Here’s what payers and providers should look for as they update their core platform strategies for the new normal in healthcare.
As discussed in our previous article, many healthcare organizations we work with have set their sights on delivering holistic, frictionless customer journeys that span the boundaries between payers and providers and seamlessly blend physical and digital experiences. This vision stands in stark contrast to the disjointed, fragmented and inefficient processes that characterize today’s healthcare industry.
Before they can seize that grail, however, many healthcare organizations must first modernize, rationalize and reimagine their current core platforms and technologies. Historically, healthcare technology platforms have been optimized for an ecosystem formed in an era of proprietary data silos and adversarial market segments. Closed architectures required extensive custom code and manual workarounds to interact with external systems and devices.
These technology foundations can’t support many of the healthcare industry’s emerging attributes, including interoperable data sets across payer and provider settings, price transparency for medical services, on-demand and healthcare-anywhere care delivery models, and real-time transaction processing – to name just a few.
Put bluntly, the last-gen technology that many providers and payers currently rely on simply won’t support the demands of the new healthcare industry, and will be unable to provide a competitive advantage in the new normal.
An industry in motion
Recognizing this, some large healthcare industry players are reevaluating their technology strategies. We’re noticing an increase in market noise and hype as multiple industry stakeholders position themselves to create market value in the emerging interoperable, price-transparent healthcare economy. Some of the moves we’re seeing include:
- Leading electronic medical record (EMR) vendors (most notably Epic but also others to varying degrees) are looking to expand beyond health system and hospital boundaries by actively diversifying into the health plan space. These vendors are investing in platforms and products that support traditional payer functionality (claims, membership, premium billing, etc.). Their belief is that an integrated, monolithic, end-to-end platform that spans payer and provider functions will drive value in a converging marketplace.
- Many large national health plans have been moving into the platform and tech space for a while now, including UnitedHealth Group/Optum, CVS/Aetna, Anthem and others. These diversification strategies have historically included acquiring or monetizing and commercializing proprietary health plan assets (including platforms) and selling them to other health plans.
We expect that several of these companies will look to build out and commercialize next-generation healthcare core technology themselves, often in partnership with EMR vendors, to drive value by enabling seamless end-to-end experiences powered by shared data assets.
- New entrants and Big Tech such as Walmart Health, Amazon Care, Microsoft and Google are investing billions of dollars into introducing new business, operating and technology models to the industry. All of these efforts will have a potentially significant impact on the evolution of core platforms in healthcare and the viability of legacy strategies.
Choosing a technology platform
We’re helping clients separate the hype from the substance of these emerging strategies by working through these key questions:
- Will you be locked in? We’re hearing from healthcare C-suites who are initially enamored by the idea of buying a single, integrated, end-to-end solution from one vendor. While we understand the apparent appeal of this approach, in reality it can be a rigid and expensive option. The “monolithic” approach puts your company at the mercy of one vendor’s ability to deliver all required capabilities, and makes it more difficult to assemble best-of-breed solutions on open platforms.
- How fast can you innovate? Organizations locked into a single vendor’s solution will be only as responsive to market and regulatory change as their vendor is. By contrast, those powered with open core technology will be able to vet and integrate new apps, devices and solutions as fast as the marketplace develops them.
- How comfortable are you with a competitor powering your business? The large national health insurance carriers that have launched platform and technology operations still maintain their core insurance businesses. Our clients express concern about ensuring the companies/vendors they rely on to provide new platform and technology services are separate from the companies they compete with on their core businesses of health insurance and care delivery.
Evaluating open core technology
Many of our clients want to modernize while still getting value from their existing technology investments, data stores and experience and knowledge. That flexibility is possible with core technology that has an intelligence layer that can absorb, integrate, orchestrate and act upon data across the ecosystem. By using core environments with open, standards-based APIs, business logic and workflows, organizations can assemble best-of-breed applications and tools to create experiences specific to their member and population health needs.
Other key qualities to look for in next-gen core technology include:
- Real-time functionality. Core technology must have real-time change capabilities fed by insights and recommendations from inside and outside the system. Both internal audiences and members/patients should have access to insights for decision-making, from comparing prices to assessing quality ratings of providers for a specific procedure.
- Support for next-generation payment models. Core technology must enable outcomes-based benefit and contract designs, bundled services, reference pricing, provider incentives and real-time adjudication and payment. As data barriers fall, systems increasingly will need to fully integrate claims and medical data with specialty, pharmacy and non-medical health services.
- Event-driven insights and automation. When core systems incorporate engines that publish data generated from EMR, claims and other processes in real time, that data can be made available throughout the organization’s application ecosystem. Using artificial intelligence, organizations can then make key processes predictive and automated, such as a machine learning-based review of rejected claims that then approves claims that meet a specific threshold.
Healthcare organizations’ core technology strategies go beyond one company’s balance sheet. They will influence how effectively the industry shifts to value-based models that promise improved outcomes and frictionless experiences at lower costs. Today’s interoperability regulations enable industry players to converge their data sets and use analytics to identify care gaps and social determinants of health. But friction points and outright obstacles among payers and providers with obsolete core systems still inhibit realization of these benefits.
Those that embrace open core technologies will be well positioned to tap the power of the emerging health ecosystem and its fluid data flows to deliver the end-to-end health experience consumers want. Organizations that lock in with one vendor may perpetuate these barriers, ultimately hurting their ability to compete.
William “Bill” Shea is a Vice-President within Cognizant Consulting’s Healthcare Practice. Patricia (Trish) Birch is Senior Vice-President & Global Practice Leader, Healthcare Consulting, at Cognizant.