Looming health care reforms are forcing all stakeholders within the health care marketplace to focus on creating business and technology strategies that will keep them viable. In particular, health insurers are revisiting how they regard, organize, access, use and transmit patient data in and out of a growing health care universe. A mid the demands of the new administration's health care reforms, stakeholders from all segments of the health care marketplace are focusing efforts anew on creating business and technology strategies that will keep them viable. This is especially true for health insurers, now revisiting how they regard, organize, access, use and transmit data in and out of a growing health care universe.

That universe of users includes regulators, providers, third-parties and patients alike, and all expect instant access to data from any number of repositories and/or stores.

And with patient data being used for any number of purposes - from claims, payment or operational functions, to clinical quality reporting and evidence-based decision support - its role cannot be overstated.

"There are big changes coming in the health industry," says Matthew Josefowicz, insurance practice director at New York-based Novarica. "All participating in the market feel something big will happen in the next 12 to 18 months, whether it comes from economic pressure or government action. It's important for insurers to have their own internal data house in order, and become more aware of the changing nature of the external data landscape."

Whether insurers have their data houses in order remains a question. A survey conducted in March of health insurers by Novarica on behalf of three SourceMedia publications, Insurance Networking News, Information Management and Health Data Management, yielded perplexing results. The survey, which targeted 27 unique health insurers representing companies of all sizes, sought to uncover the current state of data strategies among health insurers.

Not surprisingly, insurers of all sizes are making data a priority in the IT shop, with more than 23% of respondents stating they spend 35% or more of their IT dollars on data initiatives.

It follows that the majority of respondents also reported having "adequate capabilities" in data repository for use with customer data and claims, and for predictive analytics for claims and underwriting.

"Health insurers are adept at using data expertly to manage claims, and we are seeing a wide range of capabilities in these other areas," says Josefowicz. "Not surprisingly, where insurers are most advanced is in their data repository capabilities, their investment in data warehousing, and their ability to build out repositories and report out of that."


What was surprising was the respondents' answers to whether they felt they had adequate capabilities in master data management. Here, close to half answered "adequate capabilities," yet an equal number answered "limited capabilities, but no planned investments."

"There is a big split between companies that put master data management programs in place, and those that are waiting to float it to top of their agenda," notes Josefowicz, "especially as the amount of data increases exponentially, such as with pharmacy and electronic health records (EHRs)."

Josefowicz points to another revelation of the survey: Close to half of the respondents noted that they did not have an enterprise data model, and a third of those said they had no short-term plans to invest in one.

"We know that the improvement of data management processes have a positive impact on customer service, claims and underwriting, but it should be an enterprise effort," he says. "Having an enterprise data model is critical to achieving this."

Remarkably, when respondents were asked whether they had a center of excellence or formalized data governance program, 37% reported having "limited capabilities, but no planned investments."

To be fair, notes Josefowicz, some respondents are simply conducting business the way most do in a down economy-by dealing with a limited IT budget, therefore making data a lower priority.

"It's important to note that these results are more reflective of business practices rather than IT practices," he says. "It's about the way you approach your management of data, how health insurers structure themselves around the importance of data."

Even so, these findings cast a pall over plans to quickly digitize the health care system.


While laudable, President Obama's multi-billion dollar bet to get health care providers to move from a clipboard and paper to a computer to track and communicate patient health information is a long shot, say experts. In the private health care provider sector, progress is excruciatingly slow. In spite of incentives being offered by insurers, fewer than 10% of America's 5,000 hospitals, and 17% of its 800,000 doctors have digitized their patients' records, notes EMC, Hopkinton, Mass. The smaller the practice, the less likely an investment has been made in EHR technology.

"Obviously, the cost of information systems is a barrier for small practices and hospitals," maintains Paul Keckley, executive director at the Deloitte Center for Health Solutions, Washington, D.C. "This is complicated by the fact that at the federal level we have not had an IT policy that directs which systems to buy and how to use them. And although you have systems to capture data at the point of care, there are no true interoperability standards, so in spite of the likes of health information exchanges, you can't send it somewhere else and be guaranteed that the recipient will be able to deal with the file. This represents a seven-year old problem, during which time no standards have been promulgated."

The president appears to be aware of the problem, and claims to put forth a valid argument - it is possible to conduct health care business electronically. In fact, EHRs have been in place for years as part of a larger integrated health care delivery system in the U.S. Veteran's Administration. Yet, the United States lags painfully behind Canada, England, France, South Africa, Australia, Hong Kong and Taiwan, which either have a nationwide EHR system, or are developing one.

Thus far, federal mandates are not sufficient impetus. Business drivers, say experts, will ultimately play a leading role, and it seems that patients want EHRs, too. According to a survey sponsored by National Public Radio, the Henry J. Kaiser Family Foundation and the Harvard School of Public Health, three out of four Americans think it's important that their health care provider use electronic records. However, 60% of those surveyed said they are not confident EHRs will remain confidential.

"The growth of EHRs will change the way health insurers do business," notes Josefowicz. "Having a strong data infrastructure and level of expertise in terms of handling these data feeds, is key."

Helping members feel protected and empowering them to make judgments about their health care is a key value proposition for the health insurance industry. Yet Deloitte's Keckley maintains that health insurers are not making the most of this possibility to be a trusted source to their members.

"There is a huge opportunity for health plans to provide tools to assist enrollees in managing their health care decision-making," he says. "Where insurers fall short is in the personalization of these tools."

These tools do not just include information on premiums and benefits, notes Keckley. At the moment a patient needs to make a decision about treatment options, choice of physician or hospital or prescription drugs, that patient wants information.

"There is a dearth of tools available to help them make those judgments," Keckley says. "This deficiency is occurring among physicians and hospitals, and health plans fare only slightly better."

Keckley maintains that the opportunity for both insurers and providers begins in the back office, "with the assembly of information that can assist enrollees during their teachable moments. The structure of the data must be such that it can deal with more than claims history."

To create unique value, insurers can personalize the data to reflect clinical, nutritional, language and even religious preferences of members.

"This is a type of health coaching that no health plan is doing today," says Keckley.

Novarica's Josefowicz believes that the key to being able to provide this type of service rests in an insurers' "world view" of its data.

"An insurer's No. 1 asset is the knowledge they have about their customers," Novarica's Josefowicz says. "It's most important to think of data as a strategic asset. Health insurers may consider pricing algorithms or pricing models as a strategic asset, but putting data in there is key."


Hartford, Conn.-based Aetna is one health insurer that has realized the importance of patient data as a strategic asset, having established a unique philosophy that puts its 12 million members at the center. Like many health carriers, Aetna used its data initially to support claims, but during the last several years Aetna's data has been leveraged in the back office to support the internal and external data streams holding member information. Aetna's health information management systems and electronic medical records are now integrated.

"We have a lot of money invested in the data infrastructure," says Dan Greden, Aetna's head of e-health product management. That data infrastructure made it possible for the carrier to launch a consumer-directed health care initiative five years ago. 

"At that time, we had 1 million members who had a PHR available to them," he says. "With the most rapid increase seen in the last 15 months, today we have close to 9 million members taking advantage of this program."

Although the ratio of PHRs to EMRs is still considered low (Greden estimates it's currently at about 20%), that number is changing. When an Aetna member realizes they have access to their own personal health record containing pharmacy, lab or claims information, they come back to the carrier's Web site and use it repeatedly to check explanation of benefits, claims status, take a health assessment or check treatment records.

"The member's comprehensive record is married to what we call our 'care engine,' so care can improve because the member can share this record with their provider," Greden says. "This is why our usage is higher than what the rest of the industry sees."

Josefowicz asserts that Aetna may be the model, but that overall, the industry is not ready to develop the business case for PHRs. "A large number in the survey - more than half of the respondents - are still immature in developing the business case or strategy for managing PHR information, and very few have gotten close to deploying. This will have to become a business strategy because insurers like Aetna will create that atmosphere."


As part of an insurers' data exchange and management strategy, many are offering providers a variety of support vehicles designed to promote electronic data sharing and/or guide the provider in its efforts to provide quality health care.

According to the National Health Care Purchasing Institute (NHCPI), a five-year initiative of the Robert Wood Johnson Foundation operated through the Washington, D.C.-based Academy for Health Services Research and Health Policy, these support vehicles are typically based on financial incentives, such as bonuses or increased fee schedules, while others use non-financial ones, such as technical assistance. Both incentive forms can be effective in motivating providers to improve their overall performance, as can models that combine the two, notes NHCPI.

A survey conducted in March by Novarica on behalf of three SourceMedia publications, Insurance Networking News, Information Management and Health Data Management, asked 27 unique health insurers to identify such vehicles.

Although more than half reported offering incentives to their providers for participation in data sharing organizations, very few (11%) are providing subsidies for the purchase of electronic medical records systems.

"It follows that carriers are not yet taking an active role in pushing personal health records," notes Matt Josefowicz, insurance practice director at New York-based Novarica, who helped lead the study.

More than a third (36%) of the respondents report offering incentives for clinical quality metrics based on claims data, as well as incentives for providing the carrier quality metrics.

Paul Keckley, executive director at the Deloitte Center for Health Solutions, Washington, D.C., maintains that, in some cases, incentives may be moot - for now. "Clinical decision support is something that terrifies physicians," he says, "so there is reluctance to this, especially by older physicians who believe this will lead us to cookbook medicine - in essence taking away the judgment that should be using to treat patients."

And since older physicians sit on the larger clinic and hospital boards, decisions about the use of patient data sharing is also affected by the culture and politics of this age group.

This digital divide may be short-lived, however, as younger physicians choose larger group practices that use incentives of their own: technology to facilitate the business of care.

"Patients are also at the center of this pending change," Keckley says. "Before they show up for their appointment, they have already Googled their condition, and have seen three possible treatment options. The physician better mention all three, or the patient will lose trust and shop elsewhere."


The electronic exchange of health care data by any and all stakeholders requires interoperability of IT systems. So what's the problem?

Interoperability requires health information systems to work together within and across organizational boundaries in order to advance the effective delivery of health care data and, simply put, they don't. This means that to most involved in health care, from physicians to health insurers, data sharing is difficult, if not impossible.

For example, payers that use the HIPAA 835 transaction standard to transmit payments to providers that continue to use outdated practice management systems, which are unable to receive the payments.

According to The Kaiser Network's Web site, one of the more glaring examples of this problem is sluggish adoption of electronic health records by providers and is exacerbated by the lack of federal compatibility standards for electronic systems. All is not dark, however, as the federal government and other interested parties continue to work toward standards-setting.

The Accredited Standards Committee X12 signed a charter in March to participate in the Standards Charter Organization, a formal collaboration among U.S. health care standards development organizations to support industry-wide standardization and interoperability.

And David Blumenthal, M.D., who began working as the national coordinator for health information technology on April 20, has established the HIT Policy Committee and the HIT Standards Committee. The HIT Policy Committee will advise Blumenthal on a range of issues related to implementation of a national health information network (NHIN), which is still under development, progressively adding health information exchanges. The HIT Standards Committee will advise Blumenthal on standards, implementation specifications and certification criteria for the electronic exchange and use of health information.

For more about health insurance data management, search "Kaiser Permanente Dishes Keys" at www.insurancenetworking.com.

(c) 2009 Insurance Networking News and SourceMedia, Inc. All Rights Reserved.

Register or login for access to this item and much more

All Digital Insurance content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access