Deborah Norton is keenly aware health insurance consultants and vendors are everywhere, ready at the drop of a hat to help rip out costs or find ways to bolster revenue.
“I get dozens of emails every single day from companies telling me they can solve my problems,” said Norton, chief information officer at Harvard Pilgrim Health Care, an insurer that covers 2.7 million people throughout New England.
Harvard Pilgrim keeps a short list of consultants and outsourcing firms, and it uses dozens across the company. Dell Services handles a lot of Harvard Pilgrim's business, from claims management to contracting with hospitals and doctors. PricewaterhouseCoopers consulted with the insurer to get through ICD-10, the new medical coding system that went into effect last year. Technology giant Oracle and UnitedHealth Group's Optum subsidiary help out as well.
Numerous other firms are passed over since Norton, like most information technology executives at insurers, gets bombarded with outside pitches. One health plan executive deactivated a LinkedIn account to stem the onslaught.
Health insurance consulting, a niche within the overall healthcare consulting market, used to focus exclusively on how to maximize premiums in the employer market and figure out payment rates to hospitals and medical groups. Those are the keys to the kingdom when it comes to making money in the insurance industry.
But the Affordable Care Act has expanded government coverage and produced new underwriting restrictions and rules to protect consumers. That's forced consultants to rely less on their old business model and instead beef up their knowledge of government programs and value-based care.
Payers such as Harvard Pilgrim need external help getting through the ACA's changes and managing the health of their populations. But they also need help sorting through the barrage of consulting offers from an increasingly competitive field—this includes the single-person shops that offer high-level strategy in the C-suite; niche consulting firms with specialized services, such as improving Medicare Advantage star ratings; and the large firms providing a smorgasbord of consulting services.
The signature offering these days—the one that makes one firm stand out from the pack—is to help insurers glean information from their mounds of claims and patient data.
Traditionally, insurers were skilled at avoiding, not managing, sick people.
But the ACA prohibits health insurers from charging people more for coverage based on their health status, age or sex. Consequently, insurers look to tech-oriented consultancies to comb through all data at a granular level to get a better understanding of their patient populations.