In the past 18 months, the healthcare industry has been defined by a time of sustained innovation and continuing technology investment. Health plans recognize the opportunity to collaborate with providers to deliver more patient-centric care and remove cost from the system. As government regulations and market forces converge around these initiatives, now is the time to formalize value-based care (VBC) arrangements and prepare for new coverage models based on population health and guided by the promise of delivering a seamless patient experience.
At ZS, we worked with health plans to understand the opportunities they see on the horizon and explored four key insights from our research.
What's on the minds of health plan leaders today—and in their plans for the future?
Eager to learn how health plans view their role and other stakeholders in the overall healthcare ecosystem today and in the coming years, ZS captured a snapshot in time by polling senior health plan leaders about their digital initiatives, use of artificial intelligence (AI) and machine learning (ML), financial health and outlook on regulatory issues. The findings uncovered intriguing insights that we recently presented at the Healthcare Information and Management Systems Society's (HIMSS) hybrid Global Health Conference & Exhibition.
HIMSS is a global advisor and thought leader supporting the transformation of the health ecosystem through information and technology. The collaboration stems from ZS's partnership in the HIMSS Trust, a consortium of leaders from across the healthcare and technology space who are collecting, analyzing and reporting on in-depth, data-driven market intelligence. Insights gathered by the HIMSS Trust unveiled trends and challenges to help the industry prepare and predict for the next three to five years.
A benchmark for health plans within the healthcare ecosystem
ZS's first report, "State of Healthcare: Payers," surveyed respondents at all levels in the organization, from director up to the C-suite. On average, respondents had 15 years of experience in the health insurance industry. The majority of health plan organizations surveyed at the national, regional, state and community levels cover more than a million members.
In continuing that benchmark analysis, ZS captured a glimpse of where health plan leaders expect the healthcare ecosystem will be in 2025. By acting now now, the research revealed, they will advance the quality of care patients receive while building and securing their competitive advantage in the marketplace.
Insight No. 1: Personalized care offerings are expected to increase
The emergence of big tech- and IT startup-led innovations in healthcare will continue to drive a paradigm shift in the industry. As one-size-fits all health plans give way to personalized offerings, payers will deepen their plans to cover care for micro population segments and the most vulnerable individuals.
The key barriers to this customer-centric approach and the underlying digital health adoption are notably consistent across patients, health plans and providers: security and privacy. At the same time, health plans say they're confident a hybrid care model blending virtual and in-person visits will lead the way forward, even as providers operate in a legacy technology environment.
Care will not be constrained by the modality of care so much as it will be delivered in a continuous, personalized manner.
Insight No. 2: Significant returns on AI/ML practices are expected
Health plans will continue to accelerate their AI/ML initiatives, with almost 70% saying they expect to see significant returns on investment by 2025. At this stage in their operational maturity, they're turning their attention to-last mile projects such as clinical operations (up 10% from current activities) and claims operations (up 9%). Health plans hope to better align these core operational areas with providers and increase adoption to drive patient-centric value.
Keeping pace with rapidly evolving technology is seen as a key challenge, though health plans anticipate performance/scalability and data availability and reliability concerns will present less of an issue going forward. While we expect IT startups to established big tech providers to play a larger role in driving value for the healthcare ecosystem, stakeholders also include biopharma/device manufacturers.
Insight No. 3: Government regulations are projected to help overcome technological barriers of innovation
Looking ahead to 2025, health plans identified several drivers of innovation that will help to increase adoption of predictive and prescriptive analytics using AI/ML. Most notable are:
- An evolving landscape that will make greater patient-level data available through wearable devices, mobile apps, genomics and social determinants of health.
- Advances in technology that will increase our ability to process large volumes of data at high speed and low cost.
- Medical science advancements in fields such as genetic engineering.
Complementary government regulations on data democratization and interoperability should create additional health plan tailwinds. Breaking data out of silos and integrating it will additionally help to create personalized care models.
Insight No. 4: VBC arrangements are expected to increase with a higher level of provider participation
Among the most persistent challenges we face in healthcare is the slow shift from fee-for-service to VBC models. In the coming years, health plans expect providers to increase their participation in VBC and population health management programs.
Barriers to VBC adoption include questions about providers' care management capabilities (up 10% from today) and their ability to meet cost/quality metrics (up slightly at 2%). Meanwhile, the understanding of risk-based arrangements (down 5 percent) and trust in health plans to make fair payments (down 12%) appear to be of less concern.
With technology innovation and greater adoption, obstacles will gradually come down. We foresee greater participation and alignment of incentives between health plans and providers that will push VBC objectives.
Lessons for tomorrow: Prepare today or perish
We see a consistent theme emerging within the healthcare landscape, and it's all about making healthcare more personalized and value based. Thus far, we've had an industry that takes a one-size-fits-all approach.
Health plans have started looking at leveraging data and analytics to create personalized, curated health models that are geared toward patient-specific needs. They should start looking at deepening their engagement with members to create personalized, curated health plans. While we haven't reached a point where we can tailor a health plan for individuals, the industry is headed in that direction. National, regional and smaller health plans should begin taking steps on that path so they can meet the patient need.
Banking and retail already offer personalized member experiences—and they're not limited to the front-end digital experience. These industries built their capabilities all the way through, across the entire workflow and across business processes so the experience is seamless. It starts with building the right infrastructure and putting in place the right data and analytics technology.
Health plans have a great opportunity today that is being facilitated by regulatory changes and interoperability mandates that will free data from existing silos. The availability of real-time data feeds and payer-provider integrations opens the door for real-time analytics.
Data silos won't be a constraint going forward, and we will have a level playing field. Health plans that take advantage of it and start thinking about building interoperability capabilities that are more futuristic in nature—and geared toward the member experience—will be the winners.