Aijaz Ahmed, principal technology architect at Infosys PRIME Services group, is serving as a contributing writer for Rajiv Sabharwal's blog.

There are many unanswered questions surrounding health care reform, but industry gurus are already chanting the mantra of “rising consumerism.” Insurers are focused on the consumer-centric individual market segment, one of the biggest beneficiaries of reform initiatives.

All eyes are on 2014, when many major reform provisions take effect. However, some provisions hit the streets in September, and the month will be remembered as a milestone by health care historians. It was the month where it all really began … regardless of market segment, it was the month when we saw the first real changes and impacts on health care benefits. Consider:  

* After September 1, if you are self-insured (member of the individual market segment) or covered through your employer (group market segment), you should be a happy camper, since no more life-time or annual limits on your coverage can be imposed by health plans. 

* Your insurance company now cannot cancel your plan if you get sick during the covered period, unless there is an intentional fraud or misstatement of facts.

* More good news for those who like to take proactive approach for their family’s health: you get free (no cost- sharing requirements) preventive health services, for example, infant, child and adolescent immunization, and women’s preventive screening for breast cancer.

* Beginning September 23, young unmarried adults could continue to be covered under their parents’ coverage until their 26th birthday.

* Small business owners with 25 or fewer employees should be able to deduct up to 35 percent of their employees’ healthcare cost from employees’ income tax. 

Regardless of the ultimate outcome of health reform, insurers and their I.T. partners have a huge challenge ahead of them. Current business models, processes, and systems have to change drastically. Focus will shift from groups--specifically small groups--to the individual market segment. Insurers and vendors have to start thinking like the retail industry and require systems comparable with retail tech.

Costco, Wal-Mart, Kroger, CVS and many others have loyalty membership cards that capture customers’ shopping habits and their preferences in their master data management (MDM) systems. The retail market utilizes the information in different ways--product marketing, inventory controls, sending coupons to consumers, etc. Similarly, insurers’ first and foremost challenge will be to develop consumer-centric (customer and consumer) databases.  The databases will need to provide a unified view of patients’ past history (medical, dental, vision, pharmacy, behavioral health), daily habits that impact their health and wellness, and their preference for medical professionals, among other data points.

Most health plans still have segmented business units and disjointed data. They all need to be integrated to create a complete “360-degree” view of customers and consumers. It will take the old customer relationship management concept to the next level: MDM is a fairly new concept for most health plans, but the imminent changes resulting from reform will force innovation by bringing CRM and MDM together and customizing it for health care industry needs.

Just like Travelocity, Priceline and, there will be government-run insurance exchanges (presumably run by state governments) providing comparative pricing of different health plans. Insurers and vendors will have to come up with better, faster and simpler Web portals that can provide real-time cost quotes --legacy quoting and underwriting systems will have to be up to the challenge of providing 24x7 up-time, and sub-seconds response time.

Classic care management programs will not be enough to handle the challenges of this new era. New predictive modeling programs will be required to handle the consumer-centric individual market. In addition, wellness and care management programs with better incentives will be required to gain market share. Participation in community initiatives will be a big plus for the health plans. But to make it all happen, insurers will have to put on their innovation hats and bring traditional care management (utilization management, disease management, case management, prior authorization) in line with wellness and “healthy lifestyle” management, buttressed with claims and demographics data to create an end-to-end “medical informatics solutions” for better predictive modeling and simulation capabilities.

Provider relationship, network and contracts management, provider credentialing and fee schedules always have created headaches for health insurers, which often have multiple provider files with inaccurate data, as well as rigid pricing rules and fee schedules. These clunky systems don’t help in provider relationships, and customer satisfaction suffers due to the lack of accurate information for claims payments. As a result, first-pass rates go down and adjudication costs go up.

Health care reform’s emphasis on paying for clinical quality will require a complete overhaul of I.T. systems to create a single source of truth for provider data, with MDM capability integrated with strong provider credentialing systems, flexible and agile rules engines for pricing and fee schedules, and strong analytical reporting for the P4P Key Performance Indicators (KPI) measurements, which are nonexistent in legacy systems.

Bottom line: reform is bringing unprecedented change, and people, processes, and systems will have to quickly adapt. Insurers will have to focus on the traditionally neglected individual market segment to grow their businesses, and change their business and I.T. strategies to be consumer-centric and offer simple, low-cost product lines. Unprecedented business process outsourcing opportunities will emerge for software vendors, and medical informatics, social networking and data mobility will be market differentiators for health plans. 


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