What happens when public and private exchanges come together?

Change is literally in the air for health insurance carriers – in the form of cloud-based computing technology. One industry expert urged national and regional industry players alike to embrace these tools, as well as tremendous growth opportunities in the HIX marketplace.

Eugene Sayan, a principal with Softheon, believes there will be a convergence of public and private exchanges, suggesting that carriers adopt a more holistic approach and consider multiple retail channels to distribute their products as part of a multi-carrier approach or alliances such as those seen within the CO-OP market.

In a webinar produced by America’s Health Insurance Plans, he described Healthcare.gov as “the Costco” of HIX platforms, but stressed other avenues, including the role of Web-based entities, to help enroll people online and fill voids created by government budget shortfalls.

Softheon projects about 75 million people will receive their health insurance through all types of exchanges over the next five years, with Sayan characterizing Accenture’s bullish forecast of more than 40 million lives in private HIXs as a conservative estimate.

“There is a massive shift toward the private exchanges,” he said, referencing several blue-chip employers as leading the way and departing from high-cost legacy health plans. The trend will be largely driven by compliance with the 40% excise tax on Cadillac-style plans slated to take effect in 2018 as well as immigration reform, according to Sayan.

The more than 300 health plans that currently participate in the public exchanges is still a small percentage of all such plans offered across the U.S., he noted. But with sweeping changes expected across the traditional health insurance market and historically low consumer engagement, Sayan addressed the importance of carriers mining new revenue sources and improving customer satisfaction.

He identified Oscar Health as the most serious carrier competition, noting the startup’s $1 billion market valuation and $150 million raised by venture capitalists. The company, which features only about 100 young entrepreneurs, plans to expand its IT platform into several major metropolitan areas, according to Sayan.

Amid this backdrop, carriers will be forced to embrace change, as well as new technologies, and operate in a more agile or nimble fashion. “The adoption of cloud [technology] has been a game-changer,” he said, noting the app’s compelling fit for health insurance enrollment and scalability.

Mobile engagement also is expected to grow. For example, Sayan noted that 81% of consumers browse the Internet on their mobile devices, 77% use a search engine, 63% access a social network and 48% watch a video.

“We need to adapt to true mobile platforms,” he said, noting the power of that app for encouraging timely payments. “A simple pop-up on someone’s mobile phone will be a 100 times more effective than sending all the letters you want in the world that they won’t even open or read, especially when you’re dealing with a younger demographic.”

He referenced a trend to “Uberize” health insurance with brokers – an ability to connect consumers with brokers in their neighborhood. The trouble is that brokers view carrier efforts online as a threat. “It takes 10 phone calls for brokers to set up three appointments and to close one sale,” Sayan said. He urged carriers to engage brokers in the process so that both entities are working in partnership toward growing their respective businesses.

The current system is not sustainable without technology innovation, he said, adding: “I think it’s a great time to be in the health care space and very rapidly changing landscape.”

In the wake of massive and sophisticated data breaches at Anthem, Premera Blue Cross and other health insurers, Sayan suggested it’s imperative to determine whether exchanges have put in place the “proper operational infrastructure.”

It’s also critical that real-time systems are used given the timely nature of health care transactions in a data-driven business, he explained. That means quickly issuing patient ID cards and allowing for immediate payments. In light of these issues, Sayan encouraged carriers to invest in three critical elements of cloud computing. They include business process management, enterprise messaging and service-oriented architecture for IT assets that is updated nightly and an important step toward guaranteeing consumer satisfaction.

Softheon is well-positioned to observe these industry changes. The company oversaw enrollment, call-center operations, premium billing and other aspects of Massachusetts Health Connector, the nation’s first HIX platform. It also has assisted more than 50 health plans with the specific needs or requirements of their exchange operations, enrolling more than 1 million lives and processing $500,000 million in premium payments during the past 18 months or so.

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