How Obamacare Will Impact IT
As CIOs drive their organization’s Obamacare-related changes, choosing the right partner for this journey will be key to the success of their new initiatives.
By C.J. Ravi Sankar
As the U.S. health-care industry begins implementing the Patient Protection and Affordable Care Act (PPACA), commonly called Obamacare, insurance companies are experiencing a change in their business environment. For example, regulatory changes like medical loss ratio mandates require a reduction in administrative spend, while business model changes will force payers to invest in better management systems. What’s more, the influx of new, uninsured customers has made business leaders rethink their member acquisition and retention strategies, due to the following challenges:
· For a typical payer, about 20 percent of medical spend goes to 1 percent of its customer base, while 50 percent of the healthy customer base incurs only 3 percent of the medical spend
· Temkin Customer Experience ratings for 2012 place the health insurance industry at the bottom in delivering customer experience
· The Consumer Union 2012 survey reveals that consumers dread shopping for health insurance.
Increasingly, customer expectations are shaped by their experiences in using services across other industries, such as retail and financial services. For payers to deliver on these customer expectations, they will need to:
· Build a flexible business architecture
· Optimize business processes to reduce costs and improve efficiencies
· Create and manage customized experiences
· Unify their customers’ experiences across multiple channels.
Payer CIOs are at the center of this sea change as their business partners will seek their leadership in transforming payers into health-information organizations. By leveraging technologies like social media, mobile devices, data analytics and cloud computing, CIOs can improve traditional organizational capabilities to deliver these information-based products and services. Social collaboration is expanding the means by which consumers gather information and interact with businesses. Mobile device usage is changing the way organizations attract, acquire and engage with customers. Analytics and big data enable organizations to predict customer behavior using data from multiple sources, including application systems, social media, and more. Finally, cloud computing offers the flexibility to deliver these applications at scale.
Building organizational capabilities on emerging technologies is always challenging as there are competing visions, plus not-yet-mature standards and options. Innovative CIOs are leveraging third-party partners to build the initial use cases while internal teams learn from these projects. Partners that deliver superior customer experiences and provide a combination of payer domain expertise and best practices from other industries will have an advantage over traditional partners.
The other key challenge for CIOs is finding financial support for the changing model while maintaining current business delivery. CIOs need to revisit their strategies for “run the business” applications, examining ways to reduce costs through managed services and portfolio optimization in order to reallocate their budgets for transformational initiatives. Vendors with expertise in helping organizations control expenses and invest the realized savings in the creation of new capabilities will be the partner of choice. As payer CIOs drive their organizational transformation, choosing the right partner for this journey will be key to the success of their new initiatives.
About the Author
C.J. Ravi Sankar is the vice president and head of payer-provider practice at HCL Technologies.
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