Q3 2021 Healthcare Industry Trend Highlights: Health Plans

As part of our internal healthcare industry market analysis, we’re sharing some notable payer space highlights that could inform your strategy decisions or priorities for the near term. Feel free to reach out to our healthcare services team if you’d like to discuss what we’re seeing inside these healthcare trends. SDLC Partners was again listed as a vendor within the AI Strategy category in the 2021 Gartner Hype Cycle for US Payers, highlighting our innovation and robust approach to health plan technology and business needs.

Notable Health Plan Industry Trends

Market Size:

The U.S. HIT market was $61B in 2017 and is projected to grow at 11.7% CAGR, reaching $149B by 2025. The Global HIT market is expected to grow at a CAGR 15.5% between 2020-2028 and is valued at $200B as of 2020 with the payer sector the largest.

Collaborative Ecosystem – “Coopetition“ & “Payviders”:

Additional uncertainty driven by the pandemic is accelerating change and strategies for health plans. Organizations that may have seemed to be competitors may now look attractive for partnerships or cooperative competition (aka “coopetition”). Organizations are focusing on expanding outside their current markets and offloading financially draining services or that no longer fit organizational strengths or goals. Also, various arrangements among providers and employers, with payers, are evolving how plans partner, which some coined “payviders.”

Personalized Experience & Data Interoperability:

Personalized care is still the “touchstone of loyalty” and that vision requires data from various sources. Coupled with CMS’ interoperability rule, programs that require integration with social determinants of health, and community support, the journey to transform clinical, financial, and operational data is kicking into high gear. 

COVID Impact: Plan Redesigns & Network Coverage:

Patients with lingering or life-limiting symptoms from COVID-19 will have an impact on risk scoring and possibly HEDIS scores, as well as the types of benefits needed and the economics of coverage for members long-term. Many health plans are building new network coverage, adding non-medical support, and extending benefits.

Digital Health: Virtual/Hybrid/Blended Care:

According to the 2021 Health Plan State of the Industry report, 64 percent of payers are accelerating digital health initiatives coming out of COVID-19.

The uptake of virtual care during the pandemic is moving into a new phase where healthcare organizations are determining how virtual care and services should strategically fit alongside in-person, home- and community-based services and support. Health plans that cover such services are investigating how a hybrid or blended approach to care should be incentivized and covered, particularly if it improves access, decreases disparities, and achieve improved outcomes at a lower cost.

Additionally, app-based and tech-first disruptors that go direct-to-employers or -consumers offer a “coopetition” or partnering opportunity where health plans want to expand into new markets of enhanced products.

Consumers Taking More Control & Rewards for Healthy Behaviors:

A new CVS study found that people used 2020 to work on health goals and reassess their wellness priorities with 77 percent stating that the pandemic led them to pay more attention to their general health. Half said that stay-at-home orders helped them achieve a health goal. More than half said health insurance coverage was the top factor influencing healthcare decisions, but more people are exploring and open to new avenues of care. Accessing care via PCPs dropped by 10 percent since 2020 but the use of online resources, community health centers, and local pharmacies all grew since last year. However, social isolation, economic uncertainty, among other pandemic-related factors have affected wellbeing and mental health. Using alcohol, nicotine, and opioids to cope all increased.

Realized ROI from AI/ML:

Led by HIMSS, the State of Healthcare Report for 2021 highlighted that while the use of artificial intelligence (AI) and machine learning (ML) is still in the early stages, stakeholders are beginning to see benefits. Payers, specifically, are realizing ROI with 48 percent of plan executives stating that they realized a significant return and 49 percent recovered their investment. Particularly interesting, the survey found that 4:10 patients saw AI/ML as beneficial to humanity.

Gartner 2021 Payer Technology Hype Cycle:

Gartner’s2021 report highlights technologies with a rapid advance, including digital analytics architecture for payers, intelligent automation for healthcare payers, AI strategy, and BPaaS for U.S. healthcare payers. New categories for 2021 include healthcare API management, population health management solutions, CIAM for healthcare. They did not remove any categories off of the hype cycle for 2021. [1]

Enable Enterprise Adaptability:

Gartner’s report also reinforced the need for payers to institute a composable enterprise architect that “will enable you to flexibly reconfigure IT applications and meet new business requirements on demand.” Combining point solutions, on top of flexible enterprise architecture, will enable desired experiences for members, providers, and partners.[i]

Digitalization:

Gartner’s 2021 Hype Cycle for U.S. Healthcare Payers repeats the importance of digitalization from their 2020 report, highlighting it as an urgent survival imperative for all payers. They recommend a bimodal focus on digital optimization (IA, etc.) and digital transformation (AI, API, etc.). This approach looks at two aspects of creating a digital business strategy.

  • Digital Business Optimization: Includes improving productivity and existing revenue or creating a better customer experience. Gartner lists several technologies to consider:
    • BPaaS for healthcare payers
    • Generation 2 medical shopping
    • Intelligent automation for healthcare payers
    • Next-generation core administrative processing solutions 
    • Robotic process automation for healthcare payers
    • Digitally optimize current business processes
  • Digital Business Transformation: Includes creating net new revenue products and services or creating new business models. Gartner lists several technologies to consider:
    • AI strategy for healthcare payers
    • API management for healthcare payers
    • Digital healthcare payer platform
    • Community resource network management
    • Health value product design 

Technology-enabled relationships and interactions across the health ecosystem will drive member health improvement and will be the engine for transformation.

What Do These Trends Mean for Your Health Plan?

SDLC Partners has provided guidance, technology, and execution support to healthcare since our start in 2004. Tap into our trusted and proven talent to determine how these trends affect your membership, operations, and revenue.

Sources:

[i] Gartner. Hype Cycle for U.S. Healthcare Payers, 2021. Published 13 July 2021 – ID G00747458

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