A new payer survey offers insights for providers as both deal with a common challenge: technology.
As the healthcare industry moves toward value-based payment structures, health insurers are focusing on developing new business models, enhancing IT capabilities, building a better care coordination infrastructure, and lowering administrative costs.
That's the thrust of a State of the Payor industry survey conducted recently by Healthedge, a Burlington, MA-based software company that serves the healthcare payer market. Roughly 100 senior health insurance executives participated in the online survey, which was designed to identify payers' top business imperatives.
1. Embracing New Business Models
One of the biggest trends Healthedge has identified through the annual survey is a growing willingness among payers to embrace new value-based business models, says Ray Desrochers, the company's chief marketing officer.
"When we started the survey a few years ago, it was the minority that were looking to adopt some of these business models. The majority were still thinking they could continue to plug along in the old way," Desrochers says.
"In the last two or three surveys, there has been a dramatic shift, and now the majority of these executives think these models are going to be their future."
As new care delivery models emerge—such as accountable care organizations and patient-centered medical homes—payers are designing "next generation business models" that demonstrate a significant movement away from fee-for-service medicine, Desrochers says.
"There is a huge focus now on these value-based models that are designed to incent the right member behavior and to incent the right provider behavior," he says.
"A lot of these initiatives are geared toward driving the right member behavior around health and wellness, and they are blowing up the one-size-fits-all models that payers have been used to, particularly for at-risk populations with chronic conditions."
2. Making Better Use of IT and Data
A majority of health plan leaders (73%) cite improving their organization's IT capabilities as a key component to success and say they are currently using or plan to use technology to help their organizations better function in a value-based environment, according to the survey.
Specifically, 61% of executives report that delivering real-time information to all industry stakeholders is now a key area of focus.
Payers need to provide physicians with trustworthy and timely data in order to influence them to make evidenced-based clinical decisions that improve outcomes and reduce costs, Desrochers says.
"I think the data is critical. One of the things we are starting to see from a number of different organizations that are trying the next generation models is that their ability to successfully drive the right behaviors is only as good as their ability to drive real-time, actionable data," he says.
Ray Desrochers |
"Providers are an interesting breed. They will say they are too busy and don't want one more thing to do. A number of payers have found that providers will cooperate if they have the right incentives in place to maximize reimbursements … and as long as payers can give them real-time data to do their jobs. If payers can't do that, providers will throw their hands up and say, 'I already told you this is too hard.'"
Intelligence Report: Payer-Provider Strategies
Pulling data out of the traditional siloes that have created an "administrative nightmare" will also assist payers in creating more value for stakeholders, Desrochers says.
"The convergence of clinical, administrative, and financial data is making a huge difference. Together, you can really make some interesting assumptions and run some interesting algorithms to identify patients who are at the most risk, who are most in need of guidance, and who are most likely to be hospitalized," he says.
3. Enhancing Care Coordination
Once those high-risk and rising-risk patients are identified, it is important to manage their care across the continuum. Enhancing and/or implementing new and innovative care coordination programs is a key concern for a majority of the survey respondents (77%).
Payers understand that traditional care management efforts, such as calling at-risk members to help them manage their chronic conditions, can keep people healthier and result in fewer expensive emergency department visits, hospitalizations, and readmissions, Desrochers says. By refining existing care coordination programs and developing new ways to increase communication between patients and providers across the spectrum, insurers can drive costs down even further.
"Combining concepts to manage disease states and to incent you to care more and to have more compliant behavior and to incent providers is the holy grail for value-based models at the end of the day," he says.
"It's a whole different level of coordination now to have everybody in the healthcare cycle involved and incented properly. Insurers are working to coordinate care so that they are doing the right outreach for at-risk populations, getting people into the right care plans, and getting members to do their health risk assessments, to go to the doctor, and to take their medications."
4. Reducing Administrative Costs
At the same time that insurance companies are rolling out new business models, they are also trying to bring down organizational costs. Survey respondents cite a strong desire to automate existing manual business processes (85%) and the need to reduce rates of human error associated with manual processes (57%) as key to reining in expenses.
"Payers are hyper-focused on reducing administrative costs right now. Many insurers have seen over the last few years runaway administrative costs. Unfortunately, some of that is tied to these new business models," Desrochers says.
"These models can help with the care side and with the medical spend side, but what is happening in many cases with ACOs and exchange models is they are being built on 35- or 40-year-old technology, sometimes homegrown systems that are held together with Band-Aids and duct tape. Insurers are seeing higher administrative costs because they haven't automated most of it …. Many insurers now are saying this is not sustainable and that they can't keep doing it."
Rather than doing a wholesale upgrade of their IT systems, Desrochers says, most payers are making targeted enhancements in the areas that are most critical to their business development needs.
"They are looking to the next generation technology development to do specific things or to new lines of business where they don't have these legacy systems. They are using the technology as a transformation agent. Interestingly enough, in this latest survey, a vast majority of executives are saying they are going to use technology to transform one part of the organization and let that drive change within the organization."