Healthcare Reform In Effect, IT In Demand

By Ken Congdon, editor in chief, Health IT Outcomes

A week ago today, the first key provisions of the new U.S. healthcare law went into effect. These initiatives are geared toward opening up the healthcare market to more consumers, while restricting the ability of insurance companies to sift out many high-risk clients. These provisions include:

• Eliminating lifetime limits on the dollar amount to be paid out by insurance companies for essential care. Existing limits are to be phased out over time.
• Prohibiting insurance companies from dropping policyholders because of illness, or for any reason other than fraud.
• Prohibiting insurers from denying coverage to children because of preexisting conditions.
• Enabling parents to keep adult children on their plans until age 26 if the child isn't offered coverage through an employer.
• Eliminating co-payments and deductibles for many preventative procedures such as immunizations, mammograms and colonoscopies.

Changes imposed by the patient Protection and Affordable Care Act won't be immediate for most consumers. Instead, they will take effect when a consumer buys a new policy or renews an existing one. Nevertheless, insurance companies across the country are scrambling to comply with these new provisions, and many payers are concerned with the impact these rules will have on their businesses and U.S. healthcare as a whole. Namely, health insurers warn that extending new protections and coverage options to the public will lead to higher premiums for all consumers. Furthermore, many insurers fear bankruptcy as a result of not having the power to choose their policyholders.

Automating Paper Processes Is Key For Payers To Stay Competitive
Reducing administrative overhead and repetitive processes will be instrumental in helping many insurers survive or thrive in this new reformed landscape — and technology will play a key role in providing these efficiencies. Document capture and workflow automation technologies (e.g. document imaging and management software, document scanners, data capture/extraction/classification software, e-forms/forms processing software, barcode solutions, records management and compliance solutions, workflow/business process management software, etc.) should top the list of potential investments for health insurers in the coming year. Leveraging EDI (electronic data interchange) where appropriate can also be beneficial.

Few industries are more paper-intensive than the health insurance industry and any steps an insurer can take to eliminate manual data entry and routing, and paper filing and retrieval, will go a long way toward cutting costs and optimizing productivity. Both of these benefits will be crucial in helping payers process more claims with the same (or fewer) staff.

While these and other IT investments will be necessary for many insurance companies to succeed in the reform era. These investments must be carefully managed to ensure these expenses don't prove to contribute to undoing of the financial stability of the organization. Expanding IT investments in line with the ROI initial projects produce is the best way to ensure this doesn't occur. This also requires the organization to map out a specific ROI strategy for all IT investments. Finally, insurers will need to uncover new ways to work closely with hospitals and doctors to improve the quality of care while containing costs. This includes, but is not limited to, tying into a hospital's EHR and PHR initiatives.

Ken Congdon is Editor In Chief of Health IT Outcomes. He can be reached at ken.congdon@jamesonpublishing.com.