IDC Health Insights Assesses U.S. Healthcare Payer Fraud, Waste, and Abuse Solutions in New IDC MarketScape
30 Apr 2014
97% of payers surveyed plan to invest in FWA solutions in 2014-2015
FRAMINGHAM, Mass., April 30, 2014 – IDC Health Insights today announced the availability of a new IDC MarketScape report, IDC Marketscape U.S. Healthcare Payer Fraud, Waste and Abuse Solutions 2014 Vendor Assessment (Doc #HI248079). In the report, IDC Health Insights evaluates eight market-leading fraud, waste, and abuse (FWA) tools and services in depth, offering guidance to those evaluating FWA solutions for payer enterprises. Vendors evaluated in this report include: FICO, IBM, McKesson, Optum, SAS, SCIO, Truven, and Verisk. This MarketScape is being published in tandem with an IDC Business Strategy report: U.S. Healthcare Payer Fraud, Waste and Abuse Solutions Marketplace Overview (Doc #HI248027, forthcoming).
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Priority for fraud, waste, and abuse is rising quickly on the executive agendas of U.S. healthcare payers and investment in FWA solutions (software and services) will rise rapidly in 2014–2015. As a result, payers are seeking guidance on how to invest in the different types of offerings available and to better understand how the major vendors compete with each other.
This IDC Health Insights study uses the IDC MarketScape methodology to describe and assess the offerings and capabilities of eight FWA solution vendors competing in the U.S. healthcare payer market. This methodology is based on a comprehensive framework and a set of parameters that are used to assess those factors expected to be most important to the success of a given solution in a given market over both the short term and the long term. A detailed profile supports the evaluation of the offerings from each of the eight selected vendors. These include the components of the vendor's offerings, their evolution, strengths, and challenges.
Key findings of the new report include:
- 97% of surveyed payers report that they now plan to invest in FWA solutions. IDC Health Insights' annual survey of payer IT and line-of-business leaders indicates that demand for payer FWA solutions will rise steeply in 2014–2015 compared with 2013–2014. For 2014–2015, payers report that they plan additional investment/enhancement to an existing system (47%) or plan to invest in FWA for the first time (47%). Another 3% said they planned to replace a system. In the prior year's survey, far fewer payers reported that they planned additional investment/enhancement to an existing system (18%), new investment (12%) or a replacement system (16%), while the number of payers reporting plans to invest in FWA doubled.
- Predictive analytics create a major departure from "pay and chase" industry practices. Predictive analytics create accurate, cost-effective new ways to prevent or deter FWA. Historically, impressive return-on-investment (ROI) rates for FWA solutions have been based on rules engines and labor-intensive recovery efforts. Predictive analytics further enhance payer capabilities to identify and score questionable claims, procedures, and provider behaviors prior to payment.
- Payers require a more adaptive, cost-effective defense as consumer-based fraud evolves along with the exchanges. Industry participants anticipate that criminal and opportunistic perpetrators will attempt to take advantage of disruption caused by the implementation of consumer-oriented health insurance exchanges (HIXs). To address the increasing frequency of attempts by perpetrators to commit low-dollar, "under the radar" FWA, payers need to invest more in adaptive, cost-effective FWA solutions.
- FWA solutions such as those described in this document promise to address evolving threats with increased accuracy, adaptability, and cost-effectiveness. Predictive analytics promise to give payers the opportunity to fend off FWA rather than incur the costs of pursuing perpetrators after they have been paid. Solutions delivered through off-premise delivery models can be more responsive to evolving threats at lower overall price points. Technology solutions (software as a service [SaaS] and cloud) that are complemented by outsourced services (e.g., analytics as a service) are gaining broad acceptance among payers. Smaller payers in particular stand to gain the most by reaping large-payer economies of scale and ROI for their investments in off-premise FWA solutions.
Of note, disruption caused by health insurance exchanges is coinciding with a long-term rise in non–medical professional, "consumer based" fraud. Payers therefore seek more adaptive, cost-effective counter-fraud defenses. Predictive analytics are evolving rapidly to address that need. According to Sven Lohse, Research Manager, IDC Health Insights, "Predictive analytics create a major departure from "pay and chase" industry practices. This IDC MarketScape helps payers quickly and cost-effectively evaluate best-of-breed FWA solutions, including their predictive analytic technology components."
IDC MarketScape criteria selection, weightings, and vendor scores represent well-researched IDC judgment about the market and specific vendors. IDC analysts tailor the range of standard characteristics by which vendors are measured through structured discussions, surveys, and interviews with market leaders, participants and end users. Market weightings are based on user interviews, buyer surveys and the input of a review board of IDC experts in each market. IDC analysts base individual vendor scores, and ultimately vendor positions within the IDC MarketScape, on detailed surveys and interviews with the vendors, publicly available information and end-user experiences in an effort to provide an accurate and consistent assessment of each vendor's characteristics, behavior and capability.
For additional information about this report or to arrange a one-on-one briefing with Sven Lohse, please contact Sarah Murray at 781-378-2674 or firstname.lastname@example.org. Reports are available to qualified members of the media. For information on purchasing reports, contact email@example.com; reporters should email firstname.lastname@example.org.
About IDC MarketScape
IDC MarketScape vendor analysis model is designed to provide an overview of the competitive fitness of IT, telecommunications, or industry-specific suppliers in a given market. The research methodology utilizes a rigorous scoring methodology based on both qualitative and quantitative criteria that results in a single graphical illustration of each vendor’s position within a given market. IDC MarketScape provides a clear framework in which the product and service offerings, capabilities and strategies, and current and future market success factors of IT, telecommunications, or industry-specific vendors can be meaningfully compared. The framework also provides technology buyers with a transparent foundation to allow companies to independently compare the strengths and weaknesses of current and prospective vendors.
About IDC Health Insights
IDC Health Insights assists health businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the payer, provider and life sciences industries. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world's leading technology, media, research, and events company. For more information, please visit www.idc-hi.com, email email@example.com, or call 508-935-4445. Visit the IDC Health Insights Community at http://idc-community.com/health.
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Anna Di Pietro