Author: ManuAggarwal

Key Themes to Help Analyst Relations Teams Navigate 2023 | An AR-professional Exclusive Webinar

On-Demand Webinar

Key Themes to Help Analyst Relations Teams Navigate 2023 | An AR-professional Exclusive Webinar

Access the on-demand webinar, delivered live on January 12, 2023.

Analyst relations (AR) professionals play an essential role in developing their organization’s agenda around strategic planning and marketing initiatives for 2023. With economic uncertainty ahead, AR teams can help their organizations stay ahead of the curve and ultimately drive new business.

This webinar will prepare AR professionals to influence the thinking of their internal stakeholders on the key trends, dynamics, and likely scenarios to expect in the coming year.

Our speakers will discuss expectations for 2023, including:

  • What should AR professionals focus on as they plan their team’s agendas for 2023?
  • How can AR professionals align with the evolving market dynamics faced by their internal stakeholders

This is an AR-professional exclusive webinar. AR professionals should attend from:

  • IT service providers
  • Technology providers
  • BPS providers
  • Engineering services providers
Aggarwal Manu Refresh gray square
Vice President, Analyst Relations Engagement
Singh Abhisek Refresh gray square

Trust and Safety (T&S) in the Metaverse | With Great Power Comes Great Responsibility


Trust and Safety (T&S) in the Metaverse | With Great Power Comes Great Responsibility

View the event on LinkedIn, which was delivered live on Thursday, September 22, 2022.

The metaverse is an expansive network of interconnected virtual worlds that enable highly immersive experiences and social connections🌐. Due to its intrinsic nature and exacerbated by 5G and Web 3.0, the metaverse will drastically drive up data usage, unregulated social interactions enhanced by Augmented Reality (AR) / Virtual Reality (VR), and the evolution of video and live streaming content💻.

This explosive growth has immense implications for Trust and Safety (T&S), including threats to user security, increased abuse, the proliferation of objectionable content, and financial fraud❌.

📢Watch this session as our speakers present the T&S challenges brought on by the metaverse’s rapid growth, risk mitigation strategies for these challenges, and what this means for the third-party T&S services market.

Our experts will explore:

  • T&S use cases for the metaverse
  • Risk mitigation strategies for challenges that arise
  • Implications for the third-party T&S services market

Meet the Presenters

Financial Crime and Compliance FCC Operations – Services PEAK Matrix® Assessment 2022

Top Financial Crime and Compliance (FCC) Operations Service Providers

Financial Crime and Compliance (FCC) operations continue to grow within the Banking and Financial Services (BFS) industry. Given the increase in regulatory norms and technology advances, banks, financial institutions, and other emerging institutions are constantly working to meet these norms and safeguard themselves from financial crimes, while maintaining their operational costs and scaling their delivery. New regulations in the financial sector call for a dynamic regulatory compliance check, which is difficult for these institutions to manage globally. The pandemic and the looming threat of a recession have added to the woes of financial institutions and impacted agent availability, operational costs, and transaction volumes.

The growing demand for FCC support and digital has opened opportunities for service providers to augment their capabilities and add offerings for advisory, platform-led services, and advanced digital solutions. For buyers, the need to increase efficiency and productivity by reducing false positives and manual intervention, as well as by mitigating profile risks, remains paramount. Service providers now have the opportunity to go beyond managing operations and transforming engagements into strategic partnerships.

DOWNLOAD THE FULL REPORT Financial Crime and Compliance (FCC) Operations – Services PEAK Matrix® Assessment 2022

Financial Crime and Compliance (FCC) Operations: What is the Scope?

  • Industry: banking and financial services
  • Sub-industry: financial crime and compliance
  • Geography: global
  • In this report, we cover vertical-specific FCC operations. We have not covered horizontal business processes, such as Finance and Accounting (F&A), Human Resources (HR), procurement, and contact center

What is in this PEAK Matrix® Report:

This report features 27 FCC operations service provider profiles, each of which includes:

  • Relative positioning of the service provider on Everest Group’s PEAK Matrix® for FCC Operations
  • Service provider market impact
  • Service provider vision and capability assessment across key dimensions
  • Enterprise sourcing considerations

This report provides a detailed analysis of the vision, delivery capabilities, and market successes of 27 FCC operations service providers and their relative position on the Everest Group PEAK Matrix® for FCC Operations. The study will assist key stakeholders, such as banks, financial institutions, FinTechs and RegTechs, service providers, and technology providers, in understanding the current FCC service provider landscape and help them in their sourcing and partnership decisions.

LEARN MORE ABOUT Financial Crime and Compliance (FCC) Operations – Services PEAK Matrix® Assessment 2022

Our Thinking

Ins IT AR 2018 Insrr of ftr 2
Market Insights™

Insurer of the Future: Invisible Protection Provider

Ins IT AR 2018 Insrr of ftr
Market Insights™

Insurer of the Future: From Insuring Loss to Ensuring Protection

RR Cmplnc PM investments
Market Insights™

Strategic Data and AI Investments for Risk & Compliance Management

RR Cmplnc PM cmpttv advntg
Market Insights™

Future Risk & Compliance in Banks


Future-proof Your Organization with a Modern and Efficient Core System in the Era of Scarce Budgets

Managed Detection and Response
PEAK Matrix®

Managed Detection and Response (MDR) Services PEAK Matrix® Assessment 2023

Property and Casualty Insurance
PEAK Matrix®

Digital Claims in Property and Casualty Insurance – Solutions PEAK Matrix® Assessment 2023

Life and Annuity Insurance
PEAK Matrix®

Application and Digital Services (ADS) in Life and Annuity Insurance – PEAK Matrix® Assessment 2023

What is the PEAK Matrix®?

The PEAK Matrix® provides an objective, data-driven assessment of service and technology providers based on their overall capability and market impact across different global services markets, classifying them into three categories: Leaders, Major Contenders, and Aspirants.

LEARN MORE ABOUT Top Service Providers

Safeguarding Social Media: How Effective Content Moderation Can Help Clean Up the Internet | Blog

The role that social media content plays has been under increasing scrutiny. With increased global regulations mandating the moderation of online content, outsourcing service providers can play a crucial role in helping organizations develop better policies and comply with Content Moderation (CoMo) and Trust & Safety (T&S) standards. Read on to learn the challenges faced by social media platforms in moderating content and how the rest of the ecosystem can supplement their efforts to create safer online spaces.

The importance of creating safer online spaces cannot be overstated, especially in today’s times where social media platforms run the constant risk of becoming the breeding ground for obnoxious content. To ensure that users stay protected from harmful content such as hate speech, violence, abuse, and nudity, social media platforms engage in what is called content moderation. Content moderation activities screen the User Generated Content (UGC) and determine whether a particular content piece, such as tech, image, and video, adheres to the policies of the platform. This process can be performed by both human moderators and automated (AI/ML) enabled machine moderation. The all-encompassing term for content moderation and other activities that are aimed at making online spaces safer is Trust and Safety (T&S).

For moderating content, online platforms can have an in-house team of moderators and technology, or they can outsource the service to a service provider or have a hybrid approach with an optimum mix of both.

Online Content Moderation outsourcing (CoMo) is a rapidly growing market – and for more reasons than one. Driven by increasing mandates for greater moderation of the massive amount of potentially dangerous content being created and shared online, new opportunities have arisen for providers to help enterprises develop comprehensive CoMo and T&S policies and systems, igniting this market.

The need for content moderation has never been greater

For over a decade, online platforms have enabled billions of users worldwide to share content and connect with the world. As of January 2021, out of 4.66 billion active internet users, 90.1% (4.2 billion) are active social media users. Among these numbers is an increasing user base logging on to the social media platforms from increasingly diverse regions of the world. This explosion in the content volume that is generated on social media platforms every day points towards the increasing scale at which content moderation services need to be deployed effectively by social media platforms.

This massive content is also supplemented by the increased variety of this content. This exponential increase in globally created UGC has now moved beyond the written word to include videos, memes, GIFs, and live audio streaming, resulting in more avenues for the bad actors to spread harmful content.

The misuse of online platforms brings imminent repercussions

The COVID-19 pandemic was a grim reminder of how misinformation could spread like wildfire if left unabated. The amount and frequency of social media consumption increased along with content that included inaccurate and misleading information regarding the pandemic thus, potentially complicating the public health response during the peak of COVID-19.  Read more in our recent blog, Fighting Health Misinformation on Social Media – How Can Enterprises and Service Providers Help Restore Trust.

Enterprises also have to bear the brunt of inadequate moderation. For example, unmoderated microblogging and social networking service, Parlor, with around 15 million users, was denied listing by Apple, Google, and Amazon Web Services (AWS), for failing to implement content moderation policies. Additionally, the audio-based social media platform, Clubhouse, faced criticism after reports came out of anti-Semitic content released by users of the platform.

The graphic below illustrates the growing demand to moderate content across social media platforms.

Blog Banner V2 2021 10 29

Addressing the problem together

Unfortunately, given the relatively nascent nature of content moderation services and the ever-evolving content threats from bad actors, the playbook for moderating is still emerging and is not sacrosanct.

All stakeholders – the social media platforms, content moderation service providers, the users, the government and regulatory authorities, and the advertisers are concerned about better tackling the issue because there is no ‘ideal state’ that can be pragmatically achieved when it comes to content moderation.

Social media platforms too face their own set of challenges – from creating an automated moderation system that is accurate and reliable enough to ensuring that the right human talent works alongside their technology for safer platforms.

The regulatory interventions around content moderation have increased recently. Countries around the world are implementing new laws that can set frameworks and rules around what content is permissible and what is prohibited. Here too, the social media platforms need to walk the regulatory tightrope to ensure adherence to local laws as well as upholding platform rules and larger laws related to universal human rights. The graphic below shows the increased involvement of the government and regulatory authorities within social media platforms.

Blog Banner V1 2021 10 29

How can service providers complement social media platforms in their trust and safety practices?

Service providers are enabling social media platforms by:

Scale of services: Service providers are helping enterprises scale up their trust and safety services according to the unique needs of the enterprises.

Adequate location presence: Knowledge of geographical, cultural, and language level nuances is crucial for determining if content is safe or not. Here service providers are boosting enterprise efforts by providing talent that can adequately moderate local content.

Enabling through technology: Service providers are not only enabling enterprises through human resources but also through technology. On the core moderation technology side, SaaS providers are helping enterprises with pre-trained APIs which are ready to deploy.  For example, AI company Clarifai works with the social media platform 9GAG, checking 20,000 pieces of UGC daily for gore, drugs, and nudity with 95% accuracy compared to a human view.

 Marrying automation with human moderation is the best way forward

Human moderators, in their efforts to keep our online spaces clean, get exposed to the harmful content which can have effects on their own wellbeing. Hence in order to reduce such exposure, automation is the strongest bet. But there lies certain challenges.

Unfortunately, the automated AI systems still haven’t reached a reliability where they can be trusted to moderate all internet content. AI is yet to recognize the nuances that are present behind a content piece. In fact, at the onset of the pandemic, in the second quarter of 2020, when YouTube decided to increase the involvement of the content moderated by its AI systems, ~11 million videos got removed from the platform, which was alarmingly higher than the usual rate. Around 320,000 of these video takedowns were then appealed, and half of them were reinstated, which was roughly double the usual figure.

Hence, the human-AI synergy for content moderation is our best way forward as the AI learns and evolves from human decisions in a bid to become more accurate in its working.

Enough work to do for years to come

We are in the early stages of watching the CoMo market’s growth, and the answer to the “HOW” of keeping our online spaces clean can be found by the collective efforts of all stakeholders – governments can frame guidelines and legislations, civil society groups can help enterprises through research, and service providers can help enterprises scale their CoMo efforts. And as we endeavor to move towards such a state, here’s a shoutout to our content moderators, who strive day in and day out, to ensure that our online spaces remain cleaner, safer and bring the world together.

Learn more in our recent State of the Market Report, Content Moderators: Guardians of the Online Galaxy.

How Changing Demographics and the Pandemic are Influencing Wealth Management | Blog

Millennials and Gen Xers currently account for a majority of the earning population worldwide. As a result, the largest demographic cohort looking to manage wealth or create retirement income is shifting from baby boomers to these population segments (see the exhibit below), which are generally more involved, aware, and digitally oriented than preceding generations. The new investor generations demand information at their fingertips, anytime, anywhere – something impossible to achieve with traditional wealth management methods.

Exhibit: estimated shift in wealth from baby boomers to Gen X and millennials from 2016 to 2046

estimated shift in wealth from baby boomers to Gen X and millennials from 2016 to 2046

The impact of COVID-19 on wealth management

The COVID-19 outbreak has brought some key challenges in wealth management to the forefront. First, it has highlighted gaps in traditional wealth management methods, accentuating the pressing need for digital transformation. COVID-19-induced restrictions have severely impacted agent availability and as well as customers’ ability to visit advisers. Firms that can leverage digital tools to balance business continuity challenges with customer expectations will be able to differentiate themselves from others in the current climate.

Second, revenue erosion resulting from the COVID-caused recession, combined with an increase in business costs, may drive consolidation in the industry, as smaller firms will find it difficult to stay afloat. We are already seeing a shift in asset classes’ preferences. High Net Worth Individuals (HNWIs) and Ultra HNWIs (UHNWIs) will be impacted, as the wealth managers’ diverse portfolios are impacted. More than half of respondents to a UBS Group AG survey of wealthy investors said they feared not having enough liquidity in the event of another pandemic, and a similar percentage expressed worry about leaving sufficient money to their heirs.

What wealth managers need to do

Wealth managers need to increase their focus on services such as workforce management, operations continuity, customer communications, digital, goal-based planning, and portfolio impact advisory to persist through the current challenging situation. At the same time, they shouldn’t lose sight of the perpetual risks to business, such as cyberattacks, money laundering, and other security threats. Wealth management firms will need to ensure – even in the absence of physical interaction and with limited agents – that leadership maintains the confidence of both customers and employees.

Digital will remain the overarching theme to address these challenges. In recent times, Business-Process-as-a-Service (BPaaS) for back-office operations and robo-advisory have gained traction, though the solutions’ scale and magnitude continue to remain low. While BPaaS helps firms bolster their critical operations,  technology leverage can be increased further via more digital products, automated cybersecurity systems, smart portfolio creation, trade analytics, and trade simulations for efficiency improvements, productivity gains, bandwidth creation, and customer satisfaction in the next normal.

As wealth management firms look to achieve these objectives, they will require support to quickly and efficiently adopt digital, set up the required infrastructure, move workforce interactions to virtual mediums, revamp operations and traditional workflows to minimize human intervention, and hedge location-based risks. They will have to carefully prioritize tasks and implement digital step-by-step, so as not to abruptly overhaul traditional methods and processes. For this, they could opt for off-the-shelf products or customized solutions, or choose an external provider to do it all.

To tide themselves over the crisis and prepare for what’s to come, we recommend that wealth management firms:

  • Instill confidence in their clients and employees and shield themselves against other risks to survive this unprecedented situation. It will also be vital to take additional precautionary measures to maintain investor confidence. Given investor loyalty to certain firms, it would be useful to focus on maintaining the customer base rather than acquiring new customers
  • Align themselves with and adopt emerging digital industry trends, including robo-advisory, automated workflows to close sales, remote due diligence, and subscription-based advice models
  • Ease the pressure on their bottom lines by focusing on reducing cost-to-serve; automating their middle and back offices could serve as a starting point
  • Continually assess their investment philosophies; while COVID-19 is a crisis like no other, firms must draw lessons from previous crises to diversify their assets and maximize their investments in passive funds that make reasonable margins

At present, digital transformation is no longer a strategy to cater to a specific customer segment but the very means to survive. It will help meet customer experience standards and preferences in relationship management, query resolution, and communication. For employees, digital tools will enable more robust decision-making and goal-based planning for portfolios, as well as help monitor them real-time to enable faster turnarounds and higher returns.

Anti-financial Crime Talent Imperatives in the Digital Age | Blog

For years, financial institutions have struggled to attract and retain quality anti-financial crime (AFC) talent, which remains a compliance program’s most vital asset. And the situation is only getting worse.  Why? First, both the importance and application of anti-money laundering (AML) and fraud risk management are increasing. Second, the requirements and expectations of regulators are snowballing. And third, demand for AFC talent is skyrocketing while unemployment remains low. It’s a perfect storm.

Perhaps most importantly, the AFC workforce must now be able to work with artificial intelligence and machine learning technologies. Financial institutions that can’t adapt their workforce to the demands of this new augmented human intelligence era simply won’t survive. Knowing what talent to look for – and how to attract, manage, and retain it – is key.

The changing definition of talent and the rise of “bilinguals”

In the past, whenever new compliance initiatives or regulations arose, banks tended to staff up operational teams to address them. Now banks realize that hiring operational staff isn’t enough. Instead, solving for the underlying problem – be it “Know Your Customer” remediation, reducing incidences of fraud, or ensuring better AML compliance – is the answer.

To do this, banks are breaking up their talent pyramid into tasks. Those tasks that are manual and repetitive (and therefore subject to a high degree of automation) sit at the bottom of the talent pyramid. And those requiring a high degree of judgment that can be handled only by skilled employees sit at the top. As a result, talent must now be “bilingual,” possessing not only the domain and operational expertise to drive judgments but also the technology expertise to help automate repetitive, mundane tasks.

Attracting talent

If a bank has bilingual workers, it’s not letting them go, so finding such talent at scale through hiring practices alone is unlikely. Instead, the challenge is to identify skilled workers from either a domain or technology background and train them to develop the skills they lack.

One solution is partnering with universities. For example, recognizing that ready talent is not necessarily available in the marketplace, some service providers partner with universities to identify suitable individuals for entry-level positions and then train staff in those positions on AFC fundamentals.

Developing talent

At the same time, the half-life of professional skills is decreasing at an alarming pace. Regulations and technology are constantly changing, so talent agility is key. Organizations must create an environment of innovation, training, and enabling people to do their jobs faster and better, including enabling them with access to the right tools, be they bots or data libraries.

Firms are increasingly using techniques such as micro learning, which breaks information into bite-sized pieces, and spaced learning, which identifies the right moment for intervention so that trainees retain more information. Gamification is another technique that makes learning fun and increases retention.  Through a combination of these approaches, firms can train employees and develop talent much more efficiently.

Retaining talent

Today’s banks are losing employees not only to other banks, but also to techfin firms. Amazon, Apple, Facebook, and Google are all making forays into banking, and they’re always on the lookout for people who can help their engineering teams understand the financial payments and risk disciplines. To retain talent, it’s important to drive workers’ aspirations.

Keeping employees engaged is essential to retention. Engagement can be accomplished through creative challenges and contests that instill sustainable change and help employees use their skills beyond their day-to-day work.

When it comes to AFC talent, it’s a battlefield out there. To learn more about how financial institutions can attract, manage, and motivate AFC talent to achieve the best balance between human and technical intelligence, check out the webinar I recently conducted with Genpact on this topic.

Apple-Goldman Sachs Partnership Could Steal Credit Card Market Share from Consumer Banks | Blog

Apple’s March 25, 2019, announcement of a physical credit card, called Apple Card, might initially seem like a strange step away from its highly entrenched Apple Pay digital wallet. That Apple and Goldman Sachs partnered on this initiative might also seem odd, as neither operate in the consumer banking space. But when you take a closer look, you realize this is actually a very well-crafted go-to-market strategy for both Apple and Goldman Sachs.

What’s in it for Goldman Sachs?

Goldman Sachs wanted to enter the retail banking space with a credit card. But the U.S. cards market is already crowded and growing at 6-7 percent, payments is a volumes business, and it would have taken a long time to gather significant market share if it went solo. And while the wallet market is growing fast, a standalone wallet is unlikely to make a near-term impact. Goldman Sachs chose the best of both worlds; a card in partnership with a wallet service provider. This helps it enter the cards market while getting easy access to Apple’s wallet user base and future proofing the business.

What’s in it for Apple?

For Apple, this physical credit card partnership opens the path to new customer segments, particularly baby boomers who are still more comfortable with a card and have been slow to adopt digital wallets like Apple Pay. It will also help Apple expand more quickly into geographical markets beyond the U.S., where it doesn’t dominate the mobile devices market. And because Apple sells the synergy of its ecosystem and ease of use, and is promoting the card’s intuitive design, simplicity, and transparency, Apple might also boost its device sales.

Apple Card comes with an EMV chip but there is no number on the card, which means that users will have to use Apple Pay to use the card online or for NFC transactions. The physical card can only be used at point-of-sale (PoS) terminals. This may translate into a higher fee for Apple Pay and explains why Apple chose Goldman Sachs over other banks.

Further, Apple lags a bit behind some of the other BigTechs in the war for data. For example, Facebook has massive amounts of social data, and Google has enormous quantities of location and search data. Goldman Sachs can help Apple with financial analytics, an area in which it’s not particularly strong, and having access to financial data surely gives Apple an edge in its marketing efforts.

All in all, we firmly believe that Apple Card is a sound and strong market entry and growth strategy for both Goldman Sachs and Apple. Indeed, this move could prove to be a strategic masterpiece in the dynamic payments industry.

What does it mean for BigTechs and banks?

We can expect to see BigTechs like Facebook and Google make similar partnering moves to enter the cards market and tap into the larger PoS network to attract new users with their marketing power and brand name cachet.

Banks need to move faster on their journey towards digital payments or risk losing market share to other more nimble companies or partnerships like Apple/Goldman Sachs. To accelerate their move into the digital payments space, increase customer satisfaction, and avoid making huge investments on their own, banks should strongly consider partnering with FinTechs, which can be more agile and respond faster to the changing market with the right infrastructure and technology capabilities.

What’s your reaction to the Apple/Goldman Sachs partnership? Please share your thoughts with me at: [email protected].

Apple Pay Timeline

Apple Pay timeline

Technology is the Key to Innovation in Pharmacovigilance | Sherpas in Blue Shirts

The critical nature of Pharmacovigilance (PV) is obvious. For patients, it can mean the difference between better health or death from an Adverse Drug Reaction (ADR). For pharma companies, it can mean the difference between a profitable, life-saving drug, or multi-billion dollar fines and loss of reputation and revenue.

Although global PV spend has increased from 0.3 percent of total sales in 2003 to 1 percent (the equivalent of ~US$15 billion) in 2016, some of the pharma industry’s most expensive drug recalls/fines/lawsuits occurred during this timeframe.

Everest Group does not think that a further increase in PV spend is the best way for pharma companies to curb safety breaches. Rather, we believe the answer lies in creating a more effective PV process through use of technology, including analytics, automation, cloud, and mobility.

There are some well-publicized technology use cases in the pharma industry. For example, led by a consortium of world-leading experts from industry, regulatory agencies, and academia, the Web-RADR project will deliver an EU-wide mobile phone app that enables users to report adverse drug reactions directly to their National Competent Authority (NCA). And the U.S. Food and Drug Administration (FDA) has launched Sentinel, a distributed data system through which it can rapidly and securely access information from large amounts of electronic healthcare data from a diverse group of data partners.

And there are myriad ways in which technology can support pharma companies’ PV initiatives. For example:



eg pv



Digitized medicines: Smart pills with ingestible sensors can be used to track and collect patients’ health data, which can be used to run analytics for Adverse Event (AE) detection.

Mobile apps: These apps can enable pharma companies to collect ADR data much more quickly.

Cloud-based solutions: Cloud-based databases can enable pharma companies to collect data from multiple stakeholders to build an integrated ADR repository – even at a global level.

Artificial intelligence (AI): AI can help pharma companies to move beyond basic automation by identifying patterns in unstructured data.

Automation: RPA solutions can help pharma companies process structured data much more rapidly than via manual efforts.

Big data analytics: Analytics can help pharma companies use the vast amount of digital data available on the Internet (e.g., on Facebook and Twitter, and in patient forums such as Doctissimo) to supplement traditional data sources such as primary calls, EHR data, and claims data for AE detection.

Proactive PV: Robust IT solutions and advanced systems can help pharma companies monitor drug safety during the research and trials process and post-launch.


How Pharma companies capitalize on technology?

To fully capitalize on the benefits technology can deliver to the PV process, pharma companies must begin with establishing a clear and robust strategy for what they want to achieve and how they should progress along the technological curve. For instance, if their end-goal is to implement an AI-based solution, they should first invest in basic automation, analytics, and cloud. As pharma companies tend to lag behind those in other industries in terms of adopting new and innovative methods, they may find it valuable to partner with a third-party advisor to assist in the development of their strategy.

Next, they should proactively identify opportunities and partner with specialized technology vendors to fill technology gaps. For example, while many pharma companies are investing in the development of mobile-based adverse event reporting apps, they will not be able to realize their full potential until all the apps are connected with a common platform that precludes patients from having to download apps for each drug.

Finally, they should strongly consider partnering with outsourcing service providers that have a proven history of supporting the delivery, technology, and regulatory reporting requirements of the PV process. Call center, case entry, literature review and insights mining, aggregate reporting, and PV quality assurance are some of the areas in which outsourcing service providers can of great help.

Pharma companies have long been slow to adopt technology in PV. However, the time has come for technology to play a greater role in delivering solutions, with technology vendors and outsourcing service providers serving as force multipliers.

For detailed insights on new technological innovations in the PV market, please refer to Everest Group’s viewpoint: Innovation in Pharmacovigilance (PV): How to Spend Smarter Not Higher?

The Wide-Ranging Impacts of a Single Payer Healthcare System | Sherpas in Blue Shirts

On June 1, 2017, the California state senate passed the “Healthy California Act (HCA.)” The bill (SB 562), which is now in the state assembly for further action, aims to replace all private/government insurance plans in the state with a single, government-run insurance plan.

There are numerous reasons the bill will likely not pass. For example, the California state government would need to spend US$400 billion per year (more than twice the current spend) to fund the proposals in the bill, in turn requiring a massive increase in taxes, including a 15 percent payroll tax increase (source: California Senate Appropriations Committee). There’s limited political support for the bill, even among Democrats. There’s also minimal popular support, per a Pew Research Center poll, which concluded that only 30 percent of California residents prefer having the government be the sole payer. Previous similar attempts at a single, state-run payer system have failed due to the expense involved.

On the other hand, there are voices of support for a single payer system, including Bernie Sanders, the longest serving independent in U.S. congressional history, and Mark Bertolini, Aetna’s CEO, who in May 2017 asked the nation to ponder such an arrangement.

If a single payer system were ever implemented, sweeping changes would impact multiple parties.

How would a single payer system look if it were ever implemented?

Healthcare Payers:

  • If the government was the sole provider of health insurance, commercial payers would get absorbed into the government-run business
  • If the government expanded Medicare coverage to all citizens, commercial payers would die out due to strong competition from government plans
  • If the government sublet to a single commercial payer to handle the insurance market, there would be large-scale consolidation in the payer market

While there are many ways in which this could play out, a move to a single payer system would in most cases be a bane for the payers.

Healthcare Providers:

  • A commercial payer-controlled single payer system would severely undermine providers’ negotiating power. However, a government-controlled single payer system would give them some negotiating leverage
  • They would experience significantly reduced administration costs, as everything would be sponsored by the single payer

Thus, healthcare providers would experience positives as well as negatives in a single payer system.

Outsourcing Service Providers:

A single payer system would bring many opportunities to outsourcing service providers. For example:

  • Payer consolidation would require third-party support across system integration, consulting, process expertise, BPO, and many other areas
  • A government-run consolidation would lead to new areas of investments, similar to the Medicaid Management Information System (MMIS) that the states currently run
  • Integration of everything, including clinical data, under one umbrella payer would enable service providers to develop much more powerful analytics and insights

Single payer system’s governmental requirement for service providers

Of course, not all would be rosy. As a single payer system would require service providers to work with the government instead of commercial entities, they would likely face slower processing, a smaller appetite for innovation, and bureaucratic red tape. Additionally, payer consolidation would lead to outsourcing industry consolidation, likely putting some service providers out of business.

We don’t mean to spook outsourcing service providers with our views. Nor are we encouraging them to start investing in expanding their offerings. But we are recommending they keep an eye on the progress of the HCA and other similar acts around the country. Doing so might just save them from the same fate Nokia suffered at the hands of Google and Apple.

What Pain will You Experience if the AHCA Bill Becomes Law? | Sherpas in Blue Shirts

  • Health insurance lost for 24 million U.S. consumers
  • Billions of dollars of care investment marginalized
  • Providers’ margins eroded by payers
  • And a five-year setback to the healthcare system

These are potential side effects if the U.S. House of Representatives- approved American Health Care Act (AHCA) bill becomes a law. Let’s look at the impact the law would have on the key constituencies.

Healthcare providers

With the most needy (the sick and the elderly) portion of the population left uninsured, the healthcare providers will once again be expected to foot a large part of their healthcare bills due to lack of coverage, non-payments, use of ER services, etc.

Healthcare consumers

With premium increases, credits/subsidies being based on age instead of income level, and states’ ability to change or waive pre-existing health condition coverage, a large percentage of older, lower income, and infirmed consumers would likely opt out of having coverage altogether. Young and healthy people would have less incentive to get insurance coverage.

Healthcare payers

The overall theme of the bill would result in a significant decline in volume of work managed by payers. That said, there would be numerous key operational implications for both private and government payers including:

  • Product development: Payers would end up having state specific plans, leading to increased administrative work around plan design and development activities. This would likely have a cascading effect on downstream processes (policy servicing, network and care management, and claims management) which are expected to become more complex and specialized.
  • Claims: Claims volume would likely dwindle, particularly among the old and ill, as a large percentage would have opted out of coverage.
  • Policy servicing: Payers would likely experience a significant uptick in queries from patients and providers, as uncertainty around topics such as eligibility, verification, and premium collection amplifies. However, demand for certain processes, such as HIX support, would likely be sluggish.
  • Care and network management: Care management programs would likely take a backseat, given their significant cost to enrollees and providers. Additionally, companies that had invested heavily in such programs could see decline in their ROI. Lower patient volumes might drive payers to tighten their provider network, leading to less work around network management activities.
  • Government (Medicaid): Reduced federal spend on Medicaid would likely push states towards a modular approach, and maybe even a shift towards a managed care construct.

With a decline in volume of work, it might not be surprising to see some of the larger payers insource certain processes.

The Healthcare IT and BPO service providers

A lesser volume of work across various value-chain segments would translate into lower revenue for third-party vendors. In fact, even though a law hasn’t yet been enacted, the healthcare business in some of the key players, such as Accenture and Cognizant, is already growing at a slower rate than their overall company growth rate. This impact could extend to the overall outsourcing industry. On the other hand, if states decided to exercise the power granted to them differently, service providers could also expect to see increase in the complexity of work around certain functions such as policy servicing and claims management.

Additionally, the ratified law might just be the impetus that mid-to-large buyers without GICs need to opt for bundled IT and BPO deals, which were traditionally a feature of mid-sized buyers.

Of course, the above-mentioned implications are for the bill in its current form. However, moderate Republican senators might well make massive changes to it, especially after the public outrage over certain parts of the bill.

It is going to be tough time of uncertainty for all stakeholders until a law – in whatever shape and form – is passed. In the meantime, payers and healthcare providers need to work closely with their respective service providers to ensure they stay afloat and come out on the right side of fence when the dust settles.
For a detailed analysis comparing the AHCA and ACA, please see our report titled: Acing Uncertainties in the Payer Market: The Trump Cards.

Request a briefing with our experts to discuss the 2022 key issues presented in our 12 days of insights.

Request a briefing with our experts to discuss our 2022 key issues

How can we engage?

Please let us know how we can help you on your journey.

Contact Us

"*" indicates required fields

Please review our Privacy Notice and check the box below to consent to the use of Personal Data that you provide.