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New IBM Report Predicts Healthcare Reform Will Force New Roles for US Health Insurers

Growing "retailization" of healthcare will drive change in how healthcare is purchased, consumed and delivered

Armonk, NY - 28 Sep 2007: A new report released by IBM (NYSE: IBM) today paints a bleak picture of the future for U.S. health insurers unless they make radical changes in how they do business. IBM is one of the largest self-insured US employers, bearing financial risk for the health of more than 350,000 employees and their dependants.

Healthcare 2015 and U.S. Health Plans: New Roles, New Competencies asserts that as consumers take on more financial responsibility for their healthcare, they will demand more flexible products, better customer service, more accountability from health insurers and providers and greater transparency in costs and quality. To compete and differentiate themselves in this emerging, retail-like environment, health plans will be forced to adopt new roles and develop new competencies in such areas as member empowerment and provider collaboration if they are to survive. As key examples of this transformation, a growing field of health "infomediaries" -- health, wealth and value coaches -- will be called upon by consumers to help them:

"In this emerging environment, consumers will quickly become more motivated to make better health and wealth decisions. Such changing market dynamics will in turn create new opportunities and daunting pressures for health insurers," said Dan Pelino, General Manager, IBM Global Healthcare & Life Sciences Industry. "Health plans that recognize the ‘retailization’ of healthcare and then successfully transform to provide new delivery models and services will prosper, while those that fail to do so will face rapid marginalization."

The IBM report forecasts that health an differentiation will be driven increasingly by the design attributes of product and services and by equally important factors beyond cost and perceived quality such as trust. Health plans will be asked to deliver more personalized experiences for consumers while earning acceptance as more valuable business partners by healthcare providers and other stakeholders. This will require increasing collaboration between all stakeholders that helps to change consumer behaviors, anticipate care needs, provide and compensate high-value care and streamline administrative functions.

This will require health insurers to change their leadership, culture, competencies, business models, organizational structures, sourcing strategies, processes and information technology to meet the changing market and consumer preferences.

The migration toward the "retailization" of healthcare described in Healthcare 2015 and U.S. Health Plans: New Roles, New Competencies, has resulted from such factors as:

In such an unsustainable environment, IBM says health plans should anticipate the following near-term changes along the road to 2015:

IBM is uniquely positioned to help health plans address these emerging challenges through a portfolio of solutions that guide, enable and accelerate health plans’ transitions towards more integrated, on-demand, member-centric enterprises.  Built on services-oriented, model-driven architectures, IBM’s transformative solutions are enabled through core-system modernization, enterprise information management and customer-services modernization.

Healthcare 2015 and U.S. Health Plans: New Roles, New Competencies, is the culmination of extensive research and interviews conducted over nine months, beginning in January 2007.

About IBM: For more information about IBM, please visit www.ibm.com.

Contact(s) information

Gina Jesberg
IBM Media Relations
(203) 445-1545
ginajes@us.ibm.com

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