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Insurers Blame Tech for Clogging Health Exchange Implementation: PwC

Sixty-three percent of surveyed insurers told PwC that technology integration was the biggest barrier to exchange implementation.

The health insurance exchanges that are a key component of the Affordable Care Act healthcare reform law finally begin enrolling customers in a few days. But according to a recent survey by PwC's Health Research Institute, participating insurance companies find that deploying the necessary technology to participate is a major issue.

While 69% of the about 100 respondents expected that their companies would be participating in an exchange by 2015, when asked to rank the biggest barriers to implementation, 63% cited "technology integration." This was the highest-ranked of all the barriers, beating out "coordination of subsidies" at 61% and "adverse selection" with 51% among the three barriers common to a majority of respondents.

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"Insurers participating on the exchanges face significant operational challenges. They not only need internal systems and processes capable of handling high volume, but must also be able to link to federal and state eligibility, enrollment, and plan management systems," PwC wrote.

And with so much short-term energy focused on technology, other operational areas are being delayed or neglected, the firm says.

"Only 57% said they were in the advanced stage of customer segmentation, or dividing customers into discrete groups that share similar characteristics. This suggests that many insurance companies need to shift gears quickly to focus on their consumer strategies," PwC added.

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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User Rank: Author
9/25/2013 | 11:21:31 PM
re: Insurers Blame Tech for Clogging Health Exchange Implementation: PwC
If insurers are facing a heavy technology spend to participate in exchanges then that would derail parts of the Affordable Care Act. I'd be curious to know what's involved in linking with with "federal and state enrollment, eligibility and plan management systems." Why are insurers grappling with systems issues now when the program is already beginning?
User Rank: Author
9/25/2013 | 3:44:30 PM
re: Insurers Blame Tech for Clogging Health Exchange Implementation: PwC
Specifically what is the technology required here? Are there specific point solutions needed? Are there integration capabilities that insurers would not already have? Reporting/document management capabilities? Standards? Is it more about committing resources (staff, time) to this endeavor? I just find it difficult that some of the most advanced IT organizations around -- which is what we see at many health insurance companies -- would be stymied by the technology aspects of this mandate.
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