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The Pace of Industry Disruption Drives Need for Next-Generation Healthcare Payer Solutions

Recently, we met with health plan business and technology leaders to discuss trends in the healthcare industry, and the strategies they’re using to stay on top of consumer expectations and regulatory demands. Two key themes emerged: the pace of disruptive forces is rapidly increasing, which is, in turn, increasing the urgency for health plans to move to modern technology.

Some of the market forces shaping health plans’ priorities include:

  1. Retail experiences shape consumer buying behaviors. Consumers expect a digital experience like online shopping and prefer healthcare services that provide virtual scheduling, services, and information access. They’re also looking for access to comprehensive information about healthcare quality and prices.
  2. New entrants in healthcare bring innovation and enhanced services that elevate consumer expectations. New entrants in healthcare, including consumer-focused retailers, startups, and innovative care models, use digital technologies to improve the patient experience and fill gaps in the current medical infrastructure. They encourage innovation in care delivery and refine the consumer experience while bringing increased competition.
  3. Growing participation in Medicare Advantage and individual marketplaces. Medicare Advantage enrollment increased steadily over the past two years, with over half of the eligible Medicare population opting for coverage. In 2022, the average MA beneficiary had access to 39 plans. The individual marketplaces have also seen insurers expanding their service areas, with the Accountable Care Act marketplace reporting over $16M members and an average of five insurers per state.
  4. Regulation requirements evolve quickly, now with penalties. Healthcare regulations in the U.S. are constantly changing due to legislative mandates, administrative updates, and market trends. These changes make it challenging for health plans to keep up and result in increasing fines for non-compliance. While regulations aim to improve health coverage, consumer demands increase competition and require adaptation costs for health plans.
  5. Availability of data and maturing interoperability standards. The CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F) set specific API requirements that help improve access to health records for patients, providers, and payers. This enhances data sharing, improves care quality, and increases competition among health plans. However, achieving interoperability is complex due to differences in data standard implementation in legacy platforms, which slows down progress toward compliance.

HealthEdge Accelerates the Journey to Becoming a Digital Payer and Achieving Transformational Outcomes

Our conversations with healthcare leaders focused on solutions and opportunities amid mounting industry disruption. Many payers are already unlocking transformational outcomes through HealthEdge solutions, anchored by its modern Core Administrative Processing System (CAPS), HealthRules® Payer.

Recently, CAPS modernization has surged to the forefront of funding priorities. In 2023, 59% of payers prioritize allocating resources to CAPS, a significant leap from the 17% reported in 20221. This shift underscores the urgency and strategic importance of enhancing consumer experiences and streamlining operations. Here are a few examples of how health plan leaders benefit from HealthEdge solutions to support their digital payer journeys:

1. Remaining agile, adaptable, and accurate in an ever-evolving regulatory landscape. HealthRules Payer addresses the rapidly evolving regulatory landscape by enabling health plans to adjust claims processing rules or modify payment protocols quickly and easily to ensure timely compliance. When regulations are updated retroactively, HealthRules Payer facilitates revisiting claims, ensuring compliance, and making necessary adjustments.

HealthRules Payer helped our Medicaid group transition from a legacy platform where auto adjudication was significantly lower. Using the English-based configuration rules allows us to make significant changes relatively quickly and, as a result, improve auto adjudication and ultimately improve payment accuracy by eliminating the human factor in determining what needs to happen with a claim.”

Senior Vice President of Medicaid Operations at National Health Plan

2. Enabling automation and accuracy at the core of every process and workflow. The evolution of health insurance technology moved from initial integrated systems—which aimed for functionality consolidation but struggled with adaptability—to a best-of-breed approach that adopted specialized software, offering greater expertise and flexibility. However, this approach led to challenges integrating care management software and claims processing due to siloed functions, complex integration, and vendor fragmentation.

Today, health plans look to modern solutions that offer the efficiency of specialized applications and the seamless integration of a single vendor’s ecosystem, providing key advantages such as controlled integration. As the HealthEdge solution portfolio races toward integrated end-to-end solutions, barriers are coming down. This is allowing health plans to take full advantage of a best-of-breed approach while benefiting from a cohesive ecosystem. In addition to productized integrations between HealthEdge solutions—HealthRules Payer, HealthEdge Source™ payment integrity platform, GuidingCare® care management platform, and the Wellframe member experience platform—HealthEdge products themselves support an integrated end-to-end approach with numerous modules that are purpose-built.

“We outperformed our commercial platform within several months. Our Medicare business has been on a steady climb. When we launched it, we were expecting an auto adjudication rate of about 50%. But at the start, we actually hit 65% and very quickly got up to 82% or 83%, where we are right now. Our end users have grown, and we currently have over three million members on the platform.”

Executive Director, Product Management and Development, National Health Plan

3. Improving payer-provider collaboration on healthcare administrative spending and waste.  In 2020, health spending in the United States reached approximately 20% of the country’s gross domestic product. However, at least half of administrative spending is deemed wasteful. Collaborative efforts between payers and providers are essential to healthcare payment integrity and optimizing revenue cycles.

HealthEdge’s technology fosters collaboration and efficiency while addressing fraud and waste in healthcare. HealthRules Payer empowers health plans by streamlining administrative processes, enhancing efficiency, and ensuring accuracy. At the same time, Source revolutionizes claim payment through proactive business intelligence that prevents improper payments, saves time, and minimizes recovery efforts. With AI-enabled fraud detection, HealthEdge’s capabilities combat fraudulent claims, safeguard payer resources, and improve care outcomes.

“The health plan value proposition is losing, and the provider value proposition is being threatened by new entrants. Companies are either acquiring or incubating digitally focused healthcare start-ups or monetizing existing health plan platforms (analytics, claims processing, care management, sales, and marketing) by selling them as a service to other payers or into the emerging risk-bearing provider market. The demand for integrated end-to-end advanced automation across traditional payer and provider functions enables automation and accuracy at the core of every process and workflow.”

Leading Industry Analyst of Payer IT Strategies

4. Market expansion to beat the competition. The health insurance landscape in 2024 has significantly transformed, with new market expansion driving competition and growth. Providers have adapted to changing consumer preferences and the evolving competitive landscape. In this new consumer-focused era, health plans must appeal to diverse populations with unique needs, requiring flexibility and quick decision-making. With 62% of health plan leaders investing in digital transformation, modern systems such as HealthRules Payer are critical for supporting growth plans. To meet the demands of this new market paradigm, payers leverage modern technology in key areas like rapid benefit package creation, digital care management, and ASO arrangements.

“We use technology to solve the problems that you’ve had to solve for the past 30 years differently so you can go to market faster. So you can get to trends faster. So you can win new business faster.”

Alan Stein, Chief Product & Strategy Officer, HealthEdge

5. Managing and supporting Value-Based Care (VBC): The healthcare industry has shifted from a fee-for-service model to VBC, which aligns the interests of patients, providers, and payers by introducing financial incentives for healthcare providers to ensure patients stay healthy. As of 2023, 90% of CMS payments are linked to value, with 40% flowing through alternative payment models. However, fee-for-service arrangements persist. Many legacy systems cannot support this transformation, so the move to software solutions such as HealthRules Payer, which can support value-based care, is essential.

“Being a digital health plan for Highmark’s Medicaid segment means we are no longer in the era of calling our members between the hours of 9 and 5. They want to interact with us on their terms when they are available, whether through apps, portals, or web content. We have to meet the members where they want to be met. Highmark’s Medicaid members are looking for the Amazon experience. They want it simple.”

Senior Vice President of Medicaid Operations, National Health Plan

6. Exceeding member engagement expectations by providing a digital healthcare experience. Today’s healthcare consumers expect convenient and engaging experiences from their health plans. Therefore, payer leaders must adapt by offering self-service mobile tools and greater pricing transparency. Regulatory developments like the Transparency in Coverage Act and CMS’ Star Ratings changes emphasize the need for a strong focus on member experience.

In fact, two recent studies (the 2023 Consumer Satisfaction Survey of nearly 3,000 healthcare consumers and the 2024 HealthEdge Annual Market Report of 350+ health plan leaders) speak to this urgent need to focus on the member experience. Consumers expect health plans to leverage social determinants of health (SDOH) data to deliver more personalized services relative to their experiences. Customer service and self-service tools have emerged as top satisfaction enablers, along with a plan’s ability to adhere to members’ communication preferences.

“As a consumer, I focus on things that are important to me. When I am trying to order prescriptions or looking at lab results, what I would expect as a consumer is to have the right price, the right information about my quality of care, my claims, and my out-of-pocket expenses. Consumers feel the same way. It’s important that we give our members the same type of transformation to have access to a lot of good information, timely information, and quality information at their fingertips. We use HealthRules Payer, agile applications, and our network providers to make sure that the product is not only timely but also accurate.”

Vice President of Operations, Regional Health Plan

The Road to Becoming a Digital Payer

Digital transformation is a marathon, not a sprint. The critical steps in the change management and implementation process include:

  • Defining Success: Clearly outline your goals and objectives.
  • Plan and Prepare: Strategize and lay the groundwork.
  • Design for the Future State: Create solutions that align with your vision.
  • Build According to the Plan: Execute your strategy.
  • Monitor KPIs: Track how you’re measuring against key performance indicators.
  • Optimize and Customize: Continuously improve and adapt.

By automating business workflows and seamlessly exchanging data in real-time across the ecosystem, health plans deliver improved member experiences, increased quality, greater business transparency, ever-reducing transaction costs, and increased service levels. Through collaboration such as HealthEdge’s Leadership Forum, the company and health plan leaders are teaming up to ensure a path to success.

To learn more about how HealthEdge solutions can support an integrated end-to-end approach to your enterprise, visit