Healthcare organizations today face several challenges to which traditional responses are often insufficient. Staying competitive in this environment requires an urgent transformation of their operations, but leveraging significant technology advances, and deploying these effectively, is a challenging process for healthcare organizations—and a challenge that is further compounded by the 24/7 nature of healthcare services. Yet solutions exist. New digital technologies like mobility, robotic automation, natural language processing, and advanced analytics can radically change healthcare operations through a holistic approach to transformation that combines design thinking and lean management principles.
New regulations and increased competition require healthcare organizations to transform operations in a way that will not only help them meet today’s unique challenges, but also stay competitive in the rapidly evolving future of healthcare. Most players in the healthcare industry are dealing with at least three specific challenges:
Compliance. New regulations associated with the Affordable Care Act have added new administrative burdens and responsibilities. As both technology and regulations continue to evolve, many healthcare organizations remain permanently behind the curve. These regulatory changes make it increasingly difficult to comply with healthcare requirements using traditional work methods.
Consumer satisfaction. Healthcare organizations are more accustomed to operating in a provider-centric model rather than a consumer-centric model, but the market is demanding a change towards a more consumer-focused approach. There is increased competition for healthcare services, allowing consumers to make more choices about where to spend their healthcare dollars. In addition, people are spending more of their own money on health and wellness, so they are looking for healthcare organizations that provide an effective and satisfactory experience with a focus on service.
Cost reduction. Healthcare organizations need to squeeze out administrative waste, improve the health of entire communities, and reduce costly errors. Rising input costs, regulatory pressures and restrictions on medical loss ratio is forcing payers to aggressively control and account for all administrative costs. Changing regulations and stricter criteria for reimbursement continue to place cost pressure on healthcare delivery organizations, driving them to become increasingly more efficient.
Many healthcare organizations are looking at new technologies like robotic automation, artificial and cognitive intelligence, natural language processing, and advanced analytics to address their challenges. But investing in these technologies without the proper organizational capabilities offers a poor return on investment (ROI), reduces productivity and effectiveness, and drains revenue.
According to an independent study1 commissioned by Genpact, 66% of healthcare executives say that ensuring compliance with regulations is one of the three most important challenges facing their organizations, followed by consumer satisfaction (59%) and cost (51%).
A need for change
Healthcare organizations no longer have the option of continuing to do business as usual. Healthcare reforms are not optional, and consumers with a choice will select the facilities that best meet their desires and needs. Organizations that want to stay competitive must transform their operations to not only meet current realities but also embark on the complex and wide-ranging transition from a business-to-business to a business-to-consumer setup.
Technology is advancing extremely quickly, and while there are billions of dollars invested in augmenting technology and analytics in healthcare, there continue to be growing gaps between healthcare operations professionals’ knowledge and skills and the pace of new technology. Because healthcare operations must be on every single day, it’s extremely difficult for professionals in the trenches to apply time and effort to ramp up on new technology and analytics.
Healthcare organizations can learn from the experiences of similar transformation in other industries as well as leverage external process, technology, and domain expertise to determine which business processes can best benefit from advanced operating models, and facilitate the transformation. Here’s a breakdown of how some major healthcare challenges can be tackled by rethinking operations components.
Healthcare organizations can ensure compliance with regulations by transforming their systems of claims processing and adjudication. The claims processes consist of several intricate processes including verification and judgment, and it needs to be advanced enough to manage different kinds of submission modes (such as offline and online). The technology supporting the process must drive real- time resolution by doing things like determining benefits and catching duplicate claims submission.
Healthcare organizations can increase customer satisfaction by changing how they manage customer service. For instance, customer analytics programs can enable quick query resolution at the lowest possible cost structure and enhance opportunities for upsell/cross-sell of new plans or bundles. Such systems can be effective because customer service teams are the only access the end customer has to monitor the progress of the healthcare claim. In a healthcare environment where customers are increasingly empowered to make their plan/vendor choices, good customer service drives customer satisfaction.
And healthcare players can reduce costs by harnessing better functions through business intelligence and analytics. With better knowledge provided by analytics, healthcare organizations can drive better bundling and higher margins. Better provider information drives pricing and lowers costs, and better information about the patient, provider, and plan details can ensure that the patient 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 better cost to revenue characteristics, resulting in stronger cost structures and increased revenues.
Digital technology can streamline how one part of the organization interacts with other parts of the organization and with partners, such as healthcare payers, providers, pharmaceutical companies and regulatory agencies. These new networks and interactions are complex, and lean practices can help simplify the transition whether for an accountable care organization (ACO) setup or for adapting to a business-to-consumer environment. Advanced analytics delivery models like shared services or centers of excellence (CoE) can provide the ability to leverage data across the enterprise for a variety of uses such as consumer behavior models or clinical informatics provider analysis.
Changing the way change is done
With the urgent need to become customer- focused, cut costs and comply with regulations, healthcare organizations must find ways to use technology effectively to power new operating models. Healthcare organizations must build their digital strategy with a focus on delivering value efficiently to the customer. The digital strategy, goals, and action must be connected with measurement. Such an initiative has two key objectives: (1) defining the “true north” by exploring value sources and aligning strategy, goals and actions through metrics; and (2) delivering at scale by empowering workers with new ways and modes of working, through the right resources, culture, and organizational models.
Instead of defaulting to an incremental process improvement, or a wholesale rip-and-replace of numerous systems, healthcare organizations must clearly focus investments and change effort on interventions that impact those business outcomes. A scientific methodology like Smart Enterprises Processes (SEP) that employs granular data analysis and cross-functional benchmarks is critical to identify the levers that materially impact the business outcomes. Whereas, 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 by maximizing process effectiveness and harness the power of digital technology.
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 the entire operations, incorporating both technology and analytics into new digitally powered operating model.
Many healthcare organizations are saddled with a large footprint of legacy processes and technologies which complicate their transformation effort. Advanced digital technologies such as robotic automation, advanced workflow solutions can power reimagined processes using new technology to connect with legacy systems, maximizing the utility of existing investments.
Healthcare players also have 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. That data must then be translated into insight, through analytics, and subsequently to action, focusing only on the outcomes that matter. Measuring the process at hand as well as those that come before it and after it, conducting fast experiments and quickly adapting processes and systems based on the insights from the data captured provides a practical way to enable end-to-end data-to-insight-to-action that delivers on intended business outcomes.
The result is intelligent operations which are built on smart processes that sense, respond and learn continuously from the outcomes of their actions providing healthcare organizations with the ability to cope and even thrive in hyper- competitive, dynamic markets with a high- speed rate of technological and regulatory change.
Understanding the impact of change
Healthcare organizations that have revamped operations systems with a focus on technology and analytics are experiencing significant results, such as cost reduction of as much as 50% (see figure 1). Those lower costs come from a variety of operations areas, including arbitrage (21%), technology (11%), standardization (8%), resource optimization (6%), self-service (5%) and variable pricing (3%). And those 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.
As almost everything in the healthcare industry experiences changes, there’s no ground for keeping an operational status quo. Operations can and should be a strategic asset for healthcare organizations. With a deep understanding of the healthcare industry, function, and technology, organizations can rapidly close the gap between ideas and results and begin experiencing significant bottom-line improvements.
When healthcare organizations approach today’s challenges with a lean digital focus, they can implement intelligent operations. These new methods of operating allow for the intelligent use of technology that is specifically geared toward addressing process challenges and constantly measured to ensure ongoing insights and powerful results which can yield cost savings as well as improved patient care and customer satisfaction.
This document was authored by James Mapes, Global Practice Leader for Healthcare and Life Sciences at Genpact.
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