If you prefer the reading experience ofMedium you can follow us there as well.
Part 1: Implications for Payers
It is no secret that there is an incredible consolidation in the healthcare payer space. There is a prevailing wisdom that the ACA (Obamacare) has fueled this activity. Others, including former Obama administration adviser Steve Rattner claim that consolidation began with the depression of 2008. Regardless of when it started, the extreme to which these mergers and acquisitions have occurred are both eye-opening and making us give thought to their implications. Deals of the magnitude of Anthem-Cigna and Humana-Aetna would have had regulators reeling decades ago.
Given how data-intense the payer industry is, one can imagine how it plays out in the process of consolidation as well as afterward. IT issues involved in payer mergers and acquisitions have been examined from the perspectives of IT considerations during the process itself and even effects of IT on the value of the consolidation. IT considerations by all parties concerned in these deals need to be on the front burner. Of utmost importance is systems integration. There will be better IT resources and/or processes from one side, but this is rarely an all or nothing scenario. Almost always there is a necessary melding of the best practices of both parties. After a thorough inventory assessment of resources (both technical and human), a seamless transitional implementation needs to occur. Checks and balances of technical processes need to occur to avoid gaps in data acquisition and management along all service lines, internal and external.
Transparent, fluid, and timely communication among executives, analysts and technicians is critical. Teams on both sides need to work together. Quality process and technical controls are necessary at every step.
Regulatory constraints will limit types of processes in place prior to full integration. A high quality third party vendor can be critical in this type of project management.
Financial data systems, internal operational systems, and partnering external peripheral operational systems need to be considered. Specifically, changes are necessary in IT utilized in enrolling new patients, billing, designing new comprehensive patient portals, and platforms for pharma and providers. Michael Bernstein, a partner with Baird Capital’s private equity team believes that payer consolidation will lead to a ripple effect consolidation in the technology sector supporting payers. We submit that smart technology, whether it is provided by a small or large company will not only weather the storm but flourish. An illustration of such an application is illustrated in this case study which demonstrates complex data migration.
Not lost in this entire process are the issues of privacy and security. The controlled chaos involved in such activity lends itself to both privacy and security breaches. During the merger process, a third party application or management might be considered.
This scenario also begs the question “How do we easily locate all business practice documents?” Having supporting IT to facilitate the evaluation of business processes is critical from efficiency and workflow standpoints.
In the next installment on this subject, coming up on our blog on Thursday, next week, we will discuss the implications of IT on other healthcare stakeholders in the area of business consolidation.
and don’t miss the follow-up article titled “Five Services via Technologies Payers Should Provide“!
Director of Client Engagements