Today, some of the biggest government programs in existence are Medicare and Medicaid with the two health care insurance providers serving over 43% of the U.S. population. The Centers for Medicare and Medicaid (CMS) spent $1.6 trillion in 2021 and continue to grow in both size and cost on an annual basis. With this type of investment and permeation into the American populace, one would assume that this program would be running on the most up-to-date applications available. However, both public and private health care insurance carriers continue to operate on legacy systems.
Recently, Andrea Fletcher, the digital services director of the CMS, described their system as operating on technology from the 1960s, which is alarming considering the responsibilities of the program. In fact, the Biden administration has only recently announced plans to modernize their organ matching system. This announcement came from a study conducted in February, which showed that only 26% of organs were procured from donors on average. This is just one example of how efforts to improve legacy systems, which are currently being used by over 40% of the population, allow both public and private organizations to operate in a more efficient manner as well as satisfy user needs. Further exploration will show how modernization improves other areas of business, such as creating user experiences that are both easier to navigate and more personalized as well as the ability to incorporate the latest cybersecurity updates.
Modernizing as a Means to Improve User Accessibility and Personalization
Given the size and diversity of the United States population, a modern flexible system is necessary for creating a smooth user experience for every individual. Today, users connect with insurance carriers using a variety of different devices while communicating using different languages and possessing different levels of technical expertise. The ability to create a personalized user experience for each individual will require a level of modernization that legacy systems were not built for. The importance of this flexibility is accentuated when considering that the purpose of Medicare and Medicaid, in particular, is to serve the elderly and underprivileged.
Prioritizing the modernization of the consumer experience is not limited to just government organizations. In an independent survey conducted by Evolveware, 46% of private organizations measure the success of their application modernization efforts through an expected improvement in customer experience. As health care insurers continue to rely more heavily on analytics and the population continues to adopt digital technologies, the process of creating a streamlined and targeted approach to purchasing and managing health care becomes essential to staying competitive. For a multitude of companies in the marketplace, having an agile system that can be customized to each individual user can be a major differentiator, especially given the variety of factors that each individual has when it comes to making decisions about their health. Moreover, by prioritizing the user experience, organizations can improve their brand loyalty and customer retention, which are key factors when dealing with a competitive marketplace with a lot of players. Insurers have recognized this, as a recent survey of CIOs by Gartner showed that improving the customer experience and application modernization were listed as the highest priorities in the insurance industry. As customers become more judicious with their money due to current macroeconomic trends, providers will need to make sure their platforms’ user experiences are on par with their competitors.
Modernization to Mitigate the Impact of Hidden Costs and Security Vulnerabilities
The costs of not updating legacy systems should also be taken into consideration when making the decision to modernize. While the expense and process of moving away from legacy systems can seem like a significant obstacle, these systems, due to on-site maintenance and operational costs, are already expensive to maintain on a continuous basis. In fact, health care IT teams spend around 60% of their time trying to maintain and manage legacy systems. Furthermore, the opportunity cost of IT teams focusing on maintenance over innovation is significant, especially given the potential of the latest technologies to deliver a more intuitive user experience. There is also an understated but pressing labor cost with legacy systems, as members of the workforce who are familiar with these systems are aging and retiring, and the replacement workforce is not well-versed in legacy languages and technologies.
Finally, legacy systems can also contain blind spots that are prime targets for cybersecurity breaches and hacks today. Legacy applications were built at a time when these types of attacks were not common and, therefore, don’t have the most up-to-date security capabilities embedded. Many of these systems also do not have up-to-date documentation, resulting in a high potential for hidden vulnerabilities. For health care organizations that have access to sensitive data, understanding and then shoring up these vulnerabilities using modern security features is critical.
Health Care Modernization Example: Chatbots
One prominent example of how application modernization can lead to organizational success is the integration of chatbots. As technology expands and businesses identify new ways to reach consumers, the addition of chatbots has become more prominent on platforms across industries. For the health care insurance industry, the bots provide both a cost-efficient way to process insurance claims as well as an enhanced user experience through ease of use. Recent estimations show that bots can handle the workload of two to five claims processors and can deliver 20 times the production relative to cost, allowing industry employees to focus on less tedious and more innovative tasks. Using generative AI models, chatbots will continue to become more sophisticated and varied in their responses to user input. As a result, modernizing legacy systems to optimize the integration of these bots becomes integral to remaining competitive in the marketplace.
Legacy Systems and the Future
As we look to the future, both government and private insurance carriers have plenty of internal and external factors that incentivize application modernization. As Medicare and Medicaid continue to grow due to the increasing number of eligible users, an agile system is integral for user accessibility. Meanwhile, macroeconomic factors such as high costs and an increasingly competitive marketplace will force private organizations to adopt systems that can integrate and adapt to the newest technologies for a better and more secure customer experience. With serious challenges facing both the public and private sectors of healthcare insurance, the necessity to modernize has never been greater.
