Slim margins, fewer resources, and consolidation have made it harder for small health plans to compete. That’s where payer outsourcing makes a huge impact.
With shrinking margins, fewer and fewer internal experts, and increasing consolidation, it may be harder than ever for smaller health plans to compete. Can they survive and even thrive in this changing industry that’s known to be full of legacy inefficiencies?
Small health plans face unique challenges
but benefit from unique solutions, too. The key to small health plans thriving in the current healthcare climate is payer outsourcing
. Payer outsourcing involves a health plan contracting with a third-party vendor for claims processing and other functions.
In this model, an outside group of focused experts perform what otherwise would be an “overhead expense” in the form of technology investiture and staffing/resources. Payer outsourcing has expanded beyond business process outsourcing (BPO), offering innovative technology and real-time resources that don’t require an up-front capital investment. Impressively, this model helps small health plans achieve serious traction in revenue gains.
Challenges that Small Health Plans Face
Technological advances, “less is more” mentalities and lack of resources are top of mind for small health plans, according to our experience. But the struggle that a smaller payer faces seem to stem from the influx of newly-insured Americans with the passing of the Affordable Care Act. Suddenly, millions of Americans found insurance, leading small health plans to find that their legacy processes could not scale.
As the Affordable Care Act continues to evolve, a stream of regulations continue to flood the limited resources of small health plans. New regulations will make administrative costs rise for health plans, who already struggle to focus on high-value activities. In particular, the future of healthcare requires claims processing modernization, data aggregation, information security and accountable care – all with great urgency, says Healthcare Finance
Understandably, the increased pressure on small health plans to optimize means that payer outsourcing has grown in new and innovative ways. Health plans are increasingly outsourcing some or all parts of their payment integrity program, including FWA and claims processing. There’s more to it than BPO. Just look at Oscar Health, a newer health insurance company relying
on an insourced/outsourced model (and technology) to provide a more efficient healthcare experience.
“The end goal is to process claims efficiently so doctors spend less time hunting down payments for the care they already gave, and reduce errors so consumers never have to deal with denied claims or paying for services they never received,” writes