KLAS and the Healthcare Payer Market - Cover

KLAS and the Healthcare Payer Market

It has been said that perception is reality. Healthcare providers are often heralded as heroes. After all, they save lives and help us in our most vulnerable and critical moments. The commonly held perception of healthcare payers, however, may be a different story. Who likes paying premiums? Who likes getting notifications of bills? Whatever the case may be, for healthcare to work right, we need both providers and payers to fulfill their roles and collaborate well.

How often do most uninsured people go to the doctor? Aside from those associated with the term “frequent flyers,” oftentimes, people don’t, and that may even include times of prolonged sickness. Uninsured patients may wait until their conditions become serious enough to require a trip to the ER. On the other hand, insured people tend to have more of a sense of security, at least when it comes to financial health coverage, so when the time comes to see a doctor or take medication, they hesitate less to move forward. Routine checkups and preventative measures help providers to catch illnesses early and give patients a better chance at a healthy life. By covering these things and other healthcare needs, health plans play an important role in the wellness of individuals, families, employers, and communities.

From Humble Beginnings

About seven years ago, a provider organization with a payer arm approached KLAS and asked for our research on vendor payer core administration solutions. At the time we didn’t have it. But this request, along with a number of other similar requests, alerted us to the growing interest and need for KLAS to cover newer areas of vendor technology as provider organizations expanded their roles with risk-bearing arrangements and organizational expansion. The clinical encounter is critical, but so is the context, experience, and support that surround it.

With provider organizations expanding their work and role, KLAS decided to formally include “payviders”—and consequently payers—in our healthcare IT research. We set out to bring transparency to the healthcare payer market, excited to add voices and experiences from health plans to our research.

At first, the ambition was greater than the execution. A market that hadn’t ever been measured by KLAS wasn’t pleading for us to do so. After all, how many companies like the idea of being publicly measured, especially without first agreeing to it?

Let’s say that tomorrow someone knocked on your door and said, “I noticed that you run a few times a week. I will start timing you and publishing how fast you run to the entire neighborhood.” Unless you are quick and running is your thing, your natural reaction is likely to say no. But if you accepted that invitation, or if you were measured without even wanting to be measured, what might happen? Wouldn’t you be inclined to pick up your pace?

When we published our first payer HIT vendor report, it created some waves. Vendors that didn’t want to be measured spoke up. Other vendors that were highlighted for being great partners stood up. Since that time, many of those vendors and others we have started to measure have ingested our feedback and worked to improve their offerings.

Where We Are Today

In the past several years, our research in the payer HIT area has expanded beyond core administration solutions to include market segments such as quality analytics, risk adjustment and analytics, care management, customer relationship management, managed services for value-based care, and employer-sponsored healthcare services. As health plans work to become more consumer-focused and consumer-friendly, our team may consider bringing transparency to market segments such as pharmacy benefits management software and member engagement solutions.

The further our research has progressed, the more fully we have learned that in order to impact healthcare, we need to engage and measure more of the healthcare ecosystem. Including payers and payer vendors in our research has helped paint a broader picture of healthcare IT and measure healthcare more holistically. We have learned a lot from the way health plans think, the things they do, and the technology they use. That knowledge has in turn helped us to provide better research data to the market and impact patient care.

Moving the Healthcare Payer Market

Recently, KLAS analyzed our research data that comes from payer ratings to discover whether the payer HIT market has improved since we started measuring it. As you can see from the graph below, the average payer HIT vendor’s score in 2016 was about 73, which has changed over time to about 83 in 2021. Most vendor changes and improvements have been incremental and steady, but it is good to know that transparent research data is helping make an impact on the industry. Seeing our friends in the industry make improvements and changes is inspiring to our team. 

Overall aggregate performance of vendors KLAS measures in healthcare payer segments

Validating market improvements, many vendors have told us or even publicly acknowledged that they want to be more engaged with their customers. We have seen health plans use our data to hold vendors accountable and push for needed changes. Payer-provider summits that KLAS has held in recent years have brought together leaders from health plans, provider organizations, vendors, and regulatory organizations to discuss the challenges of administrative friction and find new and better ways to collaborate. We are grateful for all the hard work and humility of the HIT vendors who have collaborated with us and helped make measurement possible, and we are grateful for the participation and trust from payers that help make KLAS’ data what it is today. In the end, every positive change in healthcare matters.

Photo credit: hvostik16, Adobe Stock