Health plans tend to be on one side of disruption, or the other—the “haves” and “have-nots.” We spoke with 30+ health plan chief executive officers (CEOs) to learn how payers are investing to deliver on their technology priorities and support business objectives. We found that some CEOs are embracing radical change to stay ahead and help combat competitive and market forces. These payers—the haves—are using data to get clarity on when a member becomes a patient, are more agile in responding to patient needs and are sharpening their ability to address the total cost of care.

The have-nots are struggling to define their technology strategy due to the complexities of new technologies, tools and devices, while continuing to manage legacy platforms. Payer inequality across investment capital, risk tolerance and tech-savvy creates a distinct advantage for organizations that harness the power of technology.

"Payers need to focus on human-centered innovation – spans of services, products and technologies need to be built around the member."

– Health Plan CEO

Haves vs. have-nots: A growing divide

Health plans unable to build an integrated technology capability typically juggle multiple legacy platforms, use bolt-on data solutions and buy ”shiny objects” to potentially delight digital consumers. CEOs without a technology integration strategy aligned to business priorities are pursuing everything from infrastructure upgrades, to big data analytic capabilities, to buying startups. See Figure 1.

Innovating—and funding innovation—continues to be a major challenge. Many payers are looking to venture arms and partnerships for their innovation and digital investments. Others continue to invest in upgrading old systems, rather than having a technology strategy aligned with their business strategy. For example, among two regional health plans, one has successfully simplified its core technology platform, going from multiple disparate systems to a single unified solution. The other health plan struggled to manage a timely migration schedule, as its technology platform strategy was not fully grounded in a set of well-defined business priorities.

Activities of the have-nots are forced spend on legacy solutions, shiny object mindset, makeshift & internal builds, postmortem analysis & data used to solve issues.
Capabilities of the haves are simplified consumer experiences, intelligent process automation, delivery of instant gratification, targeted sales & market analytics & data that drives behavioral change.

Who is making the right moves?

A majority of CEOs view technology as critical to their company’s long-term survival, yet only a few market-making health plans have effectively balanced innovation risk profiles, capital constraints and organizational talent gaps to sustain their commitment to technological innovation.

Potential innovation models vary in degrees of risk tolerance and capital investment needs. (See Figure 2.) The haves may be better positioned to make large investments, and leading CEOs use “smart bets” to personalize these innovation investment models and plan their technology journey.

Innovation that is grounded inside the business, or “skunk works,” may be the easiest option for small- and medium-sized plans. For instance, these plans may train middle management on design thinking to prototype innovations that can be applied to the company’s day-to-day operations. Larger national plans can work differently to find innovation and fund investment.

"Technology not only requires startup capital, but sustained investments that include talent, culture and the organization."

– Health Plan CEO

Making integrated technology a priority

Today’s have-nots must aggressively pursue an innovation strategy that aligns to their market position. Many CEOs believe the path forward requires identifying the right external partnerships, incorporating digital disruption into the core business and increasing comfort with risk taking.

Health plan CEOs surveyed reported the most valuable part of the innovation process is creating a culture of risk taking and personalizing their own technology integration strategy. For example, a health plan in the Northeast specifically identifies early-stage technology companies with emerging capabilities aligned to the organization’s needs, and then either partners with them to become a client or make capital investments in the company for long-term gains.

Plans need to have a clear goal in mind for technology innovations. Understand the potential value of the tool, define a clear time horizon and fully appreciate what people, workflow and process changes are needed to maximize value.

Integration over anarchy

To start this journey of aligning technology with business priorities, health plans will need to:

Develop the strategy. Health plans will need to evaluate and integrate technology and business priorities to develop the right personalized strategy for the enterprise. A sound strategy will unleash innovative technologies while successfully moving away from shiny new objects.

De-emphasize heritage IT skills. Future business-driven technology demands new skill sets and capabilities for most health plans. Successful companies will reskill their workforce to ensure they have the talent and knowledge necessary to deliver distinctive expertise across a set of different projects.

Invest wisely. To complement their new talent strategy, payers should invest in targeted technologies that enable them to have better insights to inform better decisions. This can bend the medical cost curve once mature and fully implemented.

With disruption cutting so deeply and broadly in the payer space, sitting on the sidelines is not a viable option. Change takes courage, discipline and determination, but it is the only way to successfully close the gap between the haves and have-nots.

Kaveh Safavi

Senior Managing Director – Global Health

Kazim Zaidi

Senior Manager – Accenture Strategy


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