Navigating trends and focus areas

Key trends in the payer market

The greater than $6.5 trillion – and growing U.S. healthcare industry is riddled with challenges, old and new. Payers, Providers, Life Sciences, MedTech, vendors, and regulators are tasked with fulfilling their unique contributions while also collaborating to provide more consumer-centric solutions. Payer executives need to manage fundamental Payer operations alongside investing in progressive, cutting-edge technology. 

In a chaotic space, leaders must keep their eyes open to key areas to define their strategic wits and create laser focus for their organizations. 

• Government Programs and Compliance

  Following COVID-19, Medicaid plans are going through redetermination to qualify members more stringently than was the case during the pandemic. In some cases, there is a 25-40% drop in Medicaid membership, and the risk profile suggests participants are a sicker, riskier population. Meanwhile, Medicare membership is increasing, as is the age of the population, while premium rates are decreasing. These shifts demand adjustments to risk models, market entry, quality measures, compliance, and processes. Affordable Care Act (ACA) regulations continue to expand concerning marketing, transparency, prior authorization processes, and numerous other standards. 
  
  Health plans must ensure compliance with state and federal requirements. There remains an ongoing balancing act between sharing more data, in more places, with more Providers to improve care while maintaining proper privacy and security controls to protect members’ sensitive data. External audits and scrutiny of policies and procedures are regulatory cornerstones and here to stay. Internal safeguarding and anti-fraud investigations are critical to maintaining payment integrity, controlling waste and abuse, and protecting against risk. Adopting evolving guidelines and complying with regulations, if not strictly adhered to and properly managed, can be catastrophic. 

• Optimization

  Health plans run on thin margins. Executives need to continue finding ways to reduce or eliminate operational inefficiencies. Inserting more robotic process automation and leveraging GenAI to improve speed and productivity is necessary to contain costs and remain competitive.
  
  Most health plans operate on the leading eight to ten system platform vendors. Those vendors are developing and adopting new functionality. Health plans need to remain nimble and leverage the modernized technologies being released. Adopting processes and updating technologies is less a differentiator and more like health plan housekeeping that must be done. Effective leaders will integrate supplementary technologies to promote unique excellence, ensuring that they streamline operations, optimize data sharing across existing technologies, and achieve significant ROIs to bring about meaningful change while remaining aligned with the strategic vision and positioning the plan for growth.  

• Consumerism

  The rise in member-centric investments is testimony to the willful and proactive role members are taking in their healthcare experience. From where their data is stored to how much different providers cost and whether quality care is being delivered, this inundation in consumerism influenced by retail experiences is changing how Payers operate. Today, Payers are embedding innovative solutions to ensure exceptional experiences for the informed and empowered member community. They are finding unique ways to engage members through content, mobile apps, chatbots, telehealth, and wearables. Member portals continue to serve as vessels for transparency, but members want more. Meeting customers' changing needs is a bit of a trial-and-error process, requiring leaders to refine their offerings in order to give the members the greatest bang for their buck.

Figure 1 - Transforming member experience through mobile apps, chatbots, telehealth, and wearables 

• Value-based Care

  The pace is slower than expected five years ago, but the transition to more VBC models is accelerating. Research suggests a two-times uptick in the number of U.S. patients covered under value-based programs from 2018 to 2021. 1 CMS is starting to release guidelines requiring movement to VBC contracts and wants the majority of their spending to come through VBC contracts by 2030. Payers face various challenges requiring modernized systems to improve care delivery and optimize risk adjustment and quality. There is a need for analytics-enabled insights to help deliver high-quality care.

Figure 2 - Payers' challenges in adapting to consumer-driven healthcare demands 

• AI

  The shiny new toy - AI. It doesn’t come without skepticism, especially when considering patient care scenarios and other historically human interventions. However, when applied responsibly, it offers definite opportunities to optimize processes, provide better predictive analytics, and improve customer service. Around-the-clock, chatbots and other customer engagement tools are predicted to increase customer interaction and AI-driven service volume by more than 60% over the next five to ten years.1 There is much misconception that AI is a threat to human jobs and quality overall. Instead, leaders recognize that AI is a tool to augment human-powered roles and outputs. 
  
  

  Figure 3 - Integration of AI in enhancing customer engagement and augmenting human capabilities

  Every health plan is conducting proofs of concepts and analyzing ROIs to decide what to adopt. Leaders are deeply invested in developing transformative solutions and leveraging AI’s unprecedented power. All eyes are on the unignorable AI movement.  

While promising, specialty VBC models present challenges. Rise of speciality groups will create a very complex multi-player eco-system including Payers, Providers, Other Risk bearing entities etc. This necessitates intense focus on Interoperability while building robust integrations and interfaces for seamless data exchange and collaboration.

Accurately attributing the patients and associated financials under specialized models can be complex, especially for population with multi-morbidities and may require care within variety of models. Advanced analytics tools and ML models are inevitable to enable more sophisticated risks stratification & transparent attribution methods.

Addition of speciality groups in the VBC mix is only going to reduce the size of “pie” to share in VBC landscape and lead to razor thin margins. To maintain profitability in this competitive landscape, organizations must prioritize operational excellence. Automation and generative AI can potentially streamline processes, reduce costs, and enhance efficiency.