Modular Systems – The Future of Medicaid IT

A recent article in Government Technology details the issues surrounding the often difficult implementation of state Medicaid Management Information Systems (MMIS). In spite of federal incentives for states to create modular systems, many states continue to face strong headwinds in adopting this approach.

Part of the reason is the persistent misconception that only very large technology companies have the necessary resources to build and manage an integrated statewide MMIS. This stems from the view – now outdated – that enterprise information systems must be designed as “big-bang” monolithic structures utilizing outdated system development approaches in order to ensure the necessary security and stability around important authentication and authorization functions such as enrollment, claims processing, eligibility determinations, and managing payments.

As a recent State of Colorado study found, 21 of the last 21 MMIS implementations over the last 10 years failed is some way – late, over budget, or some combination thereof. While the monolithic approach was not necessarily the cause in all cases, both federal and state governments are looking for ways to change these statistics for the better.

Modular design – usually accomplished via service-oriented architecture – is a concept that allows states to segment an MMIS upgrade into smaller components. Not only does a statewide MMIS implementation become a more manageable process with modularity, there is significant potential for states to realize new savings and innovation faster as result of changing their approach.

Modularity has the add-on effect of opening up the MMIS market to smaller players with new approaches, new ideas and new solutions.

When smaller companies can compete, they also inject a level of competition into the marketplace that can lower costs for the states who are shopping for solutions.

Healthcare related expenditures account for more than 15% of state budgets and are responsible for more than a third of their annual growth. Since healthcare is typically the largest single portion of public sector spending, the lower prices that result from meaningful competition can have a big impact on state budgets.

The good news doesn’t end there – competition is also a catalyst for innovation – leading to new and creative ways to approach Medicaid IT. Cloud, mobile, and service-based approaches have been prevalent in the private sector for a while now – so what’s holding us back in the public sector?

Modularity in MMIS opens up opportunities to improve the business processes and service delivery processes, improving outcomes across the enterprise.

In MMIS, healthcare needs should be driving the technology, not the other way around.

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