Digital Transformation
Adoption and Impact on Payers

Eric Schultz, Executive Vice President, Citius Tech
Rex Wallace, Principal, Rex Wallace Consulting
Sushma Akunuru, Vice President, Business Applications Development Independence Blue Cross
Luis Cerda, Star Ratings Consultant, Rex Wallace Consulting


  1. Digital transformation is driving significant changes in the healthcare sector, with key industry drivers including regulatory compliance, cost efficiency, growth, COVID-19, data interoperability, customer and provider experience expectations, talent attraction, and time management. It is significantly impacting health plans , who are grappling with the opportunities and challenges of this shift.
  2. The return on investment (ROI) from digital transformation in healthcare can be measured in terms of cost savings, quality of care, equity of care, whole-person health, and competitive advantage. Advanced analytics and data-driven insights are crucial for accurately gauging ROI, forecasting impacts, and adjusting strategies accordingly.
  3. Digital transformation is being used to create Care Management efficiencies and improve health outcomes. Instead of case managers relying on a single, overwhelming telephonic conversation to walk patients through discharge instructions, some health plans are breaking down instructions into digestible and personalized steps communicated via interactive bi-directional text messages. This approach can potentially prevent readmissions, enhance patient satisfaction and lower operating costs.
  4. Digital transformation is being used to address health equity, with strategies such as using AI and ML technologies to enhance access and equitable distribution of care. This involves considering social determinants of health, providing resources such as nutrition, housing, and transportation, and applying diverse voices in decision-making to avoid bias in digital strategies.

Various industries are undergoing digital transformation, and healthcare is no exception. The opportunities and difficulties presented by digital transformation are being considered by all payers. The main business forces influencing payers' adoption of digital technology and the ensuing effects on these organizations will be covered in this article.


Traditionally, the role of payers has primarily involved facilitating care delivery by ensuring funding for healthcare services. However, digital transformation is gradually redefining this role. Payers are now stepping in to support physicians and other health care providers in creating an excellent provider experience and enhancing patients' experience and access to the care they need. According to one of the reports, Payers worldwide must provide the necessary underlying foundations, such as an agile organization, digital delivery capabilities, scalable IT platforms, and at-scale data processing, to stay ahead of the competition.Implementing the "connected health" multimodal connection concept is critical to this transition. Members can use cell phones for appointment scheduling and determining care costs. The COVID-19 pandemic has sparked a growing self-service trend that will dramatically improve patient experiences. has sparked a growing self-service trend that will dramatically improve patient experiences.

The digital plan includes telemedicine consultations, lab findings sent directly to mobile devices, and the conversion of complicated medical jargon into simple terms. These efforts show the potential of digital transformation in healthcare, even though they must still be complete.


Recently, there has been a focus on health equity. As a result, techniques for digital transformation are used to guarantee equal access to healthcare. Technologies based on artificial intelligence (AI) and machine learning (ML) are used to find solutions to improve access and ensure the equal distribution of treatment.

The social determinants of health must be recognized and addressed to attain accurate health equity. These include language, income, and education, among other things. Payers increasingly utilize digital technologies to offer essential resources like food, shelter, and transportation to create sophisticated databases considering these social determinants.

There are difficulties, however. All patients may not have access to smartphones or the internet, which are necessary for digital healthcare services. Some payers spend money giving members smart devices or extending internet access points. Other ideas include collaborating with ridesharing services like Uber and Lyft to provide transportation perks to members and motivating them to lead healthier lifestyles.

Digital transformation enhances patient care, but if not adequately controlled, it risks escalating health disparities.

Technology must be designed and used carefully to ensure that it eliminates inequities rather than perpetuating or exacerbating them. This calls for including voices from racial and ethnic minority populations in the discussion to ensure that their experiences inform digital strategies and AI-powered tools that will produce sustained improvements.


In the digital age, several factors are propelling payers to embrace digital transformation:

  • Compliance: Regulatory frameworks are pushing for increased digitalization in healthcare. This drive is often tied to the goal of improving care quality and outcomes, as well as enhancing data interoperability.
  • Cost Efficiency: There is an increasing demand for cost-effective solutions. Digital transformation can help streamline operations, reduce waste, and cut costs.
  • Growth: Digitalization provides a platform for growth, as it often leads to innovation and expansion of services. It also offers a competitive advantage in an increasingly digital market.
  • COVID-19: The global pandemic acted as a catalyst for digital transformation. The necessity for telehealth and remote care solutions became more evident, compelling payers to adapt quickly to meet these needs.
  • Interoperability: The ability to share data efficiently and securely is crucial in healthcare. Interoperability hinges on successful digital transformation.
  • Customer and Provider Experience: Customers and providers have growing expectations for digital services and solutions. Meeting these expectations can improve satisfaction and loyalty and create a meaningful strategic differentiation.
  • Attracting Talent: Digital transformation can make organizations more attractive to top-tier talent. People often want to work with companies that are spearheading new developments.
  • Time Management: Digital solutions can streamline processes, saving time and allowing employees to focus on other vital tasks.


The return on investment (ROI) from digital transformation is a critical payer metric. This evaluation is a multi-faceted process involving the consideration of both tangible and intangible outcomes.

  • Cost Savings: The potential for cost savings is a significant factor. Digital transformation can lead to streamlined processes, reduced waste, and increased operational efficiency, resulting in financial savings.
  • Quality of Care: The impact of digital transformation on the quality of care is significant. Improvements in care delivery and outcomes are vital markers of successful digital adoption.
  • Equity of Care: Digital transformation can facilitate equitable care access. Data-driven insights can highlight disparities and inform strategies to ensure all patients receive the necessary care.
  • Whole Person Health: Digital solutions can facilitate a holistic approach to care, accounting for physical, emotional, and financial well-being.

To accurately gauge the ROI, advanced analytics and data-driven insights are crucial. Payers need to be proactive in measuring the performance of their digital initiatives and adjusting their strategies accordingly. The ability to forecast the impacts of specific programs and strategies will be vital for realizing the full benefits of digital transformation.


Quality improvement can be considerably accelerated through digital transformation, particularly in Medicare and Medicaid environments. The readmission rate is a crucial performance statistic for health plans. The process for managing readmission rates has typically been telephonic, with case managers calling members after discharge to review discharge instructions. Due to the complexities and volume of information provided at discharge, patients can be overwhelmed, making this telephonic exchange challenging.

To improve this process, some cutting-edge health plans embrace digital transformation. They take the discharge instructions and break them down into more manageable instructions. These steps are then explained to patients via interactive, bi-directional SMS outreach within the first week after discharge.

Because it replaces a single, overwhelming telephone interaction with multiple and more manageable text messages, the payer is able to help the patient avoid readmissions, while boosting patient satisfaction, and increasing the standard of care.


The healthcare industry frequently uses the phrase "creating a delightful experience for members," but it has acquired new significance in the digital transformation age. The aim is to create life-improving experiences based on personal health needs.
From the provider’s standpoint, this entails changing the emphasis from a wholly medical approach to one that also includes a customer service paradigm. Investors in integrated technology are required as providers begin seeing their practice as a business. This covers telehealth, mobile apps, patient portals, and electronic health records. By fostering an efficient workflow, these technologies ensure that all patient demands are met in a coordinated way.

From the payer's standpoint, the aim is to make healthcare more accessible. It is essential to consider the variety of perks available to members and how simple it is for them to use them. Health plans can use robust databases to connect data among providers, resolving a problem that frequently plagues the sector.


It is essential to ensure biases don't unintentionally affect digital tactics when developing algorithms and digital strategies. This can be done by considering various points of view while making decisions and being aware of how other people live their lives. Insights derived from data can also be used to assess whether digital efforts are having the desired impact and are not contributing to disparities.


The landscape for payers is changing as a result of the digital revolution. Even though it poses difficulties for adoption and change management, it offers strategies for better care, cost savings, and growth. Digital initiatives' return on investment must be measured and demonstrated to encourage effective transformation and sustain ongoing investment.

Payers are being affected by digital transformation on a wide range of levels. It can raise standards, promote patient satisfaction, and simplify administrative procedures. Realizing these advantages, however, calls for a deliberate approach that recognizes members' requirements, makes the best use of technology, and promotes improved access to care. The digital transformation of the healthcare industry will result in a paradigm shift with a patient-centric approach at its core, with payers playing a crucial role in accelerating this change.