Challenges Three principal regulatory currents are producing the impending change for Health Insurance:
The recently passed federal health care reform bill,
New health care IT mandates from last year’s US stimulus package, and
ICD-10, an expansion of coding standards for the exchange of health care data across payers and providers.
Each of these forces will alter the way health care payers deliver services to patients and process the large flows of payments at the heart of the business. McKinsey Quarterly: The new IT landscape for health insurers, August 2010 https://www.mckinseyquarterly.com/Health_Care/Strategy_Analysis/The_new_IT_landscape_for_health_insurers_2645?gp=1
The legislation anticipates 30 million new individuals will join insurance rolls, while an additional 100 million will be shifting policies. The law will usher in a fundamental change to the industry’s business model. Today, payers mostly follow a business-to-business model: 90 percent of all private policies are paid for by employers that negotiate prices and terms of coverage. The recent legislation mandates new insurance exchanges, subsidies, and tax credits that will lead millions of consumers to contract directly with the health insurance payers. These companies will need to develop new consumer-marketing capabilities and consumer IT on a large scale—for instance, advanced Web capabilities, insurance exchange connectors, and customer-relationship-management (CRM) systems. The new legislation also mandates dramatic changes to risk pooling and pricing.
Starting in 2011, the ARRA will provide $37 billion to hospitals and physicians making “meaningful use” of electronic health records, with penalties for those failing to do so by 2015. Much is at stake for payers as well with the advent of extensive electronic health records. … the payers’ will need to build substantial new systems that can readily interface with health information exchanges and analyze electronic health records. Using advanced analytics, payers can ensure that their networks use only medically proven and cost-effective treatments.
ICD-10 … will replace ICD-9 and expand the available number of medical codes by a factor of eight. This change will enable a much more detailed description of diagnoses and treatments. While ICD-10 promises to improve the accuracy of medical management and claims, its adoption will force payers to undertake an effort likely to exceed that of the Y2K campaignas they expand the fields in their databases and support the new coding structure. ICD-10 will require payers to upgrade most of their existing IT applications, including those for adjudicating claims, managing medical cases, contracting with providers, preventing fraud, billing customers, and paying providers.
Must keep selling and servicing existing business
Reform vs. Y2K Legislated date Impacts data and operations New players w/ data networks Complex definition of solution New customers New rules for customer interfaces New and more complex coding schemes Standards for data and interchanges are evolving Calendar date Impacted primarily data Almost no change in players Simple definition of solution: Recognize correct century For reform it is: September 2010 For Y2K is was: December 2006
Staffing PMO Executive Currently reports to a “C” level executive Access across the corporation Sensitive to the corporate culture; knows how to get things done here
Staffing Regulatory & Standards Currently reports to a “C” level executive Access across Legal, Compliance, Regulatory Affairs, etc. Extensive regulatory and industry contacts “Knows the rules” and is effective in communicating what is required, why, and how it is different
Staffing PMO Central Knowledgeable in PMO processes; neutral point of view Effective communicator and integrator Communicates what is needed and obtains commitments to perform A good role for an “outsider” to provide neutrality and additional perspectives
Staffing Systems & Testing Currently reports to CIO Access across IT and related services Knowledgeable about current capabilities Committed to effective system and interface testing
Staffing Operations & Change Management Currently reports to COO Access across Operations Knowledgeable about current organization and processes Manages business process redesign and implementation
Next Steps: Identify the PMO Executive Initiate PMO staffing and planning Explore benefits of consulting support
Participated in EMR design and implementation planning
EMRnet blog and other healthcare social networking
Additional information and links are at: LinkedIn: http://www.linkedin.com/in/halamens Facebook: http://facebook.com/hal9007Twitter http://www.twitter.com/hal9007EMRnet (blog: electronic medical records): http://emrnet.wordpress.com/Hal Writes (blog: examples of my work): http://halwrite.wordpress.com/examples/ Email: firstname.lastname@example.org Cell: 424-242-5232 (Los Angeles)