest that the transition of dissolved health insurers to the Association Kenpo may increase the burden of government expenses by 12 billion yen per year².

Aiming to solve such social issues, White Healthcare Corporation was established in 2020 as a joint venture between Mitsubishi Corporation and Tokio Marine Holdings, with the mission of optimizing healthcare costs by encouraging patients to participate in their own healthcare and enabling them to choose the most appropriate medical care.

White Healthcare relaunched its OTC drug³ and regular medicine sales website "Your Medicine Box" in April 2023. Your Medicine Box" is an e-commerce site provided to health insurance members (hereinafter referred to as "members") through the health insurance, and supports members' health and self-medication⁴ by individually suggesting over-the-counter (OTC) medicines that suit members' needs while utilizing receipt data. In this interview, we spoke with Yoshiki Hirai about the background of providing "Your Medicine Box" and its aims.

White Healthcare, Inc.

Yoshiki Hirai, General Manager, Insurer Business Department

Hirai studied the Japanese social security system at the University of Tokyo's College of Liberal Arts. After joining a general trading company, he worked in finance and accounting, and experienced venture investment in the healthcare sector. 2020, he established White Healthcare and launched health insurance association management support services and health business services to promote medical cost optimization. 2023, he will establish a health insurance association for the startup industry. He is also a board member of the VC Startup Occupational Health Promotion Committee, a general incorporated association aiming to establish a health insurance association for the startup industry starting in 2023.

ROUTE06, Inc.

Daika Baba, Product Operations Manager, Professional Services Division

A software engineer for about 8 years with a wide range of experience from infrastructure to front-end, he moved to Product Manager after joining ROUTE06 in 2020, and is currently supporting mainly the growth phase as Product Operations Manager. Responsible for the product development of ``Your Medicine Box.''

Overview of "Your Medicine Box"

White Healthcare's "Your Medicine Box" is an e-commerce platform for health insurance companies, offering OTC and regular medicines to members under the supervision of expert pharmacists. Members can easily purchase OTC drugs over the Internet through their health insurance organization.
In addition, the site provides various information to deepen members' understanding of the medicines they themselves take without thinking about it. In addition, we provide a variety of information to deepen members' understanding of the medicines they take without thinking about it.

Challenges in Japanese Healthcare Financing

Baba: White Healthcare was established as a joint venture between Mitsubishi Corporation and Tokio Marine Holdings, but in what capacity have you yourself been involved?

Hirai: White Healthcare has two businesses, one for health insurance and the other for insurance pharmacies, and I am in charge of the former.

While working in Mitsubishi Corporation's healthcare division, I was exploring a business alliance with Tokio Marine Holdings aimed at addressing Japan's healthcare financial crisis, a significant social issue. White Healthcare was born out of the business concept that emerged.

With this background, I have been involved as a founding member of this company from the time of its business conception.

Baba: So you are truly a founding member of the company. You established the company in order to give shape to your new business idea.

Hirai: The business for health insurance and the business for insurance pharmacies both share the common value of "working to optimize medical expenses.

On behalf of the position of the health insurance companies, we are promoting projects that aim to optimize the use of pharmaceuticals by pharmacies and patients, and ultimately optimize healthcare costs, through the use of data and digital tools, under multiple themes.

Baba: The main theme of this article, "Your Medicine Box," was also developed as part of your business for health insurance, aiming to "optimize medical costs. What is the sense of challenge behind this?

Hirai: There is a sense of issues from both the standpoint of the health insurance companies and the patients.

There are various players involved in medical care, such as healthcare professionals, hospitals, patients, medical equipment and pharmaceutical manufacturers, etc., but it is the health insurers who have the greatest incentive to optimize medical costs, even though this is an extreme viewpoint.

Looking at the business and revenue structure, medical institutions see that an increase in patients leads to an increase in revenue, and the same is true for pharmaceutical and medical device manufacturers. I believe that some patients also want to receive the best possible medical services if they are paying the same premiums, rather than wanting to curb their medical expenditures.

Looking at the health insurance premiums you are paying, the average premium rate for corporate health insurance in 2008 was 7.4%, but it has now risen to 9.3%. This means that the premium rate has increased by approximately 2% over the past 15 years. Considering that it is 2% of monthly income, the impact is significant.

In the case of the Japan Health Insurance Association (JHIA), which small- and medium-sized companies are enrolled in, the current premium rate is 10% on average, half of which is paid by the company, which means that about 5% is deducted as insurance premiums from an individual's monthly income.

Health insurance premiums have an impact on everyone's wallet, but since the payment is basically made by payroll deduction, it is difficult to recognize the impact of health insurance premiums.

With medical expenses tightening and the national burden increasing, health insurance companies and other insurers are the most motivated to optimize medical expenses. On the other hand, most corporate health insurers, especially those operating on a relatively small scale, do not have sufficient resources or expertise in medicine and pharmaceuticals to control medical costs.

Therefore, White Healthcare's business is to provide the solutions needed to optimize medical costs as a service.

Engaging patients in healthcare through EC delivered directly to members

Baba: How do you envision "Your Medicine Box" contributing to the optimization of healthcare costs?

Hirai: I mentioned earlier about the optimization of medical costs as a company value, but in addition to that, we have another corporate mission: "patient participation in medical care".

We call it "patient participation in healthcare" when patients themselves understand healthcare better and receive appropriate navigation so that they can choose the most appropriate healthcare services according to their symptoms and health conditions. We believe that as patients become more involved in their healthcare, they will be able to select cost-effective medical services, and as a result, healthcare costs will be optimized.

The goal of the "Your Medicine Box" service is to encourage patient participation in medical care and to optimize medical costs at the same time, by providing an environment that allows patients to make good use of OTC drugs through health insurance companies. We would like to expand our services to assist patients in choosing the best medical treatment for minor illnesses and physical ailments.

Baba: What features does "Your Medicine Box" have to enable patients to participate in their own medical care, in other words, to be able to self-care?

Hirai: "Your medicine box" is unique in that it is a B2B2C (or B2B2E) product that provides services to association members through health insurance companies.

One of the advantages of providing services through health insurance companies is that we can maximize and verify the effectiveness of our initiatives by utilizing their members' medical data, i.e., receipt data.

If all we wanted to do was to promote the value of OTC drugs, we could have done it through a general-use website, but by utilizing receipt data, we can analyze whether people with this tendency can choose the best treatment method by using over-the-counter drugs. We are simultaneously analyzing the data and proposing drugs to our members who are the users of the site.

The e-commerce site for regular medicines itself is a service that already exists, and analysis of receipt data is also being conducted, but we are the first to offer a service that combines analysis of receipt data and real drug sales, which we believe is one of its major values.

At the root of our business development is our desire to provide solutions that are useful to health insurance companies.

When we first started our business, we thought we would be providing consulting services to health insurers on how to reduce medical costs by utilizing the data they have, but we have come to believe that we should not only identify issues through data analysis, but also create services that can help members change their behavior in order to truly solve the problems they face. We have come to believe that we should not only identify issues through data analysis, but also create a service that is involved in changing the behavior of health insurance members to truly solve their problems.

Our service is very important in that we can actually deliver OTC drugs to our members.

We have a hypothesis that self-medication has a significant effect on the optimization of medical costs, and we were able to share our awareness of the issue with the Ministry of Health, Labour and Welfare and the health insurance companies. The project was also launched in April 2008.

Push for information dissemination by health insurers to change members' behavior

Baba: What have you always been conscious of in developing Zagumi's product, which is marketed to members, the users, through Kenpo?

Hirai: The biggest thing is that although it is an e-commerce site, we focused on "whether it leads to a change in user behavior" as our business objective, not simply on sales. However, we had to be creative in how we designed the site so that members could take home meaningful information about the potential use of OTC drugs. This is where we needed to be creative.

The health insurance company does not want to make sales through this EC. We want to convey useful messages to our members, such as "Some of the medicines you receive at the hospital and pharmacy can be purchased over-the-counter" and "If you can use OTC medicines wisely, you can deal with minor health problems.

On the other hand, I think that union members often do not get a clear picture of the information they are receiving. We have been conscious of changing the behavior of our members by preparing a system that can provide them with the messages that health insurers want to send out, using their daily activities such as "buying medicines" as a hook.

In addition, we receive subsidies by reporting to the government on the effectiveness of the self-medication health care program that we are engaged in with health insurance companies in optimizing medical costs. In this sense, we are aware of the effect of "Your Medicine Box" in optimizing medical costs.

Baba: How do you measure the effect of medical cost optimization?

Hirai: Primarily, we measure it from receipt data, which is billing data for actual medical expenses incurred by the health insurance company. We verify from the receipt data whether patients' medical consultation behavior has really changed as a result of the use of "Your Medicine Box" and their increased literacy about medicine and health. As a result of introducing our service at a health insurance company with over 10,000 members, we were able to recognize behavioral changes in several hundred people.

In fact, when we talked to them in depth interviews, they said, "I can buy medicines here that have the same ingredients as the medicines I get at the hospital! We have also found that we have been able to offer a new option to patients who were previously unaware of the existence and effectiveness of switch-OTC drugs.

In fact, self-care and self-medication are also concepts that have been familiar in Japan for a long time. The culture of keeping a medicine cabinet of regular medicines in the home was originally Japanese. Recently, medical care has become more sophisticated and access to medical care has improved, but I believe that it is still important to be able to use over-the-counter medicines for one's own health condition and to be able to choose the right medicine for oneself.

Baba: What "Your Medicine Box" is trying to do is not something that is very far away, but rather an initiative that brings you closer to what you were originally doing in a different new way. What did you find difficult in the development of the "Your Medicine Box" product?

Hirai: It was very difficult to create a product while responding to the health insurance company's request to create a sales space that would increase literacy and encourage behavioral change among its members, rather than an EC site with the goal of generating sales. We had to develop the product while discussing a lot about how to think about the value of an EC site that does not just sell products, and how we could change the process and experience of selecting medicines.

Baba: You have a separate sales entity, or rather, a separate place where you have the medicines, and that's how you set up the system. We had a hard time figuring out how to incorporate that structure into the system. In this case, we felt that the success or failure of the product would depend on how White Healthcare could build a good relationship with the health insurance company, while also having an abundance of EC products and a CS and shipping system in place as prerequisites.

Hirai: That's right. Your Medicine Box" has two stages: whether the health insurers will see the merit in introducing this system, and whether the members who are the users will actually use the system and purchase the medicines. The first step was to get the health insurers to think that they would like to offer this system to their members! The first step was to get the health insurance company to think, "This is something we want to offer to our members!

Utilization of medical data that benefits the individual

Baba: What are your future plans for "Your Medicine Box"?

Hirai: We would like to go beyond being just an e-commerce site, and by utilizing the data that health insurance companies have, we would like to send out information tailored to each individual's health issues and promote linkage with products and products that can help solve health issues.

In addition to OTC drugs, we are also considering expanding the range of topics handled on the site to include oral care products, for example. We believe that it would be a good initiative for both health insurers and their members if we could not only sell good toothbrushes, but also identify people with specific health issues based on their data and propose useful products by providing information tailored to their specific needs.

Baba: It would be good if we can create a one-stop data flow and help users change their behavior, leading to the optimization of medical costs, which is the main goal of the project.

Hirai: There are various trends and opinions from both the government and companies on how to utilize medical data, but we want to make sure that we create examples of utilization that bring concrete and easy-to-understand benefits to users' daily lives. We can only do this from the standpoint of a health insurance association, which bears 70% of medical expenses and is responsible for the health of its members, and we would like to support the provision of new value through health insurance companies.

Photo: Hiroaki Otake