From payer to leader

How health plans can shape the future of healthcare with interoperability-enabled innovation

Jessica Bonham-Werling
Senior Content Marketing Manager, Redox

Introduction

Neither was named Rosie, but both my grandma “Granny” and great-grandma “Nana” were riveters during World War II. Neither had previously held a full-time job, but they were enticed to work during the war, at least in part, due to the promise of health insurance benefits. The war created worker shortages and wage caps that made it difficult for companies to attract new workers, but many found that offering health insurance benefits was a compelling recruitment tool. Prior to WWII, only 9% of the population was insured, but by 1960 it jumped to over 60% as more and more employers included it in employee benefits packages.

If either Granny or Nana was alive today, employer-sponsored health insurance might be on the shortlist of still recognizable things alongside Jell-O^® and Velcro^®. The 80-year-old United States health insurance landscape has been extraordinarily resilient, but the winds of change are blowing hard as consumers, regulators, and politicians demand transformation. Cries are loud (and getting louder) for removing complexity, expanding equity, improving quality, AND reducing costs. Doing all these things simultaneously might seem outlandish, but other industries have shown it can be done. Telecommunications, financial services, retail, and even manufacturing industries have shown that better, cheaper experiences are possible.

A crossroads

Health plans find themselves at a crossroads where they can dig in their heels and hope the longstanding institution will continue to be spared from disruption, or they can commit to understanding members and their care journeys to pinpoint opportunities to innovate. Innovation will fuel a revolution in health plan products and services that can help their businesses (and their members) thrive in the future.

Set a vision to lead

If you have been in the health insurance industry for more than a couple of years, you might take offense to the introduction. You have likely been working towards “change” for a while now — most health plans have had “digital transformation” on their agenda for a decade. Work began with a focus on automating and reducing costs, but transformation visions have become a bit muddled as new goals have surfaced in recent years. Improving care journeys and overall member experiences are now imperatives for plans as they try to keep pace with rising expectations.

Many health plans may find themselves wondering what “digital transformation” actually is and when it will be done. If this sounds familiar, it is probably time (or past time) for a vision reset.

Health plans’ unique view into the patient care journey makes them well positioned to lead change, rather than be disrupted by it. Many may think that providers have the most intelligence about their patients, but patients see multiple providers each year — Medicare recipients see an average of 7!² Health plans are the only entity that see (most) everything as they intake claims for nearly every health care service a member receives. They know when their members see primary care physicians, when drugs are prescribed, when lab work is done, when they see a specialist, when they are admitted to a hospital, and more. While the information may not always be timely, no other player in the healthcare ecosystem comes even close to having this complete of a view.

Health plans have the most complete view of member care journeys

What if health plan digital transformation visions focused not on the latest flavors of cost reduction or even member experience enhancement, but instead on creating the technology and data backbone to complete the full view of member care journeys? This full view will allow health plans to understand member needs, identify care gaps, and uncover opportunities for new products that may be otherwise missed. They would also position themselves at the center of the healthcare landscape where they can effectively lead the change through innovation. In their 2019 payer perspective on digital health ecosystems, McKinsey states that health plans “need to integrate with other partners in the market to enable seamless customer journeys, actively support data flows as far as possible, and enable new use cases made possible by bringing previously disparate data sources together.”³ Large national health plans have a bit of a head start and have begun to make some major strides in innovation — developing new revenue streams including Cigna’s recent launch of its health services brand, Evernorth.⁴

While there has been some progress from the largest insurers with the greatest resources, a radical vision reset will admittedly be a giant leap for most medium and small health plans. The health insurance industry is incredibly risk-averse, and this isn’t surprising as health plans are literally in the business of risk avoidance. But, a radical reset may actually be the safest move. Health plans that continue to bypass opportunities to take a real gamble on innovation will find themselves in the risky position of remaining stagnant in an industry that is ripe for rapid disruption. “Digital giants”, who are well versed in understanding and meeting customer unmet needs with instant, frictionless experiences, can and will pounce.⁶

Invest in process and people first

A vision fixated on innovation is a strong start, but real progress will come only when the vision is paired with the proper investments to execute. Achieving complete visibility into member care journeys will require data interoperability with care partners across the healthcare landscape (providers, labs, telehealth, pharmacy, other payers, etc.), and with the apps that can help turn that data into actionable information. Most leaders will see this as a “technology project” and quickly jump to making decisions on the right technology for the job, but we encourage restraint. While the time will come to think about the right technology, the competitive advantage to be gained from a vision focused on innovation is not the data or technology, but rather the way they are used. Starting with a focus on the right process and people investments is more likely to lead to long-term success.

Keys to integration success

We recently asked our integration experts to reflect on the 1900+ healthcare data integrations they have completed with Redox. They ranked the things that were most important to success, and it turns out most have little to do with technology and everything to do with how the project is established and managed.

Keys to successful data integration

3. A clear understanding of internal data flows

Half of our integration engineers put this in their top three factors for success. While the vision is to produce a data backbone that enables complete member visibility, a strategy that is simply “connect us to anything and everything that a member touches” would be misguided (at best). Connections should be prioritized to quickly demonstrate progress and gain momentum. To effectively prioritize, health plans should start by evaluating the data they already have in-house and where they foresee the most substantial gaps in understanding and acting on member care journeys. Many health plans may find that their biggest gap is not the data itself, but when they receive it. Some health plans wait up to 12 months to receive provider claims. While still valuable, clinical data that is a year old is hard to act on in a way that would be particularly innovative. Timely data creates an environment where transformative products, experiences, and interventions can be developed to delight members and close gaps in care.

Investing time upfront to confirm internal data sources, their flows, operations, and potential gaps will pay great dividends as the scope of the project is prioritized and defined. It will also logically lead to a clearer understanding of what data are needed from partners.

2. A clearly defined scope

Just over half our integration engineers put this in their top three success factors. Building on the example provided above, if the biggest internal data gap is in receiving timely care data from providers, an initial scope focused on creating real-time interoperability with a handful of networked health systems could be a place to start. Focusing on a single use case for the initial connections may also create a more manageable scope. For example, connecting with providers and establishing the realtime, bi-directional exchange of claims data could lead to improvement in the effectiveness and efficiency of existing processes like prior authorization or value-based care programs.

A narrow initial scope will allow health plans to create relatively quick wins that generate momentum and perhaps lead to new revenue and/ or administrative cost savings that can then be directed at continuously broadening the interoperability scope to other providers, other vendors, and/or other use cases.

1. A project leader that can drive the work and hold all teams accountable

Our Redox integration team cited this as the single most important element to success with two-thirds of them putting it in their top three. Even with a clear scope, an initiative will fall down without a skilled leader. Establishing interoperability requires involvement from the health plan, partners (e.g. health systems), and vendors. A leader that is well versed in building and managing relationships across diverse stakeholders is often the difference between success and failure. Further, a leader that can effectively manage both upward and downward to ensure complete buy-in throughout the organization is the holy grail.

While the initial scope should be clearly defined and narrow, the project leader should have full executive support, a position of power, and the skillset to lead a large-scale effort that is truly transformative for the health plan. They will set measures of success with ambitious, but realistic timelines at each project phase from the initial minimum viable product (MVP) scope to broad and deep integration.

While internal data, scope, and project management are not particularly sexy places to start, we think they are what will matter most in an interoperability journey. And we are not alone, research shows that 70% of transformations fail, usually because of people-related or management related issues.⁸

Invest in technology next (but really just more in people)

Once there is a good understanding of in-house data, gaps, a clear scope, and a great project leader, health plans can start to think about technology, which, you guessed it, should start with a continued focus on people. Sorry, we promise the technology is coming, but ensuring the right human resources are in place to make the best use of the data once interoperability has been established matters much more!

Achieving interoperability will set a foundation to differentiate through innovation, but interoperability on its own does not differentiate. Health plans could have timely, complete data on every single member, but if they lack the capacity or skill to do anything with the data, they will fail to gain any competitive advantage. Health plans should invest modestly in establishing and maintaining connections to exchange data, and heavily in recruiting and retaining the talent to cleanse, query, analyze, and visualize the ingested data. If health plans believe they can effectively do both, they should consider the time and skill sets required to establish and maintain interoperability at scale.

Time: Healthcare integrations notoriously take months or even years. We estimate that organizations spend about 65 hours establishing a single connection and then another 80 hours maintaining it each year. Take those times the dozens, hundreds, or perhaps even thousands of connections that a health plan needs to make, and they will quickly find that they are spending most or all of their resources establishing and maintaining connections.

Resources necessary to establish and maintain 340 in-network connections

Skillset: Achieving full-scale interoperability in today’s world will require a team that has expertise in multiple standards (HL7v2, FHIR, X12, CDA, and more) — in today’s labor environment it will take years to recruit or train the necessary talent if it is not already in-house.

Finally, think about technology investment

We’ve finally arrived — it’s time to talk about technology! While process and people will be most critical, technology will also matter. With an unpredictable regulatory environment and the rapid advancement of digital health technologies, health plans should seek out agile, proven interoperability solutions that are:

• Secure: Security is the priority when it comes to healthcare data exchange. Selected solutions should meet and exceed HIPAA and National Institute Standards and Technology (NIST) encryption standards, and third-party audits (e.g. HITRUST, SOC2) should be conducted regularly to identify, correct, and prevent vulnerabilities.
• Compliant: Some CMS Interoperability payer mandates are final, and more are coming soon. While much is uncertain, the regulations will eventually push the industry toward the FHIR standard. The selected interoperability solution should help payers adopt FHIR, but also be capable of connecting and normalizing to older standards as full industry adoption will take time.
• Adaptable: Interoperability solutions should promise the ability to quickly adapt to emerging technologies and new regulations. The solution should have a proven ability to connect to a variety of partners including providers (EHRs), other payers, public health, technology vendors, labs, devices, and more.
• Scalable: There is immense variation in the data used across the healthcare landscape which creates enormous complexity when attempting to exchange it with multiple partners. The selected solution should standardize and normalize through a single API to minimize complexity for health plans, allowing them to easily manage and monitor through a single interface, whether they have 10 or 10,000 connections. Further, a solution that takes a networked approach, reusing connections across multiple organizations, could simplify interoperability for all payers and their partners.

Finally, assuming the solution does all these things, you guessed it, the solution vendor’s people also matter! The selected vendor should provide an integration team with substantial experience to support

all of your connections from design to maintenance. Solutions that are not supported by human integration support and expertise may lead health plans down a path where they still need to hire a full in-house integration team.

Conclusion

Healthcare has been remarkably resilient as digital technology has rapidly disrupted industry after industry, but change is coming. Other industries have shown that the companies that survive and thrive after disruption are the boldest innovators. A McKinsey survey of 2,000 executives across digitally disrupted industries shows that the companies with the highest growth are those that led the disruption or were fast followers. They placed their bets on innovative products, digital processes, and new business models.⁹ We believe that disruption in healthcare will be no different and that health plans need not sit idly by — they are well-positioned to lead the change.

While most health plans are already hard at work on “digital transformation”, digitizing to do old things better will not be enough — winners will have clear visions to innovate. Executing on these bold visions will require substantial restraint — leaders must avoid jumping to technology investment before first focusing on the right people and processes to enable the transformation, and to run the transformed business of tomorrow. When the time comes, technology investments should be focused on secure solutions that are flexible enough to adapt to ongoing change, with proven ability to scale in today’s uncertain environment.

It has taken 80+ years, but the health insurance industry will soon evolve with products and services that look much different than those of today — even Granny and Nana won’t recognize them (but don’t worry, we think Velcro and Jell-O are here to stay).