New Normal in Health Insurance – Private HIX and Technology Transformation Imperatives

The unprecedented change in the US health insurance industry is driven by health reform, consumerization and technology forces. The industry is at the cusp of technology transformation and private Health Insurance Exchanges (HIX) are expected to open new market opportunities for payers. To support this strategic growth, payers must focus on a technology-driven healthcare ecosystem and consumer-driven business models and products.

The Patient Protection and Affordable Care Act (PPACA) mandated setting up of marketplaces, known as HIX or Health Insurance Marketplaces, in each US state, where individuals and small businesses can compare and purchase policies. The PPACA requires all public HIXs to be operationalized by January 1, 2014.

Currently, the payers are citing their ability in health insurance products and marketing to argue the case for private HIX. There is a substantial market that will open with the employer’ growing preference for a Defined Contribution (DC) model. With the focus shifting toward care analytics and information convergence across payers and providers, technology is slated to play a pivotal role in the how the payer business will be conducted in the time to come.

As per the Everest Group’s analysis, the market potential of the premiums collected could fall anywhere from US $204 billion to US $408 billion. The size of the opportunity can be put into perspective by the fact that a realistic estimate of the private HIX opportunity will be bigger than the public HIX opportunity. In such a scenario, technology will play a pivotal role to provide payers with an advantage and market leadership.

In this white paper, we examine six priority technology themes for health payers in the new normal:

  • Healthcare mobility
  • Business-financial informatics
  • Infrastructure modernization
  • Device support services
  • Network services
  • Database services

The various analysis and existing themes, highlighted in the white paper, suggest the crucial role of technology to shape the market environment for payers. Hence, the investments that they make toward enabling their operations and systems around private HIX will cater to a huge market opportunity.

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