Leaders of healthcare payer organizations anticipate revenues to rise next year, but many are not prepared for the change.
A majority of healthcare payer leaders expect substantial revenue growth next year, though some remain unprepared for change, according to a new industry survey.
More than 80% of payer organization executives anticipate revenue growth in 2019, according to the annual North Highland Beacon report released Thursday. Sixteen percent of executives expect more than 10% growth while 38% expect between 5 to 9% growth.
Meanwhile, 19% of respondents anticipate flat or declining revenues next year, and when asked about their sentiments heading into 2019, the largest shift was an increase in feeling time-strapped and disorganized.
Roman Fry, healthcare payor principal at North Highland, a consulting firm, told HealthLeaders that the reason most executives are responding this way is due to widespread M&A activity and joint ventures across healthcare in a "race to the top."
"If you're constantly integrating and bringing in new companies, business units, and growing, it's really hard to streamline your operations," Fry said. "I think it points back to point everybody trying to jump into 'how do we become a leader in value-based care?' as we're somewhere in between the move from fee-for-service to value-based care."
Top priorities to fuel growth next year:
- Customer experience
- Data and analytics
- Organic growth
- Operational efficiency, including new market penetration and product innovation
Fry advised payer leaders to focus on one to three areas for improvement in order to institute organizational change that will create value for members and physicians. He said that leaders who try to address multiple areas often confuse and frustrate employees.
Obstacles to attaining 2019 goals:
- Insufficient human bandwidth and resources
- Solid business strategy
- Adequate knowledge/skills
Fry said that similar to the way executives target what drives value for consumers, they should use the same approach for their employees.
"What's interesting in healthcare is that these employees are on your insurance, they're actually a member as well," Fry said. "Take care of employees first, if not, someone else will. Pay as close attention to employee experience as you do customer experience, and you'll do well."
Additional observations about payer organizations in 2019:
- Fry said payer executives maintain high confidence in AI usage but place it as a low priority and haven't fully recognized its value yet.
- He added that creating a seamless online and offline user experience is vital for future success.
- Just as insurers have encountered outside corporate disruptions this year, the "wait-and-see" approach from health systems could also invite disruptors in 2019.
- Fry did say that providers should consider pursuing joint ventures with payers in order to succeed in the rapidly consolidating market.
- "To make profit and keep operating well, you have to have a partnership strategy in place, be working towards it, or have some way to respond to value-based care," Fry said.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.
More than half of executives responded that they expect more than 5% revenue growth in 2019.
Top priorities to fuel growth next year are customer experience, data and analytics, organic growth, and operational efficiency.
Top obstacles preventing future growth are insufficient human bandwidth and resources, a lack of a solid business strategy, and inadequate knowledge/skills.