DALLAS, March 6, 2020 /PRNewswire-PRWeb/ -- BigTech is stepping into the healthcare arena armed with a technological advantage and an ability to help healthcare payers improve their meager margins, which traditionally hover around 2 to 4%. According to Everest Group, payers are primarily utilizing the solutions and products of BigTechs to improve their member experience and operational processes, with care management being the primary area of focus.
BigTechs are helping payers to improve their customer-facing platforms, leverage chatbots to handle customer traffic, and have better access to members' health data – leading to better customer experience and business growth. Payers are also using automation solutions (such as automated claims management services) from these firms to enhance their operational efficiencies and reduce cost.
Payers are currently investing $22.8 billion in the IT services (ITS) market, with 21% devoted to digital platforms and technologies. Everest Group predicts $32.2 billion in ITS spending by healthcare payers (a 5.9% increase) by 2025, with a 13.8% increase in spending on digital as compared to a 3.2% increase in traditional IT services.
"BigTechs such as Amazon, Apple, Facebook, and Google already have a track record of disrupting major industries such as retail and telecommunications," said Nitish Mittal, vice president, Technology, at Everest Group. "These technology giants are now invading the healthcare payer industry – with many already making/announcing significant investments for transforming the industry.
"The healthcare industry makes an attractive target for BigTech," continued Mittal. "Healthcare is one of the biggest industries in the U.S., expected to account for 19.4% of the GDP by 2022, and it is notorious for its rampantly rising costs and poor performance on quality indicators. The BigTech companies bring their data analytics expertise, customer-centric digital solutions, agility and consumer-trusted brands—all of which can be leveraged to improve care management and every other stage of the payer value chain, from product development to policy servicing and from IT infrastructure to claims management and business processes."
Everest Group explores the potential implications of BigTech's investments in the healthcare industry in its recently published report, Healthcare Payer State of the Market – Trends, Service Provider Performance in 2019, and Outlook for 2020. The report examines the global 2019 healthcare Information Technology Services (ITS) service provider landscape and covers themes expected to garner greater interest in 2020, including the following:
- Shift to value-based care (rather than fee-for-service): Employers, health plans, and government purchasers of healthcare are pushing for a transition to value- based payment models. The premise of this shift is to align physician, hospital, lab, doctor, and nurse incentives with health outcomes of their patients and the quality of services rendered.
- Broadening role of healthcare payers: The healthcare landscape in the US is witnessing a convergence between payers and providers, with multiple collaborations in the form of mergers and acquisitions, joint ventures, strategic alliances, etc. This convergence is critical to succeed in the value-based care model as collaboration between health plans and providers leads to efficient data sharing, higher accountability and transparency, better outcomes, lower costs, and improved patient experience.
- Data monetization: The healthcare industry's ever-growing repository of untapped data both from clinical and non-clinical sources may finally be a part of monetization use cases in the near future. The emergence of a data exchange platform is likely to spur revenue generation for companies holding data assets. At the same time, healthcare companies, researchers, and innovators may begin to realize improved innovation with requisite data up for purchase through data exchange platforms.
- Cloud adoption: A sharp increase in affinity for cloud platforms is evident in the payer IT spectrum. Cloud platforms with built-in next generation tools enable payers to efficiently manage data and run analytics on claims and care data. Keeping the converging healthcare landscape in mind, the use of cloud-based platforms for management of disparate data sources allows for seamless collaboration across multiple stakeholders.
- Rising consumerism: Regulatory policies are pushing for increased price transparency (such as the "transparency in coverage" rule that requires payers to disclose cost and price sharing information to participants). These policies and evolving customer expectations have put out a message for the payers to adopt technological solutions in order to improve customer experience at every touchpoint starting from the enrollment of a member. Payers will seek to adopt artificial intelligence (AI) based chatbots, voice assistants, and other customer experience enhancement technologies in order to fulfill expectations while keeping costs in check.
- Evolution of payer core administration platform: A modular approach for core administration platforms is taking the front seat due to lack of success of completely integrated end-to-end solutions. Enterprises are leaning toward a modular approach rather than rip-and-replace solutions in order to improve time-to-market and to preserve the ability to tweak as per their own requirements.
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About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, and sourcing. We are trusted advisors to senior executives of leading enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empowers clients to improve organizational efficiency, effectiveness, agility and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-solving skills and original research. Details and in-depth content are available at http://www.everestgrp.com.
SOURCE Everest Group
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