The health insurance industry is somehow about a decade behind every other industry when it comes to the integration of technology into their platforms, according to experts.
One big reason is replacing a legacy claims processing systems is a large capital expenditure of upwards of $200 to $300 million, according to Jeff Sage, a health technology expert with PA Consulting in Denver.
Claims processing is a system that touches every aspect of the organization, from the level of integration, workflows, staff training and reconciling data, Sage said.
Large payers spend a lot of time doing integration work on their systems, said Nick Vennaro, executive vice president and cofounder for Capto Consulting, also in Denver.
One large insurer he worked with had 14 claims processing systems. The company had bought a smaller insurer and it came with its own process.
"Now we have to support them all and bring them all together," said Vennaro, whose experience includes working for Cigna.
"Everyone has a claims system, all have the same big named things that do similar things," Vennaro said. "Once you get under the covers, they do them differently, and how they integrate systems is different."
Insurers are increasingly looking for partners who can manage their data systems, and are also investing in cloud-based solutions rather than equipment.
"The trend towards buying behavior is seeing technology as a service," Sage said. "Rather than the traditional own our own data center, there's a definite shift to get a service provider who can manage this for me, take care of the software and hardware maintenance, who can maintain, rather than maintain my own staff."
In telling insurers about solutions other than buying equipment, Softheon CEO and President Eugene Sayan said he frequently hears, "'You mean it will not cost $25 to $35 million to build my insurance division? I don't need to hire all these people? I can do it with cloud computing?'"
Cloud technology has made a lot more possible, Sage agreed.
Blockchain is still in a primitive state for adoption for healthcare systems, but it's moving quickly to pilot programs and research, he said.
Since insurers also spend 80 to 85 cents of every dollar on claims, it doesn't leave a lot of money leftover to pay for overhead, let alone to invest, according to Mark Nathan, founder of Zipari in Brooklyn, New York.
"It's crucial to lower the cost of care to be able to make investments," Nathan said.
Where they want to invest is enhancing and personalizing the member experience to influence behavior. But this also requires integration.
"Eighty percent have customer experience going on," said Nathan, who is speaking at AHIP about how data can drive the consumer experience.
Companies such as Amazon have led the way in personalizing information to the individual consumer, Nathan said.
Nathan knows a thing or two about innovation. He founded Zipari after working for Disney, Apple, NeXT and Guardian Life. The start-up grabbed attention last year for getting $7 million in investment funding from David Schwab of Vertical Venture Partners.
"We founded Zipari understanding what's going on on the payer side and what needed to be fixed," Nathan said.
What needs to be fixed is information that is siloed, Nathan said. For instance, the customer service center has no ability to get notes from the clinical side.
"It's a huge challenge to get this data from siloed systems to a central record," Nathan said.
Zipari builds a single customer experience platform. It worked with close to 200 payers last year.
"Five years ago, there wasn't much marketing to go directly to consumers," Nathan said. "The consumer's role is in increasing, not just for Affordable Care Act (market), but for group market. We do see a lot of investment in customer experience technology.'
Insurers want minimal investment upfront and fast results. Zipari charges a small price per member, per month, offers a high ROI and a quick deployment.
Much of the spending is going to simple operational efficiencies, such as a member portal that can send out a reminder for a flu shot, or for being able to get the knowledge that a particular consumer does not respond well to email but would rather get a phone call.
The other big area for integrated improvement is provider network management.
"There is such a lack of integration between providers and payers," Nathan said. "It hinders value-based solutions."
On the claims processing side, more insurers are outsourcing this work offshore to save labor and equipment costs.
The philosophy of insurers right now is, "'I really want to focus on the future (but) I have to deal with core technologies,'" Sage said. "There's an interesting bit of tension. A lot of institutions want to invest on population health, enhancing the customer experience. There's a strong desire to focus there."
But there's still a lot of basic core technology that needs to be upgraded.
"Even with the systems that are considered sophisticated, there's some that are good at Medicare Advantage, some that are good in the general marketplace and others that are focused on exchange-related activities," Sage said. "Payers are trying to enhance their technology."
This is balanced against, "'I really don't want to manage infrastructure. I don't care where it's based.'"
The use of third parties for external data doesn't eliminates the need for payers to build out payer analytics of their own, according to Vennaro.
"On value side, I think we're seeing, depending on the size of the payer, you see them partnering with provider groups," Vennaro said. "In some ways, see them sharing technology, such as analytics technology. We see more spend in how we're going to make each other successful."