The U.S. healthcare payer BPS market is relatively mature, but is also shifting towards changes driven primarily by the Affordable Care Act (ACA), the growing Medicaid and Medicare population, and advancements in technology offerings. Activity is primarily driven by the need for claims administration support with the use of automation services, member engagement services, and improved clinical analytics. The aging legacy systems in government payers and increased demand for analytics to support fraud, waste and abuse management are also shifting the mix of services sought in healthcare payer BPS engagements.

NelsonHall estimates that the healthcare payer BPS market is worth ~$9.4bn in 2015, and is set to grow at a CAAGR of ~7.6% through 2019, reaching ~$12.6bn in 2019. Of that, we estimate that the government payer market will grow from ~5.3bn to ~7bn, while the commercial payer market will grow from ~4.1bn to ~5.6bn with a CAAGR of ~8.3%.

Health plans are increasingly complying with ACA mandates by trying to provide care to a bigger percentage of the U.S. population, which means that cost reduction is key. There are many opportunities for BPS vendors to help clients reduce costs in areas of intensive manual labor via process automation in both the back office and front office. More than 70% of vendors interviewed by NelsonHall are offering such services, with others planning to do so. There is an increasing tendency to use workflow tools and optimize processes through robotic automation, reducing cost and time in claims management, for example.

Beyond cost reduction, the need for clinical analytics to help improve quality of care is also a key market driver. Healthcare regulations and the ageing long-term care and Medicaid population are driving the need to improve medical management analytics and processes through improving STAR and HEDIS ratings, improving clinical outcomes through use of analytics, improving care management with U.S. qualified nurses, and outcome-based services.

A third key driver is the need to engage members in a more consumer-centric manner. Population health management trends, as well as a changing perception of patients as consumers, means that member engagement offerings are essential for healthcare payers. Relevant services include enrollment, using omni-channel approaches, wellness support, and member engagement through U.S. registered nurses.

According to a panel presentation on healthcare reforms from the global think-tank The Hamilton Group in October 2015, healthcare regulation policies have led to significant decreases in the plan premiums that U.S. insurance consumers pay on average. However, evidence presented showed that patients do not make the optimum choice of health plans when buying insurance. The relative complexity involved in buying insurance in health insurance exchanges (HIX) across the U.S. presents another opportunity for BPS vendors to improve member engagement. Around 40% of vendors interviewed are currently providing such advisory services. These include Concentrix, EXL, HGS and Hewlett Packard Enterprise Services.

Telemedicine, and monitoring long-term care patients from a distance are two more trends on the rise. Xerox has already taken steps in this direction by partnering with HealthSpot, a company providing kiosk-based telehealth services, an alternative to retail and on-site clinics.

In summary, the keys to success in healthcare payer BPS lie in a combination of increased process automation, improved analytics capability, and a more consumer-centric approach.

You can find out much more about what’s driving the U.S. healthcare payer BPS market and about vendors service offerings, as well as understanding the challenges and critical success factors in this market, in NelsonHall’s newly published Targeting Healthcare Payer BPS in the U.S. report.