Health plan CIOs: Stop fixing IT—focus on the business

Health insurance in the US is a struggling industry. It will worsen as commercial insurance enrollment declines, Medicare reimbursements are slashed, and (likely) Medicaid is severely gutted. As the environment grows darker, health plan leaders must return to the basics and address the quadruple aim of care (cost, experience, health, and equities) instead of just optimizing their premiums and costs.

In that context, chief information officers (CIOs) must reimagine their agenda (see Exhibit 1) to influence the evolving objectives of modern health plans. For the CIO agenda to align with business needs, it must combine business acumen, purposeful innovation, and operational expertise to ensure health plans meet their enterprise objectives.

Exhibit 1: The modern health plan CIO agenda must be driven by healthcare expertise, not just technology wizardry

Source: HFS Research, 2025

A business lens must be at the core of the CIO agenda

The agenda of modern health plan CIOs must focus on delivering the impact their organization needs to navigate changing member and provider needs because of the new political and economic challenges they face. Success depends on how well a CIO can strip away complexity and ensure their team understands its core simplicity (see Exhibit 2) to deliver expertise, innovation, and excellence.

Aligning IT efforts is crucial, but the CIO is responsible for deploying technologies that solve organizational challenges, increase employee productivity, and improve member health outcomes. Too many CIOs drive their teams to optimize legacy systems. They must balance this with the effort needed to upgrade their teams’ skills to apply existing and new technologies to meet the needs of the business—the quadruple aim of care.

The lack of this mindset is why healthcare is falling behind other industries. Given healthcare’s dependence on technology, the CIO must acknowledge their responsibility and execute an agenda that elevates them from technologists to business leaders who deliver technologies and skilled teams to enable the enterprise strategy.

Exhibit 2: The health plan CIO agenda must be driven by an impactful yet simple set of critical priorities

Source: HFS Research, 2025

To succeed, the CIO’s agenda must align with the changing nature of the market. As fully insured commercial enrollment declines, Medicare reimbursement shrinks, Medicaid hits the chopping block, and self-insured employer enrollment grows, CIOs must consider the levers they control to help health plans navigate the shifting market. They cannot afford to lean on legacy technology built for a different era and market; instead, they must craft a new outcomes-oriented architecture for the new realities.

Health systems and hospitals are consolidating rapidly and will soon be larger than most regional and community health plans. Therefore, health plans must construct a diversified partner ecosystem of technology providers, clinical and administrative services, and innovative startups. CIOs must lead an attitude readjustment to recognize providers as partners instead of vendors and adopt a more collaborative approach to address the changing market.

Demographic shifts have created two new generations (Gen A and Gen Z), who, with Millennials, are mostly health consumers. Older generations (Gen X, Baby Boomers, and the Silent Generation) will remain healthcare consumers with increasing expectations of their health plan services. The older generations are also more technologically savvy and have a better understanding of navigating the healthcare landscape. CIOs must consider all these demographics in their roadmap, investment thesis, and deployment approach.

Innovation is a differentiation imperative that must be central to the CIO agenda

Health plans are not known as innovators but as proponents of managing the health risk market the way they have for more than seven decades. However, the 2008 financial crisis and the implementation of the Affordable Care Act (ACA) have slowly but steadily upended the traditional health insurance market. These events saw the government expand Medicare and Medicaid while providing employers with licenses to underwrite their employees’ medical risk. This has raised an existential question for health plans about their purpose.

In this context, CIOs must aggressively lead innovation or influence the creation of an enterprise innovation organization charged with continuous innovation, whether incremental, disruptive, or radical. Innovation must address near-term process and systems improvements while driving disruption in the mid-term to help the enterprise enter new markets or pilot new products. CIOs must drive a bold innovation agenda that can create breakthrough services or products. The days of paying lip service or encouraging employees to innovate on their own time or in the margins are over; it does not work. Innovation must be central to the CIO agenda, creating the framework, developing a partner ecosystem, measuring the impact, and positioning it to help the enterprise differentiate and accelerate growth.

Focusing on tech debt will destroy any innovations that grow the business

The payer value chain was created in the mid-20^th century. It has lost its relevance and usefulness in the 21^st century with the myriad challenges health plans face, including the increased prevalence of chronic conditions, the impact of climate change, a shortage of clinicians, and ever-increasing medical costs. The CIO agenda must resist the temptation to follow the legacy value chain. Instead, they must actively partner with other business leaders to disrupt the status quo and create a new value chain that is relevant and valuable to modern times.

Every health plan has one or more core administration processing systems (CAPS) that address all its functions, including benefits, eligibility, utilization, provider network, claims, customer service, billing, and everything else. Most of these CAPS are mainframe-based, built in the 1970s and 1980s, using spaghetti code with limited documentation, and are very expensive to maintain. Every CIO’s dream is to rip and replace them with something built this decade. However, no business case to do that would get the CFO’s support. CIOs blaming legacy systems for their failures are missing the point—healthcare needs a new model, and CIOs must build it. They must forget about tech debt and build the future based on the new value chain, creating a modern value proposition built on a new technology chassis.

The transition of the CIO agenda from legacy functioning to modern business leadership must focus on skills and talent. Shifting demographics shift the utilization of healthcare. Understanding the patterns of a new generation of consumers, the tools they use, and how they use them will determine a health plan’s ability to compete in this century. Data and its smart use must be the core that drives a CIO’s agenda. This focus on consumers and the data that informs them requires a new generation of technologists and business leaders. CIOs must understand those new skills and embrace the new type of talent.

The Bottom Line: CIOs must align their agendas to impact the quadruple aim of care actively. The days of tinkering with technologies are over.

Health plan CIOs who spend time playing accountants to maximize their budgets, invent new ways to glue together their hobbling legacy systems, and crisis manage one outage to another must either seek a new job or have a come-to-Jesus with their CEO. The health plan CIO agenda is at a breaking point and must be reset to help the enterprise reframe its purpose, create new value, and drive growth. Let the noise makers subscribe to the hype of the next AI toy, be it generative adversarial networks (GAN), artificial general intelligence (AGI), a new large language model (LLM), or quantum. The health plan CIO agenda must remain keenly focused on growing the business.