Sep 22, 2023

Taking Control of Payer Data Integration

Exchanging data is a huge - and growing - challenge for U.S. health insurers. A tangled web of new solutions and legacy systems creates data integration burdens that can stand in the way of effectively launching and administering health plans. The good news: payers and third-party administrators can simplify their approach by strategically choosing a data integration path.

Key Takeaways

  • The growth of technology solutions is forcing payers and TPAs to modernize data integration for eligibility, claims, health programs and other key functions.
  • Payer CIOs and CTOs should employ a decision framework for managing the rising demand for data exchange - thus freeing resources for meeting customer needs.
  • Downstream impacts include increasing risk and limiting technology exploration efforts.

Health plan IT leaders certainly don’t have it easy. Between cost pressures, too many projects in the queue, and the mind-numbing abundance of point solutions for modern health benefits, IT teams are racing to keep up.

So much of what payer CIOs and CTOs face stems from the makeup of the disparate modern healthcare supply chain. There are thousands of technology solutions and vendors, each using custom formats and transmission standards. This leaves payers struggling to cobble together connections to each solution.

The problem cuts across almost all technology-related functions for national and regional health plans and for TPAs: member eligibility, claims administration, pharmacy benefits, population health management programs, telehealth, and FWA (fraud, waste and abuse) solutions must share data seamlessly.

Payer IT leaders are searching for ways to take control of these data integration challenges. This paper from Flume Health examines the issue and provides a decision framework for CIOs and CTOs to consider as they drive more efficient and secure data exchange with any solution or system.

Solution Proliferation

The abundance of vendors and solutions stems from a universal goal: getting more value out of our notoriously complex U.S. healthcare system. Consumers and employers are looking to their healthcare providers and their health plans to deliver more value, choice, personalization, efficiency and cost savings.

In response, existing technology companies and emerging digital health startups have come through with thousands of solutions aimed at addressing these demands. New approaches are enhancing capabilities such as chronic disease management, behavioral health, pharmacy benefits and telehealth, using data and analytics to make them more useful to health plan members - and giving payers new tools to improve member engagement.

But having all these possible solutions to choose from creates challenges for health plan IT teams. They must evaluate and validate the solutions, ensure they meet security and compliance standards, run them through the purchasing process, and ultimately integrate them into their administrative systems and manage the related data exchanges after integration. Too often, payers find that their existing systems were not built for the complexity of modern data interoperability.

“You have hundreds and hundreds of contracts that you’re managing, and you just lose control,” Donald Hooker, analyst at Capital One Healthcare, told industry publication Healthcare Dive. “Renewals come and go, and you just don’t have the bandwidth to evaluate, is the solution really adding value?”

For CIOs, CTOs and other IT leaders at health plans and TPAs, more solutions mean more complexity.“

On one hand, the role is charged with keeping the lights on – ensuring the IT infrastructure is running smoothly, employees have the tools they need at reasonable costs, and cyber defenses are firmly in place while evolving to meet emerging threats,” says a 2023 report from healthcare publication MedCity News. “On the other hand, CIOs are entrusted with developing a strategy around technology and making sure it meshes with organizational objectives.”

Limited resources certainly add to the challenges. Payers typically allocate anywhere from tens of thousands of dollars to a few million dollars in their budget for each new integration and devote up to thousands of hours of engineering time to completing the task. IT teams work across a plethora of specific tools that perform various data trading jobs needed to effectively exchange data with third parties. When these tools are not configured specifically for this purpose, it could lead to significant errors and manual workarounds that drive up resource time - a particularly acute problem in today’s competitive talent market.

This leaves precious little time and money to pursue a strategic, long-term vision for how IT can enable payers to manage this data trading complexity, let alone improve member engagement, generate advanced insights, and deploy emerging technologies that can reduce rising healthcare costs.

A 2021 McKinsey & Co. report, “Getting Data Architecture Right: A Guide for Healthcare Payers,” lays out the challenge payer IT leaders face: “To stay ahead of the competition and take full advantage of digital opportunities, payers globally need to build the required underlying foundations, including an agile organization, digital delivery capabilities, scalable IT platforms, and at-scale data processing.

Data is increasingly becoming the main limiting factor. The biggest pain points for payers are often not data storage or evaluation but ensuring that functions across the organization have access to insights from data.”

Addressing Downstream Impacts

Two downstream impacts of these data integration hurdles are common and must be addressed in a modern data strategy for payers:

Higher risks. New solutions, vendors and implementations means more risk from the data integrations that are necessary to make these work. The threats include things like security breaches, missing key deadlines for big initiatives such as open enrollment, and even career risk for IT leaders.

Data integration is a technical area that can easily be misunderstood by payer leadership teams, so the leader in the CIO/CTO seat must be adept at making the case for resources to fulfill IT’s strategic mission, data implementation approach and risk management.

Then there's the risk of compromising IT’s “source of truth” when it comes to technology. Expensive, time-consuming data integrations can essentially consume everything in their path until completed. Overarching goals such as improving member engagement and bending the healthcare cost curve can temporarily take a back seat while racing to complete the integration of new solutions.

Managing with limited resources. Digital innovation leaves IT leaders and their teams too much to keep up with. They need to reclaim some of their time in order to think strategically. By adopting automated integration tools, they can free up time and talent to focus on the bigger issues that loom.

Most payers keep a close eye on where trends are headed. For example, they’ve concluded that strong analytics capabilities can position themselves to offer programs and capabilities to help member engagement. Many have brought on data scientists to lead these efforts. And yet, these highly compensated experts are often tasked with data mappings, taking their time away from what they do best - and what few others in the organization can do.

A Decision Framework

Fortunately for payers, there's more than one way to manage data integrations effectively and strategically. The following decision framework, developed by Flume Health, can help payer IT leaders consider their choices and select the right path for data integrations. These choices are based on one of three goals payers typically set for their integrations: Reducing complexity, expanding workforce capacity, and increasing flexibility and speed.

A Future-Proof Solution: A Consolidated, Purpose-Built, Integration Tool

What happens when payer and TPA technology leaders step back and examine these options for dealing with data integration?

Future-proof the IT foundation. For starters, IT leaders must ensure their teams and infrastructure are set up and flexible for whatever comes next. After all, the next shiny object is just around the corner - or it might already be here. It’s a safe bet that the C-suite has heard of it, even if they don’t yet grasp the possibilities and limitations.

It’s imperative for CIOs and CTOs to keep data integration from becoming a roadblock. The most common example: any new health management solution that promises to drastically improve members’ health outcomes and reduce medical costs. Often seen by payers as crucial for competitive product design, and sometimes demanded by an employer, the health solution may be considered essential to sustaining business.

While the value proposition of any solution can be debated, IT limitations to fulfilling these requests could hinder a payer’s market position. IT leaders can get ready for any new solution by ensuring data integration-related functions are on a predictable path, freeing up time to stitch point solutions together for a seamless experience.

The bottom line. The complexities and limitations of data integration can be overcome. It’s possible to consolidate the jobs of data exchange between various systems and vendors in a single, easy-to-use solution that focuses specifically on the needs of health plans.

Doing so allows payers to move faster with their integrations while reducing complexity and costs. Instead of relying on a single vendor that curates multiple solutions, or piecing together multiple solutions on their own, payers can use a consolidated tool that automates data exchange.

Solution. To help payers better manage the secure exchange of data, Flume Health has introduced a purpose-built data integration solution. Called Flume Relay, the platform systematizes the complex solution integration process involved in designing, launching, and administering a health plan.

The Relay platform is software designed specifically for health payers to connect various systems, vendors and point solutions and bidirectionally exchange necessary payer-related data - from member eligibility to post-adjudicated claims to engagement. A single platform for scalable integrations, Relay serves as a universal translation layer between sources of data. The software consolidates numerous jobs into one easy-to-use interface, allowing people with varying degrees of technical background to fulfill data integration responsibilities, automate tasks, perform testing, and even monitor status and health of a data exchange.

Relay enables users the ability to match specific customers or plan products with the right data to be exchanged – ensuring that only specific information is sent. Early applications of Flume Relay have shown that it can decrease vendor integration costs by as much as 80%.

A national TPA serving 200,000 members recently faced a tight deadline to implement more than 30 new employer group customers with nine new point solutions (including a PBM, health management programs, and virtual care). In less than four weeks, Flume Health provided a solution that enabled data exchange for member eligibility by the start of customers’ plan year, using automated data trades. Using Flume’s solution helped the TPA ensure that it met its commitment to its customers with no disruption in member coverage.

One TPA’s Recent Experience

Moving Forward

Payer IT leaders have enough complexity to sort through. They don’t need to spend big chunks of time getting basic functions like data exchange right, and they don’t need to miss out on the opportunity to innovate because of capacity constraints.

There’s a more crucial role to be played: Strategically leading with technology solutions for better member engagement, improved health and reduced costs.

By selecting an appropriate path forward for data integration, and by automating the process, IT leaders can avoid the thorny IT integration challenges that would otherwise hold them back from delivering what customers are looking for from their health plan.

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