Home Technology Why Health Plans Must Have Next-Gen CAPS Technology

Why Health Plans Must Have Next-Gen CAPS Technology


Legacy vs. Next-Gen Tech: Navigating the Dilemma and Advice for a Smooth Transition
Sagnik Bhattacharya Chief Operating & Product Officer HealthEdge

Core Administrative Processing Systems (CAPS) operate as the brains behind a health plan’s business. These systems are critical to the smooth functioning of a health plan. Today, many payers run on decades-old CAPS systems built on legacy technologies. This can be a serious drawback. 

Legacy systems may have been efficient based on the technology and best practices of decades past, but have aged beyond their time. They often require an increasing number of workarounds and fixes to try to keep up with emerging needs. These homegrown or highly customized commercial systems often aren’t aligned with the advances in cloud technology, API integration and a changing ecosystem. Through a labyrinth of customizations and duct-tape fixes added over time, legacy systems can accomplish basic functions; however, they are obstacles to enabling business agility and digital transformation for health plans. 

Health plan business leaders are faced with an environment in which regulatory requirements change quickly. They have a need to introduce and modify products in the market at a rapid pace, as well as a desire to acquire more sophisticated value-based contracts that drive toward outcomes. Leaders want technology to operate as an enabler of these business priorities, but too often are slowed by legacy CAPS and core operations that can’t incorporate and adapt to change. A next-gen CAPS platform can dramatically improve speed to market and also surface business opportunities that are simply not possible in a legacy CAPS environment.

Almost all health plan leaders agree that they need to have next-gen CAPS technology to enable digital business transformation, replacing legacy status-quo solutions that get in the way. 

So, why isn’t legacy technology phased out by payers when it should be? While it was once adequate, or at least consistent, these technologies linger because payers are hesitant to commit to a perceived large undertaking they fear will be both costly and confusing. Their  dilemma is how to efficiently and effectively transition from legacy systems to next-gen technology that leverages the cloud, APIs, machine learning and artificial intelligence. 

For 2022 and beyond, the pressure to adapt is here. The Deloitte Center for Health Solutions recently reported that 80 percent of health system leaders think that an executive championing change and the management of the implementation (68 percent) are key accelerators of successful digital transformation. This makes it clear that executives must be highly strategic in their approach. 

For payers, pursuing digital transformation – and more specifically, ditching their legacy technology – requires a strong game plan. How can they effectively navigate to a position where they can improve revenue, gain competitive advantage and grow? Here are a few key best practices:


1. Start with strong executive support

Even with the best possible outcome – change is hard. Balancing current workflows while trying to learn new systems is not an easy task; it’s natural to resist change and cling to the status quo. As McKinsey & Company notes, “people – rather than technological –  issues tend to be the biggest obstacles that keep companies from achieving their transformation goals.” The first critical element to any successful transition is profound buy-in at the management level; support must start with the C-suite and be absorbed down through the ranks. The most successful companies very effectively foster a culture that supports new and digital ways of working.

2. Assemble an implementation task force thoughtfully 

Within organizations, there is a tendency for workgroups to fall into siloes. Using tools in case management, utilization management, appeals and grievances, and IT can help develop respect, appreciation and empathy between teammates. The right talent team may exist within your organization, but it’s likely that external project management and implementation support sources will be needed.  

3. Uphold trust as a core value

When the C-suite anticipates the impact new workflows on their teams and prepares solutions in advance of those changes, they will be perceived as trusted leaders who can respond to potential pain points and ensure plans are in place for smooth transitions. 

When personnel challenges arise during the implementation, it’s important to be prepared. There might be feedback that manifests as frustration and resentment both directly or indirectly. It is critical for the C-suite to foster an environment in which employees can freely ask questions, feel represented, and not be judged for misinterpreting information or seeking further clarification. Maintaining a positive, confident persona will be key to delegating and empowering employees to take ownership of their roles during implementation and beyond.

4. Let change come in waves 

On average, the length of any new software implementation process varies widely. Consider breaking down the transition into digestible phases to allow for tangible feedback and support as the onboarding increases in complexity. These waves, determined by business priority and lines of business, can start with a small population and fewer staff working in that area, leveling up to larger groups or lines of business. The idea is to initially embrace simplicity and see what lessons can be applied to the more complex waves two and three, and use the lessons learned from earlier phases.

When unexpected challenges arise, which they often do, it’s critical to pivot, not lose sight of the end goal, and be adaptable to avoid any setbacks. Every organization’s experience will be different. Insights from personalized early phases will be invaluable to customizing an approach that truly works.

5. Begin with the end in mind

Adoption of next-generation technology provides the opportunity to transform a health plan’s business and operations. Resist the urge to replicate current-state business processes and workflows on the new technology platform; reimagine and design future-state processes to support digital member and provider engagement.  

As healthcare payers work to increase interoperability, offer member-centric solutions and adopt value-based care models, reliance on fragmented, dated legacy technologies inhibits the digital transformation that the current industry demands. Knowing when to put your legacy system out of its misery is a critical multiplier for success. While doing so, do not lose sight of what matters most during any new implementation, supporting teams and equipping them for success. When you have buy-in and empowered staff who feel like winners with any new company initiative, it can only create a stronger foundation for the future of the company.  

About Sagnik Bhattacharya

Sagnik Bhattacharya is executive vice president and general manager for HealthEdge HealthRules, where he is responsible for the development, customer success and growth of the HealthRules platform, the market-leading Core Admin Processing System for payers. Sagnik is a proven healthcare technology leader and has driven vision and execution for multiple enterprise-scale healthcare companies, with two decades of experience in building best-in-class technology-enabled solutions for providers and payers. He has held multiple leadership roles with Epic Systems Corporation, and led Epic’s payer- and provider-facing value-based healthcare solutions. Sagnik previously served as head of product and network strategy for PatientPing. He serves on multiple industry boards, including Carequality, the leading national interoperability platform.

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