As healthcare transitions to consumer-driven, on-demand, care-anywhere delivery models, the pressure increases on payers to transform their value propositions. Core administrative systems are the powerhouses for supercharging these new business models. The deep and rich utilization data within core systems is the fuel that can provide insights that payers require to improve healthcare for individual members and populations. It can also help payers understand how to create and sustain positive new business outcomes.
To achieve those goals, core systems and payers must adapt to the key forces reshaping healthcare, both from within and outside the industry. These include:
- New collaborations. Even as they have dealt with the initial impact of COVID-19, healthcare systems continued merger plans, with 14 transactions in the second quarter of 2020. Analysts expect more merger and acquisition activity on horizontal and vertical lines so organizations can expand offerings, increase volume and grow financial strength, with providers and payers likely acting as partners. More providers now are interested in value-based and capitated contracts to maintain steady income streams. Payers aligning more closely with providers will need to predict and balance risk sharing. They will also require strong collaborative capabilities to truly partner with providers in delivering care to ensure best outcomes at great value.
- New technologies. Rapid technological change and its adoption by consumers and within healthcare signal strong shifts in how healthcare is delivered. This summer, the FDA granted its first approval for a game-based digital therapeutic for ADHD treatment in young children and approved a wearable device for identifying atrial fibrillation episodes. Plan members want to share data from their wearables with payers — and expect customized service in return.
Data integration capabilities, especially for streaming data, and application programming interfaces (API) will be necessary to capitalize on new technologies and the data they generate. Payers can process claims more reliably with natural language processing (NLP). Transactions among payers, members and providers, including preauthorizations and payments, can become completely touchless using predictive analytics, artificial intelligence (AI) and machine learning (ML).
- Regulatory density. Just as membership in government-sponsored health plans is increasing, so are government regulations on payers and providers. Many of the regulations promote innovation and convenience that consumers want while at the same time increasing the need for monitoring and adhering to those mandates. The interoperability rule is laying the foundation for comprehensive portable health records that payers can build on to develop market-differentiating experiences.
Medicare Advantage and Medicaid managed plans are key growth areas for payers — and payers will need to be nimble, fast and responsive to win in these markets.
- Consumer expectations. Consumers want personalized, frictionless experiences from health payers and providers. COVID-19 safety needs drove consumers to telehealth, stoking expectations for on-demand health services delivery and care delivered anywhere. Use of atypical providers is growing as the industry addresses social determinants of health (SDoH). Payers must be able to support nutritionists, transportation providers, etc., in their coverage options and pricing calculations, especially for government plans. Payers must now consider all the different digital doorways by which consumers enter healthcare systems and how their networks should encompass these access points.
- Value=cost/outcomes. The steady shift to outcomes as the key measure of value continues. The critical aspect for payers will be communicating to consumers the value that they are receiving. That requires defining what an outcome is and then delivering care and services to achieve that goal. The near future holds key value areas to focus on, such as transparency. Regulators are forcing greater transparency in costs and quality; payers out in front of that trend will get the edge. Payers likely will need competency in designing and managing integrated benefit plans that incorporate medical, pharma, vision and dental services.
- Whole-person health. Consumers want care that helps them manage their specific health situations, whether they are dealing with a chronic condition, co-morbidities, or simply want to improve their health with lifestyle changes. This trend toward caring for the whole person requires fundamental changes in health coverage. This coverage is built on a framework for how payers, members and providers will work together toward a specific outcome. While often targeted to individuals with chronic conditions or adverse SDoH, expect “specific to me” coverage to grow. This requires new flexibility in benefit design, payment models, care management and more, such as multi-year benefit plans focused on achieving specific health goals and individual, person-centered benefits.
Reliable yet revolutionary: next-gen core administration
These trends should reforge the payer administrative value chain. Instead of emphasizing front- middle- and back-office functions, now the key links become how payers plan for, acquire, manage, engage with and make an impact on the lives of members while complying with state and federal regulations. Core systems must support emerging needs in each of these areas, evolving from purely administrative systems to systems that provide insights to the business and, ultimately, to systems that drive new outcomes for the business.
The core system remains the source of truth, or system of record, for most member utilization data. This utilization data feeds all other member-related systems and transactions. A next-generation core administrative system should be sufficiently open to become the transaction hub for all healthcare services, including behavioral, pharmacy and dental as well as medical. The system should also encompass Internet of Things, wellness and related transaction data to drive real-time insights at the point of care and at the point of processing. To accomplish that evolution, core administrative systems must have these qualities:
Functionality designed for real time.
An on-demand industry requires most transactions to take place in real time and/or be highly responsive to changing member or market conditions. Core systems must equip payers to achieve the following:
- Master flexible benefit design and adjudication. Static benefit plans increasingly will become anomalies in the consumer-centric, care-anywhere, on-demand healthcare universe. Core systems must have highly flexible benefit-design models, such as long-term and individual coverage, and real-time change capabilities that are fed by insights and recommendations from inside and outside of the core system itself. Both the product-design teams and members should have access to the insights for decision-making. Systems must support real-time updates so payers can respond swiftly to changing market environments and regulations.
- Deliver next-generation payment models. Core systems must support value-based designs, bundled services, reference pricing, provider incentives and real-time adjudication and payment. Systems increasingly will need to fully integrate medical claims and data with specialty, pharmacy and non-medical health services.
- Support all lines of business. Payers need the depth of insight into all populations served that comes from a single system able to support specialty, government-sponsored and integrated plans, and the shifts that individuals make moving between these types of plans.
Payers increasingly will participate in a healthcare ecosystem in which more data must securely flow among organizations and individuals. Core systems must be built with these foundational technologies to meet that demand:
- Cloud. Cloud-built and delivered systems help ensure scalability on demand. They take advantage of microservices, containerization and low- and no-code operating environments for streamlined operations and shorter time to market with new services and enhancements.
- Interoperability by design. The core system must be architected to integrate with other payer systems and those outside a payer’s walls, such as provider electronic health records, remote monitoring devices and other industry platforms, through data streaming and web services capabilities.
- Modularity. Tiered architectures, including components or modules, help to support integration of best-of-breed applications so payers have the flexibility to manage key value chain links per their specific business vision. They also gain speed-to-market flexibility in implementing a new focused solution providing a true return based on time to value.
- Event-driven. Core systems require engines that publish data generated from claims and other processes in real time, making that data available throughout the client application ecosystem. This enables the end-to-end support of a constituent’s journey with the health plan.
- Open access. Not only data, but also business logic and workflows must all be open so that other payer systems and apps may be integrated with the core system’s capabilities.
While still delivering highly reliable, end-to-end processing, core systems essentially must deliver “consumer-grade” experiences to all stakeholders. The following qualities are central to that requirement:
- Self-service design. Open and API-friendly core systems enable users to design their own experiences. These can range from the look and feel of the desktop to incorporating third-party data or apps into configurable workflows to streamline operations.
- Insights. Integrated analytics can improve benefit design while also improving service to members by capturing insights on specific transactions. Internal analytics can also enable core systems to be self-monitoring and correcting. All key processes in the core can be advanced and predictive by using AI, such as with ML and NLP.
- Automation. Native robotic process automation can be applied to key workflows as well as used on a plug-and-play basis depending on business priorities at the time of need.