Reviewing the drivers, restraints, challenges and opportunities for healthcare payer technology in 2021.
Those organizations that kept pace with healthcare payer technology trends weathered the uncertainty of this year relatively unscathed. In fact, 2020 made the strongest case yet for health plans succeeding with technology. If your health plan felt less prepared, you may have increased the intensity of your strategic planning efforts to ensure your health plan is on the right track. To that end, let’s explore the industry drivers, restraints, challenges and opportunities impacting these strategies as we look to 2021.
Drivers: Top Motivators for Health Plans in 2020
We can’t reflect on the past year and look forward to 2021 without addressing the novel coronavirus pandemic. It stands to have an outsized impact on the industry for years to come. And even though it didn’t uncover any unknown issues, it accelerated the need for solutions practically overnight.
Because COVID-19 so efficiently highlighted known gaps in the healthcare system – including how far behind many stakeholders are digitally – it is the source of the primary drivers for healthcare payer technology. Health plans must take care of these in the coming year or risk falling even further behind.
Calls for increased transparency
In 2019, we predicted that "health organizations will need to make real upgrades in technology if they haven’t already, or face issues meeting government regulations.” And in 2020, two rules brought this prediction to the forefront.
First, the rules against information blocking were finalized. Though deadlines for compliance have been delayed, the need for healthcare data interoperability has never been greater. This initiative is poised to solve several of the issues worsened by the pandemic, and health plans will continue to push for increased data sharing. Improvements in care quality and decision-making and progress on value-based care programs should result.
The administration also finalized a price transparency rule. It calls for first posting online documents that include prices for healthcare services and medications. A “shoppable” experience for consumers will follow.
The ultimate goal of technology is to break down barriers and allow information to empower a better healthcare system. Health plans have realized advanced technology is only as good as the data that fuels it. With interoperability, data accessibility and transparency as a focus, health plans will naturally evolve to start questioning any process within their organization that inhibits information sharing.
“Health plans that are able to adapt to these changing trends are far better positioned for long-term success.” FierceHealthcare
Improving data accessibility extends to internal operations at payers as well. The modern work-from-anywhere environment has arrived. The technology that supports it must follow. Health plans have adapted to the “do more with less” credo that pervades most industries, but manual and labor-intensive processes only contribute to the administrative burden.
By adopting integrative technology platforms, health plans can eliminate data silos and improve collaboration and oversight. As payers start to experience the big picture benefits of advanced technology, health plans will be able to work towards becoming more proactive and less reactive.
Changes in membership mix
Health plans have started to experience shifts in their lines of business. This year has brought an influx of members into Medicare Advantage, Medicaid and ACA plans. While severe impacts to employer-sponsored plans have not yet materialized, how consumers think about healthcare coverage has changed for good.
Members are tasked with owning their own healthcare experience and expect the relationship with their health payer to be frictionless and intuitive. Not meeting consumer demand will open payers up to disruption. But if health plans make technology decisions with their eye firmly on the member, they will also find numerous opportunities to improve program integrity efforts.
Changing competitive landscape
Increasing consolidation among health systems and payers is also motivating health plans to innovate. They understand that relying on legacy technology and paper-intensive processes minimizes the ability to scale. Health plans are taking steps now to upgrade their position.
And not a moment too soon. The long-predicted disruption to healthcare has arrived as top retailers have made bigger inroads in the industry. In an increasingly consumer-driven environment, demonstrating value to members and employers is key. Payers with a tech-first mindset – and the ecosystem to match – will have the strategic advantage in these situations.
At the same time, health plans will see more technology vendors looking to leverage experience with other industries into similar successes in the healthcare sector. Technology can help rapidly improve ROI on the claims recovery process. But health plans will need to shrewdly evaluate these solutions to ensure a good fit.
Restraints: Navigating the Roadblocks Health Plans Face
Health plans have long known the advantages of advanced healthcare payer technology. But the usual suspects continue to block progress. Slim margins, data security concerns and shortages in skilled workers could prevent health plans from making headway on their goals this year.
Uncertain medical loss ratios
The uncertainty around how the ongoing pandemic will affect medical loss ratios has some health plans putting strategic technology investments on hold. Profits at most insurers have risen this year, but many industry leaders predict a forthcoming correction. Combined with the historic struggles to efficiently and effectively transition to digital processes, taking on new technology projects may feel too risky in the short-term.
Health plans can overcome this perceived risk by seeking out solutions that surface quick wins and set them up for long-term advantages. Look for speed to value. Enterprise healthcare payer technology that is easy to implement, builds empathy with stakeholders, improves efficiency and reduces team frustration will pay dividends.
Concerns about data security
Dealing with large amounts of patient data makes health plans a prime target for security breaches. And the entire industry trying to quickly integrate numerous data sources has the potential to create vulnerabilities in the system. But health plans moving too slowly with technology adoption can lead to irreparable harm as well.
Current manual approaches to PHI – locally stored data, paper faxes, etc. – are even more vulnerable than secure digital processes. Modern technology, on the other hand, can grant you more control. It allows you to be more granular with granting access to PHI, for one. It also creates a digital log of access. For even greater peace of mind, seek out HIPAA-compliant technology vendors that pursue HITRUST CSF and SOC 2 certifications.
Unexpected costs of outsourcing
The data sharing and transparency regulations and other technology initiatives have payers concerned about how they will pay for and staff these projects. Additionally, health plans will have to overcome learning curves, fear of change and other internal challenges as they select solutions and look for increased returns. The vast majority – 79% – will look to outside vendors to cover these gaps.
Predictable costs will make these burdens easier to bear. Off-the-shelf solutions that are easily configurable will prove more cost-effective than custom-built technology. And a strategic combination of insourcing and outsourcing activity based on health plan core competencies will also optimize spend. A partner and technology that allows you the flexibility to decide – service by service – whether to outsource or insource based on your cost-benefit analysis will better poise your health plan to scale effectively.
Challenges: Factors for 2021
Internal restraints aren’t the only barrier to success with healthcare payer technology. Let’s look at the broader industry factors that could challenge health plans in 2021.
Provider financial instability
So far, providers have borne the brunt of the pandemic financially, and their survival is at risk. Healthcare payer technology strategies will need to support this valuable group. Without a broad network of providers, health plans will find it difficult to advance on engaging members and lowering healthcare costs. Health plans that use technology to focus on this relationship can overcome this challenge. Consider solutions that ease providers’ claims payment administrative burden and support real-time communication.
Slow adoption of value-based care
Value-based care continues its slow adoption among providers. Those participating in alternative payment models performed better than their fee-for-service counterparts in 2020. They also are more likely to pursue population health improvements that stand to keep their patients healthier during the pandemic. But other providers may hesitate to take on more risk.
Health plans can support providers in this transition with healthcare payer technology that overcomes trust and abrasion issues. Increase data transparency so both sides of the relationship are working from the same playbook. Come to agreement on interpretations of value and quality. And measure everything: clinical quality, consumer experience, return on investment, and more. Then share those data insights and work together on continuous improvements and innovations.
Considerations for selection to participate in CMS’ largest bet on value-based care to date “will include an entity's risk-sharing experience, IT infrastructure, compliance and beneficiary engagement.” Healthcare Dive
Uncertain political landscape
A new administration will be in place this coming year, including new leaders at government healthcare agencies. Stabilizing the coronavirus response will likely be the focus of any short-term action, which most healthcare stakeholders should welcome. Whether or not additional burdensome regulations or market changes will be introduced is currently unknown. Agile, tech-forward health plans will be positioned to succeed no matter what happens on this front.
Opportunities: Chances to Excel with Healthcare Payer Technology
While challenges abound in an uncertain healthcare environment, so does opportunity. Changing member behavior and technology advancements may both offer health plans the chance to succeed with their digital transformation goals.
Members open to engagement
One unexpected benefit of this year is how it has opened up avenues for member engagement. People want to hear more from those responsible for their care. They have embraced home health. And they have welcomed technology into their healthcare unlike ever before.
Payers have caught on to the fact that providing improved member services is a differentiator in a consumer-driven market. By offering convenience and addressing social determinants of health, plans can offer broader benefits with perceived higher values while lowering costs. CMS has made it easier for health plans to offer supplemental benefits, another incentive for offering them. With health plans expanding coverage in this area, digital health adoption will continue to grow.
"Leveraging the power of your lifestyle and combining it with research and technology will enable people to take full control in their health journey. With the cost of healthcare rising, providing tools to prevent or reverse diseases that could be costly for patients and the system is a win-win.” Health plan Chief Innovation Officer
Advancements in technology
Technology advancements continue, as API standards are enacted and artificial intelligence capabilities improve. Plans can leverage the mountains of data they collect through improved data analytics technology, reducing time to reports and empowering real-time decision making. And these updates come just in time. Expansion of digital healthcare may prompt more incidents of improper payments and bad actors. But A.I. has also pushed forward opportunities to proactively combat fraud, waste and abuse. By going deeper and wider into the data to push likely leads to you, new schemes won’t pass you by. This improved technology can better integrate the SIU with overall payment integrity as well.
Through secure integrations, data sharing could be a hurdle that health plans finally surpass. Cognitive collaboration capabilities will emerge for health plans if they utilize the right technology solutions. Empowering users to break down barriers within their organization will drive efficiencies and improve the care continuum.
Partner to Make 2021 the Best Year Yet
Health plans can stay ahead of the curve by making strategic investments in change, particularly surrounding transparency. Integrative technology and shifts in program integrity approaches will allow payers to continue to gain ground and focus on proactive efforts, particularly when it comes to claims recovery and payment integrity.
Extending your competitive advantage transcends trends. Fortunately, a comprehensive technology platform like Pareo allows health plans to scale and improve processes, harness the power of A.I., increase medical savings, and accelerate ROI. Talk to ClarisHealth about how Pareo can keep you a step ahead of healthcare payer technology trends – no matter what the future brings.
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