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6 Trends Transforming Health Insurance

Enhanced infrastructures, consolidation and great reliance on vendor services are among the trends SunGard sees shaping the industry four-and-a-half months out from the Jan. 1, 2014, implementation of key Obamacare provisions.

Change has been a constant in the U.S. health insurance industry long before passage of the 2010 Patient Protection and Affordable Care Act (PPACA). But the Jan. 1, 2014, implementation of key provisions of Obamacare are accelerating the push among health insurance organizations to transform in order to drive growth and improve performance. Not surprisingly, SunGard Financial Systems believes there will be a technology angle to many of these changes, and has identified several key trends that the software provider says will have a significant impact on the U.S. health insurance industry this year. The focus will be on organizational efficiency, collaboration and shared services, according to SunGard.

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"Health payers' new business strategies are driving the need to streamline business processes and react quickly to capture new revenue streams," said Paul Tiede, executive vice president, SunGard's insurance business, in a company press release. "IT investments will focus on improving claims, analytics, and financial and accounting workflows, as well as cloud or outsourcing models to help increase agility and control costs."

The six key trends identified by SunGard are as follows:

1. Increasing pressure on profit margins and manual processes will drive the need for enhanced technology infrastructures to gain efficiencies in financial accounting, investment management, and claims processing.

2. Insurers will drive industry consolidation in order to diversify revenue sources and achieve agile growth in new markets, such as increasing their Medicaid business through acquisition of niche players, focusing on the individual consumer market, and expanding into more states.

3. More states will shift the management of their Medicaid plans to private sector managed care plans, enabling states to reduce risk and cost while requiring health plans to increase agility in business and technology frameworks to support growth.

4. The expansion of Accountable Care Organizations (ACOs) and health information exchanges will facilitate innovation by connecting providers, facilities and payers to form an electronic, patient-focused model, simplifying claims processing, and establishing incentives for healthy patient behavior.

5. As health insurers change their business models, they are looking to operate smarter through vendor-provided technology, business process management, and managed services offerings.

6. Such offerings will aim to help health insurers streamline processes and data, reduce costs, and streamline regulatory and service level compliance

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio

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