Technology Tackles 3 Statutory Health Insurance Challenges

AOK 5 300x200 Technology Tackles 3 Statutory Health Insurance ChallengesFor German citizens, the misfortune of becoming sick doesn’t open the door to high deductibles and hundreds of thousands of Euros in medical debt.  In Germany, healthcare is not a privilege, but a right, and health insurance providers are a non-governmental and not-for-profit public sector body regulated by public law.  The country sustains a multiple payer health system and every citizen is covered by insurance.

In Germany, Statutory Health Insurance (SHI) is mandatory, and around 86% of the German population with incomes up to 55,000 Euros takes advantage of it.  In 2012, the contributions to the nation’s health insurance pool stood at 15.5% (7.3% contributed by employers and 8.2% contributed by employee).  Beneficiaries are completely covered by the individual who claims them as a dependent.

Citizens who earn over 55,000 Euro annually may choose to opt out of public insurance and instead pay for private health insurance.  However, only about 14% of Germany’s policy holders are privately insured.

3 main challenges

All of the SHI providers in Germany are determined to preserve the health of policy holders by providing the best treatment possible; however, the following challenges exist within the framework of the Statutory Health Insurance market:

  1. Competition: Currently there exist 134 Statutory Health Insurance companies, all which must (since 2009) charge a uniform premium rate.  In effect, competition among insurance providers is fierce. All companies compete for users based on what should matter most: quality of care, customer relationship management, the ease of expensing claims, and special treatment programs.
  1. Changes in government policy: Because SHI-companies are 90% regulated by law, each change in government policy will require an update in SHI IT systems.
  1. Rising costs: A changing demographic in Germany is leading to rising medical costs, however premiums can’t rise indefinitely, so cutting internal costs is necessary.

An innovative solution

AOK, the market leader of the Statutory Health Insurance companies (market share of about 35%), manages huge amounts of data annually.  United under the Federal Association of the AOK, 11 independent regional AOKs together manage 6 million cases of clinical treatment, 370 million cases of medical treatment, and 400 million drug prescriptions annually.

Motivated to fix the complexity associated with SHI challenges and to combat its own internal data management issues, AOK Systems, the IT division of AOK, teamed with SAP to create a cross industry solution.  The result, oscare, is a technical platform that’s available to all SHI-companies to license, not just AOK, and is purposed to cover and support all processes of SHI.

  1. Because the solution is continuously updated and completely customizable, each SHI-company who has licensed the solution is able to innovate on their own terms and differentiate themselves from competition.
  1. All regulations deemed necessary in the German Code of Social Law text, which outlines all requirements of health insurance providers, was completely implemented by oscare. The solution is continuously updated to align with the laws as they evolve over time
  1. SHI-companies are best managing costs and claim expenses by improving the services offered to customers via mobile applications and devices, the internet of things, social networks, special treatment programs, and preventative services.

Benefits with real-time analytics

With SAP HANA running on the backend of oscare, AOK was able to revamp its system of approving and declining home-nursing measures to facilitate easier and simpler working processes for employees. Previously, service providers were managed on a case by case basis via yellow sticky notes posted to a computer screen.  Now, AOK provides all of this information in real time to the processing team, tremendously improving the ease at which this function is performed and increasing efficiency in the overall process.

In addition, AOK now is able to better design disease prevention programs to improve and preserve the health of insurance holders.  In one example, in a trial run of diabetic foot, a specific complicated medical symptom, the evaluation processing time was reduced from 150 hours (about 6 full days) to 15 minutes.

Preserving a valued system

With new, innovative technological solutions, patients have access to better care through increased preventive and special health programs. In addition, prices will remain relatively standard across the SHI pool because SHI-companies running this modern technology are eliminating cost inefficiencies.

Although some may argue that a perfect health system may never exist, I am adamant that with technology, the health care industry is stronger, more accessible, and most importantly, best able to serve patients.  The harmonious triangle between SHI-companies, AOK Systems, and SAP is proof.

For more information about the different health system models, check out the following links:

For more information on SAP HANA and project oscare®, take a look at the following:

For more healthcare technology stories, please follow me on Twitter and LinkedIn.

Read the original blog on SCN in SAP Business Trends.

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Innovation » future of business