As the health insurance industry works at lightning speed to adapt to regulatory changes being enacted under the Affordable Care Act, health plan IT staffs are working at a similar pace to ensure they have the technical capability to comply and thrive amid change. It’s that pace that Workgroup for Electronic Data Interchange Chairman Jim Daley says is the main challenge faced by industry IT leaders, who must balance the transition to ICD-10 codes, privacy concerns, social media use, malware, the explosion of mobile devices and much more. Technology isn’t a sector that’s known for being static, either. “Technology is going to continue to change; your resources will stretched; you’ve got to be flexible and agile,” Daley says. Today, Daley and a panel of experts will explore the landscape of health insurance IT and arm attendees with solutions to the challenges they face at The Future of Payer IT workshop hosted by America’s Health Insurance Plans. Daley will cover a range of points, including a preview of the coming update to WEDI’s landmark 1993 report that laid the foundation for the HIPAA privacy and security law. And he’ll remind health plan leaders that IT is simply a tool to help them do what they already do, just better. “IT solves business problems. IT is there to support the business,” says Daley, who is also director of IT risk and compliance for BlueCross BlueShield of South Carolina. “You’re there to serve the payer, serve the members.” To set the stage for today’s conversation about the role of IT in the health insurance industry, I posed a few questions to another health IT expert, Susheel Ladwa. He is co-chairman of AHIP’s IT Curriculum Working Group and previously worked in the health care operations for Hewlett-Packard and Wipro. He has also served on a number of advisory boards, including for India’s Health Insurance Plans. Here’s what he had to say. What are some of the biggest IT challenges faced by health plans today, and how are they being addressed? Never before has the health plan industry seen the tsunami of changes it is seeing currently. At one end, CIOs’ budgets are shrinking under medical loss ratio requirements. At the other end, the industry is moving to a consumer-centric model that needs a host of IT capabilities that have not previously existed with health plans. CIOs today have a host of legacy applications that are aging and do not scale, while at the same time there are new state-of-the-art Web, mobile and social media products that have made inroads. The biggest challenge is to make them talk to each other while addressing regulatory challenges like ICD-10 to meet a deadline. Across the industry, I am seeing the following strategies being adopted by CIOs to address change:
- Keep higher-value work in house: Health plans are trying to move their internal employees with business and IT knowledge to higher-value roles like business analyst, project and program managers.
- Outsource low value work: Lower-value work that is a commodity (like IT infrastructure services) and keep-the-lights-on work is being outsourced.
- Transformation programs: The savings from outsourcing are being used to run transformational programs like health information exchange integrations, driving consumerism, social and Big Data analytics, etc.
In a nutshell, the next few years are defining times for health plans. The ones that will thrive will need to have a robust IT strategy with a team that can deliver the strategy on time, on budget and with the right quality. You don’t have to look very far to find someone who is excited about the promise of IT tools and big data to transform health care. What are some concrete ways those in the health IT world are addressing pressing problems in health care? How will those affect health plans? To win in the consumer-driven marketplace of the future, health plans need to start behaving like retail companies. Whoever engages the individual members best is going to lead the market. Traditionally health plans have accumulated a lot of data through claims processing, what’s next is developing the business intelligence to better drive real health care outcomes. I see three key data challenges at health plans.
- Data explosion: Traditionally health plans have been sitting on a lot of claims data. Suddenly due to EMR adoption, there is a huge amount of clinical data coming in along with pharmacy data. There is an explosion on the amount of data available to analyze at a health plan. This creates a unique opportunity and challenge.
- Data dispersion: A typical health plan has over 200-plus applications, each application with its own data; very loose data integration is typically in place. This causes a phenomenon I call “data dispersion” — there is no single source of truth. To collage and aggregate data across these applications is a big IT challenge.
- Data intelligence: While you are dealing with data explosion and data dispersion, the market is demanding better data intelligence to make business decisions that directly affect a health plan’s ability to be competitive.
So on this three-legged stool, every health plan needs to develop tools and technologies to continuously handle the three challenges. Are there other general challenges faced by health plans that IT can help address? Unlike a manufacturing or retail company, health plan products are virtual. It’s basically people, process and IT. The effective use of the three assets is the secret to success. Let’s take an example, chronic care: 2% to 5% of the population accounts for more than 80% of medical spend. Every health plan has teams of nurses running a disease management program. This is most effective if the disease management effort is combined with consumer engagement IT tools. There are patient portals, self service tools, integrations to medical devices to remotely monitor vitals and others that make programs very effective. I do feel the health plan industry has catch-up to do on consumer engagement, there is a lot to be learned from the U.S. retail industry. In the future, I expect a lot of retail strategies to find a place at health plans.