Enterprise software company Salesforce (NYSE:CRM) recently announced the upcoming launch of a new cloud service tailored to health insurance companies. Available this fall, the new software follows a strategy the company has used many times before in customizing platforms for other specific industries. This service could be a big deal, as it addresses several issues facing the health insurance industry and its customers.
What is it?
Health Cloud for Payers, as the new cloud-based service is called, is essentially an expansion on the existing Health Cloud that was launched back in 2016 for healthcare companies. This new iteration of the software will address the other half of the equation when it comes to patient care: the company responsible for picking up the bill.
Health Cloud for Payers will help centralize the data a health insurance company has on its members. Having information on things like benefits and claims in one place will help an insurance company's service department be more efficient. And features like the automation of case-management tasks and care requests will drive better results for patients and insurance-plan sponsors.
Included in the service will be the ability for payers to custom-build new customer-facing digital systems that help simplify access to benefits and other help.
Speaking about the new industry-specific platform, Salesforce's chief medical officer, Dr. Joshua Newman, said: "Payers around the world are no longer just competing against one another, they're being compared to any company providing a convenient user experience that builds loyalty. With Health Cloud for Payers, Salesforce is providing a solution that makes it easier for insurance companies to streamline workflows and connect with both members and providers in more effective ways."
Why it matters
Salesforce's attempt to improve the health insurance industry and outcomes for patients is obvious good news. Health insurance has come under fire in recent years for various reasons, including the skyrocketing cost to acquire care. So any improvement in industry operations and patient experience should be something everyone can get on board with.
The new-and-improved Health Cloud should be good news for insurers and patients, but it's even more important for Salesforce. Customizing existing software to the needs of a specific industry has been the company's template over the years. Offerings include tools for the digital retail, automotive, banking, and telecom industries, among others. That complements acquisitions of complementary software businesses and partnerships with third-party developers on Salesforce's AppExchange.
That has provided 20%-plus growth for years for the enterprise software company as it chases bigger rivals in the business services space, like Microsoft (NASDAQ: MSFT) and Oracle (NYSE: ORCL). This puts Salesforce on track to achieve its goal of $20 billion in annual revenue by 2022, on its way to a longer-term push to become one of the world's largest technology companies in the next two decades. Salesforce hasn't been shy about its lofty aspirations, but the fastest-growing enterprise software company ever has a track record for exceeding its own guidance.
Thus, new custom-made tools in the cloud for a huge industry like health insurance look like a good way to drum up more growth. Helping patients connect with insurance providers more conveniently in a digital format looks like a win for all parties.
Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Nicholas Rossolillo and his clients own shares of Salesforce.com. Some of his clients own shares of Microsoft. The Motley Fool owns shares of and recommends Salesforce.com. The Motley Fool owns shares of Oracle and has the following options: long January 2020 $30 calls on Oracle. The Motley Fool has a disclosure policy.