Last year, our payer articles focused on accelerating digital transformation, increasing transparency and trust in value-based care, and strengthening data foundations. As we move into 2025, we draw on a recent Milliman MedInsight survey of payer customers to offer key insights for payer executives and analytics teams. This article explores the hurdles payers face—from data governance challenges to limited resources—and examines how artificial intelligence (AI) is stepping up to address these issues. We also spotlight innovative efforts to integrate multiple data sources, setting the stage for more informed and effective care delivery.
1. Key payer analytics challenge
Payers frequently grapple with maintaining high-quality data. Errors and omissions can skew analytics, hinder decision-making, and compromise overall effectiveness. These challenges not only strain day-to-day operations but also pose risks to patient outcomes and compliance.
Survey respondents identified the following as top challenges for their organization:
- The role of data governance: Strong data governance measures are crucial for ensuring data reliability and uniformity. Without a well-defined governance framework, inconsistencies can erode the credibility of analytics. Establishing robust protocols helps keep data accurate, secure, and aligned with regulatory requirements.
- Fragmented data sources: Payers routinely manage information from diverse origins—claims data, clinical records, and third-party inputs. Merging these sources presents a considerable challenge due to differing formats and structures. Such fragmentation complicates the goal of creating a single, comprehensive view of patient health.
- Resource limitations: Limited staff and competing organizational demands are common hurdles for payers. These limitations can stall efforts to meet internal and external analytic requests as well as managing new datasets for deeper insights. In fact, 70 percent of survey respondents identified resource constraints as a top challenge associated with leveraging new datasets.
For example, payers often struggle with ensuring trust in provider reporting data due to limited resources and fragmented data sources. Milliman MedInsight helped one large payer reduce the time spent on provider inquiries by using reports that combine widely recognized Milliman methodologies. Self-service learning tools that explain and validate these methods can also improve workflows and build greater confidence in the data.
Likewise, payers lacking data quality and governance, and adequate resources may struggle to keep up with the rapid advancements in technology, such as AI and machine learning, which are increasingly used for driving better outcomes and operational efficiency.
2. Potential and Realities with AI
Artificial Intelligence (AI) is advancing at a rapid pace, prompting many payers to adopt it for a wide range of strategic purposes. In fact, sixty percent of survey respondents indicated they are using AI for various initiatives such as data cleaning and automation. The path to successful AI implementation, however, is not always straightforward due to split success rates.
Factors like poor data quality can significantly undermine AI initiatives and feature engineering, which involves creating new attributes from raw data. Since effective feature engineering relies on well-contextualized information, Milliman MedInsight offers the Health Cost Guidelines (HCG) Grouper. This tool uses Milliman’s HCG categorization and utilization counting methodology to process medical claims, pharmaceutical claims, and member eligibility data. By adding more granularity to claims, such as a flag for partial-year groups, the HCG Grouper enhances underwriting decisions. Without strong data labeling and rich context, AI models and their derived features risk becoming less insightful or even misleading.
Furthermore, the combination of data quality, governance, and integration hurdles can stall progress. Even high-potential AI initiatives may falter in the absence of sufficient expertise or robust infrastructure. Nevertheless, payers are increasingly embracing AI tools to control administrative costs, improve member satisfaction, and sharpen their competitive advantage. As AI continues to evolve, payers are also uncovering new opportunities to apply the technology for more accurate risk assessment and predictive care recommendations.
3. Improving data management for future goals
Payers understand that effective data management for value-based care (VBC) involves more than merely storing information. Their primary goal is to establish a 360-degree view of member health by integrating diverse data sources—claims data, EHR/EMR records, and supplemental data—into one accessible platform. This comprehensive approach enables payers to detect care gaps, identify early indicators of chronic conditions, and make more precise, evidence-based decisions. By presenting a clearer picture of member health, payers and providers have a shared basis for clinical and financial decision-making, reinforcing accountability across the care continuum. This alignment of goals and insights solidifies trust among all parties, setting the stage for more innovative approaches to population health management and further accelerating the transition to value-based care.
Data consolidation is crucial because payers under a VBC model face two principal pressures. First, they prioritize improving member health, which requires knowing exactly what resources are needed to achieve optimal outcomes—a top concern for 80% of surveyed payers. By accurately diagnosing and allocating the right care resources, payers can close care gaps, bolster population health, and tailor treatments to individual needs.
Second, 67% of respondents cite efficiency gains as a way to curb waste and lower expenses. Streamlined workflows, effective data sharing, and targeted interventions reduce unnecessary spending and refine clinical documentation, aligning operational costs with care quality rather than volume. In balancing both imperatives, payers can more effectively identify high-risk individuals, intervene earlier in chronic conditions, and elevate the overall standard of care.
4. Gain a competitive edge with Milliman MedInsight payer solutions
By adopting a trusted platform, payer organizations can unify siloed data sources into a single, unified repository. This cohesive framework lays the foundation for data-driven strategies, allowing organizations to forecast emerging needs, manage risk proactively, and refine benefit designs for optimal performance.
Equipped with the comprehensive, enterprise-wide perspective of the Milliman MedInsight Payer Platform, payers can more efficiently identify areas where they can have the greatest impact. Founded on the MedInsight Health Cloud, the Payer Platform illuminates emerging trends in member cost, utilization, lines of businesses, as well as overall plan performance, supporting strategic decisions. Whether it’s expanding care management initiatives or refining provider networks, the Payer Platform delivers insights to support high-value service delivery.
Equally important, the Payer Platform strengthens collaboration among key stakeholders through the following applications and capabilities:
- Insights: Empowers users to interpret and present complex data in engaging, visually compelling ways
- Analytics: Uncovers valuable insights from complex data sets in seconds using MedInsight Query Express® and Cube Browser
- Employer Group Insights: Fuels revenue growth and customer retention through flexible, self-guided group reporting that can be securely accessed by employer groups and brokers
- VBC Contracts: Enhances performance in value-based care by providing a holistic view of financial metrics across multiple contracts
- Innovation Portal: Accelerates analytic processes and intricate queries with pre-packaged AI/ML models and marketing intelligence
In addition, our Risk Adjustment Platform offers payers a sophisticated tool to accurately assess and manage the risk of their populations. It leverages advanced analytics and data integration to ensure that patient risk is properly evaluated, leading to more precise reimbursement and better care management. By automating complex processes and providing actionable insights, this platform enhances operational efficiency and compliance, ultimately improving outcomes for both payers and patients. When you partner with MedInsight, you gain access to our global network of Milliman consultants and time-tested methodologies, empowering payers to craft and implement strategies that improve quality of care, control costs, and drive sustainable growth.
Additional resources about our payer solutions
Schedule a call: Connect with one of our healthcare analytics experts.
Meet our experts: Visit us at the Becker’s Spring 2025 Payer Issues Roundtable event April 28-29, 2025 in Chicago where we’ll be participating in a panel discussion on “Charting Medicare Advantage Growth for the Next 5 Years.”
Join our webinar: Register to attend our webinar “From data to strategy: Scaling payer analytics for growth” and hear from industry leaders who will share their experiences on using payer analytics effectively.