Guest post by Deanne Kasim, IDC research director, payer health IT.
Part of the role of being a research director is to analyze current industry trends, developments and policies and help clients navigate these IT, market, economic and regulatory changes. A post-health reform environment has accelerated the rate of change in all these areas. I recently developed a discussion of the top 10 areas of change payers need to focus on for the next 12 to 18 months (http://www.idc.com/getdoc.jsp?containerId=HI253579). The following is a brief discussion of the top three predictions.
Payers need to develop greater understanding of who their consumers are and adopt more of an omni-channel approach for reaching and meaningfully engaging different population segments.
Consumers understand how to assess the concept of value in other areas of their lives, such as researching information to purchase a new car, a major appliance, or a house. But they do not have nearly as good of an understanding on the way health insurance works, how to necessarily use it, or how to define value in insurance benefits and care choices. Health reform has forever changed the business model of health insurance and placed consumers front and center in the equation. This increased emphasis on the consumer needed to happen a long time ago and now payers are challenged to radically change how they develop, market, and administer health insurance benefits accordingly. IT tools and applications are quickly evolving to better support the consumer’s purchase decisions and use of insurance benefits, and payers are continuing to realize the potential and importance of this developing product area.
According to IDC Health Insights’ 2014 Payer Survey, payers were split between increasing the 2014 budget for consumer engagement strategies (49 percent) and keeping the budget the same (51 percent). I fully anticipate these numbers will be higher in this year’s survey, as more payers commit additional resources to the development and support of thoughtful consumer engagement strategies, processes and IT applications.
As the industry moves from pay-for-volume to pay-for-value payers need to form more “win-win” relationships with providers and this requires leadership, trust and the IT applications and analytics to support this.
The longtime practice of paying for volume is changing rapidly to pay for value, and the U.S. Centers for Medicare & Medicaid Services (CMS) continues to lead developments in pay for value methods, including a variety of value-based reimbursement (VBR) practices, pay-for-performance (P4P) and global or episodic payments. The establishment of patient centered medical home (PCMH) and accountable care organization (ACO) models, combined with the reduced reimbursement realities under the ACA, has incentivized more providers and payers to explore new, mutually beneficial reimbursement arrangements. Providers and payers will have an increasing need for analytics applications to help predict and monitor clinical quality outcomes and financial performance measures in order to make VBR arrangements work for all involved stakeholders. In addition, as payers continue to employ narrow networks as part of their public HIX business line strategy, VBR arrangements with the contracted providers can enhance the performance of both payers and participating providers.
More Payers Will Implement Private Cloud Solutions, Including Those Featuring Software-as-a-Service (SaaS) Models, to Better Manage Data Collection, Aggregation, and Analytical Efforts.
Healthcare organizations, including payers, are actually ahead of many other industries in their adoption of both public and private cloud models. Payers have many incentives to utilize cloud solutions in a wide variety of application areas, and the trend for increased adoption will continue into 2015 and beyond. Cloud technology continues to increase the efficiency of IT operation departments and enables IT managers to cost effectively upgrade outdated infrastructure and optimize data center operations.
Based on IDC Health Insights’ 2014 Payer Survey, payers are using the cloud accordingly and these trends are expected to increase moving forward:
- 71 percent of surveyed payers reported their adoption of cloud technology has increased the demand for related IT skills and their IT budgets.
- 57 percent of payers adopted cloud technology to address analytical requirements.
- 41 percent of payers adopted cloud technology to address end-to-end remote patient monitoring or
- consumer carried devices to gather clinical information.
- 41 percent of payers adopted cloud technology for the implementation of care and disease
- management solutions.
- 39 percent of payers adopted cloud technology for the implementation of customer resource management (CRM) and consumer engagement solutions.
In 2015 and beyond, payers will continue to have hesitations about the security risks associated with a cloud technology model, whether it is public or private, particularly in light of recent high profile security and data breaches. However, the anticipated trend is that payers will continue to increase their adoption of private cloud solutions, particularly software as a service, as the advantages of agile development and speed to market of new innovative services outweigh the costs.