Are Health Insurers Prepared for Healthcare Reform?

Countless papers have been written about the impact of healthcare reform on the insurance industry, but few look at these changes from the perspective of how these mandates will impact healthcare payers -- particularly, technology, people and processes. In the interest of bridging that gap, let's take a look some of the challenges health insurers face, and some solutions they might consider.

Insurance companies offering health plans either directly, through employers and/or governmental health care programs must address, in whole or part, all of the provisions and mandates flowing from healthcare reform. the status quo is no longer sustainable for healthcare payers to prepare for dynamic regulatory reforms across public and private plans.

Health insurers have new opportunities to look beyond current financial incentives and get more aggressive about quality, costs and waste. Employers' satisfaction with their health insurers has eroded during the past several years, however health insurers can respond by providing more value through better information management.

According to a recent paper by PWC: What Employers Want from Health Insurers in 2010, "Satisfaction by large employers decreased by an average of five percentage points, from 64 percent in 2008 to 59 percent in 2009, while satisfaction among small employers held steady." While the NAIC and 34 states currently have minimum Medical Loss Ratio (MLR) guidelines for insurance companies, few are as stringent as the national standards established in the Affordable Care Act legislation. Existing state-specific minimum MLR guidelines range between 50 percent and 85 percent, with most falling between 60 percent and 75 percent.

The changes payers now face will require strong maintenance and consistent monitoring to maintain employer satisfaction across claims accuracy, timeliness, fees, online payments, eligibility, discounts and analytical reporting capabilities.

Insurers that understand the implications to health care payer information technology systems promising better care and less paperwork, managing MLR demands on the system, and improving communication between payers and providers can turn reform mandates into a competitive advantage.

Several healthcare payers are testing innovative new technology and business models that deliver not only business process management (BPM) operational efficiencies but also task-level workflow analytics for compliance reporting. The most innovative, proactive payers will lead the industry to new business models promoting new programs, services and technology that address health care reform phases to help raise employers' satisfaction with insurer services while managing Medical Loss Ratios (MLR).

Reforms can leverage existing people, process and technology to evaluate and determine clear, relevant outcomes to elevate importance and satisfaction on performance guarantees, and health risk profiles. This is an opportunity for employers to value programs and services that increase satisfaction, targeting performance guarantees, wellness programs, disease management, personal health records and online comparison tools.

About the Author: Don Canning is vice president, strategic analysis, SunGard iWorks.