Controlling Chaos with Technology: An Overview of Transformation in Health Insurance
A transformation of unprecedented scale and speed is sweeping through the health insurance market. Health plans face numerous and competing demands as the market tries to reign in cost growth while improving health quality and outcomes. Driven by members, providers, regulators and payers, four primary forces are at the heart of this transformation: Consumerism, Care Delivery, Regulation, and Consolidation.
Consumerism: In parallel, reform will increase the mix of individual buyers of health insurance, and new benefit designs will members’ cost sensitivity across the board. Supporting and managing this growing faction of accountable but not-quite-empowered members increasingly relies on differentiated analytic capabilities. These tools will progress far beyond traditional clinical, predictive modeling and sales management. Payers will hide powerful analytics consumer-friendly decision support tools, enabling members to make better care and coverage decisions.
Care Delivery: Though most types of insurance that depend primarily on pricing and underwriting to drive profits, health plans are among the rare few that actively manage the underlying risk that they cover. Provider performance analysis used for tiering and steering of patients to the most efficient and effective care venues will become more complex as payers integrate the expanding breadth of raw clinical big data into these assessments. Beyond payers’ own needs to manage member health and utilization, providers are depending on payers for similar support as they assume increasingly more financial risk.
Regulation: As healthcare reform advances with its roadmap of progressively more challenging requirements, payers must build a fabric of trust to enable compliance and maintain member confidence. However, the reelection of the current administration only removes some of the uncertainty about what lies ahead. Congressional tension, state mandates, and quality regulations promise to deliver a steady beat of new requirements. Agility will be as important as compliance and trusted cloud services will become essential in delivering secure access to member and provider data.
Consolidation: To holistically address market pressures, payers are orchestrating a wide range of formal and informal alliances with health providers, vendors, and other benefits providers. Insurers will need enabling technologies and platforms to foster communication and minimize the friction of transformation. The ability to support increased multi-party exchange of clinical, administrative, and financial data will be a key enabler of effective collaboration. Many insurers will find cloud technologies flexibly enable platform transformation and secure data exchange while keeping IT costs under control.
The confluence of forces tugging on payers’ resources has never been so strong or diverse. Fortunately, emerging technologies present the opportunity to harness the power of big data, analytics, trust and the cloud to remain viable and valuable to members, sponsors, and providers. Upcoming posts will more closely explore the trends, technologies, and best practices affecting the industry.