July 2, 2012 | By Rey Villar
Anyone in healthcare knows that Payers are juggling a daunting list of challenges, opportunities and priorities. Working with a number of Payer clients allows us to support their information worlds as business priorities evolve. Let’s take stock of some of the major trends that are impacting Payers today.
Exchanges are envisioned to allow individuals to purchase healthcare insurance with greater product transparency and simplify how individuals and Payers interact. New regulations claim that the new products and services will be highly standardized, but our research suggests increasing product complexity will result.
Regulatory change has driven most Payers to rethink their entire technology landscape as they move to drive medical loss ratio down to the required level. This is despite multiple starts and stops around ICD-10, healthcare reform and other areas of provider reimbursement and pay-for-performance programs. This need is a key motivator to manage data smarter. Smarter data management lowers costs by a factor 5x to 10x (based on Ajilitee’s experiences).
Daily operations are changing as the need to interconnect Providers and interconnect to other Payers increases along with the need to improve service and reduce costs to process claims. Other areas of business as usual include simply providing an accurate provider directory so that Members can find the providers by specialty and at a convenient service location.
Payer/member interactions are changing dramatically. Some Payers are evaluating disbanding core operations to focus on branding and Customer Relationship Management (CRM) as their core value proposition. This is not unlike a McDonald’s franchise model where McDonald’s is a management company versus an operating company. How a Payer interacts with members, tracks contacts across time and touchpoints in service and care management and uses that information to improve sales and service is one of the hottest areas for Payers today. Fortunately, there are easy models of technology and business processes that can be leveraged from other industries like banking and telecommunications. CRM is also important for providers (think provider relationship management).
Sales and Marketing
● How Payers connect with prospects is changing in the looming presence of exchanges. Payers are engaging in more direct-to-consumer (DTC) approaches, similar to how drug companies changed sales and marketing strategies when access to physicians waned. DTC means tracking groups, finding segments and using classic marketing methods, like surveys and third-party demographic data, to learn about and target prospects.
● The changes are also occurring on the Provider side as Network Management becomes key to collaborative care/cost management (think reimbursement models and ACOs) as well as marketing for target segments e.g., ethnic alignments of Physicians and Members.
● Product fragmentation will increase despite the presence of Exchanges. Payers may become management companies but Payers may also become more vertically integrated and penetrate further into the value chain of care. The multiplicity of product definitions will increase as additional benefits, exclusions, inclusions, logos, affiliations and product components are combined in complex ways to fill the niche targets that CRM technologies are able to find and sell into.
Stay tuned for more blogs on Payer and Provider trends. Next up: The Biggest Payer Pains.