Shore up IT systems in stages to better manage the data flood

Key Points

But integration and analytics are a struggle for most health plans. Simultaneously, payers are fighting a flood of mandated and competing IT projects, driven by healthcare reform and the technological evolution.

"We're a small company, and we're cranking out more than 300 different file feeds every week," says Martin Watson, CEO of SeeChange Health.

Brokers often send data on paper for small groups or in electronic feeds for larger groups. Employers or larger firms might send eligibility feeds. While consuming all that incoming data, plans are simultaneously tying into other external sources, such as wellness vendors, disease management companies, pharmacy benefit managers and biometric screeners. Each of these partners is different in how it sends data and what it expects for reporting.

Data integration could be a relatively simple operation for the self-contained health plan taking a risk on claim exposure. The plan would need to connect with outside entities, but it might have a single PBM, biometric vendor, eligibility source, and so forth.

A managed care organization that provides an administrative solution to employer self-funded plans, however, will likely deal with almost every PBM in the marketplace. And that adds more layers of complexity, says Watson.

"Large third-party administrators manage self-funded companies that may have different plan designs, geographic areas, and networks, and have various ways they want to use their data," he says.

The purpose of the data must be considered. Increasingly, data is used for strategic analytics well beyond just claims processing.

"It's all about using data to manage the potential risks and predict the future costs, so that you can put the appropriate tools in place-through data integration, through analytics, through cost management," says broker and consultant Kristy Long, COO of Premier Consulting Associates.

The ability of the plan to integrate and use data from its sources drives better management practices and helps control claims costs. Such capabilities are in greater demand as more plan sponsors opt to self-insure.

"Most claims administrators say 'we integrate all your data,'" Long says. "As an employer, you need to know what that means. You want to understand the risk inherent in your high-dollar claims. You can identify a potential high-risk claimant by diagnosis, or the member may have a pharmacy claim or an outpatient treatment that could lead to a high-cost claim in the future. An employer wants to know the potential costs associated with that risk-short and long term-and to understand how the administrator identified or integrated this episode or claim with all data-both medical and pharmacy-and how it is being managed."