With the onset of healthcare reforms, the individual health insurance market is set for a major expansion. Insurers need to decipher whether they can profitably expand their presence into this segment. Obviously, making the transition is not going to be easy. Insurers have already realized that their overall profitability might be compromised by MLR restrictions with health insurance exchanges likely to be unforgiving on substantial premium hikes. Payers on the exchanges are expected to showcase products with competitive costs. This discussion delves into how payers can continue to drive profits in the face of such rising challenges.
There have been a lot of opinions expressed about how the payer’s margin will be squeezed in the reformed health insurance market. This discussion focuses its attention on dealing with the situation, i.e. preparing a business strategy for survival in the new Exchange market.
1. Get Smart About It: There is Life for Plans off the Exchange
Restrictions imposed by the ACA are here to stay but a smart payer can still dig out profits by reading between the lines. For instance, the Healthcare Law stipulates that health insurance products sold on and off the federal/state health care exchanges should put forth the same range of premiums, out-of-pocket expenses, etc. However, the ACA doesn’t stipulate that standalone products sold on the exchange need to be retailed in the same format in the non-exchange market.
A robust, cost-effective and future-ready IT infrastructure is critical for healthcare organizations as they try to increase efficiencies and lower cost of ownership in the face of increasing competition and shrinking margins. In the changing healthcare landscape, organizations must have the ability to capture, index, save, report, understand, track and interpret data. Besides reporting, data analysis presents a serious challenge as the industry steadily moves towards a value-centric model, breaking away from its fee-for-service tradition. While IT investments are on the rise, ROI and long-term objectives are rather blurred for many organizations.
This is the second part of a discussion about how healthcare leaders should perceive the emerging Exchange marketplace and get ready to ensure survival and profitability in this fast changing domain. To read the first part Click Here.
Healthcare leaders shouldn’t think they need to drastically reform their business model to survive in the reformed market. The better approach is to perceive the situation as rebooting their operations, armed with better technologies and greater business intelligence. To ensure that their business is positioned for success, senior decision-makers across healthcare organizations need emphasize upon:
This is the first part of a discussion about how healthcare leaders should perceive the emerging exchange marketplace and get ready to ensure survival and profitability in this fast-changing domain.
Healthcare reforms can prove intimidating to people who get overwhelmed by its vastness. Yes, health reforms are complex, intertwined with a never-ending series of updates and releases. While healthcare executives can get overwhelmed with compliance issues, they need to address the equally critical aspect of survival in a revisionist market. For developing an effective business strategy in this marketplace, the following should be considered:
With the goal of making the new healthcare system work for everyone, the PPACA as amended by the Health Care and Education Reconciliation Act created a requirement called Share Responsibility. This is applicable to individuals, insurance companies, medical device companies, medical providers, pharmaceutical companies, employers and the government. On January 30, 2013, the HHS and IRS released a Final Rule and two Proposed Rules related to the individual part of Shared Responsibility.
Shared Responsibility for Individuals
This requirement was put into effect with the perspective of making health insurance feasible for consumers and the payers in the long run. By making a basic type of coverage necessary, health care benefits of individuals and subscriber volumes for insurers are addressed simultaneously. Individuals should maintain a Minimum Essential Coverage (MEC) or be ready to be penalized where the penalties will be levied as Shared Responsibility Payment.
For a health insurance shopper, reading through the literature of different health plans can be rather overwhelming. The information is usually provided in a complex format where narrowing down the most relevant details becomes difficult. Plan details usually include multi-tiered payment options, along with complex calculations about cost-sharing and coverage-limitation scenarios. The Affordable Care Act seeks to make shopping for health insurance an undemanding and well-informed process.
This is why the Summary of Benefits of Coverage (SBC) was put into effect in September 2012.According to this mandate, every health insurance payer, including those who will be listed on the State Exchanges, needs to provide easy-to-understand and detailed description about their health plans. In the health exchange ecosystem, all the insurers operating on a State Exchange should use the same SBC form. An uniform format allows consumers to easily compare the benefits and coverage limitations across different plans.
This is the second part in our discussion about the increasing role of Analytics in the Healthcare industry. Here, we explore how Analytics offer irrefutable benefits to the insurers and try to derive a conclusion. (Please Click Here to view the first part of this discussion).
For Payers: Analytics Eases Adaptation to Healthcare Reforms
Payers can benefit from Healthcare Analytics where everything from Electronic Health Records to ICD-10 and Health Information Exchange updates can impact their expenses, profitability and marketing penetration. Typical areas where analytics are immediately useful include categorization of population health indexes, evaluating success of marketing strategies and assessing new provider networks. In addition, analytics invariably yield a more granular form of data which is better suited for disease management programs.
This is the first of a 2-part discussion that explores the role Healthcare Analytics can play in the era of Health Reforms. Here, we discuss the contemporary realm of Analytics and the challenges to its usage.
Pharmaceutical companies are perhaps the most seasoned users of Analytics in the healthcare market since detailed analysis is central to their efforts in drug research and clinical trials. Other healthcare entities like payers, provider organizations and government agencies haven’t adopted Analytics as enthusiastically. However, this scenario might change rather soon. With State Exchanges set to redefine the health insurance marketplace, most healthcare organizations have understood that they can either adapt to the reforms or perish. As 2013 progresses, healthcare businesses are realizing that they need to squeeze more out of every dollar spent, limit wastage of resources and eliminate fraudulent practices to achieve profitability-cum-compliance. This translates into many operational and administrative changes. Healthcare Analytics can make this transformation less challenging.
The creation of Electronic Health Records (EHR) was established by President George W. Bush in 2004. He created the Office of the National Coordinator (ONC) for Health Information Technology to support the adoption. The ONC created standards for medical records but adoption was slow. In 2009, President Barack Obama picked up the torch stating EHR was a priority.
Other countries have picked up the adoption of EHR as well. In the UK, where it is referred to as EPRs (Electronic Patient Records), representatives from NHS (National Health Service) have touted EPRs vital for streamlining and safeguarding patient information, improving health informatics and fueling data-driven patient services.