The IBM View on healthcare: The value of building sustainable health systems Capturing the benefits of health plan transformation
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Few issues draw more attention than the ongoing debate over healthcare.
Annual spending is expected to grow faster than the economy by more than a full percentage point for the next several years.
Demand will increase as 77 million baby boomers reach retirement age by 2020.2
Most would agree that the current system is unsustainable.
Now, with major changes from the Patient Protection and Affordable Care Act (PPACA) already in effect and more on the way, it is clear that the health insurance industry can no longer do business as usual. Some of the new rules pose major challenges to U.S. health plans.
Standards like the International Classification of Diseases 10 (ICD10) mandate may increase administrative costs.3 At the same time, stricter medical loss ratio provisions in the PPACA penalize payers for spending too much on administration relative to care. Health plans are caught in the middle, forced to make significant improvements in efficiency.
Traditionally, U.S. health plans have dealt directly with employers, leaving consumers with very little real choice. Today, people are more likely to “shop” for insurance. Over time, that will force business models to become more consumer-focused, requiring health plans to compete in a new marketplace where the customer experience is an important differentiator.
Read the the full report from the IBM Center for Applied Insights on this link