It’s no secret that healthcare costs in the U.S. are skyrocketing – on both the payer and the patient side. And with the high cost of a customer service representative (CSR) call—according to one survey, as much as $6 per contact—payers can lower costs by allowing members to manage their healthcare bills and interact with their insurers via web portals. This is pushing payers to retool their digital front doors in order to cater to a consumerism model.
The Rise Of Consumerism
The rise of consumerism presents payers with unique challenges and opportunities to engage their members. Using modern technology like mobile apps, push notifications, and data-driven communications, payers can educate patients on preventive care and healthy lifestyles, which helps lower out-of-pocket payments and builds brand value with consumers – all while alleviating costs on the payer side.
The Switch the Value Based Care
In addition, value based care (VBC) is helping the healthcare industry deal with the upward spiraling costs of healthcare. VBC, a form of reimbursement that ties payments for care delivery to the quality of care and rewards providers for both efficiency and effectiveness, has the potential to lower costs for payers by improving long-term healthcare outcomes for patients and reducing readmission rates.
Technology is a key enabler in the move to VBC. For example, wearable technologies and their associated apps are growing in adoption. This approach is already supporting patients with chronic conditions such as type 2 diabetes, asthma, arrhythmias, clinical depression, and other disorders—and the list continues to grow. Another promising innovation is the use of physical therapy exercise apps for home rehab post-operatively, which eliminates the need for office visits and yet provides accountability for compliance with the prescribed therapy.
The Need For Big Data Analytics
Another important way that technology is transforming the healthcare industry is the realm of data-driven decision making. Payers have oceans of historical data that can be mined for insights using data analytics tools. Analytics are unlocking new models in which clinicians can deliver more informed care, patients can be more directly involved in their healthcare, and insurers can better assess the value generated in order to determine fair reimbursement.
On the business side, payers can monetize data analytics by creating targeted marketing campaigns to optimize member acquisition. In addition, insights from data analytics can help the customer experience group to design initiatives that foster loyalty and improve retention rates and ratings.
Four Reasons Payers Are Moving To The Cloud
The trends discussed previously put additional stress on the payer’s infrastructure. In many cases, legacy architectures and monolithic proprietary applications are just not up to the task. Although the healthcare industry in general and payers in particular have been slow to move to the cloud, the arguments to do so become more and more compelling. Here are four reasons chief information officers (CIOs) are adopting a cloud-first mentality.
Scalability: The Sky’s the Limit
Rather than populate the data center with enough hardware and software to handle peak loading—and then watch it sit idle most of the time—the cloud allows payers to spin up more computational power in the cloud on demand to accommodate these changes in volume. By moving key applications to the cloud, organizations only pay for the additional computational power and resources when they’re actually needed, reducing the total cost of ownership (TCO). And there’s never any doubt that resources will be there when needed, because the resources of a public cloud provider are essentially infinite compared to the needs of any one organization.
Security: Providers Have Your Back
Personal health information (PHI) is a high-priority target for cyberattackers, and it’s no wonder: a single medical record can sell for as much as $1,000 on the black market, up to 50 times more than a credit or social security number. And PHI theft is not the only risk. Ransomware can render millions of records unusable and force organizations to pay substantial sums to the cybercriminal or recover information from disaster recovery sites, also a costly process. Given the importance of data security, payer CIOs have been reluctant to migrate PHI and other intellectual property from their data centers to the cloud.
However, the notion that data is safer on-premises is a myth. Public cloud providers have far better security because they invest far more in security than any individual payer can possibly match. Why? Because data security IS their business. If a cloud provider suffers a breach, it can lose millions of customers representing billions of dollars of revenue, to say nothing of brand damage and compliance penalties. Public cloud providers such as AWS, Microsoft Azure, and Google Cloud have large, global teams of experienced IT professionals focused solely on cloud security—a stark contrast to the average payer organization that often struggles to find and train even one full-time security staffer.
Innovation: There’s No Place Like Cloud
More than one commentator has made the observation that the “I” in CIO increasingly stands for Innovation. As enterprises make the transition from brick and mortar to online, IT infrastructure becomes the enabling platform for digital transformation. Where CIOs were once responsible for keeping the IT infrastructure work—the so-called “keep the lights on” imperative—now they must develop new products and services to drive revenues and increase operational efficiency.
However, legacy infrastructures based on asset ownership are inherently rigid and difficult to change. The cloud is significantly more agile, easing the process of architecture change and experimentation. Public cloud providers offer a wide range of services which developers can leverage to build more powerful applications and do so faster than ever. For example, a developer can spin up an Artificial Intelligence (AI) environment in just minutes on AWS or Microsoft Azure, compared to the lengthy and costly process required to build that same capability from scratch in the local data center.
Analytics: There’s Gold in Those Mountains of Data
Over the years, healthcare payers have accumulated massive amounts of historical information about their members and providers—information that they can potentially turn into revenue using data analytics.
But there’s a problem. Analyzing massive amounts of data requires significant storage and computing resources, something that most people didn’t plan for when they architected their current platform. The initial enthusiasm for analytics can lessen when the executive staff sees requisitions for additional servers and storage units. In addition, it’s hard to predict the level of resources that will be needed as the data analytics program expands.
And there’s another problem. In the typical payer organization, data of various kinds — clinical, financial, and operational — remains in silos because of legacy systems and interoperability issues. Mergers and acquisitions further complicate the picture by introducing multiple systems for electronic health records, enterprise resource planning, and imaging.
Migrating to the cloud doesn’t solve all these problems automatically but it does bring into play the necessary capabilities. Business analysts can easily scale computing and storage resources as needed for large analytics runs, then decommission those resources at project completion to avoid paying for unused capacity. Furthermore, the cloud is a perfect platform for data unification initiatives, simplifying connectivity and boosting collaboration in today’s geographically dispersed organizational structures. You can use the cloud to reduce the risk for large initiatives by avoiding capital outlays and taking advantage of analytics services offered by the provider.
How To Make Your Cloud Migration Pay Off
When—not if—you do decide to move to the cloud, there are ways to make it as beneficial as possible for your organization. Read the full white paper, What Healthcare Payer CIOs Need To Know About Moving To The Cloud, to learn six essential principles to make your cloud migration pay off.