Tag: Obamacare

Obamacare enrollment begins, but no major gain for Wipro, Cognizant | In the News

IT services companies, which were betting on the enrollment for Obamacare to revive faster growth in healthcare services business in the US, may be disappointed as the Trump administration has cut budgets and time for enrollment of the landmark healthcare programme.

Global analysts largely say “nothing much has changed” despite efforts by the current administration to replace the healthcare legislation and this could mean no major change in business for IT services companies, both Indian and global, at least this year.

“…the shorter enrollment period, discontinuing of some subsidies, and reduced funding for advertising also illustrate that the uncertainty is far from over. Consequently, we do not expect the payer segment of the healthcare market to change a great deal with demand for IT services stable but not driving increased growth,” said Peter Bendor-Samuel, chief executive, Everest Group, a global IT research firm.

Read more in Business Standard

Break-ups are Painful, Difficult, and Costly; The Current Insurance Payer Merger Saga | Sherpas in Blue Shirts

In July 2015, two mammoth players in the U.S. health insurance market decided it was time to form even bigger entities, similar in size to UnitedHealth Group (which held 17 percent of the market.) First it was Aetna deciding to merge with Humana, primarily consolidating the Medicare Advantage market. A few days later, Anthem and Cigna, with a relatively more complementary membership base, decided to merge.

By the end of 2015, shareholders of all four insurers had approved the deals. However, the Department of Justice and several states (mostly Democratic ones) opposed and appealed against the mergers. In early February 2017, the federal court ruled both anti-competitive and blocked them, citing increased concentration.

Had the mergers been approved, Anthem-Cigna would have led the market with highest share of the entire insured population, followed by UnitedHealth and Aetna-Humana. In Medicare Advantage (MA), Aetna-Humana would have surpassed UnitedHealth to become the market leader.

Insurance payer mergers

Let’s take a look at what transpired in both cases.

Aetna and Humana
On February 14, 2017, the two companies mutually decided to end the merger agreement, rather than appeal the antitrust decision. Due to a contractual clause intended to ensure both parties remained encouraged by the merger prospect, Aetna will have to pay Humana a break-up fee to the tune of US$1 billion. This massive financial hit does not include various other expenses Aetna had to incur in order to prepare for the deal, including legal and accounting fees, bonds issuance fees, interest to be paid while repurchasing the bonds, and the premium it has decided to pay for bond repurchases. All told, the total cost of the merger that didn’t happen will be around US$2 billion for Aetna. This is a relatively straightforward scenario, albeit very costly for Aetna.

Cigna and Anthem
This is a much more complicated situation. Since the merger was first announced, a lot of animosity has grown between these two insurers. Cigna has gradually changed its stance from being pro-merger to anti-merger. In fact, Cigna has gone to the length of filing a lawsuit against Anthem, and asking for $13 billion in damages. This does not include $1.85 billion that Anthem owes to Cigna as a termination fee. Anthem, however, appealed this, claiming that the merger deal timeline is valid until April 30 – and it is still hopeful for merger activity.

Unless Anthem and Cigna accept the ruling without appeal and carry on with business as usual, I see two possible scenarios here:

  • Convince the new administration that the deal will have a positive impact on consumers, and get it approved with the help of the new head of the Justice Department
  • Accept the ruling, and use the money (planned or already raised) to fund acquisitions of smaller payers without triggering the antitrust regulations

The first option seems less likely. However, since the new U.S. president’s swearing in ceremony, we have seen that extreme events cannot be explicitly ruled out with the new administration. Additionally, Trump’s and Republicans’ plans to repeal and replace Obamacare will require support from the industry…and who better to support this than two of the top three publically-listed payers? Another key element in favor of these mergers being approved is that the new administration is more lenient when it comes to antitrust matters than the previous administration, as evidenced by the possible approval of the Bayer and Monsanto deal.

The second option would result in Anthem paying a hefty amount for failure to be able to complete the deal.

The high termination fees for these deals gone bad will likely negatively impact Aetna and Anthem (if indeed the Anthem/Cigna merger doesn’t happen.) For example, per the latest filings, Aetna’s net margin has declined from ~5.9 percent in 2011 to 3.6 percent in 2016, while Anthem’s was 2.9 percent in 2016, down from ~4.4 percent in 2011. As a result of the lawsuit filed by Cigna, Anthem will end up shelling out even more than Aetna, as even if we the decision is in favor of Anthem, it will still have to pay litigation expenses.

Insurance payer mergersThe road ahead for these payers is filled with uncertainty, especially for Anthem and Cigna, since they are embroiled in a legal battle. Yet one thing we can be certain of is that Aetna and Humana are watching from sidelines, potentially resuming merger talks if the Anthem-Cigna deal is approved. While it remains to be seen how the new administration reacts, things should get clearer in the coming months.

BPO: Healthcare Payers’ Swiss Army Knife | Sherpas in Blue Shirts

The healthcare payer market continues to experience rapid transformation as efforts to control costs, minimize waste, and root out fraud and abuse collide with the effects of an aging population, the burgeoning insured population brought on by the implementation of the Patient Protection and Affordable Care Act (PPACA), and advances in technology and medicine. Taken alone, any one of these events would have significant impact on healthcare payers; together they’re nothing short of revolutionary.

Faced with such transformation, healthcare insurers are seeking strategies that can help them to manage ever-increasing demands. Among the more impactful tools they can employ is business process outsourcing (BPO). The healthcare payer BPO market, currently estimated at about US$4 billion, is growing at a healthy 14 percent annually. And it’s no surprise, as BPO is more important than ever in helping healthcare payers to streamline their operations and reduce costs. Beyond the basics, BPO can also help providers to research, develop and launch new products; to glean value from the masses of data they capture; and, to identify and reduce cases of fraud, waste, and abuse.

And there appears to be some evidence that payers are tapping into the power of BPO to help address their most significant challenges. While claims processing remains the most commonly outsourced BPO process, other more strategic areas are driving overall growth:

HC Payer BPO SPL 2015 I3

  • Product development & business acquisition (PDBA) – though the smallest segment of all outsourced healthcare payer BPO market, PDBA grew the most, at about 50 percent, between 2012 and 2013. The implementation of PPACA has forced payers to come up with new plans that are comparable to others and easy for members to understand, driving significant activity in this area
  • Member management – increasing by about 35-40 percent from 2012 to 2013, member management is another fast-growth BPO trend being fueled by PPACA. The Act is driving payers’ need not only to manage more, and increasingly diverse members, but also to take advantage of the vast amounts of data generated by the growing insured population
  • Provider management – changes in the healthcare environment are compelling payers to collaborate more with healthcare providers, in turn driving a need for better provider management. The result is that outsourcing in this area grew at about 35-40 percent year-over-year
  • Care management – As payers increase their direct contact with patients, and as part of their attempts to manage costs, healthcare payers are increasingly getting involved in care management activities, driving growth in the area to about 30-35 percent in one year

The changes in the healthcare market are daunting for even the most prepared and best funded healthcare payers. In order to compete in the increasingly challenging and competitive market, payers have to take advantage of every tool available, and BPO is fast becoming the industry’s Swiss Army Knife.

For more insights on the healthcare BPO market, see our just released report, Healthcare Payer BPO – State of market with PEAK Matrix™ Assessment. Log in or register to download a complimentary preview.


Photo credit: Flickr

Health Insurers Grappling with the New Dawn | Sherpas in Blue Shirts

If you’re a stakeholder – any stakeholder – in the United States’ healthcare system, the data in the following charts is troubling and flummoxing.

The U.S. Healthcare System Paradox

 

 

Although the country’s outlay on healthcare (as a share of GDP and per capita) substantially exceeds that of other developed countries, it ranks behind most nations on many measures of health outcomes, quality, and efficiency. In fact, a June 2014 study by the Commonwealth Fund ranked the U.S. dead last on most performance dimensions – e.g., access, efficiency, and quality – when compared against 10 other developed countries (Australia, Canada, France, Germany, Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom).

Winds of Change

The health insurance space in the U.S. is undergoing a radical transformation driven by regulatory changes and consumerization of demand. So it is not surprising that the current focus of the massive reform underway in the country focuses on cost rationalization and efficiency enhancement.

Health Insurance Themes

Reforms (primarily rising from the Affordable Care Act, or Obamacare) are reshaping health plans’ operating model. The onset of a value-based reimbursement model (moving from “defined benefits” to “defined contribution”) raises fundamental questions about current business paradigms. The impetus provided to Accountable Care Organizations (ACOs) and the blurring lines between payers and providers are leading to a fundamental realignment of incentives, ownership, and priorities. Obamacare and ICD-10 have had a sizable impact on payers’ technology portfolios as they look to leverage next-generation IT and modernize legacy platforms.

Payers are embracing the challenge of consumerization as their customers take increasing ownership of health outcomes, signaling the shift from large national accounts to the individual segments. This directly impacts their sales, outreach, and member engagement channels and methodologies. There is a renewed focus on approaching traditional buyer segments through non-traditional channels, primarily Health Insurance Exchanges (HIX) and direct engagement. These wide-sweeping changes are leading to a rethink of current systems, processes, interfaces, and vendors.

Payers Looking Ahead

Reform mandates key driver in healthcare ITO deals

Payers are marrying reform-driven changes with their overall technology portfolio in an effort to pivot from a primarily B2B business to a B2C model. These regulatory changes call for increased systems integration efforts, establishment of public portals, customer outreach, remediation, testing, and revenue cycle program management.

Healthcare reforms, a dynamic regulatory landscape, and consumerization of demand are transforming the healthcare industry. Payers need to understand, assess, and be proactive in navigating these choppy waters.

For further insight, check out our recent publication,  “IT Outsourcing (ITO) in the Payer Industry – Annual Report 2014: Regulations on Payers’ Mind.” This report provides an overview of the ITO market for the payer industry. Analysis includes market size and growth, forecasts (up to 2020), demand drivers, adoption and scope trends, key areas of investment, and implications for buyers and service providers.

Cognizant Acquires TriZetto: The New “Big Blue” of Healthcare IT? | Sherpas in Blue Shirts

Today, Cognizant announced the acquisition of TriZetto® (a leading provider of healthcare IT software and solutions) for US$2.7 billion. The deal ties in favourably with Cognizant’s dominant position in the healthcare IT marketplace, with the combined entity having US$3 billion in healthcare revenue. TriZetto has around 3,800 employees across the U.S. and India, who will join Cognizant’s existing healthcare business, which currently serves more than 200 clients.

The acquisition is a landmark deal within the Indian IT service provider community, given the size, scale, intent, and implications to the status quo, but what makes it unique is its focus on industry solutions vs. other services-centric acquisitions.

Indian IT service providers’ notable acquisitions

 

What it means for Cognizant’s services focus

TriZetto primarily develops and licenses IT platforms and service for healthcare providers and payers, competing with the likes of Allscripts, DST Systems, and McKesson. Cognizant aims to leverage its dominant position in the market–a healthcare IT portfolio in excess of US$2 billion–to provide an integrated portfolio across services and platforms. Investing in products and solutions has been a key area of focus for Indian IT service providers as they look to embed their solutions within enterprises buyers, use technology adjacencies, and leverage the technology-platform model instead of flexing just the labor arbitrage card. This acquisition could be one of the steps allowing Cognizant to cross-pollinate and build an integrated (applications/infrastructure/business process services) services play in an industry in which it has primarily relied on its application services strengths. 

What it means for Cognizant’s growth story

Cognizant will get access to multiple software platforms and aims to realize nearly US$1.5 billion of potential revenue synergies over the next five years. TriZetto currently operates at 18.5% margins on a revenue base of US$711 million. The numbers are right in the zone for Cognizant, as it wants to continue to drive its growth-plus-margin story in the high revenue base in which it currently operates. The products, platforms, and solutions play has very unique challenges, opportunities, and operating dynamics. Whether Cognizant can navigate this fundamental transition and still maintain its growth story, will be an interesting study.

How it relates to the way Healthcare IT industry is evolving

The ongoing transformation in the U.S. healthcare system is shaping service provider’s strategies as they look to capture the incremental opportunity that is up for grabs. The focus on driving down healthcare costs, wide-sweeping reforms (driven by Obamacare and ICD-10), and blurring lines between payers and providers, are principally reshaping the healthcare delivery model. Cognizant will aim to drive increased stickiness with healthcare buyers to drive retention in an increasingly complex vendor landscape. It is aimed at garnering a large share of the growth pie, when it comes to the payer and the provider ITO market. This acquisition is an unmatched clear indication that service providers must evolve from a services-only play to a platform-based solutions play, to stay relevant in a market that has an immense potential to grow.

 

What this means for the competition

The deal will also have myriad implications for the overall healthcare IT services competitive landscape. Most competitors of Cognizant already have a steady revenue stream (large or small) implementing TriZetto solutions, most importantly Facets™, which is used by most payers in the U.S. How this impacts its engagements and partnerships will be tricky. Whether Cognizant will want to (and if so, how) assume a dichotomous role of a partner and competitor will be another interesting area to watch. Additionally, whether Cognizant plans to ultimately absorb TriZetto (thereby dissolving the brand) or leverage its unique positioning is also unclear.

Cognizant is ideally placed in healthcare with few like-sized competitors, allowing it to consolidate. Two things that are definitely salient here–one, Cognizant is going all out to bet big on healthcare; and two, this acquisition has the potential of taking it to a different league altogether! There are already murmurs in the healthcare IT industry equating Cognizant to a new “IBM,” when it comes to its negotiating power at the table. This is another step in ensuring it stays ahead of peers as the competitive intensity in the market increases. The deal definitely has characteristics of a long-term strategic bet than a tactical manoeuvre.

Download the complimentary breaking viewpoint: Cognizant Acquires TriZetto for US$2.7 Billion.

New York’s Plan for Medicaid Services — and Why It Matters | Sherpas in Blue Shirts

A movement is underway in the state of New York that, if successful, could result in a seismic shake-up in the U.S. healthcare industry. In a contract now under bid for developing a new program for processing Medicaid claims, New York will shift to paying for Medicaid on a managed-care basis rather than the current system of paying by procedure. The risks are high for both the state and its selected service provider, but so are the opportunities for the first movers to capture a large market throughout the country.

Why the change in pricing structure?

Basically New York wants to pay by service. They want to pay healthcare providers (doctors and hospitals) to treat a patient for an ailment but don’t want to pay for all the different procedures that go into that. The state’s goal in changing the structure is to give providers incentives to work with their patients efficiently against the goal of curing them, rather than maximizing their revenue by doing more procedures.

It’s a lofty goal that shows great promise. We can all agree that incentives matter and curing more people at a lower price is a wonderful thing. But there are consequences that accompany this goal.

The consequences are big

The backbone of the Medicaid system is a transactional billing process and platforms for paying by procedure. Achieving New York’s goal will require changing Medicaid’s underlying computer systems and operations of Medicaid. It’s well worth doing, but it’s a big issue.

The stakes are high

New York is one of the first to come to market for changing the payment structure, and the stakes are very high. As we saw with the Affordable Care Act (Obamacare), big rewrites of healthcare platforms are risky, expensive and painful. New York’s plan is no less risky, expensive and painful in that it deals with a substantial part of the U.S. economy and the services cover the poorest of the poor — an important set of stakeholders that we don’t want to disenfranchise.

The risks are also high for the service providers that win the contract to work with the state to develop the new structure. Hopefully New York learned from the lessons of implementing the Affordable Care Act and will spend adequate time defining the requirements and selecting the appropriate service providers and will also create flexibility for the providers as they move down the journey of discovery to build these new platforms. The requirements will emerge as they start working on the problem, making the traditional waterfall process of government contracting difficult.

The stakes are also high for the healthcare providers, who don’t wish to be in the cross-hairs of public scrutiny as the early adopters of the exchanges in the Affordable Care Act.

The benefits are substantial

Despite the high risks, the benefits are equally high. A restructured payment system promises better patient outcomes, greater efficiency for the state, and an improved healthcare industry. And the first mover that successfully builds this platform will be well positioned to capture a very large market and resell it to the other 49 states.

It’s a risky, high-stakes game. But they have all to play for.

Why Healthcare IT Security Must Be at the Forefront of the CIO Agenda | Sherpas in Blue Shirts

Considering the nature of regulations and the sensitivity of personal information, one would assume that IT security is a top priority in the healthcare space. However, an estimated 29 million+ patient health records have been compromised, (classified as HIPAA data breaches,) since 2009. The number of health records breached in 2013 jumped a whopping 138% over 2012. Serious security flaws have even been detected in Obamacare’s much-touted flagship health insurance exchange website, HealthCare.gov, including severe lapses spanning JSON injection, unsanitized URL redirection, user profile disclosures, cookie theft, and unprotected APIs.

An Afterthought

Healthcare IT security challenges

The pace at which IT is changing the healthcare landscape makes it a prime target for malicious activity. Industry headwinds such as big data, payer-provider convergence, BYOD, HIX, EHR/EMR, and the Internet of Things (IoT) are adding to the healthcare information security conundrum. Patient records have become increasingly common in the fraud marketplace. When combined with other data sources such as insurance and medical data, the problem assumes more alarming proportions.

And it’s not a case of absence of punitive measures. Under the new HIPAA Omnibus Rule (effective from September 2013), firms face fines of up to US$1.5 million in the event of a violation (“willful neglect that was not timely corrected”). Europe has enacted several data security measures. Even before the latest regulatory rulings, insurer WellPoint was fined US$1.7 million after its online application database exposed information concerning more than 600,000 patients.

Feeding the problem

Although CIOs often list security as a priority imperative, it just doesn’t translate into actual spending. This discrepancy can be attributed to a confluence of reasons. The problem originates in a lax culture regarding IT security. The majority of information security breaches are highly avoidable, and most lapses can be traced back to sloppy system administrator password practices, careless sharing of sensitive information, failure to change default login credentials, among others. Healthcare information security is still not a top execution priority for most personnel, and most security programs are hampered by lack of relevant expertise and attention. Regulatory inconsistencies compounds the issue, i.e., multiple agencies are involved (FTC, FDA, FCC, to name a few), and their often divergent mandates contribute to the travails of healthcare IT security stakeholders.

Healthcare IT security roadmap

Stakeholders – both buyers’ internal IT teams and third-party service partners –face an increasingly complex technology conundrum. Any mitigation strategy should incorporate leading practices utilized in similar initiatives:

  • Conduct a thorough risk-assessment to proactively identify and secure vulnerabilities
  • Establish clear level-driven permission policies (on a need-to-access basis) applicable to data, applications, and devices (keeping in mind expanding BYOD policies)
  • Institute appropriate staffing practices to make sure personnel with relevant skills are given charge of security tasks
  • Ensure adequate personnel training and sensitization toward information security
  • Implement best-in-class encryption standards
  • Collaborate with business associates (held to the same standards as HIPAA-covered entities) to establish processes and enforce standards
  • Evaluate the security strategy along a security versus accessibility paradigm
  • Drive synergy between the business and IT vision to avoid incoherent implementation resulting from disparate imperatives

Ultimately, any healthcare IT security policy has to encapsulate the individual needs and challenges of various stakeholders – patients, providers, payers, and third parties – to ensure equitable access and health information exchange for coordinated care. The unenviable task of securing healthcare information in the onslaught of exploding devices and touch points calls for a carefully thought-out and implemented approach. But first, healthcare IT security must make a monumental shift from being an afterthought to being a primary strategic imperative in any plan design.

Accenture Takes Over from CGI to Salvage HealthCare.gov | Sherpas in Blue Shirts

Obamacare’s “My Bad” moment

You could hardly be surprised when news came out earlier this month that the Obama administration was considering replacing the incumbent HealthCare.gov vendor – CGI Group – with Accenture. By now, the rollout of Obamacare’s (or the Affordable Care Act) much-touted flagship health insurance exchange website, HealthCare.gov, has entrenched itself as a case study in how NOT to implement a large-scale IT system.

With costs incurred inching northwards of US$400 million (at last count) and multi-faceted complications resulting from the ambitious launch across 36 states, the harsh media and public spotlight has laid bare various problems beset the program. Despite having an array of veritable IT service partners (including the likes of Booz Allen Hamilton, CGI Group, and, later on, UnitedHealth Group), the website was plagued by frequent crashes, error messages, delays, and other glitches, frustrating consumers who looked to sign up for a health insurance policy.

Live and learn

Now that the initial hyperventilation and brouhaha over the episode has settled, it is time to evaluate the lessons for service providers and buyers alike. As is the case for any major IT engagement, one can never hold a single stakeholder to take the fall when things go south. Here, there were a wide range of missteps, including disagreements over project leadership, lack of communication between vendors and administration, inadequate testing, underestimation of web traffic, divergence of political ambitions regarding IT imperatives, murky ownership, and an absence of a clear problem-mitigation strategy, which in totality led to the mess the administration finds itself.

As one would expect in a scenario like this, there is no one-size-fits-all strategy. However, to distill the key learning for a large-scale IT project involving various stakeholders with divergent viewpoints, it is essential to:

  • Establish a clear roadmap by aligning technology imperatives with business needs
  • Include clear performance-linked incentives/penalties in SLAs to ensure compliance
  • Institute qualified management with relevant skills to tackle issues at hand (in this instance, Centers for Medicare and Medicaid Services was responsible for the program despite lacking any technical know-how)
  • Ensure convergence between technology and sales stakeholders to maintain cohesion
  • Embrace incremental milestone approaches including betas and testing, which are necessary to tackle niggling implementation issues before rollout

There is an overarching necessity to identify the operational challenges beforehand in order to mitigate post-implementation complexities. With federal IT spending expected to increase, it is essential that service providers and buyers gear up to inculcate predictive thought leadership as the silver bullet to avoid messy reactive measures.

The road ahead

Accenture would seem like the ideal fit for a project of such magnitude, given its proven expertise in the domain – it led the construction of California’s state health insurance exchange, which received positive feedback from stakeholders. Also, this type of a large-scale systems integration engagement is right up its alley, and plays to its strengths. This is reflected in Accenture‘s positioning as a leader across Everest Group’s PEAK matrix for healthcare and life sciences ITO. That said, the company will be under increased scrutiny and immense pressure to deliver given the attention the project has garnered.

Healthcare Life Sciences ITO PEAK Matrix

For more perspective on ITO trends, buyer imperatives, and market opportunities in each of the payer, provider, and life sciences market segments, read Everest Group’s complimentary report on State of the Healthcare & Life Sciences ITO Market: 2014. The report also looks at how the Healthcare and Life Sciences ITO opportunity will pan out in 2014, and provides projections on its growth and market size going into 2020.

Accenture Takes Over for CGI | Sherpas in Blue Shirts

We just witnessed one of the most spectacular examples of where choosing a service provider based on the lowest price can be a really bad idea. The Obama administration’s recent about-face in contracting with Accenture to take over for the incumbent CGI on the beleaguered healthcare.gov website is a vivid reminder that low price doesn’t necessarily end up being low cost.

Accenture is the premier firm in large-scale systems integration. So we have to wonder: Does the Administration wish they had picked Accenture to begin with?

One has to feel sorry for CGI, for the healthcare.gov build and launch is notorious for the government’s role in poorly scoping and poorly managing the project. So it’s likely that any firm might well have come to grief. Still, this is really just a simple story of penny-wise and pound-foolish decision making.

Government procurement decisions tend to settle on past experience and low price. Accenture is the most-respected provider for complex, large-scale SI projects; but as anyone that has bought services from Accenture knows, its expertise comes at a premium. Yet when a project absolutely has to succeed, the price is worth a premium.

Lesson learned and buyers beware!

If you select a service provider based on price and terms/conditions, you may walk right past the company that would be your strongest partner in delivering the results you want. Perhaps even the government now realizes the hazards of low-cost bidding. When it really matters, buy the best.

Obamacare’s Pulse in the Healthcare Services Industry | Sherpas in Blue Shirts

Will the troubles of Obamacare upend the robust growth that we have been experiencing in services in the healthcare space? It’s an interesting question, given that Obamacare’s march toward the looming January 1, 2014, launch date resembles a complicated traffic snarl with a lot of cars wrecked and not drivable.

Let’s look at the situation from three perspectives.

First, there is a possible so-called “nuclear option” in which Congress would repeal the Affordable Care Act, better known as Obamacare. The fact is the underlying reforms necessary for healthcare providers (hospitals, physicians) and payers will further churn an uncertain market and drive more change into the market. So the impact from Obamacare would be even more growth for the services businesses.

Second, it is highly unlikely that the healthcare industry’s new commitment to evidenced-based medicine and data-driven health plans will diminish. Although the business models and supporting processes may eventually take a different form, the commitment of both industry and government for the underlying changes will continue whether or not the government implements Obamacare. Again, the massive industry-wide changes will drive growth for service providers.

A third perspective involves the life sciences space. Here the industry is at the brink of a patent cliff with patents expiring on blockbuster drugs. This dilemma will cause life sciences companies to either restructure to accommodate a lower revenue base or to change their business models. As the patent expirations will continue unabated, the need for services providers to support business change will continue without regard to what happens with Obamacare.

So we believe it’s clear that Obamacare has a strong pulse and is no lightweight when it comes to impacting the healthcare services; it may actually provide a big bounce to services providers’ revenue.

Despite the bumpy, uncertain road Obamacare is traveling on, its failure or success will not change the trajectory of the growth in the healthcare services industry. The necessary changes to business processes and models in the healthcare provider and payer space will continue under any scenario that happens with Obamacare.

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