The annual AHIP Institute 2010 meeting was held last week in Las Vegas.   What was hot, along with the 108 degree temperatures:  assessment of the medical loss ratio target implications, positioning for the individual market; technology as enabler of efficiency.  What's not:  ICD-10.

On the business front, this industry group is squarely focusing on the implications of healthcare reform compliance.  The implications of the medical loss ratio benchmark was an undercurrent in many of the business and technology discussions.  There are a number of unanswered variables and perhaps looming unintended consequences.  Among the most prominent include the definition of administrative and clinical expenses and then healthplan classification and reporting.  Consistent and comparable measurement and reporting is a notable hurdle.  As the definitional debate continues, some interesting consequences may arise depending on the final clarification.  One example, if all technology is considered an administrative investment, the healthplan may be in the difficult position of needing to invest to improve medical costs – but that investment may shift its medical cost ratio – to at least a momentarily heavy (and noncompliant) administrative burden.  Furthermore, if the healthplan invests in technologies that , ideally, would have a strong effect on clinical costs, this could again swing the health plan's medical cost ratio in the wrong and noncompliant direction.  Clearly, no one is voting for increasing administrative costs that have no affect on efficiency, cost containment or increasing quality. But the full impact of one on the other  -particularly if a healthplan is markedly successful in using technology to improve its business and the health of its customers – may have a counterintuitive affect on the ratio than the envisioned by the health reformers.

 Whilst these conundrums are considered, on the technology front, vendors are beginning to mobilize to promote the power of technology in medical loss ratio compliance – presumably to  shift some marketing messages on  the potential for technology innovation and adoption to provide adherence to medical loss ratio benchmark.  Nearly universally, vendors reported increasing pipelines.  Many were also reporting new "framework" deployment and software as a service strategies. These are two means of mitigating the very high historical costs of technology acquisition, implementation and management.   And, as Health Insights has assessed previously, integration of actionable analytics across transaction, process and workflow tools was also in evidence. 

However, what was not hot was a focus on ICD-10 compliance. Overall, industry has been very slow to mobilize for ICD-10 compliance, pre-occupied perhaps by Reform legislation, economic concerns, the sheer enormity of the project among other issues.  The sleeping giant appears poised to awake as both industry groups and vendors report a slow increase in questions, assessments and technology strategies emerging.  Clearly, ICD-10 compliance is not purely a vendor issue; and if it were, managing the great numbers of vendor, legacy and new solutions would be challenging enough.  As 2010 slides into its second half and Reform details are clarified, expect sudden shift to ICD-10 concerns and activity.  

Health plans will face new challenges in 2011 in driving budgets that position them for business success and compliance in the reforming and ICD-10 healthcare markets.  IDC Health Insights is now executing its 2010-2012 Healthcare Payer Business and Technology Survey to identify trends, technology priorities and strategies.  Results will be published in late August.  Healthcare Payers that wish to participate will receive a free summary of results.  Please contact Janice Young at jwyoung@idc.com.  And many thanks.