Plans partner with technology providers

With new electronic medical records (EMR) rules taking effect by 2012 and the technology becoming necessary by 2015 for practices to receive tax benefits and subsidies, health plans are assessing their role in the electronic exchange of healthcare information.

For example, Aetna recently entered into an agreement to acquire Medicity, a health information exchange technology company, headquartered in Salt Lake City, Utah, for approximately $500 million. Medicity's connected network provides collaboration and coordination of care delivered through a variety of communications tools, which helps physicians and other health care providers get timely clinical information about patients using the platform of their choice.

Kunal Pandya, a senior analyst at Aite Group, who specializing in health insurance and payments, expects other large health plans to strategically invest in health information exchange (HIE) technologies. Such investments, whether via acquisition or partnerships, allow plans to improve metrics and could help with contractual negotiations with providers.

"The trend toward IT from an upgrade perspective is moving beyond acquisition and toward partnerships," says Pandya. "Lots of health plans would like to partner with EMR systems. In 2011, document management systems and content management services and risk management vendors will prove to be value-added services."

As health insurance memberships grow in response to federal healthcare reforms, Pandya says technology can help streamline that influx. With some of reform rules like medical loss ratios and risk carrying with new memberships, risk management technology vendors have an easy job in creating a selling point for themselves, he says.

EMR is also finally gaining traction among providers. According to a survey by the Centers for Disease Control and Prevention's National Center for Health Statistics, more than half of office-based physicians are using an EMR. The CDC report, "Electronic Medical Record/Electronic Health Record Systems of Office-based Physicians: United States, 2009 and Preliminary 2010 State Estimates," shows rates have doubled since 2005.

"If you look at larger providers, they are already far along in the process from a revenue cycle management perspective," Pandya says. "The technology gap is getting smaller with mid-sized providers looking at EMR vendors and revenue cycle management."

Adoption rates for small- and mid-sized providers will depend largely on the tax benefits and penalties they'll pay when it becomes mandatory, according to Pandya.

"It all depends on cost benefit ratio," he says.