How To Be Successful In Health Plan Management

Transcription

1 IBM Global Process Services Thought Leadership White Paper April 2012 Rethinking value delivery in health plan operations The top 10 areas for consideration

2 2 Rethinking value delivery in health plan operations A listen to the heartbeat of health plan operations executives The state of operations at most health plan organizations is one of upheaval. Most would agree that substantial change and stamina are needed for a healthy tomorrow. In the course of interacting with dozens of health plan operations executives, we have listened to and discussed many of their most pressing challenges brought about by healthcare reform, the innovations they were pioneering, and their visions for the future building of a sustainable health plan operating model. What did we find? Health plan leaders understand that they have a vital mission to create healthier and happier members through provider collaboration to support exemplary, coordinated, evidence-based care and wellness promotion activities. At the same time, they must achieve operational excellence to reduce the costs and inefficiencies of their operations to foster health and wellness. Underpinning both thoughts is a notion that some of the fundamentals of today s business model must evolve to be sustainable in the future. The recent foray of health plans, into the hospital and physician practice arena through acquisition, points to a forward integration strategy to gain more control of care delivery practices, visibility to evidence-based care and quality metrics, and pay for performance. Overall, health plan operations executives consistently voiced a need for ongoing examination and diagnoses of critical areas for incremental improvement and often wholesale transformation. One of the key areas was continuous focus on a sustainable operation that can achieve both business innovation and efficiency by proactively managing financial, cost and regulatory requirements for wellness and chronic disease management. Rapid insight into plan metrics for decision-making was seen as key and influenced everything from the fundamentals of business model design, to member segmentation and targeting decisions, to making operations more efficient. Although leaders are consistently excited to discuss the future of their organizations, they also value many of the successes of the past, including managing costs smartly and being pragmatic in balancing considerations involving people, process and technology. Outsourcing is expected to play an important role in achieving future business goals. Listed below are IBM s top 10 transformational prescriptions for a happier and healthier health plan operation, which are separated into a section for member health and happiness and one for operational excellence. Taken from our interactions and evaluations of many of the best health plan organizations in the world, these are the topics that are shaping the business conversation today. Prescriptions for member health and happiness 1. Change your mindset. Group think for individual customization. Many health plan executives envision substantial shifts in the fundamentals of engaging their membership base. Many feel that today s benefits package-oriented coverage model is unsustainable in the near future, particularly with looming healthcare reform regulation, the rise in unemployment and the decline in employersponsored insurance programs by over 10 percent in the last decade. 1 The future must focus on affordable individual patientor member-coordinated care management and more closely

3 IBM Global Process Services 3 resemble a consultative business where healthy outcomes are the focus, instead of simply paying for care and acute interventions after the fact. Medical practice quality, payments reform and collaboration between the health plan and the provider are the three legs of the stool that need to be balanced going forward. Central to this shift will be a focus on understanding members needs, providing advice, and changing behaviors and healthrelated decisions. Better tools and access to information need to be developed to empower the member with information at the point of service on treatment costs and outcomes to help reduce waste and give the member control over their healthcare. 2. Get active: Care management is a team sport. As health plan business models evolve throughout 2012, the value proposition to members, employers and provider networks must also shift. Health plan executives seek to improve brand value through a spectrum of wellness, disease prevention and chronic care management programs designed, developed and marketed to capture and satisfy empowered healthcare consumers. Health plans wish to be viewed as proactive, collaborative, positive team players with providers in helping members be healthy as opposed to the common image of tolerated financial gatekeepers. Monitoring and measuring the team progress calls for a new approach to payments and performance metrics, including legacy utilization patterns plus care delivery outcomes. The role of analytics becomes central to having headlights to activity as it happens and predicting costs and savings patterns as well as understanding the impact of the outliers that differ from typical members. Advances in data analytics now reach further than ever before, including predictive modeling for treatment outcomes and care management and outlier detection for fraud, waste and abuse. The results are expected to speak for themselves in terms of reimbursement and payments based on performance and business model sustainability. 3. Look to lessons from the retail world to change member acquisition activities. As the traditional health plan business-to-business (B2B) sales and revenue recognition model declines, health plan executives are faced with a new model similar to the retail and consumer products industries: business-to-consumer (B2C). Banks and telecommunications companies have learned over the last decade that acquiring new business means access to the right data to gain a deeper understanding of consumer segments and attendant buying behaviors. In a similar vein, health plans will need to double efforts to focus on and understand member segment characteristics that provide clarity to target markets and an understanding of appropriate acquisition programs, costs of managing multiple communication channels and member segment profit potential. Member insight and data will be keys in these endeavors as more customized benefit options, pricing and delivery features will need to be matched to individual member demographics. Health plan leaders can even decrease business risk as a result of better understanding this evolution of consumers and markets by leveraging analytics. 4. The heart of your business: Improve member experience and retention. Many health plan executives are seeking to achieve a 360-degree view of members and provider networks to help design the optimal experience that can shift and meet changing consumer needs and requirements, all at better costs. Keeping members satisfied and loyal supports profitability within the base, while lessening acquisition costs. Plans should prioritize their interactions with

4 4 Rethinking value delivery in health plan operations members to focus on the most important aspects within the relationship. The consumer member will continue to evolve and shape the services required of payers. Health plans that anticipate and meet consumer demands can gain a significant advantage, particularly as the individual market stands to quadruple in the next five years. Unstructured analytics is empowering companies to analyze their vast stores of unstructured information, such as voice data, s, social media and other information sources previously not tapped, to make new discoveries and better understand and anticipate customer needs. 5. Engage your healthy advocates. Rethink producer performance and profitability. As a new form of producer, public and private health insurance exchanges will play vital channel roles in the distribution of health insurance products starting in Although controversy abounds on how the exchanges will evolve, health plan leaders will begin to find new intelligence in their broker and producer data assets. Brokers are expected to continue playing a key supporting role as the individual volume expands. Because broker fees are not exempted from the calculation of administrative costs, an understanding of channel efficiency, member experience and profitability is critical to choosing the right producers to play alongside the exchanges. Brokers can provide invaluable services to members in navigating the options and helping them choose health insurance. By applying analytics to these data sets, health plan leaders can more successfully understand producer profitability, understand specific events that create advocacy, and make better producer channel decisions with more speed and accuracy. Prescriptions for operational excellence 6. Prepare for future examinations: Countdown to 2013 compliance. ICD-10, HIPAA 5010 and compliance with changes in government reform programs top the current list of issues impacting health plans. Health plan executives discussed their desire to reduce variable costs in achieving and managing compliance and establishing predictable fixed costs to help manage compliance requirements in the future. Although the move to ICD-10 promises strategic transformation and, to a great extent, improves transparency, the burden in terms of cost and compliance is substantial. Improved utilization management can be achieved through the efficient use of ICD-10 diagnosis and procedure codes by plans and providers and the exchange of patients profile information. This can signal variations in treatments across the care process and inform hospital resource management of activities. In light of constantly changing regulatory demands and new levels of scrutiny, successful health plan organizations must manage regulatory mandates, risks, and internal governance policies and protocols to more securely and cost effectively met the needs of members, employers, providers and producers. 7. Take your pulse: Balancing profits, ratios and ratings. As payment reforms and accountable care organizations (ACO) are mobilized to execution, the basis of competition will also shift in lockstep. Health plan leaders need to optimize their operations towards profitability with the goal to effectively manage costs and simultaneously manage compliance with a host of performance metrics and service levels including medical loss ratios, HEDIS/NCQA, MTM scores and STAR ratings. Continuously meeting or exceeding the myriad of metrics requires an investment in time, resources and technology to fully understand the involved processes, the barriers to achievement, as well as the steps to achieving greater visibility to performance

5 IBM Global Process Services 5 levels. Using analytics, contact center metrics across time and performance dimensions can help in developing more reliable estimates of performance. Through better standardization and deployment of advanced tools, technology, resource deployment, process optimization and information can all play into fixing the performance measurements puzzle at health plan organizations. 8. Stop repeating bad health habits: Reduce redundancies and rework. In an ideal health plan world, rework, pends, denials and appeals would be eliminated and enrollment, claims and contracting throughput and cycle times would be rapid. Although health plan executives understand the issues, people, process and technology limitations prevent this panacea and hamper process maturity and efficiency. The first step to reducing redundancies and rework is to identify wasteful redundancies and inefficient processes and then redesign operations to meet operational efficiency goals. Health plan leaders are interested in new, simplified approaches to process redesign that utilize new techniques and technology and can be enabled with analytics. By improving process efficiency, plans can do more with less, providing a win-win for members and the organization s bottom line. Payer and provider interoperability also need to be considered when health plans take the lead in addressing their workflow, data and administrative requirements. Reducing or eliminating steps within the process of enrolling a member or paying a claim need to be confronted holistically and in coordination with the plan sponsor, producer and provider communities. 9. Create a healthy routine: Seek process automation opportunities. Many health plan organizations speak to simplification and standardization as hallmarks towards a more efficient operation. For decades, automation of amenable business processes has been the path to providing quality and efficiency. Although not every process can be automated, automating routine tasks with technology is another lever companies can use to simplify, standardize, and improve performance and profitability. With limited dollars for enterprise technology infrastructure improvements, leaders are looking to new ways of automating key functions, deploying new process modeling technology and techniques for automation at the desktop level. Today, it is possible to reduce or even eliminate manual data entry errors by automatically provisioning the appropriate desktop views, corresponding information, process step options and scripts at the right time in processes like enrollment or pended claims resolution. All too often, agents or processors spend valuable time cutting and pasting data from multiple applications. These steps can now be managed through simple automations that perform the cut-and-paste update tasks automatically, freeing staff to focus on resolving member issues or moving on to the next transaction more quickly. 10. Analyzing your results: Did we mention analytics? Health plan executives are seeking to improve business processes and care delivery outcomes by leveraging common enterprise information and data standards. Using operations data and analytics, they can integrate, manage and analyze information at rest, in motion and at Internet scale to gain visibility to care delivery outcomes, provide transparency and deliver business insights across the health plan value chain. Operational analytics can turn the transformation and improvement discussion on its head, providing a quantitative dashboard view to opportunities and priorities for continuously improving business operations.

6 6 Rethinking value delivery in health plan operations The future of outsourcing at health plan companies Business process outsourcing remains a powerful lever for health plan executives who want their current business model to focus more on care, offer best-in-class member experiences, and simultaneously demonstrate operational excellence. Health plans can use outsourcing to more quickly adopt new leading practices, trial and scale alternative business operations, and focus their energies on devising new business strategies. For member-facing operations, the contact center is a key enabler of plan-to-patient communication and likely hosts the most significant interactions a health plan organization will have with its membership. Outsourcing is viable for member contact across multiple channels (voice, , online, chat, social media, etc.) and across multiple functions, including member care, advisory services and provider network maintenance. Health plan executives should consider bundling or dividing member communications when considering outsourcing companies (for example, e.g., non-voice member communication may be accomplished by one vendor). In demonstrating operational excellence, outsourcing can be a powerful tool in membership enrollment and billing, provider relations, and claims lifecycle management. Outsourcing helps enable companies to shift entire back office operations, more quickly adopting industry-leading practices in resource allocation, process optimization and technology enablement, all while employing reduced cost structures. Not all outsourcing vendors are equal. When considering outsourcing services, health plan executives need to evaluate the maturity of the operation and make certain the new arrangement delivers more than just reduced-cost processing. Process transformation and improvement as well as data and physical security should weigh heavily in the decision making process. Teaming with the right company for analytics can be the genesis of a new revenue center or a supplement to existing revenue centers. Changing the model and exercising your ability to succeed Health plan leaders today should understand and explore these top issues to help reduce future business challenges. As part of your sustainable operation, outsourcing will likely play a critical role in how health plan organizations increase their operational performance, grow into new business models and improve their ability to keep members healthy and happy with profitable outcomes.

7 Notes

8 For more information To learn more about the IBM Global Process Services Offerings for Health Plans, please contact your IBM representative or IBM Business Partner, or visit the following website: bpo-healthcare.html Additionally, IBM Global Financing can help you acquire the IT solutions that your business needs in the most cost-effective and strategic way possible. We ll partner with credit-qualified clients to customize an IT financing solution to suit your business goals, enable effective cash management, and improve your total cost of ownership. IBM Global Financing is your smartest choice to fund critical IT investments and propel your business forward. For more information, visit: ibm.com/financing Copyright IBM Corporation 2012 IBM Corporation Route 100 Somers, NY U.S.A. Produced in the United States of America April 2012 IBM, the IBM logo, and ibm.com are trademarks of International Business Machines Corporation in the United States, other countries or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol ( or ), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. Other product, company or service names may be trademarks or service marks of others. A current list of IBM trademarks is available on the web at Copyright and trademark information at ibm.com/legal/copytrade.shtml This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. THE INFORMATION IN THIS DOCUMENT IS PROVIDED AS IS WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided. The client is responsible for ensuring compliance with laws and regulations applicable to it. IBM does not provide legal advice or represent or warrant that its services or products will ensure that the client is in compliance with any law or regulation. 1 Urban Institute, Based on data from the ASEC Supplement to the Current Population Surveys. Please Recycle MBW03025-USEN-00