Not so long ago the travel industry was dependent on a network of specialist guides, paper tickets, written reservations, and expert knowledge. Today, most travelers have never seen a paper ticket, transit and lodging are arranged with owner operators over mobile apps, and self-service is the norm. Yes, there are still high touch services and expert guides, but they mostly focus on the special cases – group travel, exotic destinations, and the like. 

Similar shifts have occurred in industries as diverse as banking, retail, and insurance. But none of these changes happened overnight – the first ATM for banking is said to date to 1967 – nearly 60 years ago. The move from novelty to norm in such vast business segments happens when four drivers collide:

1. Regulatory facilitation – Barriers must be removed, and in some cases, incentives and penalties established, to permit – or force - shifts in business models.
2. Technological infrastructure – Networking, interoperability, security, user interfaces, mobile phones – the evolving list of technical enablers is mind boggling.
3. Business value – A marketplace dependent on the free flow of data between competitors and business partners is impossible without sufficient return on that information sharing investment.
4. Consumer interest – Until the other three elements reach some critical mass, consumer interest is confined to early adopters, but once that tipping point is reached, consumer demand becomes a dominant driver.

Healthcare has been one of the slowest industries to make the shift to a self-service digital economy despite the undoubted public benefit of enhancing access and reducing costs. This isn’t just due to the hands-on nature of care and the complexities of healthcare data. It’s also an artifact of arcane financing mechanisms that pit the interests of providers, patients, and payers against one another. 

Hence the efforts of the US government to employ its regulatory levers to create a tipping point. 

The CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F) is the most recent of these levers. It pairs the deployment of new technical infrastructure – a set of required Application Programming Interfaces (APIs) - with several major operational changes. Among the latter are tight windows for action on prior authorization requests, and an aggressive approach to information sharing between payers. The catch is that the rules apply only to a limited number of “impacted payers” – basically those federally funded plans operating under managed care models. 

Despite these limitations, this new regulatory push is likely to make a significant difference to the entire US healthcare sector. Why?

1. CMS – the Center for Medicare and Medicaid Services – has indicated that it will implement some of the same changes for what is known as Fee for Service (FFS) Medicare. When combined with the impacted payers, it means that those changes will apply to virtually the entire US population over 65 – the highest consumers of healthcare services. This will create critical mass.
2. The required technical investments require little to no additional effort for use by other health plans operated by a health insurer. For example, a payer with both Medicare Advantage and Medicare FFS plans can use the APIs for both populations, once they are implemented.
3. The combination of technical and operational investments required is pervasive enough that it may be easier for health insurers to apply them to all the health plans they operate. And the new information assets the rules demand may offer enough additional business benefit to make them worth extending to the full health insurance product suite. 
4. Consumers, who have shown almost zero interest in the patient record sharing mandated by previous rules, are likely to be far more interested now that those records will provide visibility to prior authorizations – a major source of consumer frustration today.

Consider one example of how this may play out. 

The new rule mandates deployment of an HL7 FHIR API to share information between a member’s current, concurrent, and past payers. Impacted payers are required to be assertive in making this happen, with the expected benefit of better care coordination for their members (think better outcomes and possibly lower costs). The shared data should be retained by the payer as a longitudinal health record. 

But longitudinal, or unified, health records have value far beyond regulatory compliance. When part of a long-term architectural framework, that includes integrating clinical and claims data, they can be used to: 

• Reduce the cost of data acquisition for quality and performance measures.
• Support analytics to sustain and improve quality scores, e.g., reducing care gaps, tied to payment incentives for themselves and their provider partners.
• Evaluate performance for existing products such as Medicare Advantage offerings and deliver the data for designing new ones.
• Evaluate network adequacy for plan design and performance.
• Support population health management initiatives.
• Reduce provider and member abrasion with an improved and efficient experience, including providing low touch and self-management tools to patients to reduce the cost of treatment/reduce need for services.

In other words – there is value to the entire business of the health insurer. There is value to the providers who are part of its networks. And there is value to the consumer. 

If health insurers choose to take a minimalist approach to compliance with the new legislation, then we may well fail to achieve the goal. But I’m hopeful that enough will recognize the opportunity for fundamental change to push even the most reluctant among us to embrace the high tech promise of digital health, and to make high touch care available to those who need it most.