Health plans are no stranger to doing “more with less.”
Many have been dealing with IT resource scarcity for decades.
But while scarcity is hardly new, there’s no denying it’s grown more painful than ever in recent years. From skyrocketing health care costs to constant regulatory shakeups, some health plans have a challenging time maintaining a technology ecosystem that meets requirements, supports customers and partners and enables innovations that move the needle on key business metrics.
This article will cover some of the major contributors to IT scarcity, their impact on health plans’ business and a path forward.
5 Contributors to Health Plan IT Scarcity
IT scarcity results from a simple equation. Health plans have limited resources available, and too many competing priorities to properly address.
However, this overly simplistic description misses much of the nuance surrounding IT scarcity. Finding a path forward for health plans requires a more in-depth understanding of the problem. To that end, five of the most common contributors to IT scarcity for health plans include:
1. Technology reliance by partners and customers
Health plans are heavily reliant on brokers and other partners, and don’t have the luxury of focusing exclusively on their own needs. If brokers, in particular, aren’t armed with strong technology to support customer acquisition and maintenance, it can have a significant impact on revenue and other critical metrics such as retention, late payments, and more.
The same is true for customers. If they aren’t provided with a strong and intuitive technology experience — ideally with additional features that differentiate a health plan from its competitors — satisfaction can quickly dwindle, potentially harming retention and limiting customer acquisition.
2. The need to deliver value across the entire quote-to-pay lifecycle
Balancing their own needs against those of customers and partners, health plans are under pressure to improve and expand services across a wide range of functions. This includes:
- Easing the administrative burden of tasks like quoting, enrollment, data exchange and billing for both internal staff and brokers.
- Adding value to the consumer experience to support customer acquisition and retention
However, as we’ll see, health plans may have precious little resources remaining for this work after attending to the essentials.
3. Regulatory, compliance and data protection mandates
The US health care industry is among the most highly regulated in the world, and the environment continuously evolves. Mandates such as Cost Transparency often include requirements that are complicated and tough to meet. This forces health plans to invest precious IT resources on a regular basis to stay up to date — or risk non-compliance fines.
4. Difficulty calculating ROI of technology investments
Before investing heavily in technology initiatives, health plans naturally want to know they will provide an adequate ROI. However, health plans may lack the resources, skills or technology needed to identify the areas and initiatives most likely to generate a strong return.
Investing in building a strong technology analytics capability is something many health plans would love to do — but they may simply lack the resources to do so.
5. The ongoing burden of maintenance
Even leaving aside regulatory changes, health plan IT systems are complex, and require constant maintenance to remain functional. This requires an ongoing allocation of resources that further depletes those available for other functions.
Maintenance is particularly painful for organizations that develop key systems in-house. Maintenance can account for as much as 70 percent of the Total Cost of Ownership (TCO) for internally developed software applications. As systems age, they can increasingly become a financial and operational burden, forcing entities to invest budget and human resources year after year just to keep them operational.
The IT Scarcity “Fall Out”
The immediate effect of resource scarcity is a forced focus on breadth over depth — the need to do many different things often results in incomplete execution of individual functions. This can lead health plans to build systems or features that are “just enough” to satisfy a need, demand or requirement, but which don’t fully deliver for the health plan, its partners or consumers.
However, in focusing on “must haves,” there’s a deeper sacrifice: innovation.
Given its status as a “non-critical” need, innovation is typically the true casualty of IT scarcity. Naturally, this can (and does) impact health plans’ ability to improve business outcomes and differentiate from competitors.
Notably, a lack of innovation tends to impact the end user experience for partners and consumers.
This is significant, because if partners and consumers have a poor experience (e.g., of the sales, enrollment or billing process) this may eventually lead to serious consequences for the health plan such as reduced revenue and retention, member dissatisfaction, access to care issues, late payments and more. With customer experience increasingly being the deciding factor in consumer healthcare decisions, health plans neglect innovation in this area at their peril.
Fundamentally, the equation is simple: Less innovation may mean a poorer experience for brokers, partners and consumers — and ultimately a negative impact on financial performance.
Why Hasn’t This Been Solved Yet?
The simple answer is that IT resources are scarce… and that isn’t going to change any time soon. Most health plans have tried a variety of routes to address IT scarcity, including:
- Building systems internally
- Pursuing a “best in class” strategy of purchasing multiple (often SaaS) point solutions
- Purchasing a comprehensive platform that fulfills all necessary business functions
Some health plan IT strategies have “bounced around” over time depending on their CIO’s preference, the current regulatory environment and the availability of attractive technologies. However, no matter which approach they take, health plans have typically been frustrated in their attempts to balance their three primary IT needs: compliance, maintenance and innovation.
The Solution: A Fully Integrated Technology Experience
Given the need to constantly maintain systems and address changing regulations, building systems internally is a tough choice for today’s health plans. However, so too is working with numerous point solutions — no matter how good they are individually, blending multiple systems together inevitably creates operational efficiencies for health plans and their partners.
At Benefitfocus, we believe a health benefit platform that supports the full quote-to-pay lifecycle is the ideal solution to help health plans battle IT scarcity.
Working with Benefitfocus can help your health plan:
- Manage the entire quote-to-pay lifecycle from a single technology ecosystem that’s continually maintained and updated for innovation
- Simplify administration, drive efficiencies, and enable you to focus on what’s most important
- Create meaningful connections with your members, brokers, and employer groups year-round through an engaging and hyper-personalized experience
- Deliver an outstanding user experience for all your internal staff, partners, and customers
- Harness powerful data-driven insights to help you identify key cost drivers and improve member health outcomes
To find out more about how Benefitfocus can help your health plan make the most of its IT resources to maximize customer experience and financial success, book your free demo today.