The Future of Healthcare IT and Unbundling the PBM Business Model

The Future of Healthcare IT and Unbundling the PBM Business Model

Introduction:

The healthcare industry has seen significant developments in the first quarter of 2023, particularly in the fields of healthcare IT and pharmacy benefit management (PBM). Despite some challenges and uncertainties, there are promising opportunities for innovation and improvements in healthcare delivery, reimbursement, and operations. In this article, we will explore the latest trends and developments in healthcare IT and the recent announcement by Blue Shield of California regarding the unbundling of the PBM business model. We will also discuss the potential impact of these changes and provide actionable advice for stakeholders in the industry.

Healthcare IT: Driving Transformation in the Industry

The healthcare IT vertical plays a crucial role in enabling healthcare providers and payers to streamline their operations and improve patient care. In the first quarter of 2023, the industry witnessed 70 VC rounds with a total investment of $1.3 billion. While this represents a slight increase from the previous quarter, it is still below the pace set in 2020 to 2021. However, the urgent need for improvements in healthcare delivery has continued to drive interest in healthcare IT.

One of the key highlights in the industry was the Healthcare Information and Management Systems Society (HIMSS) Conference, held in April 2023. The conference showcased generative AI and interoperability solutions, which have the potential to transform the healthcare industry. Although these technologies are currently limited in their use cases, they hold great promise for the future.

Unbundling the PBM Business Model: A Reality Check

Blue Shield of California recently made headlines with its announcement to transform how medications are purchased and supplied by unbundling the PBM business model. While it is commendable that they are undertaking this experiment, it is important to have a reality check and understand the implications of this move.

Contrary to the claims of disruption, Blue Shield will act as a general contractor for a subset of pharmacy benefit management services. The functions of pharmacy benefit management can be performed by various entities, including employers, health plans, government agencies, independent PBM companies, and pharmacies. Blue Shield's role in this unbundling is interesting but not as novel as advertised.

Actionable Advice:

• 1. Embrace Healthcare IT Innovations: As healthcare IT continues to evolve, it is crucial for healthcare providers and payers to embrace innovative solutions such as generative AI and interoperability. By incorporating these technologies into their operations, organizations can improve patient care, increase efficiency, and stay ahead of the curve.

• 2. Evaluate Alternative PBM Options: While Blue Shield's unbundling of the PBM business model is an intriguing experiment, it is essential for stakeholders in the industry to explore alternative PBM options. Smaller, more transparent PBMs such as Capital Rx, Navitus, and WellDyne can provide viable alternatives and welcome the opportunity to work with healthcare organizations.

• 3. Foster Collaboration and Partnerships: To drive meaningful change in the healthcare industry, collaboration and partnerships are key. Organizations should actively seek opportunities to collaborate with healthcare IT companies, PBMs, and other stakeholders to develop innovative solutions that address the challenges faced by the industry.

Conclusion:

The healthcare industry is undergoing significant transformations in the fields of healthcare IT and pharmacy benefit management. While there are challenges and uncertainties, there are also promising opportunities for innovation and improvements. By embracing healthcare IT innovations, exploring alternative PBM options, and fostering collaboration and partnerships, stakeholders in the industry can drive positive change and improve patient care. It is crucial for organizations to stay informed, adapt to the evolving landscape, and take proactive steps to shape the future of healthcare.