The healthcare industry faces a number of daunting operational challenges, many of which have proven to be resistant to traditional process re-engineering responses. Staying competitive in the current environment requires that organizations move quickly to use technology to transform their operations, but leveraging new technologies, and deploying them effectively, is a challenging process — one that is further compounded by the "always-on," 24/7 nature of healthcare services.
Despite these hurdles, new digital technologies such as mobility, robotic automation, natural language processing, and advanced analytics have the potential to radically and positively impact organizations that adopt a holistic approach to transformation, taking into account design thinking and Lean management principles. But investing in these technologies without first instilling the proper organizational capabilities can have the opposite effect, reducing productivity and effectiveness and draining revenue on projects that fail to deliver the promised return on investment (ROI).
Challenges
The spectrum of issues confronting healthcare organizations is multifaceted, but most players in the industry are dealing with three principle challenges that are impacting their operations:
Compliance: Regulations associated with the Affordable Care Act have added layers of administrative burdens and new responsibilities. With technology and the regulatory environment evolving simultaneously, many healthcare organizations find themselves permanently behind the curve, struggling to comply with the new requirements while relying on traditional work methods.
Consumer satisfaction: For decades, healthcare organizations have been accustomed to operating under a provider-centric model, but recently the market has been evolving toward a more consumer-focused approach. Increased competition for healthcare services has empowered consumers, allowing them to make more choices about where to spend their dollars. At the same time, people are spending more of their own money on health and wellness, so they are looking for healthcare partners that can provide an effective, seamless experience with a focus on service.
Cost reduction: Rising input costs and restrictions on medical loss ratios are among the forces driving payers to aggressively control and eliminate administrative waste. Moreover, changing regulations and stricter criteria for reimbursements continue to apply pressure on healthcare delivery organizations, forcing them to become ever more efficient or risk losing market share.
The Need for Change
Given these converging – and sometimes competing – pressures, healthcare organizations no longer have the option of continuing to do business as usual. Consumers, when given a choice, will select the facilities that best meet their desires and needs. Organizations that want to stay competitive must transform their operations now, not only to meet current realities but also embark on the complex and wide-ranging operational transition from a business-to-business to a business-to-consumer mindset.
While organizations are investing billions of dollars in augmenting technology and analytics systems, there are growing gaps between healthcare operations professionals' knowledge and skills and the pace of new technology implementation. New systems require training, planning and careful implementation, but it is extremely difficult for healthcare professionals in the trenches to apply the necessary time and effort to ramp up on new systems.
Organizations would do well to think carefully and methodically about which business processes can best benefit from advanced operating models, and allow those practices to lead way in operational transformation, rather than attempt an end-to-end overhaul. Here is a breakdown of how some major healthcare challenges can be tackled by rethinking operations in a component-by-component fashion:
• Healthcare organizations can ensure compliance with regulations by transforming their systems of claims processing and adjudication. Claims processing consists of a number of intricate processes, including verification and judgment, and it needs to be advanced enough to manage different kinds of submission modes (both offline and online). The technology supporting the process should drive real-time resolution by performing tasks such as determining benefits and flagging duplicate claims submissions.
• Healthcare organizations can increase customer satisfaction by changing how they use analytics to manage customer service. When implemented properly, customer analytics programs can enable quick query resolution at low cost, while enhancing opportunities for upsell and cross-sell of new plans or bundles. Such systems can be effective because customer service teams are the only access that the end customer has to monitor the progress of a claim. In a healthcare environment where customers are increasingly empowered to make their plan/vendor choices, good service drives customer satisfaction.
• And healthcare players can reduce costs by harnessing business intelligence and analytics. Better information about the patient, the provider, and the plan details can ensure that the queries are resolved immediately (reducing cost of resolution), providers are given their payments on time (minimizing over-payments, and eliminating penalties), and plans can be bundled, combined, or tweaked to better suit the payer-patient-provider relationship. All of this results in stronger cost structures and increased revenues.
Changing the way change is done
Healthcare organizations must build their digital strategy with a focus on delivering value to the customer, but it is critical that their strategies, goals, and actions be connected and carefully measured. This ability to measure progress provides: (1) a definition of "true north" that aligns strategy, goals, and actions through discrete metrics; and (2) a way of empowering workers with new ways and modes of working, through the right resources, culture, and organizational models.
Rather than defaulting to incremental process improvements, or a wholesale rip-and-replace of numerous systems, healthcare organizations must clearly focus investments on interventions that have the best chance of impacting business outcomes. Adopting a methodology such as Smart Enterprises Processes (SEP), which that employs granular data analysis and cross-functional benchmarks, is critical to identify the levers that will most materially impact the business outcomes. Combining this assessment with what we call a "Lean Digital" approach - a combination of design thinking, Lean management practices, and advanced digital technologies - can enable the practical design and execution of the transformation.
A Lean approach helps drill each process down to keystroke level, developing focused solutions that are appropriate for the organization's workforce, existing technology infrastructure, and unique challenges. Design thinking and domain expertise can help reimagine operations, incorporating both technology and analytics into new digitally powered operating model.
Many healthcare organizations are saddled with legacy processes and technologies which complicate their transformation effort. Advanced digital technologies such as robotic automation and advanced workflow solutions can connect with legacy systems, maximizing the utility of existing investments.
Healthcare players also possess vast amounts of data, and the key challenge is to ensure that there are processes capable of capturing the right data that matters at the right time. The data must then be translated into insight, through analytics, and subsequently to action, focusing only on the outcomes that matter. Measuring each process, conducting fast experiments, and quickly adapting processes and systems based on data, enables end-to-end action that delivers on intended business outcomes.
The result of adopting the Lean Digital approach is an intelligent operations model built on smart processes that can sense, respond, and learn continuously from the outcomes of their actions.
Healthcare organizations that have revamped operations with a focus on technology and analytics have seen cost reductions of as much as 50 percent, according to Genpact's experience with clients. Those lower costs have come from a variety of operations areas, including arbitrage (21 percent), technology (11 percent), standardization (8 percent), resource optimization (6 percent), self-service (5 percent) and variable pricing (3 percent). And the results happen quickly. Rather than waiting months or years to see new processes transform the bottom line, organizations that implement focused analytical changes are seeing the impact in a matter of weeks.
Conclusion
There is nothing more constant in the healthcare industry than change, so there is no rationale for maintaining an operational status quo. Rather than being a hindrance, operations can and should be a strategic asset for healthcare organizations. Those that approach operational transformation the right way, with a Lean Digital focus, can rapidly close the gap between ideas and results, and begin experiencing significant bottom-line improvements, improved patient care, and greater customer satisfaction.
James (Jim) Mapes leads Genpact's global Healthcare business, and also serves as the U.S. Leader (Healthcare) and Practice Leader for the integrated Healthcare and Life Sciences business, where he drives a comprehensive growth strategy that encompasses expanding Genpact's services and solutions capabilities to address the needs of clients in the evolving post-reform healthcare payer, provider, medical device, and pharmaceutical markets. Jim has more than 25 years of senior management experience including over a decade in the healthcare industry in back office operations and technology services functions. Prior to Genpact, he most recently served as senior vice president for Global BPO Sales, Operations and Account Management at Optum, United Health Group's Health Services Platform, and also has worked in a variety of leadership roles for several Fortune 50 organizations such as WellPoint Blue Cross and Blue Shield, AIG, and Prudential Insurance Company of America. Based in Dallas, Jim holds an executive MBA from Syracuse University and has also completed a Healthcare Management Executive Leadership program at Cornell University.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.