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Invest in IT to ensure post-reform change


The health insurance industry is evolving as insurers move toward more incentive-based payments and sell plans on the health insurance exchanges. But the progress is slow-moving because insurers are hampered by outdated technology and information systems.

Many insurers are interested in pursuing new care models, according to the latest "State of the Payor" survey from HealthEdge. Of the more than 130 health plan leaders surveyed, 58 percent are focused on accountable care organizations, 53 percent are looking into pay for performance and 40 percent are considering value-based benefit designs. Additionally, 64 percent of insurers are thinking about participating in exchanges and another 64 percent are considering Medicare and Medicaid expansion.

But despite widespread interest in these next generation healthcare models, change to insurers' IT systems has been sluggish. Almost half of the health plan leaders surveyed (47 percent) said outdated technology is the biggest barrier preventing them from participating in new care delivery models. Another 32 percent cited insufficient financial resources as a roadblock to change.

"While payors begin to participate in or support a number of new healthcare delivery models, antiquated legacy technology systems continue to be a strong barrier to success," HealthEdge said in statement accompanying the survey.

It seems hard to imagine any large industry so behind the eight ball on technology. It's even harder to understand why health insurers, such dominant players in the powerful healthcare market, could possibly not invest in IT. It's not because insurers aren't aware that technology can cut costs: Eighty-one percent of insurers in the HealthEdge survey said automation of manual processes would have the most significant impact on reducing administrative costs. And 55 percent recognize that auto adjudication also could lead to lower spending.

Ray Desrochers, HealthEdge executive vice president, previously told FierceHealthPayer that next gen models will ultimately fail without the necessary technology that, based on these survey results, most payers don't have in place.

Moving forward to implement new models, like ACOs and pay for performance, without crucial infrastructure is like building the walls of a house before laying the foundation in the ground. No contractor would ever propose such a plan; neither should insurance executives. Insurers simply can't underestimate the value of IT as they attempt to leverage their influence on the healthcare industry, shifting it toward a value-based market instead of a system that rewards multiple services.

There are, of course, many examples of insurers boosting their IT infrastructure to better succeed in new models of paying for care. Aetna, for example, uses its vast mobile health platform, which provides consumers access to health and wellness apps from one online hub, to help keep their members healthy, decrease healthcare utilization and lower costs. And Cigna and Kaiser Permanente both use technology to successfully engage their members through more consumer-friendly website redesigns and increased social engagement.

If more insurers can take similar steps to incorporate technological capabilities, we will soon see an IT infusion throughout every aspect of health insurance. And insurers will benefit by spending less to cover their members who stay healthier and more informed about their care.

"It's like this cacophony of opportunity that's coming together and is going to lead improved outcomes for the patients delivered at a lower total cost," Humana CIO Brian LeClaire previously told FierceHealthPayer in an exclusive interview. - Dina (@HealthPayer)