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July 3, 2015

Obamacare Encourages Healthcare Players To Innovate

Posted by Sanjay Dalwani (View Profile | View All Posts) at 5:05 AM



Supreme Court gives Obamacare major victory [Source: https://www.youtube.com/watch?v=rFIHFeReCpc]

There was once a popular trend in the American presidential politics known as the Flat Tax. The idea was that the country's tax system had become so complicated that some of the candidates proposed one, flat tax for every taxpayer. Come tax time, the payer could fill out her taxes on a simple index card and mail it back to Washington. No accountants, no multiple tax forms, no bureaucracy.

That idea never took hold. In the tax system, that is. But the idea of universal healthcare more recently seeks to do for insurance what the Flat Tax would have done for taxation: Create a simple way to obtain and pay for universal healthcare coverage. That's a huge job, and it's easier said than done. But America has made its first bold steps towards a universal system that European and other major countries have enjoyed for decades.

With the Affordable Care Act, which is popularly known as Obamacare, everyone stands to gain some sort of simplicity when it comes to receiving quality medical coverage. For the Medicare crowd (the elderly) and the Medicaid populace (the ones who cannot afford to pay for insurance), the ACA is a boon. The groundbreaking legislation will see increased adoption of healthcare for both groups. And that's the idea - a country should be able to take care of its oldest and poorest citizens. Especially the richest country (by both earnings per capita and GDP) on earth.

But before we get there, take a look at some sobering statistics:According to federal data, the costliest one percent of patients (chronically ill patients without a support system) in the United States consume a whopping 20 percent of the country's spending on medical care. That's quite lopsided, to say the least. It gets even more interesting: A portion of the aforementioned crowd is referred to as 'dual eligibles' - a staggering 9.6 million people who qualify for both Medicare and Medicaid. In 2010, the Medicare fee-for-service program spent an average of US$ 19,418 on each of these patients compared to US$ 8,789 spent on other beneficiaries. By 2024, total annual spending on 'dual eligible' is projected to top US$ 775 billion, according to a PwC report.

So as Obamacare takes off, intermediaries and providers must be prepared to serve new volumes of additional members. According to latest statistics, since the ACA became a law, around 16.4 million people gained health insurance coverage. This expansion has prompted the development of cost-containment initiatives and a harmonization within the healthcare ecosystem - a lot of it by leveraging information technology. For example, healthcare providers and payers are looking at adopting innovative care models such as value-based reimbursement models and bundled payment models, which will enable them to provide integrated and affordable care. Here, healthcare information technology will play a critical role by supporting these new models and developing payment systems that are designed to improve quality, reduce costs, and enhance patient and member experiences. Let's take another example, a U.S customer service representative at a healthcare payer contact center typically has to access anywhere between two to 40 different systems to service member queries. This increases call service time, reduces CSR productivity, and also impacts member experience adversely. Healthcare payers can address this by adopting solutions that provide a 360 degree view of information and interactions from different systems on a single dashboard, enabling a representative to provide a more efficient service. Other key areas of IT-led innovation are in high-tech wearables and virtual care solutions, such as telemedicine to help identify and better manage high-cost patients. Without a doubt, the right information technology can quicken the process and ease the burden considerably.

Not surprisingly, Medicaid expansion and 'dual eligibles' have put forth several business challenges in front of the major players in the industry. Payers will need to develop a set of integrated IT and operational capabilities to support this new delivery model. Enterprises in this space should be asking themselves if their healthcare solutions support key functionalities, including eligibility determination for Medicaid renewals and notices for special enrollment. Like the Flat Tax, which sought to simplify taxes - the ACA is perhaps on its way to simplifying things too. But, it will take a little while longer. Enterprises that are equipped with the best healthcare IT will benefit immensely by cutting through all the red tape and being responsive to customer needs.

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