Five Trends Impacting Health Plans: Using Technology to Ride the Wave of Change

Cem Tanyel, CSO and SVP, Consulting and Delivery at TriZetto, a Cognizant Company
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Cem Tanyel, CSO and SVP, Consulting and Delivery at TriZetto, a Cognizant Company

In the last decade, healthcare has undergone significant transformation, forcing stakeholders to find new and innovative ways to remain successful in an increasingly competitive market. Previous practices and methodologies need to be reframed as health plans move quickly to adapt their technology infrastructures in order to accommodate changes spurred by the Affordable Care Act (ACA) and the increasing consumerism of healthcare.

As a result, organizations should focus on the following five trends that are significantly impacting today’s health plans:

• Mergers and acquisitions – With changing market forces, the industry is now witnessing larger health plans beef up their presence while at the same time, smaller, more vulnerable plans seek greater agility in order to remain competitive as market needs and interests continue to evolve. Examples of recent mega mergers include Aetna and Humana, Anthem and Cigna, and Centene and HealthNet.

• Convergence between health plans and providers – Accountable care models (i.e., payment and care delivery models that seek to tie provider reimbursement to quality metrics and reductions in the total cost of care) are expanding, while enterprises dependent upon a traditional “fee for service” approach are experiencing increased pressure to prove their value.

• The U.S. government as the world’s largest healthcare payer – As health plans look for ways to grow their businesses, they continue to roll out new programs to serve Medicare and Medicaid. Meanwhile, the ever-changing requirements associated with regulation continue to be a burden. All of these factors could be significantly impacted by the results of this fall’s presidential election as the market tries to predict the new president’s potential impact upon the healthcare industry.

• Consumer influence – The establishment of health insurance exchanges enabled direct connections between consumers and health plans, and many plans are still trying to find ways to capitalize on this business model. In some cases, the promise of these exchanges has not yielded expected results—with high risk and low returns driving plans such as United Healthcare to end their participation. Whether serving states exchanges or not, all health plans are seeking closer relationships with consumers, members and patients.

• Health plans need to do more with less – As consumerism and governmental regulation force the declining healthcare reimbursement rates and increased competition within the market, health plans are now looking for ways to achieve greater operational efficiencies and reduce their administrative costs.

Health Plans Look to Social, Mobile, Analytics and Cloud to Enable Evolution

As healthcare organizations hone in on these trends, the latest wave of technology innovation — incorporation of social, mobile, analytics and cloud (SMAC) —are four key developments that can assist in adapting to these market shifts. To remain competitive in today’s market, health plans should capitalize on the benefits of SMAC as they navigate the turbulent waters of the sea-change occurring within the industry. In order of importance, the following SMAC technology applications should be considered by CIOs within the health plan business model:

• Cloud technology  –The technological revolution has provided opportunities for health plans through the use of cloud technology, including increased flexibility, universal accessibility and reduced expense. However, many health plans are being cautious in their approach to this technology. With protecting patient confidentiality a moral and legal imperative, public clouds contain potential security risks that prevent health plans from migrating their core system applications. While private clouds present a more attractive alternative, the industry is seeing highly limited utilization among health plans. Cloud-based applications are currently primarily restricted to non-core systems that do not contain patient confidential information—such as development/test/train environments or auxiliary systems. Conceptually, cloud-based deployments can support core system integration during health plan mergers or alternatively, provide a fast way to split systems in divestiture situations. Health plans are also closely watching deployment technologies that allow systems to be deployed in a private cloud, a public cloud or on premise—based on their business requirements.

• Mobile reform – Mobile reform is at the heart of the healthcare consumerism trend. Many health plans are looking to add more value to their patient portals, as well as supplement these portals with mobile applications capable of linking them directly to members and patients. According to a 2013 market research study from Health Research, Inc. (HRI), 65 percent of consumers with one or more health applications on their mobile devices are using these apps at least once every week. Health plans need to figure out how they can embed themselves into one of these sticky mobile apps.

• Social networking – These platforms are an uncharted area of huge opportunity for health plans. According to the HRI research study noted above, 56 percent of consumers would be more comfortable having their data shared among healthcare organizations if it meant that they would receive better care. These platforms offer an environment where consumers, members and patients have the ability to choose what they want to share, how much they want to share and with whom they want to share their information. Healthcare enterprises capable of solving the conundrum between utilizing social networking platforms to deliver better care and protecting member/patient privacy can expect to see huge returns from their innovation.

• Analytics – This is the enabler of population health and a key focus area for health plans today. Unfortunately, the fragmentation of information across multiple care settings and across numerous payer and provider technology environments is a significant hurdle that needs to be overcome along the way. Communication and interaction between organizations and their data is required, a mammoth task given the multitude of businesses, care-givers, applications, languages and data formats involved. In addition, any solutions offered must incorporate substantial security restrictions that protect patient privacy and confidentiality.

SMAC for Success

With the healthcare industry in a current state of flux, necessity is the mother of invention. All stakeholders should expect to see exciting breakthrough innovations from our nation’s leading health plans in the near future. This can be accomplished by focusing on applying SMAC technology toward the five major industry trends. As a result, health plan thought leaders will be driven to new heights of technological creativity to ensure their organizations remain both relevant and profitable.

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