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  Home > Our Publications > eHealthcare Strategy & Trends > Featured Article
Health Plans Look to the Internet As the Future

by Danny Fell

Of all the healthcare organizations betting on the Internet today, perhaps none are as optimistic or committed to information technology as health plans. Chris Levan, chief information officer for BlueCross BlueShield of Tennessee, puts it succinctly when he states, “Everything we do has a Web component now.”

Internet applications for health plans span a wide spectrum, from sales and service to e-health initiatives. For example, health plans rely on the Internet to power provider connectivity for electronic claims and reimbursement transactions, support member management programs, enable more cost-effective and timely case review and utilization management, and more recently, to deliver personalized disease management programs in an effort to improve consumer health and lower costs.

Mary Scanlon, senior vice president of e-business at WellPoint, foresees a breakout year for the role of e-health within health plans. “There is much greater alignment with the business and operations side of what we do than ever before,” says Scanlon. “It’s no longer just about a Web site or a particular online application – we are actively engaging consumers online in managing their health, accessing quality and pricing information, and changing behaviors.”

Industry trends and drivers
Some of the more important drivers and trends that will shape how health plans utilize the Internet and Web portals in the near future include the following:

1. Demand for lower healthcare costs. From managing administrative overhead by reducing paperwork and transaction times to enabling more efficient and appropriate medical care, health plans are leveraging the Internet to lower their costs as well as monitor and drive down the costs of providers in their networks. The shift from traditional business practices to electronic communication is a fundamental priority for most health plans.

One area of particular focus for health plans is finding ways to deliver better disease management programs to patients with chronic illnesses. According to the Centers for Disease Control and Prevention, the medical costs of people with chronic diseases account for more than 75 percent of the nation’s $1.4 trillion annual medical tab. Focusing on five major diseases, Levan says, BlueCross BlueShield nurses utilize the phone and Web, in combination, to help providers and patients who are really sick receive the right care – a critical component of managing costs.

2. Growing consumerism movement in healthcare. Although the consumer-directed movement can mean many different things, health plans generally define the industry buzz phrase as a trend toward employers thrusting more healthcare responsibility and choice onto their employees. This might include choosing a health plan or selecting options within a given plan, comparing cost and quality data on various providers, and making more informed decisions about treatment options and follow-up care. The Internet often represents the most effective channel for health plans to deliver these services to members, meaning the plans themselves need to offer robust tools for doing more online.

“In many cases,” says Levan, “it’s becoming a requirement for doing business and winning contracts. Employers are demanding we push more consumer [member] content online, and health plans have to deliver to be competitive.”

The movement to more comprehensive online healthcare solutions is coming from both sides, according to Scanlon. “Employers want to drive consumerism and expect fully integrated programs that help them measure and improve cost and quality for their employees,” she says. “At the same time, consumers are having to make more informed decisions about their healthcare. The technology allows us to personalize the advice and support we give them.”

Scanlon cites WellPoint’s success with personal health coaches and surgical support nurses who answer questions and follow patients through pre- and post-surgery care. “Using Web-based videos, we can educate consumers about the specifics of what to expect, how to prepare for their surgery, and how to take care of themselves once they leave the hospital,” she says. “Leveraging technology, we can improve the overall experience and outcome for the patient.”

3. The move to online health records. Health plans are also beginning to take the lead in payer-based community health records. BlueCross BlueShield of Tennessee has been busy building online medical records for its commercial business and its managed Medicare plans. Levan says his company has also been giving its employees incentives to participate in the online records in an effort to expand the program and fine-tune the tools.

An even more ambitious initiative involves electronic health records for Tennessee’s Medicaid population (known as TennCare), of which Levan’s organization manages 750,000 of the approximately 1.5 million covered lives. The online records were pre-populated with two years of medical history and are now mandatory for participation in TennCare. BlueCross and the state see the program as an important tool for improving care, lowering costs, and reducing fraud and abuse within the system.

4. Increasing transparency in healthcare. As a result of the other trends, health plans are also being asked to help lead the industry in delivering clear, distinct information about healthcare quality, patient safety, and pricing. In response, health plans – and self-insured employers – are turning to the Web and new health info-mediaries, such as Subimo (, to collect, analyze, and communicate quality outcomes and pricing data to consumers in more user-friendly, interactive programs.

Scanlon gives an example of how members in one of WellPoint’s consumer-directed health plans can enter a prescription and their ZIP code and identify where they can get that particular prescription drug filled and how much it will cost, depending on the source. Other tools allow users to compare different drugs and even estimate the costs of different medical treatment options.

5. Interest in pay-for-performance programs. Rewarding healthcare providers and patients with financial incentives is another area where technology is playing an important role for health plans. “We have three different incentive programs within our network today,” says Scanlon. “They range from rewarding consumers for completing online health-risk appraisals and health coaching [activities] to participating in exercise and fitness programs.” She believes that incentives will play a key role in changing consumer behavior, citing as an example the growth of online financial “savings accounts” that members build up as they participate in various activities and programs.

6. Expanding government influence. Although the Medicare Modernization Act of 2003 received the most attention for the Medicare Advantage program it created, the new legislation was also intended to foster more healthcare choices for Americans covered by Medicare and encourage greater use of electronic communications within the healthcare industry. For example, it includes grants for physicians to implement electronic prescription programs and funding for new pay-for-performance pilot initiatives.

Challenges and opportunities
Although health plans continue to position themselves as important online healthcare partners, that role can also bring unique challenges. “While employers are looking to us to publish even more on efficiency and quality, this is still a politically charged issue with some hospitals and physicians,” says Levan. In response, his organization is working hard to meet with providers both to share and discuss comparative data before it goes out to consumers and to educate the industry about the use of such information. The same goes for personal health records, which some consumers may see as intrusive on the part of a health plan.

In many respects, the fact that health plans have functioned as “virtual” partners within the healthcare industry – serving both providers and patients from a distance – makes them ideally suited to take advantage of information technology and new communications channels to conduct business and deliver services and value to the industry as a whole.

Progressive health plans that continue to find ways to leverage the Internet to build their brand value while lowering costs and improving care will likely emerge as real winners.

Danny Fell is a partner with the Chattanooga, TN-based marketing firm Daniel+Douglas+Norcross. Fell speaks and consults frequently about the Inter-net and healthcare. You can reach him at


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