MOUNTAIN VIEW, Calif., Nov. 20, 2015 /PRNewswire/ -- Recent analysis from Frost & Sullivan's Health Insurance Information Technology: US Overview and Outlook, 2014-2020: Changing IT Priorities for Next Generation Health Plans (http://www.healthcareIT.frost.com) finds health insurers are actively deploying new types of information technology as a lever for needed improvements in operational efficiency and transformation to more consumer-focused business models.
If you are interested in more information on this study, please send an e-mail to Kayla Belcher, Corporate Communications, at kayla.belcher@frost.com.
The Affordable Care Act (ACA) has brought new regulatory and compliance obligations to the insurance industry, upending traditional business practices and changing established IT priorities. Furthermore, the pace and extent of industry change demands fresh approaches that require embracing cultural change on a wide scale.
In addition to ACA, key issues health insurers are grappling today with include:
As health insurers pivot to new market realities, IT will be at the center of enabling their transition to new business models dependent upon maximizing consumer engagement and containing financial risk. While total IT spending for the industry is expected to grow in line with premium growth, reflecting a surge of new covered lives due to ACA, Frost & Sullivan predicts the industry standard percentage of the total premium devoted to IT will not significantly increase overall due to growing margin pressures and the need to contain rising administrative costs.
"ACA is an overwhelmingly disruptive force for the U.S. healthcare system. Health insurance organizations will continue to respond by aggressively containing administrative costs including IT purchasing," explains Frost & Sullivan's Principal Connected Health Analyst, Nancy Fabozzi. "Significant shifts in how spending is allocated across IT market segments will force many vendors to develop new strategies and capabilities, particularly for consumer and analytics IT, which is imperative to remain competitive."
Frost & Sullivan predicts the U.S. Health Insurance IT market will grow at a compound annual growth rate of 5.5 percent between 2015 and 2020. While IT spending will increase overall, allocation of the spending will shift with less capital devoted to IT infrastructure and core administrative systems to more spending on analytics and consumer engagement solutions.
Thus, the allocation of spend among various health insurance IT segments will shift to focus on new business priorities arising from the shift to a direct-to-consumer model.
"IT spending priorities for the health insurance industry will increasingly focus on new tools for data analytics, consumer engagement, as well as population health and care management, especially building out new capabilities capable of improving communication and engagement with members, including mobile and real-time decision support," according to Fabozzi.
The drivers of this trend include greater consumer access to medical information via the Internet as well as the need for patients to take on increased financial responsibility for their healthcare costs; particularly with the rise of high-deductible health plans.
Thus, there is a strong uptick in incentives from payers, providers and employers designed to grow and build consumer health awareness, cultural shifts in attitudes about patients' right to access their personal health information, as well as the growing use of mobile devices and apps among consumers and healthcare providers alike.
Health Insurance Information Technology: US Overview and Outlook, 2014-2020: Changing IT Priorities for Next Generation Health Plans is part of the Connected Health (http://www.connectedhealth.frost.com) Growth Partnership Service program, which also includes research in the following markets: health information exchange, health data analytics, telehealth, emerging wireless technologies, acute care information systems, enterprise clinical information systems, and billing and revenue cycle management systems. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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Contact:
Kayla Belcher
Corporate Communications – North America
P: 210.247.2450
F: 210.348.1003
E: kayla.belcher@frost.com
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