19 minute read 20 May 2021

Future-proofing the business

Building a superior experience for health plan customers through digital transformation

Bill Preston

Bill Preston

United States

Matthew Kaye

Matthew Kaye

United States

Jimmy Joseph

Jimmy Joseph

United States

Natasha Elsner

Natasha Elsner

United States

Hemnabh Varia

Hemnabh Varia


As health plans move into the future of health, they should live up to the standards of other industries that have moved toward customer centricity through digital transformation, building on a foundation of transparency, interoperability, and trust.

Executive summary

For health plans, staying competitive as we move to a customer-centric Future of HealthTM will effectively mean delivering a seamless, personalized, and secure experience that exceeds customer expectations. Health care organizations will no longer get a pass simply because “it’s complicated”; they should live up to the same standards as other industries. A better customer experience can be built on the foundation of transparency, interoperability, and trust. Health plans that can succeed in this future are those that recognize the need to transform their business from managing enrollment and pooling risk to taking care of members’ health and well-being over their lifetime.

What progress are health plans making in this transformation? A survey of 35 technology leaders at health plans and 30–60-minute interviews with 10 technology executives showed that the headway is slow and the challenges are many.

Organizations’ understanding of what it means to be digital has evolved from an efficiency play to enhancing the customer experience as the main goal today. Fifty-seven percent of survey respondents seek better customer service and engagement as the No. 1 outcome. While the member is the most important customer, health plans think of caregivers, employers, brokers, their own employees, and government purchasers as customers too.

Realizing this vision of superior customer experience through digital transformation calls for a different set of skills from technology professionals and executives. Respondents call it systems thinking, engineering mindset, or end-to-end planning. It involves understanding the whole system, the overall goals, its various subsystems, and the recurring patterns in the relationships between the subsystems. To achieve systems thinking, technology teams should work closely with the business and bring in experts with human-centered design and user experience, whereas technology leaders should be part of strategy planning and execution.

Modernization progress of customer-facing platforms is slower than other core platforms. We asked respondents about modernization progress of five technology platforms (clinical, core admin, analytics, engagement, and customer service). Only two (of 45 respondents in the survey and interviews) said they have completed modernization of a single platform. The majority are in process or plan to modernize in the next one to two years. Engagement and customer service platforms see the least progress: 57% and 45% of respondents, respectively, are in process or plan to modernize within one to two years. How organizations approach platform modernization is informed by their existing infrastructure, previous technology investments, vision, and growth strategy. 

Shift left on cyber. The survey respondents identified cyber and information security as the number two investment priority after business intelligence. However, interviewed leaders warned it could be expensive to correct cyber-related mistakes, particularly ones having to do with cloud configuration. Baking in cybersecurity in DevOps from the outset can make for a more efficient and resilient process.

Our respondents also spoke of challenges. Two-thirds identify lack of requisite expertise (69%), such as cloud engineering and software architecture, and incremental investment approach (66%) as their main challenges. Half say disparate systems and businesses from M&A activity (54%) and the lack of defined vision (49%) have challenged their digital transformation agenda.

Our view is that while platform modernization is important, health plans at different stages of digital transformation have an opportunity for quick wins in three areas that can help advance their digital agenda: customer engagement, analytics, and cyber. Below are a few examples.

• Add texting to omnichannel engagement

• Create self-service workflow to help customers with easy questions (e.g., benefits inquiries or claims status inquiries)

• Take advantage of analytics to improve care gap closures and social service referrals, or to create personalized network steerage suggestions

• Enhance identity and access management

Digital transformation is about future-proofing the business. In Deloitte’s vision for the Future of Health, companies that can create a delightful customer experience, invest in their health, and earn their trust will win. The time is now for health plans to seize this opportunity and execute a robust digital transformation strategy.

Research findings

About the study

In February 2021, the Deloitte Center for Health Solutions surveyed 35 technology leaders (including chief technology officers, chief information officers, chief digital officers, and chief analytics officers) from health plans with a minimum of 500,000 lives. The survey included questions about investments in technologies and broader organizational strategies to understand their priorities and vision. All 35 responding organizations participate in government programs and 31 sell commercial health insurance products.

In addition, in February–April, 2021, we conducted 10 in-depth qualitative interviews, 30–60 minutes each, with technology executives from regional and national health plans to understand the approaches they are taking toward modernization of their legacy platforms and goals they hope to achieve in the short and long term.

What does digital transformation mean?

Digital transformation is a journey, not a destination

Several organizations told us their vision for digital transformation has evolved over time. Initially, it was mostly an efficiency play, whereas now it is about customer experience. As our respondents put it, digital transformation is a means of building a connected ecosystem of members, providers, and internal stakeholders to provide value-centric services, enhance member relationship, and improve collaboration across the value chain while leveraging multichannel opportunities.


“Early on, it was about basic process automation. There was always a strong desire to digitize and automate workflow, which was done in silos. Over time, the focus shifted to how we create seamless interactions across silos that otherwise create handoffs.”—Director, digital planning

To thrive in the future and head off new competition, health plans recognize the need to significantly modernize their core platforms and transform their business so that they can meet customers’ evolving demands.


“Every industry has gone through democratization, transformation, and transparency, whether it’s a seat in the travel industry or a product in retail. But when you look at health care, the transparency, availability, and convenience don’t exist, and the underlying software platforms are holding it back.” —SVP and chief digital officer

Respondents admit that health care lags other industries, even heavily regulated and conservative ones like finance and property and casualty insurance. Most of the survey respondents say they are in the early stages of digital transformation: 77% reported they need three to five years or even more to fully implement their digital transformation plans. Respondents recognize that digital transformation can never be declared complete because new investment opportunities continue to arise. Even organizations that date the start of their digital transformation programs back to the early 2000s or 2010 say they have a lot left to do.

What outcomes do health plans want to achieve through digital transformation?

Seamless customer experience is the end game

Experts we interviewed say the No. 1 outcome they try to achieve through digital transformation is to improve the customer experience. They employ interactive capabilities, online tools, and apps to create a seamless information-driven end-to-end experience—whether it’s to understand and navigate benefits, access care, or receive health advice. And they are beginning to leverage artificial intelligence (AI) and analytics to guide the member to the next best action.

In the survey, 34% of respondents say better customer service and engagement is the No. 1 outcome they expect as a result of digital transformation; for 57%, it is one of their top three outcomes (figure 1). Other key benefits include reduced regulatory and compliance risk (57%) and increased agility and scalability around technology (54%). We heard that sometimes regulatory requirements can create opportunities, for instance to fund an initiative (like interoperability, price transparency, or automated prior authorizations) that wouldn’t be an immediate priority without the regulation. And although agility and scalability around technology isn’t a business goal in and of itself, we heard repeatedly that this is essential for doing business. In the words of one executive, “Companies that aren't in the software industry need to start behaving like software companies in terms of how they push solutions and meld the technology with the business.”

While the member is the highest priority customer, health plans we interviewed think of caregivers, their own employees, employers, brokers, and government purchasers as important customers too. However, it is impossible to prioritize everything, and at many organizations, these other customers are taking a back seat for now. The survey results echo this: Data sharing and collaboration with providers (49%) is the fourth-highest ranked desired outcome of digital transformation, better service of employers and brokers is much lower (14%), and the ability to leverage alternative workforce models is in between (31%).

Companies we spoke with prioritize digital initiatives by line of business, geographic market, and as a response to COVID-19 (e.g., digital and virtual health).

It appears that digital transformation is on the rise vis-à-vis other enterprise priorities. In a recent study of health plan CFOs, finance executives reported that over the past year their organizations increased capital investments in digital (AI, RPA, cloud) and core business technologies (ERP, clinical, operational), whereas investments in ventures and other businesses and in new building assets decreased.1

Immediate areas of focus

1. Better campaign management 

Health plans told us they are making progress toward better customer experience by improving how they communicate.

One interviewed executive told us their organization created a “contact preference”capability to obtain permission and identify member preferences for communications, which in turn enabled it to design a campaign management system that segments members and matches the communications to their preferences and needs, such as preferred language, channel (text, email, phone, mail, app), and frequency.

2. Reducing the burden on the member

Health insurance products are difficult to understand, use, and shop for, and health plans are designing processes that make it easier for customers to do these things.

One health plan created a context-driven device-appropriate workflow for Medicare enrollment that presents questions and next steps based on prior answers and existing information. For instance, an existing member transitioning from a group plan to an individual Medicare Advantage plan is not asked to enter information that the plan already has (such as demographics or current medications). And while a prospective member will be asked for more information than an existing one, the redesigned shopping and enrollment process is far less confusing, and includes tips, tricks, and FAQs.

3. Reducing the burden on employees

Often, contact center representatives have to navigate multiple applications just to get the information they need to do their job. Health plans employ digital tools to pull information in real time from multiple underlying core systems around enrollment, benefits, claims, care management, and pharmacy, creating a far smoother experience for representatives serving members and providers.

4. Making care management more efficient

One technology leader described a digital care management program through an external vendor that allowed them to engage more effectively with members who are prediabetic, newly diagnosed diabetics, and those who have had diabetes for some time. This program significantly increased their ability to reach more members and allowed them to free up care management nurses to engage more frequently and in real time with these members. The organization is now planning to expand this program into other chronic conditions.

Longer-term goals

1. Member retention

Each time a member switches to a competitor, it costs the health plan money to recruit a new member to replace him or her. For this reason, investing in a positive customer experience today should pay dividends in member retention in the future. Additionally, new sensing tools based on advanced analytics and AI can generate actionable intelligence to prevent disenrollment through timely service recovery or other efforts. But the most valuable currency for member retention is trust—health plans should prove to their members that they genuinely care about them—and health insurance as an industry is starting from a low level of trust.2


“It all comes down to trust, getting consumers to trust you explicitly. We can build all the services but to really do it, customers need to believe you look out for them, not yourself. Health plans are always the butt of the blame for everything wrong with health care.” —CTO

2. Improved health care outcomes, at scale

Interviewed executives spoke of using advanced digital tools such as machine learning and AI to create next best actions by identifying trigger events (such as medication errors, malnutrition, hospital-acquired infection) or “forks” in the member journey that can set them down one path or another. These insights can help guide members toward a path or next best action that would optimize the outcomes they aim for. These tools will build on existing risk stratification models and integrate members’ devices (Fitbits, smartphones, smart speakers), add other data, and train these models to generate and customize next best actions. Data can be internal (claims, care management, prescription history) and external (community-based organizations, customer apps, search histories), and the more data is collected, the smarter the model gets, leading to a greater impact for more members.

Additionally, organizations are building the data and analytics infrastructure that will support value-based contracting with providers (through data sharing and decision support), with the goal to improve population health. Regulatory mandates on interoperability are helping these efforts.

3. Increased operational efficiency

Using workflow automation, health plans can create self-service platforms for members and providers. This could alleviate the need for staff to attend to routine things like answering basic benefit questions. Instead, they could be redeployed toward higher-value activities like supporting members with complex care needs around disease education, social needs, or care navigation (e.g., coordinating second opinions or travel arrangements to a clinical center of excellence).

What skills do technology professionals and executives need?

It is not just about technology

Technology skills alone are not enough to ensure success of digital transformation. Digital transformation requires strong understanding of the business, technology, and systems thinking (we also heard the terms engineering mindset and end-to-end planning to describe this concept). One of our respondents said that systems thinking used to be a classic IT construct prior to the 1970s and 1980s. It requires understanding the whole system (organization), the overall goals, its various subsystems, and the recurring patterns in the relationships between the subsystems. By focusing on the entire system, one can find solutions that address as many problems as possible in the system and remove friction between different parts.


“IT teams have to have a systems view end-to-end of how each piece plays into everything else. Without that, each piece creates its own entry and exit criteria that even in combination create a value chain that’s too heavy and administrative. End-to-end perspective ensures they can understand the security and quality controls, the nonfunctional requirements of the delivery platform or process that ensure the integrity of the process. So yes, it’s a new way for people to have to think in IT, but it comes from an old set of skills and alternative disciplines.” —SVP and CTO

To achieve systems thinking, technology teams should work closely with the business, and technology leaders should be part of strategy planning and execution. Respondents gave advice on where to look for these skills: For instance, people with Six Sigma backgrounds can see, analyze, and break down processes, and apply systems thinking; and human-centered design and user experience experts are important because they understand the customer point of view and user experience.

Additionally, interviewees said that the role of technology leaders should be more defined, and they should be empowered to take strategic decisions and have a say in the budget.

How do organizations prioritize legacy platform modernization?

Health plans recognize the need to retool or transform their core technologies and processes to reduce costs, improve the medical loss ratio, and position for increased adoption of digital technologies. With an outdated infrastructure, it can become increasingly difficult to take full advantage of new digital tools and truly improve customer experience.

Approaches to platform modernization vary. Only two of our respondents across the survey and the interviews have completed modernization of a single technology platform. The majority are in process or plan to modernize in the next one to two years. Survey respondents say they have made the most progress with clinical platforms; this includes care management, utilization management, and medical policy (figure 2). And they report the least progress with engagement and customer service platforms. Our research suggests that how organizations approach platform modernization is informed by their existing infrastructure, previous technology investments, vision, and growth strategy. Below we describe several approaches we observed.

Case study 1. Building the digital foundation requires an overhaul. At one organization, an antiquated core platform of 30 years ingrained in all aspects of the work was restricting growth and ability to scale. Consider a member phone call where a contact center representative has to open eight or 10 applications to have all the necessary information on the member.

With the new system, reps will have all information in one place—enrollment, eligibility, claims, care and utilization management—which will help them connect benefits around medical, dental, vision, and pharmacy. Despite a system stabilization period that will be required when multiple platforms go live at about the same time, the tech executive expects to see benefits within a year.

As a next step, the organization is defining a digital member journey. One element in that journey is an AI-driven capability to prompt the member toward next best actions for her health, building upon her profile, clinical and claims history, social determinants of health, and other internal and external data.


“We started with the core. That core is very hardwired and modularized, and if you try to take out one module you’ve got to take out the other module, and as you lift that one out, there is something else we have to address. Daunting doesn’t even begin to describe it!” —Vice president, IT & CTO

Case study 2. Complete overhaul is not the answer. Organizations decide whether to retrofit or replace based on which drives the most value. Some can extract value from existing platforms, especially those that were updated in the past couple of years.

One organization saw the greatest value in modernizing its data and analytics platform, which supercharged its data collection and integration, analytics, and recommended actions.

All digital data (in notes and in forms) is fed into a natural language processing engine and those insights enhance risk stratifications algorithms and estimates of member likelihood to engage in care management programs. Data integration tools convert this and other data into formats that their legacy care management and administrative systems can recognize, and those legacy systems create the workflow for customer service and care management staff to serve members in new ways. For instance, customer service reps can now close gaps in care by helping members schedule a wellness visit or by transferring the call to a telehealth specialist, and care management nurses can refer members to specific community resources (based on member social service need and geography).


“We modernized our data and analytics platform because at the end of the day, the data and analytics is really what’s going to drive a lot of the downstream workflow in the legacy systems that are operational in nature. Do we always get to do what we want because maybe the legacy system has limitations? No, we don’t. But as the API technology evolves, it will allow us to go a little bit further.” —SVP, chief data officer


Case study 3. Connecting the silos left from previous digital initiatives. One provider-sponsored health plan began its digital initiatives in the 2000s; at that time, it aimed to improve the efficiency of operations at a functional level. Considerable care was given to preserving the firewalls between the care delivery and health insurance side of the business. However, this resulted in a disjointed experience for the member and in low adoption of digital tools.

Once the organization applied the customer lens, it became clear that they needed to break down functional silos, and cross-functional teams from both sides of the business needed to sit together and talk to each other not “my department vs. your department” but from a member standpoint.

This in turn created a need for a different governance approach. They assigned champions from senior ranks to lead and be accountable for the effort, with dedicated teams supporting them. And approvals of large digital transformation initiatives had to take place above the business unit and go all the way to the board of directors.



“There was a feeling that we don’t want the health plan to be involved in care delivery and vice versa. We built nice digital things on the care delivery side and on the health plan side that were related, but the pieces did not connect well, and the consumer was mad. Now, the leadership felt that their investment is not paying off because consumers are not adopting.” —Director, digital planning

Case study 4. Acquisitive growth calls for strategic integration. For an organization that grows by acquisitions, the technology challenge is having to constantly bolt on new systems, data sources, people, standards, and data centers. If the goal is to extract the scale premium from M&A, the technology should focus on integration.

This organization uses two approaches. The direct-to-digital approach is to layer on top of the integration effort the movement toward the digital solution that the organization wants, which requires completing a two-step integration in one step. For instance, an on-premises email system of an acquired company is allowed to remain until the entire organization moves to a new system: This skips the step of moving from one legacy system to another as an interim integration. Complex legacy assets, on the other hand, require functional migrations: The provider experience is moved to the provider portal and member data to the member system. For government programs, functional migrations can take years because of regulatory requirements around data integrity and data preservation.


“We’ve learned that integrating companies requiring big bang membership moves is really dangerous: The configuration of benefits, the links to providers and systems are so deeply embedded that integration of assets through functional migration is more effective than direct-to-digital.” —SVP and CTO

Cybersecurity is key to customer trust

Cyber and information security did not rise to the very top as a technology investment priority in the survey; it was number two, after business intelligence (figure 3). But interviewed respondents warned that it can be expensive to undo or correct cyber-related mistakes. Several said cloud architecture can be a cybersecurity landmine, especially when organizations operate in or integrate multiple cloud systems. When security-related issues arising from multicloud environments that don’t “play well with each other” become visible to customers, organizations can lose trust that would be difficult to restore.


“Even a hint at information security gaps is a showstopper. People will abandon whatever they are doing if things are not behaving in a way they have seen on Amazon or another digital site.” —Director, digital planning


The 2020 IBM study on data breaches suggests that these anecdotes from our respondents may be indicative of a trend: Stolen or compromised credentials and cloud misconfigurations were the most common causes of security breaches, accounting for nearly 40% of malicious incidents,and the average cost of data breach in health care was US$7.13 million, the highest of all industries.3

Shift left on cyber: Cultivating a DevSecOps mindset

In our client experience across industries, we have observed that even as technology organizations began embracing agile development, many continue to approach security in the same incremental, siloed way they did with waterfall. And in many DevOps pipelines, security is still treated as a bolt-on rather than a design feature. We recommend a shift-left security approach, which gets companies closer to DevSecOps, an evolution of DevOps. DevSecOps enables companies to automate good cybersecurity practices into the toolchain and use them consistently. The DevSecOps trend is more of a mindset than a formal set of rules and tools, and systems thinking is at its foundation.4



“The move from on-premise data centers to cloud for a traditional health care player is a lot more complicated than people think if you’re paying attention to security. The first time you go into AWS, or try Google cloud, or the first time you try Oracle cloud, there’s an enormous amount to get right: setup and institutional knowledge, monitoring, security, performance, and everything else. Because while each of those clouds sounds similar, their actual operations are very distinct and different. You have to think systems thinking end-to-end, you have to think engineering, and when you do, really really evaluate those things.” —SVP and CTO



What are the challenges?

Expertise and commitment

In the survey, two-thirds of respondents said lack of human resources with requisite expertise (69%) and incremental investment approach (66%) are their main challenges. Half of respondents said disparate systems and businesses from M&A (54%) and lack of defined vision (49%) have challenged their digital transformation strategy (figure 4). In interviews we heard that technical expertise—such as cloud engineering and software architecture, or even cyber, data, and analytics—are easier to find than experts with institutional knowledge capable of systems thinking.


No-regret moves for any stage of digital transformation

Based on this research and our client work, improving customer experience through digital transformation is not contingent on the status of platform modernization or overall digital maturity. Health plans at different stages have an opportunity to advance their digital journeys and achieve quick wins in at least three areas: customer engagement, analytics, and cyber. Consider these examples:

• Add text messaging (such as SMS) to omnichannel engagement. Customers increasingly favor text communications over voice. These days, a texting option can be a quick and inexpensive addition to a health plan’s customer service and care management platforms.

Self-service workflow can help customers get easy questions answered or steps completed (e.g., benefits inquiry or claims status). This not only improves their experience but also reduces workload for customer-facing staff. Consider digital document upload for out-of-network claims or electronic submission of prior-authorization requests and appeals.

Analytics can raise customer relations or care management to a new level. In case study 2, we illustrated how one health plan used analytics to improve care gap closures and social service referrals. Other applications may involve personalized network steerage suggestions (imaging or labs) for members with a propensity to seek care out of network.

• Enhance identity and access management. A recent consumer survey showed 55% of consumers have stopped using a website because the login process was too complex and 92% of users will leave a website instead of recovering or resetting their login credentials.5 Managing access and identities is an essential business enablement function that touches on operational efficiency, compliance, and cyber risk. At the same time, a well-executed, frictionless, authentication process can improve member experience. It assures the member that their information is secure without leaving them frustrated or locked out.


Digital transformation is about future-proofing the business. In Deloitte’s vision for the Future of Health, customers will exercise agency, engagement, and control over most decisions about their health and their health data, and there will be greater focus on preserving health and well-being. Companies that can create a delightful customer experience, invest in their health, and earn their trust can win in this future. While health plans have different digital transformation strategies and are at different stages of maturity, they all recognize the time is now to seize this opportunity.

  1. Wendy Gerhardt and Maulesh Shukla, Building resilience during the COVID-19 pandemic and beyond: How health care CFOs are navigating with an eye on the future, Deloitte Insights, September 9, 2020.  View in Article
  2. David Betts, Leslie Korenda, and Shane Giuliani, Are consumers already living the future of health?: Key trends in agency, virtual health, remote monitoring, and data-sharing, Deloitte Insights, August 13, 2020.View in Article
  3. IBM, IBM report: Compromised employee accounts led to most expensive data breaches over past year, July 29, 2020;  IBM, Cost of a data breach report 2020, 2020.View in Article
  4. Vikram Kunchala et al., DevSecOps and the cyber imperative: Elevating, embedding, and evolving your risk response, Deloitte Insights, January 16, 2019.View in Article
  5. Transmit Security, The impact of passwords on your business, accessed April 25, 2021. 
    View in Article



Project team: Wendy Gerhardt provided oversight to the project and helped interpret the findings for the paper. Apoorva Singh assisted in interpreting the survey data, transcribing, and analyzing interview findings. We thank Dave Biel for setting the overall direction of this research.

Acknowledgments: The authors would like to thank Leslie Read, Prayas Malhotra, Vishal Iyengar, Deepak Gulati, Mark Lockwood, Chris Shudes, Abhishek Shukla, David Geisinger, Alison Hagan, Kristin Klettke, Sujay Subramaniam, Phuong Lecong, Danielle Pfeiffer, Paul Lambdin, David Kirk, Derek Hamilton, Lucia Guidice, Sarah HeddlestonRamani Moses, Sarah Thomas, Laura DeSimio, and the many others who contributed to the success of this project.

This study would not have been possible without our research participants who graciously agreed to participate in the interviews. They were generous with their time and insights.

Cover image by:  Ryan Olbrysh



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Bill Preston

Bill Preston

Principal | Deloitte Consulting LLP


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