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Payor Involvement in the New Healthcare IT 

  • March 2014
  • 6 pages
  • Frost & Sullivan
Report ID: 2051527

Summary

2013 proved to be a year of tremendous rethought on traditional payor roles in various emerging models for care that involve varying levels of consumer participation as well as more capitated setups that limit payment for plan-supported provider billing. Most industry thought leaders on both sides are convinced that IT infrastructure development to support these initiatives will form a key part of post-Affordable Care Act (ACA) reimbursement programs starting in 2015, provided such consensus can be
implemented evenly across the board.

What are the Main Restraints on Payor-Based IT Investment?

Frost & Sullivan believes that the three main temporary restraints on greater investment in next-generation IT systems are:
• Implementation and deployment speed around “business essential” billing and collection systems;
• Actual sales for capitated model designs to the core large employer market; and
• Cooperation to support next-generation population analytics to decrease overall member utilization and member satisfaction services.

The speed of policy change does not evenly match deployment times and infrastructure cost for systems that support those broad changes. For example, the annual industry service cost of traditional billing and collection automation approaches approximately $1 billion in total industry integration, with up to two months of closed-loop integration to existing legacy claims processing systems per buyer.

Add to this that only about 60% of all national claims are truly automated, with bi-directional exchange of claims payment requests, semi-real time adjudication of submitted claims, patient plan verification, and actual accounts payable log and provider payment. Current billing and collections rely heavily on prompt clear-out of accounts payable, so backlog created by the adjustment process to automated systems can be cost-prohibitive to the payor system. Capitated models in the private sector, such as value-based design, Medicare-style accountable care, and defined contribution plans, all require a deep degree of employer and provider buy-in to justify a systems transition instead of simply migrating internal service processes such as claims processing. To date, at the end of 2013, there was substantial surveyed interest in defined contribution structures but fewer actual sales across the industry in the over 1,000 employer market.

There is also the assumption of consumer risk acceptance and behavioral change through the creation of an array supplemental member health tools and services, all of which require infrastructure investments in mobile health, wellness and wellness-related tools and services, and medically verifiable health tracking tools. Many payors speculate that utilization of such “deep” medical services will be far greater when offered at the consumer or provider levels, so there is hesitation in placing a large bet on such tools right now.

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