Introduction

The healthcare industry is witnessing unprecedented churn and transformation, leading to a surge in adoption of IT and business process outsourcing. Driven by regulatory reforms, tenets of consumerization, market consolidation, and emergence of next-generation digital avenues, acceptance of outsourcing has accelerated in the space. The payer industry is grappling with widespread reforms as well as increasing consumerization of demand fundamentally altering their operating model. To tackle these, market participants are actively looking at technology as a lever of operational efficiency and transformational change. As HIX, ACOs, payer-provider convergence, and the overall shift to value-based reimbursement get operationalized; payers need to chalk out an effective IT strategy.

Ongoing regulatory changes – primarily Obamacare and ICD-10 – have had a sizable impact on payers’ technology portfolio, as they look to leverage next-generation IT, as well as modernize legacy platforms. Payers are embracing the challenge of consumerization as their customers take increasing ownership of health outcomes, signaling the shift from large national accounts to the individual segments. This directly impacts their sales, outreach, and member engagement channels and methodologies. Service providers across the spectrum have beefed up their capabilities to cater to this growing market. With companies stepping up adoption of outsourced delivery, there is an uptick in demand for relevant research and market intelligence on demand and supply trends in healthcare outsourcing across each subvertical – payer, provider, and life sciences. The need is more pronounced for the vertical-specific IT outsourcing function, where business challenges are driving greater adoption.

Contents

In this annual report, we analyze the current trends and future outlook of large, multi-year ITO relationships in the payer market. This report is structured across four key sections, each containing insights on the payer ITO market, with a focus on large-sized contracts:

• Healthcare IT outsourcing market overview: Analysis of the overall healthcare outsourcing market and transaction trends:
• Market size and growth
• Transaction trends for IT outsourcing in healthcare
• Segment-level analysis of healthcare outsourcing transactions, including:
• Business segments: Healthcare payer, provider, and life sciences
• Function segments: Application Outsourcing (AO) and Infrastructure Outsourcing (IO)
• Geographic segments
• Payer ITO market overview: Analysis specific to the payer ITO segment with a focus on large transactions:
• Transaction activity and growth trends
• Demand characteristics for payer ITO services by geography, ITO subfunctions, buyer type, and buyer size
• Delivery trends for payer ITO services, including offshore leverage and global delivery locations
• Renewal opportunity till 2020
• Regulations on payers’ mind: Focus on the regulatory upheaval underway in the United States
• Overview of regulatory landscape
• Patient Protection and Affordable Care Act (PPACA or Obamacare)
• ICD-10 transition
• HIPAA compliance
• Healthcare IT and data security concerns
• Outlook for 2014-2015: Analysis of the outlook and implications for ITO for the coming year
• Outlook for overall healthcare IT outsourcing
• Outlook for payer IT outsourcing