Healthcare Payers – Web Special

Sept. 1, 2009

Healthcare Payors Prepare for One Heck of a Ride

Payors need a solution for enhancing business agility, supporting quickly-changing regulations and standards, and for improving their interactions with everyone involved in the healthcare delivery cycle.

By Rob Gillette

Images of the Wild West often invoke a time of unbridled opportunity against a backdrop of uncertainty, danger and chaos. This is an apt reflection of today’s IT marketplace for healthcare payors, as reform, regulatory changes and the move away from the static, one-size-fits-all healthcare of the past creates new challenges and opportunities for payors across the nation. One point is clear: Payors that wish to successfully compete in the rapidly emerging healthcare marketplace will require a new generation of systems that were designed and built with all of these needs in mind.

Current healthcare technology is dominated by a collection of 20th-century client-server and mainframe systems that have been cobbled together to meet each organization’s specific needs. Given these solutions were only designed to address the static benefit plans and provider contracts of the past, they must now be augmented by an ever-increasing number of manual processes and satellite systems in order to handle the new options that the market demands. These manual efforts and add-on systems often cut into margins, are prone to human error, and are a significant reason behind the industry’s much-maligned customer service.

Payors need to adopt a new generation of healthcare technology that will enable them to realize an enhanced level of business agility, quickly support changes to regulations and standards, and improve their interactions with everyone involved in the healthcare delivery cycle. This new infrastructure should reflect a dynamic, member-centric view of benefits, as the healthcare paradigm moves from the rigidity of traditional 80/20 plans, toward a multitude of innovative, value-based plan designs and consumer-based options.

These changes, along with the integration of predictive modeling, care and disease management, pay-for-performance, and consumer-based compliance incentives, are expected to drive improved healthcare outcomes, higher quality of life for patients and their families, and reduced overall costs. Achieving the full range of anticipated benefits, however, can only be accomplished by employing technology solutions that enable payors to quickly and easily meet new market needs, reduce manual effort, increase transparency and easily integrate with the rest of the world.

Yesterday’s payor systems were not designed to deal with the level of change that is currently taking place in today’s healthcare marketplace. As a result, changes to benefit plans or provider contracts, for example, particularly changes that are made retroactively, often generate a significant amount of costly, manual rework. With current systems, reports are generated to attempt to determine the impact of a retroactive change. Then, people using these reports struggle to determine claim and member impact. Another set of people manually implement the approved changes. There has to be a better way.

Leveraging modern technology to automate claim adjudication should be a high priority for all health plans. Changes in standards, and the ever-increasing complexity of claims, are compounding many payors’ challenges in this area. The additional disruptions that most payors will face as a result of regulatory changes, such as ICD-10, will mirror the challenges that were experienced during the Y2K remediation cycle.

To effectively compete in the 21st century healthcare marketplace, payor organizations will need to employ modern technology platforms that allow them to address changes, regardless of complexity, in hours or days, not the weeks, months or years that are required to adapt legacy systems. At the same time, they must adopt solutions that can be easily integrated with other systems to maximize IT investments. Modern systems, particularly those that leverage language-based approaches, offer highly configurable, scalable and cost-effective solutions that are able to meet 21st-century healthcare business needs.

Each payor’s viability will depend on its ability to rapidly address market needs, adapt to changing standards, provide new levels of transparency and offer superior customer service. No payor can afford to be saddled with an outdated or inefficient technology infrastructure that limits its ability to thrive in the new world of healthcare.

Traditional, hard-coded systems cannot quickly and easily address the types of questions that are common in today’s complex healthcare claims. Consumer frustration related to payor service is increasing, not only because it requires multiple phone contacts to get an answer, but also because each call can result in a different answer to the same question. This is simply unacceptable.

Payors need flexible technology platforms that integrate the data that is currently contained in disparate systems to provide instantaneous, accurate information to everyone in the delivery-of-care cycle. This will help to significantly improve customer service and provider relations, and it will allow people to make better informed decisions based on a true understanding of both the cost of care and the available options.

A payor’s ability to rapidly address change will allow it to differentiate itself in this competitive market. The ultimate winners in tomorrow’s Wild West shootout will be the payors who embrace new technologies that go beyond “next generation” and allow them to quickly implement changes, minimize costly manual processing, and improve relationships with their members, providers, employers and brokers.

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Rob Gillette is CEO of HealthEdge.