Payer organizations looking to revamp their infrastructure to support big data analytics and a variety of value-based accountable care arrangements are turning to business process outsourcing (BPO) partners in an attempt to bolster population health management, says a new survey by Black Book Rankings.
With nearly 90 percent of payers seeking service partners to help make gains against high-cost patients by improving chronic disease care, retooling administrative processes, and expanding access to care coordination, the non-traditional BPO market is experiencing a 22 percent year-to-year increase.
“At a time of great change in health care, BPO vendors are helping public and private payers achieve great efficiency and cost savings, improve transparency and member services, and enhance the health plans’ ability to participate in the reforming health care business models,” said Doug Brown, Managing Partner of Black Book.
While growth in traditional BPO services is relatively slow, the innovative BPO market is slated to be worth $8 billion in 2016, a significant increase from its $5.2 billion valuation in 2014. Services in this new sector include data analytics, utilization management, claims modernization, population health management and big data analytics projects, and the design and implementation of new insurance plans and products that promote value-based accountable care.
“Payer contracting in these evolving areas has nearly doubled in just the past twelve months,” Brown added. “The most significant opportunities for outsourcing service providers to support both public and private insurers lie within member analytics, population health, and claims processing modernization.”
The integration of more robust population health management services is a top priority for 87 percent of health plan managers over the next two years, the poll found. Chronic disease management programs, big data analytics and aggregation, and health information exchange are also important to support the overall goal of reducing costs through greater reliance on large-scale data sets.
More than a quarter of payers are investigating the idea of outsourcing care coordination and case management services to a dedicated partner in order to expand capabilities while reducing stresses on in-house resources.
Internal administrative processes are also getting a makeover as 83 percent of payers plan to start claims modernization and improved claims processing projects by the first half of 2016. With ICD-10 set to strain payers to the limit after the October 1, 2015 implementation date, these updates may be necessary to keep revenue flowing smoothly through the provider community. More than two-thirds of payers believe that enlisting the help of outsourcing service providers is the best way to achieve their administrative modernization goals.
“Recent outsourcing adoption advances are being fueled by service and start up urgencies of newly developed health plans, expanding provider-based plans, and insurers experiencing higher membership demands driven by Obamacare,” said Brown. “But 92 percent of current and prospective users source the big gains for payer BPO vendors to the need for swift solutions to address increased regulatory governance, controlling fraud/waste/abuse, and the lack of capabilities in the current mix of in-house technologies.”
Payers and providers are experiencing similar challenges on the population health management front, and both are throwing time, money, and technology at the problem. A new ReportsnReports brief predicts that the healthcare IT market, including clinical analytics and business intelligence infrastructure, is set to grow at a 6.01 percent compound annual growth rate until 2019. This increase will be driven by the need to employ predictive analytics and revenue cycle management techniques to ensure financial sustainability in an accountable care environment.
Providers are also looking at outsourcing as a way to alleviate the strain of certain business processes, including data analytics and revenue cycle management. Black Book estimated in November of 2014 that the provider-centric RCM outsourcing market, driven by fears over the impacts of ICD-10, would be worth nearly $10 billion by the middle of 2016, mirroring similar rapid growth on the payer side.
