Three ways the health insurance industry must evolve

RakowskiHealthcare reform and the increase of high-deductible health plans (HDHPs) have resulted in many substantial changes in the healthcare industry. Among the most significant changes today is the transformation of patients to health consumers.

Related: Eight ways to retain high-deductible members

These new health consumers have more information about healthcare available to them, are becoming more conscious about their healthcare spending, and are taking a more active role in their care.

They want more price transparency, particularly as they encounter higher deductibles. In a recent PricewaterhouseCoopers (PwC) study, 83% of employers reported offering a high-deductible plan. These plans, by nature, encourage consumers to consider all options before selecting and utilizing healthcare services.

Related: Consumerism increases retail opportunities and access to coverage and care

Healthcare “consumerism” is only one of many areas of focus for the industry. A call to action from industry stakeholders is prevalent, largely based on the fact that the U.S. spends more than $2.9 trillion annually (or $9,255 per person) on healthcare, more than any other country. Even so, Bloomberg ranks the U.S. at a lowly 33^rd on its “World's Healthiest Countries” list.

To reduce costs and create a healthcare system that works better for consumers, the healthcare industry needs to cater to the consumer, become more connected, and better manage risk. The following outlines some of the ways U.S. healthcare can and should evolve.

NEXT: Facilitate patient-centric healthcare

Facilitate patient-centric healthcare

Consumers have more purchasing power in their healthcare choices than ever before. So, if health insurers want to increase engagement and satisfaction to retain members, they must redesign processes and services through the lens of a consumer.

Related: Price Transparency: A significant force in healthcare

This requires better coordination and collaboration from the two biggest stakeholders in healthcare-payers and providers. These two groups have an opportunity to work together to enhance the consumer experience by providing meaningful information that empowers the health consumer to become more educated and active in their own care.

Finally, consumers have more incentive to engage in products and services to help them better monitor and manage their health and well-being. They want access to tools and products when and how it’s convenient for them, and they desire the same retail experience in healthcare that they do in shopping for other products and services.

NEXT: Break down silos

Break down silos

To achieve healthcare interoperability, payers and providers must break down long-standing silos and become more connected.

Related: Four ways managed care executives can advance interoperability

By improving the flow of information and making the care management process easier, organizations can reduce costs and become more efficient, while simultaneously improving the consumer experience.

One area of opportunity ripe for improvement is claims processing and payment. Despite significant improvements in the use of technology and electronic data interfaces, process errors and waste continue. Providers still submit incorrect or incomplete claims that are denied for clinical or administrative reasons, and these denials result in wasted time and resources spent on inefficient communications between payers and clinical staff.

Related: READ: Five private sector interoperability initiatives to watch

When communication and information flow is improved on the front-end, this unnecessary rework can be significantly reduced and more claims accurately submitted and paid the first time.  

NEXT: Better control risk

Better control risk

Fraud, waste and abuse in the U.S. healthcare system costs an estimated $60 billion to $80 billion annually due to either a deliberate attempt to deceive the system or inefficient administrative processes and systems, according to Gartner, an information technology research and advisory firm.

Related: Under attack: Arm yourself against hackers

Payers must have audit and compliance systems to prevent losses before they occur, and if necessary, recover funds quickly. The “pay and chase” model of today needs to be replaced with analytics and surveillance that identifies potential fraud before money flows to the perpetrator.

Data breaches are another area of concern. In 2014, data breaches cost the healthcare industry an estimated $5.6 billion in losses, according to the Fourth Annual Benchmark Study on Patient Privacy and Data Security by Ponemon Institute. The use of wearables, mobile, and remote devices means there is an enormous amount of sensitive personal data floating around “in the cloud.”

Payers and providers must develop more effective strategies to protect patient privacy.

Kelly Rakowski is senior vice president, Healthcare Payer Services, Xerox.