Adapt to change in 2009

"New consumer expectations and disruptive market forces are quickly changing the way that healthcare is financed and delivered," says Paul Veronneau, partner, PricewaterhouseCoopers (PwC) Healthcare Advisory, leader of payer performance practice. "Healthcare organizations that thrive will be those that continue to look for and deliver on the enormous opportunities to add value and improve health and productivity. Like every other industry, healthcare will become more consumer centered and will need to demonstrate real value for the money."

PwC's Health Research Institute recently identified health industry issues for 2009 that are the most significant for managed care executives: the impact of the financial crisis and growing number of underinsured; wellness program participation; and conversion to ICD-10.

ECONOMIC HITS

As unemployment rises, the number of people in employee-sponsored plans is declining, according to Ben Isgur, director, PwC's Health Research Institute. As a result, commercial payers may see a drop in enrollment and premium revenue this year.

The consumers' role in managing their own health and wellness has reached a tipping point, and wellness programs will receive greater attention in 2009. Large and small employers say that wellness programs are important to them, but only 15% of eligible employees actually participate.

"The success of wellness programs is linked to participation levels, and participation, in turn, is connected to incentives," Isgur says. "The study found that workers are two to four times more likely to enroll in wellness programs if they receive gift cards or other incentives."

ICD-10: INVESTMENT REQUIRED

The conversion to ICD-10 will increase the number of code sets used for billing and clinical classifications from 17,000 to 150,000.

"This conversion, likely to be costly and disruptive, will impact all major provider and payer processes," Veronneau says. "In addition to clinical process changes, the entire healthcare system . . . will have to be adapted."

When the conversion process is complete, ICD-10 will provide payers and providers more information about the care process, such as increased accuracy of reimbursement and quality management, says Veronneau.

According to PwC, in view of the three health industry issues described above, managed care executives should:

"For example, health plan services that rank higher in importance, but lower in satisfaction, such as wellness programs, deserve immediate attention," Veronneau says. "Services that are low in importance and satisfaction may need re-invention."

"This strategic approach should include everything from awareness building to impact assessment and execution," Veronneau says. "The earlier MCOs begin the process, the more time they have to adapt to change. And those that align this regulatory requirement with such strategic goals as revenue growth, operating efficiency, and quality improvement, the less they will spend, the more coordinated they will be, and the more competitive they will become."

In addition, managed care companies that embrace ICD-10 conversion as a catalyst to increase patient safety and quality will be turning a regulatory requirement into a strategic opportunity, says Isgur.