Health Care Reform Requires IT Solutions to Influence Consumer Perception at a Health Care Payer

Health Care Reform Requires IT Solutions to Influence Consumer Perception at a Health Care Payer

Rahul Bhaskar (California State University – Fullerton, USA) and Au Vo (Claremont Graduate University, USA)
DOI: 10.4018/978-1-4666-4619-3.ch003
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Abstract

Recent health care reform is one of the biggest changes that the health care industry has ever faced. This reform represents paradigm changing opportunities and challenges for the company providing health insurance in a managed care environment. The CIO of a premier managed care health insurance provider (ABC Company) wants to take advantage of the new environment using Information Technology. He and his management teams have determined, using primary research, that the customer perception of the health care company’s cost and accessibility to quality health care are the most important factors to their customers in the new market. They are aware that even though they have been able to use information technology to predict customer reaction to changes in cost and perception of quality, it will be very difficult to deliver new systems and processes that support ABC Company’s exposure to the new realities it faces in the market.
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Organizational Background

A debrief from a consulting firm about the recent health care overhaul legislation caused the CIO of a premier managed care health insurance provider (“ABC Company”) to conclude that this health care reform was a significant change for the health care industry and his company in his living memory. The reform was not only significant in providing health care access to more than 32 million additional individuals but also would force the health insurance companies to rethink the way they delivered health care. After almost 90 years of surviving, his company may have to close its doors, if it did not take initiatives to keep its competitive edge and adapt to the new realities of the health care market.

Market was demanding health insurance providers to rethink their business model. It was clear from the primary research that the consumer perception of the company’s cost of health care and ample access to quality health care was of utmost important for the company to survive. The new legislation had made consumers more aware of the choices in health care insurance products available in the market. Consumers wanted a company that they perceived had a lower cost than the competition and that provided an ample access to a quality health care. The CIO and the other senior executives in the company knew that demand for controlling costs to the consumer, and ample access to a quality health care tend to inversely affect each other. For example, improving quality of the health care is likely to result in an increase the health care costs. To gain a competitive edge in this new environment of providing cost control and amply accessible quality health care at the same time would require a shift not only in the way the company delivered health care, but also how customers perceived these changes. They knew that altering the consumer perception was a new model for them and they had not tried something this radical earlier in the company’s history.

As they studied the market and determined that it was immensely dynamic due to the new health care law and filled with an uncertainty, the CIO of the ABC Company and his management team determined that customer perception changes required use of Information Technology based solutions integrated with the new processes. The team knew that if no action was taken, a company that had survived infinite vicissitudes in its 90 years, will not survive the new era of change in health care provision. An understanding of the health care cost, and accessibility to a quality health care was important before planning information technology systems that could track, influence and maintain the consumer perception of the ABC Company’s efforts addressing these challenges.

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