With just one day to go before the America’s Health Insurance Plan’s (AHIP’s) flagship #AHIP Institute 2016 conference in Las Vegas, and energy building among participants, I thought it appropriate to share some market reflections based on Everest Group’s research over the past five years.
Here is a snapshot of what you’ve heard from the analyst community:
- As a data and process intensive sector, healthcare has the potential to mature into an all-digital, technology native industry
- Political debate and regulations will drive healthcare technology spend, to the same extent that they drove banking technology spend in late 1990s-2000s
- Data and insurance exchanges will transform how insurance products are created and sold
- Payer provider convergence will drive accountability and efficiency of care financing and delivery
- Growing payer consolidation will create efficient behemoths, driving technology spend and bringing down healthcare costs
“The best laid plans of mice and men oft go astray.” Such has been the sobering reality of the healthcare industry initiatives in the past five years.
- Growing consolidation has created more concerns than solutions:
- The Blues are currently fighting an antitrust multi-district litigation in which the plaintiffs have alleged that customers were cheated of low costs due to growing cartelization and reduced competition between The Blues
- The Anthem-Cigna and Aetna-Humana initiatives haven’t done anything to address the cost issues and the technology investments that will drive operational efficiencies
- Analytics initiatives are stuck in a limbo:
- Data security issues have made the case for interoperability even weaker. Per, a PwC survey, more than half of consumers trust neither payers nor providers with their data
- Privacy issues have stifled access to data and build decision support systems
- Net-net, what we see being touted as next-gen analytics is just an incremental version of business intelligence
- There is a lot of “digital washing” going around:
- Every technology initiative (mobile app, cloud migration, social media initiative) is being anointed as “digital,” not because of the tenets themselves but because of the seeming association with the word itself
- What is passing as “digital” are just IT initiatives with a smattering of SMAC (social media, mobility, analytics, and cloud)
- A good number of service providers and enterprises consider it enough to be associated with the term “digital,” whatever that means.
- Care delivery in a capitalist construct is a living contradiction:
- The healthcare industry is a mix of government, non-profits, and for-profit entities. For various ethical and political reasons, cost is the only metric the industry feels comfortable talking about openly
- Meaningful use and quality improvement have become complex/esoteric goals, often conflicting with organizational financial goals
- To assimilate learnings from banking, the industry needs to have transparent financial metrics
- The Republican-Democrat divide on Obamacare has brought this contradiction to the fore. The biggest worry is that there does not seem to be a right way forward, except that most of us will agree with the tenets of low cost, universal coverage, and doing away with exclusion of pre-existing conditions.
However, there are aspects that serve as silver linings to the increasingly depressing discourse on the conflicts impeding healthcare technology spending.
- Per the PwC survey, mobile health adoption has jumped 100 percent, giving a solid boost to the technology evangelists within healthcare organizations
- Consumers have become more costs conscious, relying less on the government to take care of them. There is growing evidence that most consumers will engage healthcare spend advisors the same way they do retirement or investment advisors
- Telehealth adoption is growing by leaps and bounds. Today, most of the top 20 hospital systems offer a variety of remote or community care options for diagnostics and therapy, driven by technology. The incentive for keeping in-person visits and hospital readmissions down is real in financial and social terms
- Last, but not least, despite the beating the healthcare exchanges have taken in terms of underwhelming enrollment numbers, the exchanges as a marketplace for insurance products are here to stay. This has worked in the traditional insurance setting, and there is no reason it will not succeed now, given the shift to defined contribution likely to create a US$350 billion premium market by 2020 (Everest Group estimate.)
This year’s #AHIP Institute has a robust agenda. Topics range from the usual (cost and efficiency of care) to the more adventurous (new products, analytics, and technology collaboration). The imminent presidential elections also provide an interesting backdrop. The debate on reforms is back with full force, even though people seem reticent to take a clear stand.
With a tip of the hat to the recently passed Muhammad Ali, I hope the speakers at the event will pull no punches when expressing themselves on the following topics:
- The digital agenda and IT investment roadmap for payers
- The bubble surrounding payer consolidation
- The future of exchanges
- The future of reforms
I’ll be at the conference from June 15-17. If you’d like to chat with me on any of the above topics, or any others, feel free to reach out to me at [email protected] and follow me on Twitter: @abhishekxsingh.