Although it’s been possible for businesses to cling to legacy IT in the past, the rapid leaps forward that all markets have experienced in the last few years are dictating this: The time to get your digital systems in order is now. This is especially true in the healthcare ecosystem, where shifts in regulatory and market forces now require health plans to refine their strategies so they can flex and rise to the challenges we’re seeing today and those coming around the corner. Mapping a plan to integrate new technologies and address the customer-centricity mandate to better compete has never been more vital, even if health plans don’t view themselves as leading the charge on innovation.
Exciting new opportunities are bubbling up right now, and ZS has explored these dynamics to unveil four key insights for health plans.
What’s on the minds of health plan leaders today
Eager to learn how health plans view their role and other stakeholders in the overall healthcare ecosystem today, ZS captured a snapshot in time by polling senior health plan leaders about their own digital initiatives, use of artificial intelligence (AI) and machine learning, financial health and outlook on regulatory issues. The findings uncovered intriguing insights that we presented recently at the Healthcare Information and Management Systems Society’s (HIMSS) inaugural State of Healthcare digital event.
HIMSS is a global advisor and thought leader supporting the transformation of the health ecosystem through information and technology. The collaboration stems from ZS’s partnership in the HIMSS Trust, a consortium of leaders from across the healthcare and technology space who are collecting, analyzing and reporting on in-depth, data-driven market intelligence. Insights gathered by the Trust will unveil trends and challenges to help the industry prepare and predict for the next three to five years.
A benchmark for health plans within the healthcare ecosystem
ZS’s latest report, “State of Healthcare: Payers,” surveyed respondents at all levels in the organization, from director up to the C-suite. On average, respondents had 15 years of experience in the health insurance industry. The majority of health plan organizations surveyed at the national, regional, state and community levels cover more than a million members.
By benchmarking health plans within the whole healthcare ecosystem and in relation to their peers, ZS identified trends taking shape today that signal what may come tomorrow. The research revealed a compelling number of opportunities for health plans seeking to enhance and secure their competitive standing through actions they can take now.
Insight 1: Operational maturity has taken hold
Having made great strides, health plans driven by AI and automation are prioritizing continuous improvement. Their commitment to invest, test and deploy widens their lead in the market and creates greater challenges for laggards.
Some 53% of respondents said their organizations accelerated AI and machine learning practices following the onset of COVID-19 and 47% now have dedicated innovation labs for AI. Health plans reported that numerous operational functions were improved by AI, with the greatest gains made in member experience and provider operations, followed closely by provider experience and finance. Nearly half recovered their investments in AI and the other half saw a return they described as “significant.”
Meanwhile, most respondents reported speedier adoption of digital initiatives to improve telehealth, provider engagement and member acquisition during the past year. A strong theme that emerged is that COVID-19 facilitated adoption of technology and innovation throughout healthcare and across numerous functional areas within health plans.
Insight 2: Technology is a chief barrier to innovation
Cultural factors—human nature’s resistance to any sort of change—are common barriers to innovation, but that’s not what health plan leaders are reporting today. There’s a been a big shift indicating that now technology, and not people, is what’s stifling progress for digital health initiatives and holding back the benefits that come from tech enablers like AI and cloud computing.
Though the value of telehealth was long understood in theory, many were uncomfortable with the concept in practice until the onset of COVID-19, when patient engagement was restricted to a virtual setting. Everyone stepped up: As patients embraced the convenience of online care and clinician fatigue eased, the mental barriers to digital health fell away one by one. Skeptics—providers and patients alike—became advocates because they experienced benefits firsthand.
This created the proverbial silver lining: With advantages of telehealth now undeniable and optimism about the prospects of digital health initiatives on the rise, health plans are motivated to continue on this path to innovate in a number of ways. Patient-centric innovations that once seemed beyond reach—those nice-to-haves—now appear more feasible and worthy of investment.
The technology at health plans remains an obstacle to innovation, however—specifically legacy systems with poor quality data trapped in silos, lack of interoperability between disparate systems and the inability to scale. But this challenge is not insurmountable. After final analysis, COVID-19 may prove to be the catalyst that compelled many businesses—not just health plans—to do what they’ve been postponing too long: Wean off legacy systems, map a plan for innovation and invest in AI and machine learning, automation, cloud computing, the Internet of Things and other advancements to invest in their long-term viability.
Insight 3: Deepen partnerships to drive innovation
Health plans look to healthcare technology startups and big tech to drive innovation. They also believe government policies and regulations are keeping pace with technology evolution, according to ZS research findings.
This is a clear signal of optimism that the climate is right to establish and deepen relationships with all stakeholders in the healthcare ecosystem. An encouraging 53% of survey respondents told ZS they think healthcare and IT startups are empowering health plans via solutions that drive provider integration and incentive alignment.
The key to moving beyond the technology hurdles that health plan leaders told us about may be in forming partnerships with external resources to bring in the expertise and innovations needed to propel needed change within health plan IT.
Insight 4: Value-based care has taken center stage
Providers’ willingness to adopt value-based care (VBC) arrangements is accelerating and there’s a lot of runway ahead. Those who operated under VBC arrangements during the pandemic fared relatively better than those who didn’t, according to ZS research findings, suggesting this trajectory will continue.
At the same time, regulatory and payment reforms are increasingly focused on VBC arrangements today. More than half of health plan leaders polled indicated they foresee major healthcare payment reforms on the horizon in coming years, with provider reimbursement and drug pricing under the microscope.
These findings reinforce the opportunity here, that health plans recognize coming regulations are pro-consumer. As a result, improving the patient experience across all facets of care must be a priority.
What health plans can do today to innovate for tomorrow
With a grasp of the evolving healthcare landscape, health plans are in a position to make a stronger case to accelerate investments to enable interoperability, AI and machine learning, cloud computing and automation. By extending their operating models to integrate with the entire healthcare ecosystem, health plans can reap the rewards of innovation to secure financial health.
One way to start is to think about setting up an innovation lab along with an operating model and governance structure built around it. With a governance mechanism in place, health plans can experiment with innovative use cases and customize them to various needs. Then, the operating model enables health plans to take those use cases with most promising outcomes and integrate them into the enterprise.
Once innovation is successfully embedded into the organization, the governance structure and operating model make it easier to adopt and drive value from new technology acquired from outside the enterprise, particularly big tech and healthcare IT startups that are leading innovation today.
As providers continue to gravitate toward VBC arrangements and VBC becomes a greater focus for regulatory and payment reforms, it’s clear that now is the time to refine VBC capabilities to manage affordability going forward.
These first steps will lead to deeper partnerships with the government, technology innovators and clinicians to improve healthcare delivery and the patient experience, all while reducing the cost of care across the healthcare ecosystem.
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