Outsourcing Implications of Healthcare Payer-Provider Convergence

20 Mar 2013
by Abhishek Singh, Jimit Arora

Executive Summary

The healthcare market is at a unique point in history as the traditional boundaries between payers and providers blur at an accelerated pace. Healthcare payers and providers are increasingly finding reasons to build organizations that assume the responsibility of both sides of the equation - care financing and care delivery.

With payers starting to acquire and manage providers, and providers assuming the financial risk for the patients they serve, these organizations have embarked on a transformational exercise – which has immense strategic and operational implications. This convergence in healthcare, fundamentally, alters the demand profile for technology and business operations, and hence, creates a downstream supply impact as it pertains to sourcing decisions (especially service provider selection).

“New” healthcare entities looking to realize synergies across their outsourced portfolio will seek service providers that provide competence and expertise across the entire healthcare ecosystem. The corollary to the above is that as payers and providers converge, service providers who have invested in a balanced and holistic portfolio of healthcare offerings will find themselves better placed to serve this new market opportunity.

With an eye towards the future, this viewpoint analyzes the implications of payer-provider convergence on the IT outsourcing service provider landscape across four themes:

  • Payer-provider convergence: This section introduces the ways in which payer-provider convergence is becoming an industry reality and provides examples of convergence
  • Evolution of IT services priorities: This section establishes the resultant transformation of IT services priorities in response to convergence
  • Selecting the right service partner: This section examines the current supply landscape and the choices available to the healthcare organizations
  • Succeeding in the era of convergence: The concluding section lists out the implications for the healthcare organizations and the service providers as they seek to succeed in the evolving marketplace

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