In order to maintain its own fiscal health, the health insurance industry must build the technology and processes needed to meet consumerism's demands.
The profusion of products and services emanating from health insurers under the moniker of "consumer-driven healthcare" presents an exciting prospect. Scarcely a week passes without a significant announcement from a leading carrier about new consumer-oriented offerings or functionality. But delivering genuinely consumer-oriented health insurance is easier said than done; and beneath the surface impression of a newer, more agile approach, the industry is still lumbering and tardy in its response to the consumerist call.
"I hate to be associated with an indictment of the industry, but the fact is we are not a consumer-driven industry; we never have been, and it's going to take us a damned long time to get there," laments Steve O'Dell, vice president and managing director of First Consulting Group's (FCG; Long Beach, Calif.) health plan practice.
It can't take too long, however, because the industry isn't in a position to set the timetable. As employers are being pushed inexorably to high-deductible coinsurance plans, carriers are faced with the need to deliver the capabilities necessary to support those plans - quickly. And the success in which they deliver those capabilities may determine whether consumers appreciate the help or merely feel more burdened.
"I think that's the soft underbelly of the so-called consumer-driven-plan model: whether we're actually giving consumers the tools to manage it," O'Dell says. "The real question is, will consumers understand what they're being given, or will they just feel that they're the dumping ground for all the cost?"
So far, health insurers have not done a good job of introducing new products, according to O'Dell. Adopting the language of consumer-orientation is easy, but companies that are not actually customer-focused simply do not spend sufficient time in preparing their offerings, he suggests. "Too often health plans start with an idea and then launch it, forgetting that there's development in the middle," O'Dell quips.
First, carriers must make their plans completely transparent, he insists. In order to fulfill that commitment, they have to recognize that data hygiene is critical. "Once you start providing data and decision-making tools to plan members, sponsors and others, that data has to be almost perfect," he explains. "Health plans today, if they admit the truth, will tell you that the state of their data hygiene is pretty poor."
Investment in business intelligence and data warehousing will be crucial in turning that data into information that is useful for consumers and employers. Carriers will also need to develop the kinds of Web capabilities that can provide reliable, accurate information on an up-to-date, if not real-time, basis. Customer expectations in this regard will be set not only by their experiences with other industries, but by what they have at stake owing to their own increased responsibilities. For example, O'Dell cautions, "Once you introduce health savings accounts [HSAs], you're dealing with the consumer's money, and one mistake with an HSA will be much worse than 500 mistakes you've made paying claims historically."
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio