Legacy sys­tems, prac­tices weigh on in­sur­ers

Modern Healthcare - - COMMENT -

Re­gard­ing the ar­ti­cle “Re­form Up­date: Fac­ing ACA man­dates, in­sur­ers di­ver­sify into tech­nol­ogy” (Mod­ern­Health­care.com, Aug. 28), com­mer­cial in­surance com­pa­nies should not com­plain about the re­quire­ments of the 80/20 rule. When you con­sider the ad­min­is­tra­tive costs re­lated to the man­age­ment of Medi­care and Med­i­caid pro­grams is 6% or less, the com­mer­cial car­ri­ers re­ally have lit­tle to com­plain about.

It is in­evitable that com­mer­cial in­sur­ers will con­tinue to mi­grate away from their core business model be­cause of their own in­ef­fi­cien­cies. To re­main rel­e­vant in the health­care un­der­writ­ing and payer mar­ket, they will need to invest hun­dreds of mil­lions of dol­lars to com­pletely re­struc­ture their ag­ing legacy sys­tems. The great­est chal­lenge will be be­hav­ior mod­i­fi­ca­tion inside an in­dus­try that is steeped in legacy mar­ket per­cep­tions and struc­ture.

New play­ers in this mar­ket are be­gin­ning to emerge. They do not have the over­hang of the legacy sys­tems and op­er­at­ing prac­tices. Their ad­min­is­tra­tive cost struc­tures are lower, and the op­er­at­ing prac­tices are far more stream­lined, while pro­vid­ing eas­ier ac­cess to health­care man­age­ment in­for­ma­tion to the car­rier and providers.

Most im­por­tant is more trans­parency be­tween the payer, provider and the pa­tient. We will not turn back the tide of ris­ing out-of-pocket costs to the pa­tient, but we can and should re­move the mys­tery.

B.P. Ful­mer Man­ag­ing part­ner Ex­change EDI At­lanta

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