Enterprise Content Management Solutions for Solving Health Payers Business Problems Abstract The United States Spends 15% of its GDP on Health Care, the highest in the world. Due to rising health care costs and lack of fundamental reforms, health insurance is inaccessible and expensive for many people. Containing rising cost and making it available and accessible to all the citizens is so important that Health Care has been at the centre of the American Presidential Election this year, the winning candidate has promised to lower health care costs by $2,500 for a typical family by investing in health information technology, prevention and care coordination. The onus is equally on Health Care payers as on government who must run their business effectively and come out with innovative product and service offering to 1make sure that more and more people are able afford health insurance. Today these companies are entering a challenging business environment where early technology adoption is required to maintain competitiveness or create differentiation, requiring new business, budget, and risk management capabilities. This White Paper peruses various challenges faced by 2Health Insurance providers and how a comprehensive Enterprise Content Management (ECM) Strategy Using IBM FileNet can be used to meet some these key business imperatives for Health payer to keep them competitive in the market place.
TABLE OF CONTENTS 1. Healthcare payers: The Situation on the ground today 3 2. Key Challenges Faced by the Health Insurance Providers 4 3. IBM FileNet ECM Solution for addressing Key Business Requirements 6 4. Conclusion 9 5. References 9 6. About the Author 10
1. Healthcare payers: The Situation on the ground today In a Wall Street Journal-NBC Survey almost 50 percent of the American public says the cost of health care is their number one economic concern. The United States spends more on health care than other industrialized nations, and those countries provide health insurance to all their citizens. One in four Americans say their family has had a problem paying for medical care during the past year, up 7 percentage points over the past nine years. A recent study by Harvard University researchers found that 68 percent of those who filed for bankruptcy had health insurance. In addition, the study found that 50 percent of all bankruptcy filings were partly the result of medical expenses. The United States spends six times more per capita on the administration of the health care system than i t s p e e r We s t e r n European nation. The point to be noted is while the government High Cost of Health Care Health care spending in the United States reached $2.3 trillion, and was projected to reach $3 trillion in 2011. Health care spending is 4.3 times the amount spent on national defense. Elimination of one piece of paper per claim can save USD 1.8 Billion a Year. will try to improve situation through policies and standards, the Healthcare insurer have to make sure that they operate with maximum efficiency and make best use of technology to reduce their operational cost and create a customer centric environment. Effective and Efficient use of technology reduces administrative expenses and expedites core business functions. Here s one example: Priority Health paid 5.1 million claims last year, 86 percent of which were received electronically compared to only about 30 percent 10 years ago. Being able to process claims from hospitals and physicians electronically now is paramount because it eliminates errors and rework caused by rekeying. It simply ensures they re received accurately the first time. Specific health plan software processes those claims automatically so hospitals and physicians receive their payments faster. 3
2. Key Challenges Faced by the Health Insurance Providers Containing Cost In 2007, health care spending in the United States reached $2.3 trillion, and was projected to reach $3 trillion in 2011.1 Health care spending is projected to reach $4.2 trillion by 2016. In 2005, the United States spent 16 percent of its gross domestic product (GDP) on health care and is projected to reach 20 percent by 2016. Premiums for employer-based health insurance rose by 6.1 percent in 2007. National surveys show that the primary reason people are uninsured is the high cost of health insurance coverage. To maintain competitiveness, health insurance companies must continue to deliver enhanced value to members and employers. Out of adaptation to market factors, health insurance companies must design new products and business models to deliver health care at affordable premiums and, at the same time, control their own expenses Meeting Regulatory Requirements Companies in all industries are being audited more than ever before, and expending significant resources to comply with these new, stringent rules. Compliance with government legislative or regulatory actions also leads to increased costs in claims processing and administrative expense trends such as required two-day minimum hospital stays for normal baby deliveries, HIPAA, and relaxation of pharmaceutical advertising increasing members demands for certain high-profile drugs. Health insurers must manage a myriad of regulatory and legislative initiatives covering the medically uninsured, National Provider Identifier and ICD-10 (the new diagnostic coding system). Health insurers in Massachusetts, for example, that want to participate in the state's new mandatory health insurance program have had to develop new products for new markets, such as the uninsured or underinsured high-risk populations. These firms' technology capabilities don't easily accommodate new-product development efforts. Managing the Impact of Industry Consolidation Between 1995 and 2004, there were over 400 mergers involving health insurers and managed care organizations. While the market is consolidating, the ultimate consumers of health care patients do not appear to be benefiting from the consolidation of health 4
insurance markets. Instead, during this period of consolidation, health insurance premiums have risen dramatically and continue to rise without an expansion of benefits. Moreover, many of the large national health insurers have posted high profits over the past four years, even during times of economic slowdown. The primary beneficiaries of these mergers appear to be shareholders and the highly paid senior executives of these companies. Making Effective Implementation of Technology Consumer interaction with health insurers is becoming increasingly important. Consumers realize that their customer experiences outside the healthcare realm are far more efficient and satisfying. Therefore, they are expecting and beginning to demand more accurate information and tools with which to make clinical and financial health decisions. The smart use of technology will not only speeds up the processes administration cost and helping keep premiums affordable but will also improve customer interaction and engagement with the insurers. Yet, often the implementation of technology in these companies has been accomplished in a piecemeal fashion by automating existing processes, rather than focusing on aligning the claims processing function with a customer-centric process initiative and the ability to process claims electronically. Need Of ECM to remain competitive for Health Insurers "Enterprise content management" is an umbrella term and represents a vision and framework for integrating a broad range of content management technologies and content formats. ECM represents the consolidation of point technologies document imaging, document management, records management, Web content management, Business Process Management and document-centric collaboration into suites sold by a single vendor. The consolidation of point technologies into a composite ECM market means that health insurers can buy all the critical content management functions from a single vendor with wide set functionalities, less deployment cost and integrates easily with legacy/existing systems. Here are the key reasons for using ECM Solutions for Health Insurers: Health insurers need ECM to improve access to documents and gain better control over them, to support regulatory compliance, to foster collaboration, to automate paper-intensive business processes, to gain employee efficiency, and to improve customer 5
service. Health insurers also need a content management system to track versions of documents, to route documents through a p r e - d e f i n e d process and to provide secured access to individual documents. C o n t e n t management can Why ECM? To Gain Better control over documents To Support Regulatory Compliance To Automate Paper Intensive Process To Improve Employee efficiency and Customer Service Easy to Implement, Configure and Change. enable documents to be accessible via a Web browser. Health insurers have historically implemented content management in paper-intensive areas such as claims, customer service and enrollment. The focus is now shifting to other areas, such as appeals and grievances and care management. A well-designed and effectively implemented content management application can save employees time, decrease process latency and increase user efficiency. Today Insurers need systems that are increasingly built around components that are disposable and easily replaced. No longer is it necessary for applications to last 10 years. That means application durability will become less important than the ability to configure and implement quickly, and it will become more important to have application agility when market conditions change. This flexibility and need for speed is the challenge health insurers' IT architectures. ECM Systems provided Insurers with these capabilities which keep them flexible and ahead of competition. 3. IBM FileNet ECM Solution for a d d r e s s i n g K e y B u s i n e s s Requirements IBM FileNet allows health insurance organizations to move more decisively knowing that they have control over their content and business processes, integrated into their existing systems. The IBM FileNet architecture offers enterprise-level scalability and flexibility 6
to handle the most demanding content challenges, the most complex business processes, and integration with existing systems. The IBM FileNet architecture provides a framework for functional expansion for managing enterprise content and Web publishing challenges, and provides greater process control and consistency across the enterprise. Based on IBM FileNet architecture, IBM FileNet offers the following product suites: Business Process Manager, Content Manager, Web Content Manager, Image Manager, Forms Manager, and Records Manager. Used together, they provide a unified platform for a wide range of mission-critical business activities, create real process efficiencies and make accurate business analysis easier and timelier. Reduce operating costs To reduce operating cost, IBM FileNet Content Manager provides numerous technology and business benefits. Like, processing work more than 50 percent faster while significantly reducing processing cost, saving 35,000 man-hours every year by drastically reducing the time spent looking for information and reducing operating costs by more than $1.5 million and adding a significant amount of incremental profit to the bottom line. Reducing processing times improves profitability by streamlining exception processing and deploying distributed processing to achieve economies of scale. Using IBM FileNet Business Process Manager, health insurance companies can streamline exception processing by providing instant access to critical information. IBM FileNet Business Process Manager is a proven ECM solution that increases process 3 performance, reduces cycle times, and improves productivity by automating, streamlining, and optimizing complex business processes by managing the flow of work throughout the enterprise. Gain Better Control over Your Documents IBM FileNet combines universal content management and advanced document management capabilities with industry-leading Active Content process capabilities to drive unstructured information for better and faster use in the organization. IBM FileNet also delivers active management of enterprise content across the enterprise regardless of what repository it resides in and maintains secure control over metadata, process and compliance activities while managing highly customized, transactional content delivered to the right place at the right time. The Insurer can streamlines document management tasks by providing extensive 7
versioning and parent-child capabilities, approval workflows and integrated publishing support provided by IBM FileNet. Create a Customer-Centric Approach Health insurance companies must differentiate themselves through superior customer service and satisfaction to drive customer loyalty. With this self-service approach via a portal, companies can reduce the number of incoming inquiries, allowing them to reallocate workers and their workloads. With more and more customers able to navigate Web sites in search of information, self-service gains efficiencies and reduces the overall cost of handling customer transactions. A key component in realizing self-service via the Web is IBM FileNet Web Content Manager, which uniquely combines easy-touse Web content management capabilities with integrated process capabilities for managing the creation, approval and publication of Web content and complex documents to multiple Web sites, in multiple formats and in multiple languages, if required. IBM FileNet Web Content Manager can control vast amounts of dynamic Web content across globally distributed sites and provides integrated process management capabilities to ensure secure and accurate publication of Web content. IBM FileNet Forms Manager provides everything needed to design, deploy and process electronic forms (eforms) across the enterprise to speed business decisions. IBM FileNet Forms Manager enables health insurance companies to transform cumbersome paper forms into fully interactive eforms that directly connect to the applications that drive the company s business reducing costly errors, streamlining operations and increasing overall customer responsiveness. Ensure Regulatory Compliance Compliance to industry regulations and standards within an organization requires control of its processes, its content and the ability to connect to other legacy systems within the health insurance company. IBM FileNet ECM solutions are an excellent way to manage these processes and accommodate future changes in these processes. IBM FileNet Image Manager, IBM FileNet Content Manager, and IBM FileNet Business Process Manager form the basis of a powerful solution to address HIPAA claims attachments. IBM FileNet Image Manager delivers high-performance information retrieval to thousands of users and integrates seamlessly with other enterprise applications and systems. With integrated Business 8
Process Management capability, IBM FileNet Image Manager gives health insurance companies the ability to quickly respond to changing business conditions and make informed and accurate decision-making easy by accelerating access and security to critical content and documents. 4. Conclusion Providing better health care to members has been one big advantage of Enterprise Content Management Technology. The others have been reducing administrative expenses and regulatory compliance. ECM transforms the businesses processes associated with claims processing to reduce time and costs, while increasing efficiency. This helps health insurance companies run leaner and keep expenses down for all parties involved in the health care process to ensure health care remains affordable for everyone. Enterprise Content Management Solution using IBM FileNet ECM transforms and integrates business functions across the enterprise by combining content, process and connectivity within a single integrated architecture. By automating and optimizing mission-critical processes, companies reduce cycle times, plus provide the ability to make the right decisions and react quickly to market conditions. 5. References 1. Health care Technology http://www.sbnonline.com/local/article/13948/72/154/he alth_care_technology.aspx 2. Gartner: 10 Trends That U.S. Health Insurers Must Consider During Their 2008 Budget Processes 3. Gartner: ECM and BPM Acquisitions Confuse Health Insurers. 4. The Impact of Rising Health Care Costs, http://www.midatlantichealthinsurance.com/rates.htm 5. http://www.hin.com/library/registerssh.html 6. Is There Evidence That Recent Consolidation In The Health Insurance Industry Has Adversely Affected Premiums, http://content.healthaffairs.org/cgi/content/full/23/6/29 7. http://www.ahipresearch.org/pdfs/ahip_invhealthit_05. pdf 9
6. About the Author Ranjan Kumar Jha is Senior Business Analyst at HCL Technologies Ltd. He is a part Business and Technology Solution Group (BTSG) of Enterprise Content Management and Portal (ECMP) Practice. How can I help you? Hello there. I am from HCL Technologies. We work behind the scenes, helping our customers to shift paradigms and start revolutions. We use digital engineering to build superhuman capabilities. We make sure that the rate of progress far exceeds the price. And right now, 59000 of us bright sparks are busy developing solutions for 500 customers in 20 countries across the world. transform@hcl.in 10