What's the biggest change from the pre-healthcare reform days to the post-implementation days that are coming? According to Kathy McCarthy, the director of health insurance for Oracle, it's the kinds of data that insurers need to collect and analyze.
"Plans going into accountable care organizations (ACOs) or patient-centered medical homes (PCMHs) now have to reimburse based on performance," she says. "That requires more than claims data – they also need to collect clinical data and other nontraditional data."
McCarthy says this will drive health insurers to a data warehouse model, so they can collect all the data they need in one place and make sure it's easy to meet reporting requirements.
"That type of a model requires a lot more agility of the systems," she says. "It requires them to be integrated with systems they're not integrated today to provide data that's required for risk management."
It's not just data, either: McCarthy notes that many plans are only now starting to get into ACOs after seeing the effects of pilot programs. With so much uncertainty around healthcare reform from day one, many insurers have been reticent to lay a solid foundation for the post-implementation world, she explains. Health insurers largely still use legacy systems built for the old world of group distribution, and these need a lot of updating so they can compete in the health insurance exchanges.
"Plans are taking a wait and see attitude, but they really need a new market architecture," she says. "If you're not on the exchanges in October you're going to miss out."
The exchanges require new kinds of product and new one-to-one touchpoints that have a huge impact on legacy rating, billing, and claims systems at health insurance companies. Taking billing as an example, she says, health insurers have to be able to process subsidies coming in from the federal government, at different amounts, for different policyholders, cleanly and efficiently.
"On the rating side, you've got geographical and subsidy factors, and on the billing side, some of these systems have never done an individual bill," she says. "You have to probably change or touch a large majority of the code."