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Information Technology is the Key to U.S. Healthcare Insurance Transformation

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Information Technology is the Key to U.S. Healthcare Insurance Transformation

December 23, 2015
By John Casaretto
Contributing Writer

An industry analysis from Frost & Sullivan’s (News - Alert) Health Insurance Information Technology: US Overview and Outlook, 2014-2020: Changing IT Priorities for Next Generation Health Plans says that information technology is critical to efficiency and improvements for health insurers. Among the things cited in the report, several factors that are challenging health insurers in the U.S. include the Affordable Care Act (ACA), inflation, and the following: 

  • Continued cost inflation driven by hospitals, pharmaceutical companies and technology vendors.
  • Tougher contract negotiations with large employers and provider systems.
  • The rise of individual consumers demanding a higher level of service and lower premiums.
  • Growing experimentation with changing reimbursement models and risk-sharing arrangements, which require a more cohesive approach to sharing information with members and providers.

As the ACA has taken hold it has been accompanied by a number of compliance and regulatory obligations. Facing financial choices and needing to revamp internal cultures are two major factors for organizations to consider according to Frost and Sullivan. The changes that organizations face are disruptive and will challenge conventions across the spectrum of business processes and practices.

In fact, the ACA is described in the report as “an overwhelmingly disruptive force for the U.S. healthcare system.” The analysis points out that health insurance organizations are responding to these by containing administrative costs and IT purchasing. Additionally, there are anticipated shifts in spending across IT market segments, which will spur new capabilities and strategies needed for insurers to keep a competitive edge.

One expected change will be the focus of information technology. New spending will either be initiated or redirected towards data analytics, customer engagement, and population health management. Expanded capabilities in communicating with patients can also be expected within this shift.

As the report notes, "The drivers of this trend include greater consumer access to medical information via the Internet as well as the need for patients to take on increased financial responsibility for their healthcare costs; particularly with the rise of high-deductible health plans."

In short, technology will be a vital part of the continuing evolution of how patients obtain health insurance in the U.S., and how insurers optimize their positions in what is a very dynamic market poised as many analyst believe for significant “disruption.” 

Edited by Peter Bernstein

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