With the healthcare industry's ever-evolving nature, we’ll walk you through how Mulesoft can enable the changing paradigm in healthcare insurance.
A look back at health insurance
Health insurance has come a long way since the early 20th century. The first instance of medical expense coverage for a group of people was developed for workplace injuries.
Then in 1929, Justice Kimball at Baylor University made history with the first modern insurance plan that covered hospital expenses beyond workplace injuries for educators.
Over the last few decades, the healthcare insurance industry has grown tremendously with a straightforward business model- contract with care providers to serve members and then package these services into insurance plans sold to groups and individuals. Providers would submit the bills for their services to the insurance company and be paid based on their contractual agreements.
Shifts in health insurance organizations
Fast forward to 2021—if you listen in to the quarterly earnings calls of the publicly-listed insurance companies, these organizations are no longer recognizable as traditional healthcare insurance companies. Why? Because they’re doing so much more than selling insurance, they’re also service providers.
Here are some excerpts from recent earnings calls of two major health insurance companies:
- Connecting members with their entire care team on a single centralized platform and allowing them to seek support in real-time when it's right for them.
- Partnering with connected device manufacturers to leverage their capabilities to extend remote care options that allow patients and their clinicians to conduct virtual office visits.
- Launching an innovative program designed to address the basic needs of an employer's workforce with on-site resource coordinators focused on things like housing, food, transportation and other core resources.
- Partnership with a virtual health start-up to provide access to virtual care.
- New partnerships in over 20 communities to close gaps in care and address health equity challenges.
- Meeting the ambulatory surgery needs of over 250,000 patients, delivering exceptional care in convenient and affordable settings.
- Matching 1 million members with a personal navigator to help them manage and improve their health.
- Offering tools to find the lowest-cost prescriptions near them regardless of the health benefits.
- Delivering over 500,000 virtual visits on their behavioral platform this year.
As you can see, health insurance organizations are no longer just selling insurance products. They have evolved into large, integrated healthcare platforms with complex business models. They’re competing and growing by building ecosystems of services and capabilities that address a variety of customer needs. The larger the ecosystem, the larger the incremental revenue. As an example, for Anthem, a 1% increase in market share is equal to $2B in incremental revenue. While these organizations build their ecosystems through internal innovation and external partnerships, turning this evolving portfolio of capabilities into seamless and connected experiences requires an integrated architecture for data and analytics. Also, it is not possible to pass on costs of the expanding organizational complexity to the customer. Increasing competition and the need to reduce healthcare costs limit pricing flexibility.
Regulations put pressure on the need for digital transformation
Aside from market imperatives, there are limits on how much of the revenue from insurance premiums can go into non-medical costs. The regulatory requirement to maintain the medical loss ratio—stating at least 80% of the insurance premiums collected from customers must go into medical expenses—must factor into how the infrastructure is developing. The increase in market share must happen without impacting operating margins. Essentially, all front office, middle office and back office operations must scale. So as ecosystem building becomes fundamental to the business structure, scalability has to be a critical design principle in the evolving organization. Regulation is also driving the need for easing data flow to the outside world. Patient data access APIs and payer-to-payer data exchange are mandated in the CMS interoperability and patient access rules.
API is the acronym for Application Programming Interface, which is a software intermediary that allows two applications to talk to each other. —Mulesoft resources
So why Mulesoft?
An interoperable and flexible architecture thus becomes essential to success in the health insurance industry. Mulesoft, an integration and API lifecycle management platform, provides the foundation for an API-led connectivity infrastructure that can give standardization and flexibility to the flow of data. Not only does it help integrate the evolving ecosystem of services in the organization, but it brings agility to the business. The Mulesoft Accelerator for healthcare provides the foundational template for this architecture. If ecosystem building is a healthcare payer’s business strategy, then API-led frameworks enabled by Mulesoft should be part of the technology strategy.