Healthcare Fights For Mindshare, Marketshare & Margins

Healthcare leaders embrace three trends: retail healthcare, the convergence of care management and customer service, and a new focus on compliance and operational excellence.

Keith Dayton, Sr. Director, Healthcare Solutions, Pegasystems

March 25, 2014

5 Min Read

As the velocity of change in healthcare continues to accelerate, we are seeing three big trends emerging: healthcare retail transformation, the convergence of care management and customer service, and compliance and operational excellence.

Let's look at how these three major themes are being addressed by leading healthcare organizations. My tack is to share how organizations are using change as a competitive advantage by applying the right focus and strategy in combination with advanced, agile technology.

Healthcare retail transformation
For many moons, the health insurance model in the US was almost pure business-to-business (B2B). Health plans sold their programs directly to employers, and the human resources departments within those employers served as the ambassadors of plan benefits for the employees. Now, the industry model is quickly transitioning from B2B to B2C (business-to-consumer). That's adding increased levels of operational complexity.

"Retail" means dealing with all the implications, an aging population, new consumer demands for multi-channel retail experiences, and so on. In response, health plans are investing time, effort, and money to explore ways to better educate their current and potential members on their offerings, on a much larger scale. Operating in a B2C environment has opened health plans to a customer base that includes the traditional B2B clientele, but also individual consumers, each with his or her own specific circumstances and needs. As a result, some health plans are creating new content, opening retail storefronts, launching awareness campaigns, and implementing numerous other initiatives to create retail engagement -- all with mixed results. It's truly radical change, an incredibly disruptive challenge, but it is also a phenomenal opportunity.

In the midst of all this turmoil, we see innovative healthcare organizations really gaining traction. The organizations taking control are doing so by focusing on the customer experience and creating unique, customized, member-centric initiatives that deliver efficient and highly automated interactions to make the product explanation and management, sales, enrollment, and on-boarding of the member easy, convenient, and seamless. These types of integrated programs, with the correct application of technology, are catching the attention of member populations and driving the kind of customer loyalty previously reserved for consumer brands. This kind of stickiness can only be good for reducing costs and creating the kind of collaborative healthcare that can drive up the quality of health while driving down costs.

Customer service and care management
To me, care management is the cornerstone of healthcare transformation. It is the intersection of clinical care and customer care, and a properly designed and managed care management program simultaneously reduces clinical and administrative costs, improves health outcomes, and creates loyal members. How awesome is that? To that point, it's exciting to see that many leading healthcare organizations are recognizing that care management is, indeed, a real sweet spot for the true "value-added" aspects of engaging with their members. Fully integrated disease, case, utilization, and wellness programs on a unified platform that is also connected to the customer service system offer a truly seamless and meaningful experience for members.

Care managers engaging members (and providers) are the supreme ambassadors of "MY" healthplan. Every interaction they have is a "moment of truth" that creates a lasting impression of how well the health plan is treating them. Care teams help members with a wide variety of needs to manage their care plans, select services and providers, figure the cost implications of different choices, and even deal with appointments and prescription refill reminders. They are often the central point for optimizing the collaboration among the plan, the members, and the providers. Training care managers in customer service, not just clinical service, and fusing the two together on a deployable platform, offers incredible opportunities for innovation, happy members, and great outcomes.

Compliance and operational excellence
The quest for operational excellence has long been a focus for healthcare organizations seeking to maximize productivity while simultaneously reducing costs. With the new Medical Loss Ratio rules, this has become an even more urgent initiative. It is really interesting how "compliance" has become such a dominating force as well, and is now a key metric in almost every department's operational excellence report card.

Healthcare reform has created new legislation and new transparency where compliance performance can quickly translate into everything from jaw-dropping penalties (bad) to demonstrating great quality scores (very positive). These two examples can have significant impacts on the top and bottom lines. For example, the halo effect of great quality scores (especially in the B2C model) often results in better member retention and even revenue premiums, whereas costly penalties are… well, costly.

What can a healthcare organization do to optimize operational excellence and improve compliance? Knowing the requirements is key, but having the processes, systems, and workflows that expose and dynamically track the activities as they relate to the specific measures at all times ensures that complex requirements are being consistently followed. Just as important, when a requirement (like a service level agreement) is in jeopardy of being missed, an automated alert system escalates the issue to a supervisor or manager to address and correct the issue before it becomes a compliance problem. Organizations need to have a nimble system that can be quickly modified, tested, and re-deployed to keep ahead of rapidly changing state and federal regulations. Often, the challenge includes multiple state regulations changing simultaneously. This "speed-to-value" is proving to be the critical path for winning in this new post-reform economy. Compliance, adherence, and agility are critical aspects of today's healthcare solutions.

In all the excitement and confusion that the market is experiencing, we see several great opportunities emerging where, with the proper focus, healthcare organizations can establish their leadership while improving both the customer experience and their company's performance.

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About the Author(s)

Keith Dayton

Sr. Director, Healthcare Solutions, Pegasystems

Keith Dayton is Senior Director, Healthcare Solutions, for Pegasystems. He has been in healthcare information technology (HIT) for the past 18 years, serving as EVP of Operations for ActiveHealth Management, General Manager of Comprehensive NeuroScience's Care Management division, and EVP of Click4Care. Keith's HIT experience has focused on designing, building, implementing, and managing systems and programs that leverage information and technology to improve clinical, operational, and financial outcomes.

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