Discovering Payer Healthcare IT Trends with EY-Parthenon
Payers play an important role in healthcare, and their strategies impact patients' and members' levels of health, costs of care, relationships with providers, and much more. For decades, KLAS has published research that has given insights into healthcare-provider organizations’ technology strategies and their utilization of IT solutions and services. Now, we have opportunities to bring in payers’ stories to draw a more complete picture of the healthcare market as a whole. For this reason, we are excited to partner with EY-Parthenon to examine payer IT strategies and trends more deeply.
This research comes at a time when the current market faces some turmoil from macroeconomic factors and industry trends. We have found that these challenges are directly affecting payers’ strategic priorities. To help bring some transparency to this space, EY-Parthenon and KLAS recently published our findings in the 2023 EY-Parthenon and KLAS Research Payer Tech Study. I’ll be going over a few of those findings below.
An Overview of the Market and Our Methodology
Our goal in doing this research was to help the industry better understand what issues are top of mind for payers, how payers plan to address those issues, and how technology helps payers achieve their goals. We know that over the last two years, the industry has seen higher-than-expected medical costs due to a rising demand for healthcare services that were postponed during the COVID-19 pandemic. Payer business models are also being disrupted as more employers move to self-funded models and provider incumbents are taking on more risks than what is typical in payer healthcare.
To gain the necessary insights, EY-Parthenon surveyed over 100 payer leaders, director level and above, from a variety of payer types and sizes. These included large national payers, regional for-profit and non-profit organizations, and third-party administrators (TPAs) and managed services organizations. We also included ‘new age’ or non-traditional payers, as well as some self-sponsored payer organizations. KLAS additionally interviewed 22 payer leaders.
Trends Covered: Two Main Sections
Readers can think of the insights in this report in two main parts. The first part covers payers’ overall strategies and the top-of-mind concerns they plan to address. For example, we see from the data that payers are becoming increasingly more cost-conscious. Over 70% of respondents said that cost optimization was a priority. That makes sense with the pressures payers face from increasing medical costs as post-pandemic elective procedures pick back up and payers see a larger number of bills coming through.
The second part covers how healthcare IT solutions play a role in supporting payers and the different solutions that payers are likely to invest in. For example, we're seeing more of an appetite from Medicare Advantage (MA) plans to invest in risk adjustment. Much of that is due to regulations being tougher and CMS scrutiny around risk adjustment rules.
We also dive into what factors influence decision making when payers are choosing between different Healthcare IT products or offerings. Some factors are considered table-stakes, while others are differentiators. We also touch upon AI and Gen AI and explore payers’ appetites for fitting this new advanced technology into their tech decks.
Why Read the Report? Insights for All Stakeholders
First and foremost, I recommend that payers read this report to understand how their competitors are functioning in this current market. For example, payers reading the report will see how the economy is impacting their market as a whole and that they’re not alone if they’re taking a more frugal approach. More importantly, though, they can also majorly benefit from learning about the different lines of business other payers are investing in and what areas they might want to look at more.
With the dynamic of US healthcare between payers and providers, providers should also be very interested in the findings of this report. In particular, the report’s data is great for larger healthcare organizations that have or are considering offering a health plan. We made sure to include data and insights on provider-sponsored health plans.
As for healthcare IT vendors, I recommend reading the report to understand the factors influencing payers’ technology decisions. We show, for example, the importance of pricing, integration, and external interoperability. It will help vendors see where their potential competition is coming from and how AI currently impacts the market.
Finally, investors can check out the report to see what innovations are coming down the pipeline that could be good for potential investments.
Join Us for a Webinar
If you’d like to learn more about the report and our findings, please join us for a webinar on Tuesday, December 12, 2024, at 11 a.m. MT or 1 p.m. ET. You can register here.
In the meantime, I recommend reading the report to learn more details about all the findings.