Health care consumerism – the notion that people are capable of demanding the health services they want, how and when they want them – is no longer just a trend; it’s becoming the norm. And, with the nation’s third open enrollment now behind us, the timing couldn’t be more advantageous. If any sector in the U.S. economy is ripe for change, it’s health insurance. The entire system is highly fragmented, confusing, and exceedingly expensive.

Health benefit exchanges – both public and private – have emerged in recent years as the latest expression of health care consumerism, making it easy for people to make an online selection of the benefits they want, based on their needs and preferences. Furthermore, as more consumers shop for insurance on their own, they are bringing a perspective from interactions in other facets of their lives, specifically retail. In other words, health care consumerism is not a myth.

Payers are faced with a marked proliferation of electronic distribution channels and the difficulty of determining which channels are essential and optimal for them to partner with. Furthermore, payers must consider which channels offer the greatest prospects for maintaining or growing their customer base, relative to the costs associated with developing and maintaining the unique requirements and interfaces to integrate with those distribution channels. At the same time, the providers of these platforms recognize the inherent challenges and costs associated with not having uniform standards for transferring data between partners. Recognizing the market need, the PEC has convened an interoperability working group (PEC IWG) with the singular purpose of developing, promoting and maintaining industry interoperability standards.

Private exchanges are gaining traction in the employer-sponsored insurance market as solutions for offering increased plan selection while also simplifying administrative procedures. Beyond these specific impacts, private exchanges have an opportunity to generate value for employers and employees in even more broad and significant ways. Benefits consulting firm Accenture estimated that there are approximately 6 million individuals enrolled in private exchanges today and that number could increase exponentially to 40 million individuals by 2018. However, enrollment alone will not be the best predictor of private exchange success. The real driver will be their ability to generate value for all constituents, especially employers and employees.

For three years, the market has been closely watching private health insurance exchanges that aspire to create new value in the group-market health insurance transaction.  A litany of venture entities and private equity outfits have flooded the market with investments under the auspices that technology would disintermediate the traditional insurance purchasing model, introducing new efficiencies and sales opportunities. There is wide and varied conjecture about the core problem private exchanges should and can remediate.