Health plans face some pressing challenges in 2025. Rising healthcare costs driven by inflationary pressure, prescription drug spending and behavioral health utilization will make operational efficiency a key theme in the coming year. Member engagement, with the goal of boosting retention, will also be a key focus, fueled by increased competition, particularly among Medicare Advantage (MA) plans.
To address these and other key challenges, health plans will make the strategic use of member data a priority. By leveraging advanced data and AI strategies, health plans will aim to become more member-centric, achieving a competitive advantage and sustainable growth. Here are specific areas of focus on the horizon for 2025:
1. Operational Agility and Efficiency Become Essential
According to McKinsey, there are several factors at play that drive health plans to become more efficient. These include increased utilization of covered services, inflationary pressure, and a tightening of government reimbursements – an especially challenging proposition for managing and growing Medicare Advantage and Managed Medicaid plans.
Tangible steps that will help health plans navigate these challenges include:
- The standardization and simplification of workflows to reduce redundancies and administrative waste.
- Investment in scalable technologies to ensure data quality and availability, improving care coordination and compliance.
- Utilization of analytics to identify high-risk populations and allocate resources effectively to optimize care pathways and reduce downstream costs.
These steps share a common foundation: payers need to take a hard look at how they are using member data and how they are segmenting their member base. Workflows, for instance, that revolve around individual member journeys not only reduce redundancies and waste, they also lead to better member engagement. Similarly, ensuring data quality helps improve health outcomes by being more relevant for individual members. Using analytics and AI tools is crucial for learning about specific member cohorts, yielding more refined segments and enabling more personalized member experiences.
2. Member Retention Takes Center Stage
Due to its vast and expanding beneficiary base, particularly with the aging baby boomer population, Medicare Advantage plans offer significant opportunities for payers in 2025, combining federal funding with flexibility to innovate in care delivery and supplemental benefits. This predictable revenue stream supports financial stability, while Medicare’s emphasis on value-based care aligns with industry trends, encouraging cost-effective and outcome-driven care models.
It is for these reasons that retention is a key focus, especially as member churn increases. A 2024 Commonwealth Fund study showed that Medicare Advantage members are more likely to switch coverage than those in traditional Medicare (21 percent, vs. 6 percent), compared with 15 percent of beneficiaries in private health plans.
Members cited various reasons for seeking new plans, including a lack of personalized experiences and poor customer service. Meeting member expectations for personalization, then, has a direct impact on increased retention. According to Boston Consulting Group, within 6 to 12 months of implementing personalization, some payers see improvements in CX by 10 percent – correlating to higher member satisfaction, which addresses a key reason members explore different options.
Member-centric engagement through personalization strengthens retention for several reasons. A health plan offering personalized experiences demonstrates its commitment to the member relationship beyond collecting premiums and processing claims. Examples of personalization include:
- Matching members with available providers in their area.
- Recognizing social determinants of health (SDoH) and addressing barriers to scheduling preventive care.
- Clearly communicating changes to benefits or coverage that impact members or their dependents.
In contrast, irrelevant screening reminders, outdated educational materials, or static mass-marketing emails frustrate members and introduce friction into their experience. Payers must understand all there is to know about each individual and make that knowledge accessible in the right ways to drive superior member experiences. This requires continually listening for member signals, proactively addressing issues, and delivering relevant experiences at the right time and through the right channels.
A single member view containing all relevant data – including claims information, medical history, prescriptions, transactions but also consumer behavior and preferences, SDoH and other attributes – is pivotal. This unified view supports member-centric engagement, improving satisfaction and loyalty.
3. Secure Data and Tech Stack Modernization
To manage costs, safeguard customer data, and advance member-centric engagement, health plans will increasingly emphasize technology modernization and consolidation. They will invest in solutions that enhance their ability to leverage and protect data effectively. As a result, payers will maintain a strong focus on on-premises and private cloud deployments, ensuring a secure and controlled environment for strategic data management and utilization.
One prominent health plan – a Redpoint customer – said that a technology consolidation significantly improved its ability to deliver relevant experiences. During a technology audit, the plan discovered that it had three different marketing campaign platforms as well as six different ESP and SMS providers. The lack of full visibility into the consumer journey created a disjointed member experience. Additionally, the siloed architecture introduced risks, as data had to be copied and shared among platforms. Consolidating the tech stack not only improved member experiences but also reduced operational costs and minimized security risks by lowering the number of potential attack points.
Health plans will continue to refine their practices for collecting, storing, and utilizing member data, particularly as it concerns PHI. For this reason, many health plans will keep all member data – not just PHI – behind their own firewall. Keeping data together, such as within the confines of a private data cloud warehouse or on-prem, minimizes data movement and thus reduces the risk of a data breach.
4. Rise in Self-Service Tools and Smart AI
According to Deloitte, roughly one-third of healthcare executives identified technology investments as a priority for 2025. That includes investment in AI-enabled solutions.
As health plans continue to explore how to best integrate AI tools, there will be a larger focus on making sure that data is fit for its intended purpose, with AI use cases of particular concern such as an increased demand from members for self-service tools.
An effective use of AI however, depends on training AI with clean, accurate data. Using AI to mediate customer complaints and predict a next best action relies on building a real time, unified member profile with data that is cleansed, standardized, enriched and made ready for business use as data enters the ecosystem. Any digital self-service tool that is built for member use, for instance, must have a complete, up-to-date understanding of the member to ensure that every interaction is seamless and reflects the member’s individual needs at the moment of interaction.
According to McKinsey, AI adoption in healthcare has been lagging behind other industries, partly because of a lack of alignment on where to start as well as heightened risk. The study solidifies a focus on data readiness, zeroing in on member experience priorities, and the optimization of real-time insights as critical steps in optimizing the use of AI for healthcare organizations.
Moving Toward a Data-Driven Future in 2025
Sustained success for health plans in 2025 will hinge on their ability to address rising costs, enhance member retention, and deliver more personalized and more secure digital experiences. The following three pillars emerge as critical to navigating these challenges and achieving long-term growth:
- Pristine Unified Member Profiles for Data Availability and Quality
A single, unified member view that combines claims, medical history, prescriptions, and consumer behavior will be the cornerstone of operational agility and member satisfaction. High-quality, real-time data will not only empower health plans to personalize engagement but also ensure that AI and analytics tools deliver actionable insights to optimize care pathways, predict needs, and reduce costs. - Member-Centric Engagement Through Personalization
Personalization is no longer optional. Health plans that proactively address member barriers, recognize SDoH, and deliver tailored interactions will strengthen loyalty and retention. A consistent focus on listening to member signals and delivering relevant, timely experiences across channels will demonstrate a commitment to member well-being, driving satisfaction and improved outcomes. - Tech Stack Optimization and Data Security
With member data becoming increasingly valuable, safeguarding it is paramount. Consolidated, on-prem tech stacks offer a secure environment for member data while enabling seamless and relevant experiences. Keeping sensitive information closer to the vest streamlines operations, minimizes risk, and ensures compliance with privacy regulations.
By prioritizing these strategies, health plans will overcome the immediate pressures of 2025 while building a foundation for sustainable growth. Unified, clean data, personalized engagement, and robust data security will enable payers to enhance member experiences, maintain loyalty, and achieve a competitive edge in a dynamic and demanding healthcare landscape.
