Ready or not, healthcare reform is underway in the United States. The pace is accelerating, and by most accounts, effects will be far-reaching. Established insurers are looking to acquire new capabilities; new competitors are entering the market; and everyone is working to position themselves to comply efficiently, surmount challenges, and, most important, capitalize on new opportunities.
The individual mandate, a critical component of the Affordable Care Act upheld by the U.S. Supreme Court in June 2012, creates an opportunity for disruptive innovation in all areas of the healthcare payer's business. The individual market holds great potential for payers to provide new product and service offerings that retain profitability and growth. As with every opportunity, however, there is associated risk. While states debate whether to expand Medicaid, launch health insurance exchanges, or both, payers have less than 18 months to plan their strategies, change their infrastructure, and launch new products to capture market share.
One of payers' biggest challenges will be in the way that they go to market – maintaining a business-to-business strategy while also learning how to increasingly market to and transact with business-to-consumer. Long accustomed to b-to-b transactions, payers must now learn to interface directly with end users as well as understand the nuances of local markets. Payers must implement flexible IT systems that enable unprecedented business agility. These systems will be critical to their success.
Today, as payers expand b-to-c capabilities, they must keep in mind that the b-to-c model requires some fundamental shifts in the way they do business — ultimately affecting their entire enterprise platform: claims processing, provider contracts, benefit design, billing, marketing, communications and IT infrastructure. To more easily cope with these kinds of changes, payers should ask themselves questions including, but not limited to, the following:
- How will we market to individuals?
- How can we use health insurance exchanges as a new sales channel?
- How will we make our offerings appeal directly to consumers in the speed to market and cost-containment pressures of the retail world?
- What new programs can we put in place for consumers to manage their own healthcare choices?
Taking the time to address these questions thoroughly and sooner versus later will help payers determine their technology and other organizational requirements and, ultimately, build a solid foundation for success. Ensuring enterprise-agility remains a challenge, but to meet it head on, payers need to take a hard look at their underlying IT infrastructure to determine if it is flexible enough to accommodate individual consumers and roll out new products quickly; if systems are configurable and do not require custom coding when business needs change; and more.