Learnings from MESC 2022 — The 80/20 Rule for Medicaid Enterprise System (MES) Integration

Given the complexities of Medicaid Enterprise Systems (MES) integration, many state agencies are searching for technical solutions before having defined system integration.

This is especially evident when you apply the 80/20 rule applies to system integration. The 80/20 Rule observes that 80% of consequences come from 20% of causes. When applied to MES integration, the 80/20 Rule relates to a traditional, technical scope alongside the non-technical aspects necessary to procure, implement and maintain a modular MES successfully.

Achieving successful Medicaid Enterprise System integration is not just a technical challenge

Initial system integration strategies tend to focus on the technical components, such as Enterprise Service Bus, API gateways, and managed file transfer. It was widely believed that system integration challenges could be addressed solely through purchasing and implementing new software. These technical solutions became the industry’s ‘easy button,’ and organizations concentrated on developing technical requirements.

However, achieving successful system integration is not solely a technical problem. Understanding the business aspects associated with integration is critical to establish a strong solution framework. Integration across organizations can be daunting. Organizations must align differing missions, data definitions, cultures, approaches, governance, and organizational structures. The focus on technical solutions means these business aspects of system integration often receive less attention during the planning and procurement process. This results in RFPs that only focus on acquiring a technical solution, but fail to address the business need.

Successful integration is supported by a comprehensive analysis of scope

So, how does the 80/20 rule apply to system integration? As I was pondering how to explain the wide variety of tasks necessary to successfully modularize to current and potential clients, I started thinking about the ratio of technical integration services to ‘non-technical’ work.

When we analyzed our systems integration requirements database, which contains over 5,000 records, we found the scope of the RFPs and the emphasis on technical requirements seemed misaligned. Almost 80% of the RFP requirements were technical. However, less than 20% of the RFPs’ scope categories aligned with traditional technical systems integration. The majority of the scope categories pertained to non-technical requirements. There is a disproportionate emphasis on technical requirements, which hinders successful integration.

Now that multiple state MES system integration projects have gone through several development life-cycle phases, industry partners are noticing the importance of the non-technical RFP requirements (what had been 20% of the system integration requirements). At the 2022 Medicaid Enterprise Systems Conference (MESC), we heard from the State of New York. The State of New York is the latest Medicaid agency to make a clear delineation between the systems integration technology platform and other non-technical services. This separation of the platform and integration services raises the importance of the services during the procurement, implementation and operation of the MES. Most recently, New York announced a strategy to split scope into business and technical advisory components, and to have a combined Systems and Data Integrator. Likewise, states including Florida, South Carolina, Kentucky and Tennessee have recognized that technical and non-technical scope can be separated contractually to better address their Medicaid programs’ full spectrum of needs.

NTT DATA’s Government, Consulting and Advisory (GCA) approach is successful system integration occurs when a state accounts for the entire scope required to effectively modernize and then allocates it across vendors and state staff. The customary 20% of attention given to the non-technical services that make up 80% of the scope must be increased to derive the greatest benefits for the MES.

When thinking about MES systems integration, the 80/20 rule is simply a mental model for us to reframe the requirements and outcomes we emphasize. MES vendor agreements and project cultures must balance both technical and business needs to achieve successful system integration.