Legacy systems, practices weigh on insurers

Regarding the article “Reform Update: Facing ACA mandates, insurers diversify into technology” (ModernHealthcare.com, Aug. 28), commercial insurance companies should not complain about the requirements of the 80/20 rule. When you consider the administrative costs related to the management of Medicare and Medicaid programs is 6% or less, the commercial carriers really have little to complain about.

It is inevitable that commercial insurers will continue to migrate away from their core business model because of their own inefficiencies. To remain relevant in the healthcare underwriting and payer market, they will need to invest hundreds of millions of dollars to completely restructure their aging legacy systems. The greatest challenge will be behavior modification inside an industry that is steeped in legacy market perceptions and structure.

New players in this market are beginning to emerge. They do not have the overhang of the legacy systems and operating practices. Their administrative cost structures are lower, and the operating practices are far more streamlined, while providing easier access to healthcare management information to the carrier and providers.

Most important is more transparency between the payer, provider and the patient. We will not turn back the tide of rising out-of-pocket costs to the patient, but we can and should remove the mystery.

B.P. Fulmer Managing partner Exchange EDI Atlanta