Healthcare IT Market Headwinds and Tailwinds | Market Insights™
The healthcare IT market is facing growth drivers and inhibitors, both of which have implications for service providers and payers
The healthcare IT market is facing growth drivers and inhibitors, both of which have implications for service providers and payers
The share of digital services in new outsourcing deals doubled in the last three years
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.
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.
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.
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:
With a decline in volume of work, it might not be surprising to see some of the larger payers insource certain processes.
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.
Healthcare payer BPO market drivers and challenges
As the market reaches labor arbitrage maturity, buyers are increasingly looking to next-generation solutions to improve performance
As buyers’ needs evolve from traditional purchasing drivers – such as cost reduction – to emerging purchasing drivers – such as better technology and expertise – service providers also need to evolve to remain competitive
Healthcare payer BPO market growth decelerating due to
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