The Changing Healthcare Landscape: How IT Solutions and State-Based Exchanges Are Delivering Broader Coverage, Significant Cost Savings

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By Dan Thomas, CEO, IdeaCrew, Inc.

The evolving face of healthcare IT 

Along with many preceding social factors, COVID-19 is influencing the public’s perception of healthcare insurance and raising expectations of the government’s responsibility for ensuring Americans’ coverage and access to healthcare.  Over the past year, the advantages of operating a State-based Exchange (SBE) over the Federally-facilitated Exchange have come into focus.  Responding to challenges of the pandemic on a local level State-based exchanges organizations stepped up efforts to broaden healthcare coverage for residents and small business employees, through various means, including extended enrollment periods, new subsidies, and related policy changes.  

As outside factors continue to evolve the health insurance landscape, SBEs and States considering becoming one have a special opportunity to play a central role advancing health insurance programs for their constituents.  And exchanges that are able to build and adapt their technology to quickly respond to emergency declarations, legislative and policy changes are well-positioned for success.

SBEs continue to play a central role in the leadership and adaptive nature of the healthcare industry. As such, it is critical that they are on top of the leading issues facing the industry to keep access available to state residents and position infrastructures to continue to adapt in the pandemic era and beyond. 

The leading role of the state exchange system – and growing areas of opportunity

In today’s healthcare environment more than ever, state exchanges are integral in helping the public get access to affordable healthcare as an alternative to the federal marketplace. Exchange systems vary state-to-state and have taken different forms since the passage of the Affordable Care Act (ACA). Over time the exchange space has evolved to move increasingly away from large corporate players to now be led by a few small and mid-sized groups who can deliver healthcare coverage options at more attractive prices. 

The dynamism that small and mid-sized exchange entities bring to the healthcare system has been a leading priority in recent years, however the execution has evolved over time. Launching a State-based Marketplace is much different today than in 2013. The risk and cost are dramatically lower than those early days.  

States today are in a great position to offer their residents a truly competitive insurance marketplace. Public awareness and support for healthcare exchanges is higher than ever before.  Today a State may procure a proven, built-to-purpose State-based Exchange technology solution at a fraction of the cost. These same benefits and savings are available to many states looking to migrate from 2013-era systems.

For example, in 2015, we worked with the DC Health Benefits Exchange Authority (HBX) to develop a purpose-built, state-based technology solution that manages health insurance for DC resident individuals, small business employers and employees, and congressional staff. This State-based Marketplace platform then allowed the HBX to reduce the tax assessment and provide more affordable options for people to make the switch, and our ability to implement new policies quickly on the platform saved Washingtonians approximately $36M in premiums as a result of the American Rescue Plan Act of 2021 (ARPA). 

Best practices for state exchanges to maximize outcomes 

Agile development methodology continues to be a leading best practice and a key way to develop innovative technologies. From a client perspective, the result is working technology solutions delivered on-budget and on a timely basis. 

This competency comes into play both under rollout of general system improvements and custom development projects.  For example, HBX was the first State-based exchange to introduce changes in late March introduced by ARPA. 

I advise state exchanges to ask potential vendors and their clients about their processes related to technology development and solution maintenance.  What is the vendor’s track record for introducing system improvements and extensions?

Methods to develop transferable solutions and the future of the state-based exchange

As state-based systems continue to grow in popularity and demand, so does the importance of developing exchange structures that are transferable state-to-state. The most important element of developing solutions for wider applications is to determine the specific exchange’s mission. 

At the risk of over-simplifying, this means answering the question: is the primary mission to maximize premium reduction or is the exchange an instrument of a larger policy? The first scenario replaces the federal marketplace with goals of a better customer experience and pass cost efficiencies along to the public in the form of discounted premium rates. The second scenario not only brings the marketplace local, but its mission includes system extensions and customizations that achieve broader state-level policy objectives. Neither is right nor wrong. Both scenarios offer other benefits and can reduce rates of uninsured for the state.  

Going forward, the industry is continuing to be propelled by technological advances that drive internal innovation. One specific area of focus is creating systems to help agencies better track and manage data quality between distributed systems. 

The future of the healthcare industry continues to advance. State-based exchange systems are continuing to emerge as a leading vehicle to deliver affordable healthcare coverage to state populations to create broader overall coverage and new outcomes. More widespread coverage availability at cost-effective rates creates benefits for all state residents, and the development of transferable IT solutions to conduct these initiatives is a critical component for the next future of the healthcare industry.

About the Author

Dan Thomas is the CEO of IdeaCrew, Inc., based in Washington, DC. Dan advises clients on technology strategy, designs business-driven solutions, and leads hyper-productive teams as they implement and operate industry-leading, category-defining enterprise and core mission systems. For more information, visit www.ideacrew.com

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