In 2020, the U.S. healthcare payer BPS market saw accelerated growth in the adoption and design of digital solutions across all functional areas. The acceleration is driven mainly by consumer demand for an "Amazon" experience from their health plans and providers, to know the cost of care for associated benefit plans to assist in plan selection or inform decisions about elective procedures and treatments. It is also driven by approaching federal regulation deadlines. Specifically, regulatory requirements from the Cares Act and subsequent rulings from CMS are driving further steps towards interoperability throughout 2021-2024. These requirements follow the initiatives by CMS offering price lookup tools for outpatient procedures and OOP costs for physician visits for Medicare consumers.  

Regulatory deadlines drive digital adoption

By January 1, 2022, private payers and group plans must standardize data files to be made publicly available and shared through APIs. The available data will be an opportunity for insurtechs and technology vendors to develop price comparison tools further and price analyses to inform their development.

After January 1, 2023, these payers must offer online plan comparison tools for consumers to view negotiated provider rates and personalized OOP costs estimations for 500 commonly utilized services. This will require real-time underwriting and price aggregation and analysis, with the ability to segment the data by facility and provider. Then, starting on January 1, 2024, individual and group plan consumers will be able to view the estimation of the total OOP costs, including usual tests, procedures, DME, and other items associated with specific treatment plans.

Opportunities for tech vendors to provide services & digital solutions

Without significant digital transformation, meeting the interoperability and price transparency requirements poses a considerable challenge for U.S. healthcare payers. Legacy and "home-grown" systems perpetuate siloed digital solutions, unstandardized data, and difficulties in designing APIs and intake of external data. The disjointed process becomes even more complicated when payers face these challenges on a seasonal basis to perform market assessments, develop products, and price new and renewed plans.

Additionally, payers face the challenge of complying with continual changes in required API formats, currently defined by HL7's FHIR. Payers will need support in converting or implementing the standard format and subsequent testing as regulations and required formats change, such as federal exchange marketplace plans that must implement FHIR APIs with third-party apps for open data access.

Capgemini spotlight: price transparency offerings

U.S. healthcare payers can obtain digital solutions to support regulatory compliance with Capgemini's price transparency solutions. Capgemini has 15 years of experience in the Medicare Advantage space, providing enrollment and member account maintenance management services, solutions, and advisory support. The recent focus has been on designing analytic and AI-driven tools for healthcare payer and provider clients in meeting regulatory guidelines and customer-driven demands for enhanced digital experiences and upfront cost estimations.

Capgemini offers service-line driven pricing for the average cost of medical care from hospitals and healthcare providers in the consumer's area. Capgemini developed the relative pricing guidance for hospitals, with an average of 1200 parameters per hospital for ~700 hospitals, categorizing both operational and overall spend by diagnosis parameters. The hospitals were then ranked into low, medium, high. In addition to overall price analysis, Capgemini parsed hospital spend by service line to provide cost estimations by diagnosis or treatment.

Capgemini is also working with several Blues to estimate OOP cost projections viewable on the member portal. Capgemini designed a cost calculator for a medical procedure at a specific healthcare facility, including the member's expected copay/deductible. A pricing engine was then implemented into a Blue's member portal to provide hyper-personalization, utilizing both internally available eligibility data and the aggregated market data for variable cost pricing. Currently, Capgemini offers implementations of ranking engines enabled by pricing algorithms and provider registries, returning search results of the top 10 providers most relevant for a specific diagnosis or procedure and the estimated cost of copay/deductible/OOP for each provider.  

Capgemini's price transparency work is also heavily focused on utilizing MLR for cost-sharing estimations, including telehealth in the cost estimations. For a U.K. health plan, Capgemini implemented a solution to perform plan comparisons against industry standards, such as a specific member with a particular set of demographics and health characteristics, to estimate the eligibility and cost-sharing – competitive pricing. The solution incorporated several analytics tools to perform analysis and reporting on historical cost-sharing.

By the end of 2021, Capgemini's digital solutions in price transparency will integrate the payers' provider search tools to rank relevant providers based on health outcome metrics. Capgemini continues working with certain Blues plans to develop a marketplace with shared data and real-time quoting for care pricing and plan comparisons, involving interoperability and price transparency initiatives to benchmark the cost of services by area and plan. Additionally, Capgemini's development is focused on creating bundled pricing for all procedures and tests associated with a long-term treatment plan, as will be required of healthcare payers by 2024.

Increased demand and opportunities for digital transformation in the near future

The challenges faced by U.S. healthcare private and group payers present opportunities for technology vendors to provide digital solutions and services for payers to meet both the regulatory requirements and consumers' digital experience expectations. Client engagement types will vary by payer size, as many large payers only require specific solution design and implementation within their existing systems, while many mid-market and regional plans will be looking for BPaaS models of engagement with technology vendors. Payers will be looking for digital solutions to provide personalized real-time quotes for procedures and later for bundled pricing by the treatment plan and expanded data sharing to enable price transparency initiatives.

Digital front doors and transparency a new normal for healthcare?

U.S. healthcare is no stranger to an environment of continuous change and has not been spared the effects of the COVID-19 global pandemic in 2020. The unique circumstances born from the need for social distancing during the pandemic have accelerated healthcare consumers' demands for digital transformation. The ask comes from all healthcare continuum vantage points – patients, providers, payers, and vendors. Healthcare must change its practices to allow for more seamless digital interactions to meet these demands.

As with other service industry sectors, healthcare consumers want the option to access their health services virtually – evidenced by an increase from an 11% utilization of virtual visits in 2019 to over 45% in 2020. Some larger health systems have made this transition without significant challenges, expanding telehealth contracts, and receiving service reimbursements for both commercial and federally funded insurance types. However, many providers were faced with the decision to either suspend their practice or invest in digital platforms or services to offer virtual visits. Cognizant's Core Admin Solutions support providers' internal processes to offer telehealth and payers and providers in efficiently & quickly submitting process associated claims and authorizations via Trizetto's Touchless Authorization Processing (TTAP). The demand for telehealth has become an independent demand from the initial catalyst of social isolation and continues to be at the forefront of patient expectations. Even the senior population is thought to have few barriers to accessing virtual care, with 84% of sampled senior consumers stating they do not have any technical challenges in attending a virtual appointment with their doctor. With the remote operation of the doctor's visit comes the corresponding demand for total digital transformation; payment processing, e-prescription writing, prescription home delivery, and remote patient monitoring. Multi-faceted companies, like Cognizant, offer a variety of bundled or unbundled services and platforms to help healthcare providers and payers address the increased demands for digital interactions. This new digitization is also thought to reduce costs by increasing care coordination, administration, and manufacturing efficiency.

Providers and Payers are finding that digital products also offer the opportunity to clinically manage their patients and members remotely, with IoT, remote monitoring devices, and health wearables. The consumer can utilize various devices, measuring vitals, health coaching through AI, and tracking other metrics related to health risk factors. 65% of consumers utilize some type of wearable. With this percentage of adoption and available data, providers and payers have an exciting opportunity to address their patients' and members' health outside of the doctor's office. Vendors offer bundled platforms or paired digital services to collect, aggregate, and analyze the patient/member data to facilitate care management efforts by both their clinicians and their health plans. Though this digitization also requires a financial investment from the organizations, the vendors promise a visible ROI in cost savings and improved health outcomes.  

Driving the transformation

Regulatory bodies have been pushing healthcare providers and payers towards a digital transformation, most recently with the ONC Cure's Act Final Rule. The rule was created to increase interoperability and access to consumer's own health information. Though the rule pushes providers and payers towards the shared goal of an enhanced patient experience, compliance with these requirements will come at a cost. By 2021 payers will be required to allow consumers access to all their claims and health information and to develop APIs to share data with other organizations and regulatory bodies. Though the compliance will be a financial investment for providers and payers, vendors such as Cognizant can implement or offer platforms to achieve such price transparency.

The Centers for Medicare and Medicaid Services (CMS) has similarly taken steps to guide providers and payers towards a better patient experience. In the 2021 Medicare Advantage Final Rule, CMS announced a change to its CMS Star Ratings measures, increasing the weight of the patient experience metrics. Payers must now invest more heavily in their consumer requirements – digital transformation to achieve an end-user-friendly suite of digital platforms. Cognizant addresses another of these drivers by offering several applications and platforms that facilitate both back-end processes and consumer-facing platforms in assisting payers in meeting heightened digital demands from their consumers. Cognizant's continued investment in Trizetto products offers payers such an opportunity for an enhanced user experience with an automated enrollment platform. Such an offering would make a payer more attractive in the upcoming Medicare Advantage and ACA Marketplace OEP (open enrollment period).

Healthcare organizations are also feeling the pressure for change from InsurTech companies and their partnerships with healthcare providers. These initiatives are attracting members and patients with their omni-channel user interfaces and strategic focus on digital platforms and processes.

Product Suites to Achieve the New Normal

Amongst Cognizant's comprehensive suite of product offerings, their digital healthcare platforms and services support over 200 million lives in the U.S. Payers and providers alike have the option to select a la carte products or bundled services to meet the changing regulatory requirements and evolving demands of their consumer and patient bases. Cognizant continues to exact leadership and be forward-thinking in its current and planned digital transformation offerings and continued investment in Trizetto Healthcare Products ($100m):

• Core Payer and TPA admin solutions, for claims processing and management
• Payer-provider solutions, for facilitating contract pricing and modeling and payment administration. Cognizant has planned offerings for onboarding and credentialing
• Government and Quality Solutions, for enrollment and encounter data management, and support of quality rating measures and reporting. Cognizant is planning offerings for enhanced care coordination
• Care Solutions, for clinical and utilization management and value-based benefits. Cognizant is planning offerings for for automated authorization and referral management
• Data orchestration SoE solutions for data aggregation and engagement. Planned offerings include additional integration and analytics for interoperability.

While Cognizant, and other vendors, offer a wealth of products and platforms for health systems and payers, for many the financial investment required has been a barrier. But COVID-19 is having an impact, in spite of an estimated four-month loss of $202.6bn for hospitals and health systems in the U.S. Every U.S. health system recently interviewed by NelsonHall regarded digital transformation as more important as a result of COVID-19, with increased investments planned in SaaS and cloud infrastructure. Overall, hospitals & health systems in the U.S. have shortened their planning horizons to address short-term priorities and investments. One major healthcare system stated that their planning horizon was now weeks rather than years. The same reduction in planning horizon is also evident in healthcare payers, but here with a need for customer retention combined with a much stronger emphasis on cost control.

As is true in other sectors, the pandemic will likely increase the acceleration of digital transformation initiatives across healthcare, with a clear focus on achieving short-term results (rather than in years), producing very immediate improvements in both productivity and customer experience.

NelsonHall recently attended the SE2 Partnership Forum, entitled ‘Future-proof: From Here to Digital’, in Washington D.C., where the main focal point of discussion was the challenge of digital transformation in the life insurance and annuity sector.

Here I look at a number of developments in SE2’s offerings that are helping clients to address the challenge of digital transformation.

Digital consumer experience

SE2 offers multi-channel consumer engagement, deploying chatbots (or ‘roboadvisors’) to optimize the customer experience, including an interactive messenger with cognitive capability. It also uses machine learning and analytics.

SE2 uses Alexa to provide self-service capabilities, whereby customers can use voice activation to request policy details, change premium schedules, and receive dedicated virtual assistance and offers on new products and plans. As well as increasing personalization and improving the customer experience, this also increases cross-sell and upsell opportunities.

For digital content delivery, SE2 uses Broadridge, which encompasses three areas:

• Experience management: replacing static documents and emails with dynamic, personalized and relevant digital communications
• Omni-channel communications: delivered to traditional electronic channels (email/SMS) and to personalized cloud solutions and online banking interfaces
• Data and analytics: offering improved digital adoption, enabling customers to set digital preferences.

SE2’s digital content delivery improves the customer experience, helps reinforce value propositions and promote new products, and goes beyond email with new digital channels. It allows clients to select preferred communication channels, offers a network of insurance brands that help drive digital adoption, and enables continuous improvement via robust analytics.

Digital Direct Life platform

The Digital Direct Life platform provides an enhanced, responsive UX and includes configurable eApp, Questions for D2C, and Agent Assisted Apps. Its Open Integration Architecture with OOB connectivity to major third-party providers includes vendors used for gathering evidence in life underwriting (MIB, MVR, Rx, etc.) and medical vendors (Lab, APS, etc.). It has a notification center with continuous multi-channel updates that enables self-service and integration with UW platforms using industry standards (ACORD) for automated and manual UW connected to a multi-channel payment gateway.

The platform uses Automated Underwriting (AU) with Electronic Health Records (EHR), with advanced techniques like Application Triage Algorithms, to achieve automated application decisions without any manual review in 75% of cases. This reduces underwriting time from the current 30-45 days to near immediate delivery, with the cost reduced from $400 to less than $50.

AU with EHR provides a single point for collection, consolidation, text mining, and reporting of EHR data, helps distribution channels close leads faster, helps insurers improve customer experience, increases revenues, and reduces cost. It also makes health and wealth management seamless, bypassing invasive underwriting procedures involving lab work (e.g. blood testing).

Improving speed to market

SE2 has applied the following technology enhancements to enable clients to improve their speed to market:

• A template-driven responsive website offers optimized web experience. Self-service administration toolsets are presented on a responsive web design pattern that is device agnostic and comes with a notification center
• Digital integration platform, which provides client-centric business services delivered with a scalable business integration architecture. The open architecture leverages industry standards across internal and external partner ecosystems, leveraging Mulesoft, ActiveMQ, and Informatica
• Enterprise output framework, a real-time framework enabled for scheduled transactions, with consistent template management utilizing the carrier’s branding. Its Output Manager manages on-premise and offsite print and mail capability, and also provides enhanced audit and compliance across the print and delivery lifecycle, along with integration with partner channels like Broadridge for e-delivery
• An actuary engine (from Accenture) provides a configuration-driven product rule engine that allows granular configuration of transactions and scheduled events. A modern UI controlled by a security layer and seamless integration with the SE2 annuity Policy Administration System (PAS) reduces the effort to implement product rule changes.

Future proofing initiatives

SE2 is also involved in a number of initiatives with the aim of providing ‘future-proof’ life & annuities capabilities for its clients, including:

• Blockchain. SE2 is on the LIMRA Blockchain Advisory Board, and indicates that there is a consensus among carriers on the positive impact of Blockchain, evaluating technologies and conducting POCs that require industry-wide collaboration. Leveraging learnings from other industries, including P&C insurance, and identifying potential use cases for industry-wide solutions helps improve peer-to-peer settlement in Blockchains. Benefits are derived in the form of increased transparency, accurate tracking, permanent ledger, and cost reduction
• Virtual and augmented reality that enhances the user experience with richer content, provides real-time information enmeshing of real and virtual worlds, training and advocacy to increase effectiveness and efficiency, and design visualization for heightened experience and insights
• Insight-driven analytics (from DataRobot). Along with its partners, SE2 is helping its clients achieve state-of-the-art in life underwriting by combining the power of predictive analytics with the SE2 platform. Insights derived from the SE2 platform are augmented with third-party data (e.g. from MIB, MVR, Rx, and APS) to create an analytics partner ecosystem operating as a one-stop shop, with annuity and life analytics driving decisioning, and advanced technology using a data lake and machine learning.

Summary

The global life insurance market is being transformed rapidly due to the increased adoption of digital solutions, providing opportunities for life companies to gain competitive advantage by responding quickly to changing market forces, consumer needs and preferences.

SE2’s deep domain experience and commitment to digital transformation are key strengths in this market. The company backs its own investments by partnering with startups to reduce speed to market and provide greater efficiencies. SE2’s strategy to develop world-class digital life insurance solutions recognizes the power of both innovation and collaboration in realizing this goal.