The recent SIIA 2024 Conference in Phoenix painted a clear picture of the current and future TPA market — one where technology is enhancing operations, strengthening overall client support and improving the member experience.

A panel entitled “Today’s Look at Tomorrow’s TPA” invited seasoned TPA executives to address overall trends, with a major emphasis on the promises and potential pitfalls of innovation.

The panelists included Bill Meehan, president of Cobalt Benefits Group; Megan Rigby, chief growth officer for Web TPA; John Powers, president of Marpai Health; and Justin Tran, chief strategy officer for Personify Health.

Much of the discussion revolved around the central role of technology. TPAs are using technology in sophisticated and transformative ways up and down the business — and must continue to do so if they want to keep pace.

Here are four key takeaways about TPAs and technology:

1. The Market for Healthcare TPAs is Growing Fast

Any discussion about TPAs and technology begins with the fact that the TPA market is growing fast, and is expected to rise from about $400 million today to an estimated $750 million by 2032, according to the panel. This kind of growth is opening the way for change and funding opportunities for innovation.

The panelists highlighted myriad of reasons for this growth, including private equity investment in new point solutions, the explosion in down market business, the maturity of captive markets, a major increase in large claims, and the rise of larger broker consulting agencies that want to create their own solutions and differentiate.

John Powers of Marpei Health noted that the number one reason employers hire TPAs is to provide cost savings. Megan Rigby of Web TPA followed up this observation by noting that ongoing eight to nine percent cost increases “are not sustainable, and employers need to do something different” by moving away from “status quo solutions that haven’t delivered the value.”

2. Technology is Everywhere and TPAs Are Savvy Adopters

It’s no surprise that technology has become the backbone of operations and client support for TPAs. In an industry where technological advancements are proceeding at a rapid pace, Third-Party Administrators (TPAs) must remain adaptive and agile to stay relevant.

From automated claims processing to advanced data analytics, TPAs are adopting solutions in every function and every department to streamline operations and provide better service to clients—on both the employer and member side. Of particular importance is the introduction of sophisticated analytics to identify and zero in on problems to be solved.

Bill Meehan, President and CEO of Global Benefits Group, emphasized how their organization uses AI-driven tools to reduce administrative burdens and minimize errors. These tools not only enhance efficiency but also allow TPAs to focus more on strategic tasks.

While AI brings obvious potential for meaningful change to how TPAs operate, Rigby cautioned that AI solutions need further “seasoning.” In the nearer term, Justin Tran of Personify Health noted that AI “tooling” can provide critical support for remote workers. In other words, one of AI’s biggest near-term impacts may be on employee engagement and job satisfaction.

“We need to use tools like AI to make the work more enjoyable,” said Tran, who noted that during a recent town hall, employees had more questions about new tools and work solutions than about compensation.

3. Tech Can Enhance the Member Experience… or Fracture It

In terms of overall importance, the panel noted that improving the member experience is right up there with delivering cost savings.

Today’s members expect a seamless and personalized experience. But according to Justin Tran, the proliferation of new solutions such as large language model chat bots will fracture the member experience, especially if these solutions are spread unevenly among different member groups within a single TPA. 

Tran said, “Utlimately, the TPA is going to be held accountable for navigating this fractured environment.”

Megan Rigby highlighted how Web TPA is using mobile apps and online portals to offer members real-time access to their health information. These platforms provide easy navigation, making it simple for members to find doctors, review claims, and manage their benefits. Implementing such technology is crucial for TPAs looking to differentiate themselves in a competitive market.

John Powers noted that engaging the member means “having that Amazon experience” where interactions happen seamlessly within an app, and members “don’t have to talk to someone if they don’t want to.”

4. Innovation Means More Than Just Integration

Private equity funding has led to an explosion in point solutions for TPAs, which Rigby noted have grown up with the advantage of not favoring a single vendor or solution set.

At the same time, TPAs must remain flexible and adaptable to not only incorporate these diverse solutions, but make sure they are interconnected.

“We have hundreds of vendor solutions we integrate with, to the tune of about a million data files that we exchange on behalf of our clients every year. That’s not enough, though… everyone says they’re integrated but you have to do something with that data,” such as using it to discover how and where “to plug the leaks,” said Rigby.

“We talk a lot about this, but we don’t do it justice,” said Bill Meehan. “[When it comes to] the amount of vendors, there’s a tremendous amount of work, not just trading files but how do you make that data actionable.”

“We often say we’re really flexible,” added Meehan, “but it doesn’t do it justice to how much complexity is underneath that.”

“Data integration flexibility is key and reporting is key,” said Tran.

Future Trends in TPA Technology

Looking ahead, the TPA industry is set to ride on other technology-driven trends.

Value-based care and direct contracting are expected to gain traction, driven by advances in data analytics and machine learning. These technologies enable TPAs to deliver more targeted and efficient care.

Another area of discussion was risk-sharing arrangements, which are becoming increasingly popular among TPAs. The panel discussed how technology can support these arrangements by providing accurate data and predictive analytics.

Additionally, the rise of telemedicine and wearable health devices will transform how TPAs interact with members and manage their health data.

Conclusion

The SIIA 2024 Conference made it abundantly clear that technology is driving and reshaping the TPA landscape, and quickly. By leveraging new tools and solutions, TPAs can enhance client support, improve member experience, and stay competitive in a rapidly evolving market.

Have questions? Stay engaged with us for more insights into how the payer market is harnessing technology for growth and long-term success.

Brian Posnanski is the VP of Marketing and Brand Strategy of Intellivo, overseeing all facets of marketing, communications and brand strategy, Brian leads the marketing and communications team with a focus on go-to-market planning and demand generation.

Interested in more? Check out our just published eBook “Subrogation for Health Plans: 5 Things to Know.”