Since the Affordable Care Act was signed into law more than four years ago, healthcare payers have recognized that their world would change. Think of a couple expecting their first child: they know that their lives will be transformed, but it’s not until the baby arrives that they can actually understand the extent of change (and often chaos) that ensues.
Well, the baby has arrived. The anticipation of change has evolved into a reality of mandates, deadlines and competition. Payers that have traditionally sold to and worked with business organizations must now target individual consumers. Established business and technology strategies are proving to be ineffective and obsolete, and service providers are increasingly taking on responsibilities and services that have previously been considered core to the payer.
Put more bluntly, the healthcare industry is discovering that what it’s done for the past 50 years doesn’t work anymore.
One underlying imperative in today’s market is simplification: Simplification for the consumer in understanding plan options and making choices and finding providers; simplification of provider interactions and benefits confirmations; simplification of new product introductions; and simplification of compliance with mandates, especially as timelines continue to accelerate.
That last point – compliance mandates – is opening up significant opportunities for service providers to use social media and other disruptive technologies to drive innovation and change. I recently spoke with a provider who developed a solution to drive a 60 percent reduction in cost for claims management processing, coupled with a 50 percent reduction in time required to comply with new mandate implementations. What’s interesting is that the solution required disrupting established legacy business processes that had been sacrosanct in the pre-ACA environment. It also required the new thinking and innovation that the provider had brought to the table. In the past, this transformational project would have been in the purview of the internal team – an internal team wedded to legacy practices and the established order. As a result, it would have never gotten off the ground. Today, however, the C-suite is recognizing that bigger and bolder thinking is needed to address the enormous operational challenges posed by the ACA.
In looking for solutions, payers seek to apply proven approaches to the new problems the sector faces. While finding proven approaches to new problems by definition poses a challenge, the good news is that lessons learned from other industries that have been roiled by competitive and regulatory change can be applied to the healthcare market. I’ll be discussing some of these lessons at the ISG Sourcing Industry Conference, which will be held in Dallas later this month. Hope to see you there and benefit from the insights and experience of the provider community.
About the authorAl Denis brings considerable experience in information technology (IT) to ISG clients in his role as Director, Healthcare Practice Lead for ISG. In his career, Al has delivered technical, sourcing and business services to Blue Cross and Blue Shield of North Carolina, Anthem, Kaiser Permanente, Sentara Health Systems, CareFirst, University of Pennsylvania Health System and Wellpoint. Al is among ISG's most accomplished experts in the evaluation of complex global sourcing alternatives, including solution evaluation and supplier management.
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