How automation can increase payer productivity and profit

How automation can increase payer productivity and profit
Jul 8, 2021
Payers use of automation in healthcare can increase productivity in front and back offices, boost profit, and help manage workflow.
Payers are at a complex point in the healthcare evolution. While there is now more technology spend, KPIs to track, and insights into provider performance than ever before, payers’ operations are often still plagued by legacy systems, siloed knowledge, and disparate processes. This leads to an increased focus on streamlining payer operations through digital transformation, and more specifically, process automation.

For payers, process automation allows for achieving greater productivity by either utilizing the same resources to do more or utilizing fewer resources to do the same, both of which help offset rising labor costs and inefficient labor spend. This often leads to a common misconception that automation will simply save costs through headcount reduction. However, the truth is that automation removes certain responsibilities and activities within roles—not eliminating the roles themselves. It is paramount that payers utilize automation to drive incremental efficiencies, thus enabling employees to perform more value-add activities and help payers realize their automation potential.

Automation in payers’ back and front offices

In today’s payer landscape, common challenges—such as complex health plans, changing consumer needs, and a need for more data-driven outcomes—can inhibit business growth and operational productivity if not remediated appropriately. That said, a process automation at scale can help resolve many of these challenges and the associated business impacts. In fact, many processes in both back and front offices of payer operations are becoming increasingly automated, though with different target outcomes.

1. Back-office benefits

Things like contracting, onboarding, credentialing, billing, and enrollment processes can often realize significant efficiency and savings gains from automation. These processes are usually highly repeatable, have multiple handoffs, and contain both manual and duplicative steps—making them prime automation targets. Additionally, lack of automation can result in lower performing contracts and networks, leading to business-wide impacts such as financial losses, lower profitability, and consumer dissatisfaction. A prime example of automation improving performance for multiple back-office processes at once is provider onboarding. With automation, a provider can be credentialed, setup in network(s), and setup for claims submissions and payments with fewer errors and less processing time. Moreover, preventing a provider from both having to call back multiple times with issues and being passed from person to person reduces provider abrasion, expedites changes to networks and contracts, and saves on redundant labor costs.

2. Front-office benefits

Many customer intake/setups and contact center activities have redundant and highly manual inquiry tracking and post-inquiry documentation steps. These processes are often inundated with several core challenges, including multiple handoffs, repetitive process steps, siloed business knowledge, and downstream delays. These issues are further compounded by disparate technology platforms, decentralized data, and incomplete utilization or unification of available data. However, whereas back-office claims processing activities often take place behind the scenes, front-office activities can happen directly during experiences with customers (members, providers, or brokers). The additional layer of member-facing impacts makes many front-office processes a higher risk for payers to address with automation, as customer experience and “human touch” needs cannot be sacrificed or replaced. By focusing on the right use cases, implementing process automation with the right level of self-service, handoffs, and backup mechanisms—coupled with appropriately training both employees and customers—these risks can be reduced, and automation can be selectively leveraged.

Automation can not only help address core challenges, but also reduce the technical gaps that hold payers’ businesses back, specifically by enabling greater data standardization, reporting capabilities, and data availability. And as more payers and providers leave legacy systems, automation at scale for both front- and back-office settings can bolster productivity and create efficiency gains across most organizations.

Value-based care implications of automation

Automation has the potential to do more than just increase operational productivity. Automation can also increase the capability to effectively evolve with value-based care needs, improved talent efficacy, increased overall profitability, and the ability to better serve members.

1. Enables payers to better adapt to value-based care and serve members

With the introduction of the Affordable Care Act, payers have started shifting away from fee-for-service models and instead have focused more on pay-for-performance models. One of the critical factors in a successful transition to value-based care is the ability to identify high-performing provider (HPP) networks. That is, exclusive groups of high-value health care providers and health professional organizations that serve a defined patient population, while also delivering improved clinical outcomes, providing lower treatment costs, and ranking higher in overall billing efficacy. However, simply identifying HPPs is often more complicated than it is straightforward, due to the need for established and validated metrics, consolidated data, and a near real-time view of the data. Automation can help realize these capabilities through greater data accuracy, visibility, and transparency, which enable payers to begin defining the necessary metrics and strategies.
Moreover, process automation and streamlined operations can help payers maintain HPPs within their network through higher provider satisfaction and Net Promoter Scores. This is critical, as identifying the HPPs is only part of the challenge. In fact, ensuring that HPPs continue their relationships and contracts with payers is the other key to maintaining a strong alliance and building a competitive advantage.

However, the benefits of HPPs expand beyond payers; they can also help members receive better care and experience more value on the whole. In a typical HPP, a payer contracts more exclusively with a smaller network, resulting in economies of scale, increased contract negotiation power, and lower costs for both employers and plan members. Additionally, the public largely favors the benefits of HPPs. A University of Chicago survey found that 57% of small employers would opt for a high performance network if it would lower costs by 5% or more, while 77% said they would choose the high performance network if it lowered costs by at least 10%. While steerage is not legal in the new healthcare reform laws, there is a way for payers to use data from automation to identify facilities, providers, and networks that perform to a specific level and have proven outcomes. That can then be incentivized to lower rates in return for higher reimbursement incentives, which draw more customers and, without force, steers members to a “choice” facility or provider. This leads to the ability to better track and manage patients, which better informs drivers of population health and care management activities.

2. Enables payers to improve talent management

Automation has benefits that can be seen across the healthcare industry as well as its workforce. The largest realized gain would be from increased data sharing capabilities, enabling greater knowledge transparency, increased data visibility, and fewer redundant efforts—all of which would allow employees to perform more “value-add” work. Employees who feel valued are more engaged, and engaged employees are more likely to be more productive and stay in their current role. In this way, automation can reduce overall healthcare costs through reduced attrition and by recruiting and retaining high-demand skillsets. This affects the consumer side as well, as many employers now offer wellness programs tied to healthy outcomes or encourage the tracking of health information. This increased visibility and access to customer data can serve to only improve employer health plan offerings, which then benefit the employees themselves.

3. Enables payers to increase profitability

Automation improves productivity and operations within the payers’ back and front offices, and also helps combat the trend of declining margins. The immediate impact of automation can lead to fewer process inefficiencies and reduce the risk of manual data errors, which results in more accurate master data, greater data visibility labor savings, and higher satisfaction among both employees and members.

Automation also enables capabilities that can help payers improve long-term profitability. By breaking down data siloes, payers are able to more easily analyze and better understand their providers, networks, and members. In turn, they can adjust reimbursement structures, target more effective provider networks, and price both contracts and plans more appropriately, which contributes to increased profitability. Additionally, automation can improve provider, member, and employee satisfaction with the payer, resulting in high-value providers and members choosing to stay with the payer for longer periods, causing employees to be more engaged and productive.

Where to start

Large shifts in technology and digital transformation don’t happen overnight. That said, organizations can take several key steps now, no matter where they are on their automation journey. For example, starting with a holistic technology assessment and systems audit may help to quickly identify both gaps and opportunities in terms of where they are and where they need to be. A detailed automation roadmap and implementation plan can then determine the right path, duration, and investments while creating the right safeguards throughout the process. Finally, and perhaps most importantly, selecting the right partner to help guide and support this initiative is paramount to success.

In the end, automation not only enables payers to streamline their operations, optimize labor allocation, and improve profitability, but also paves the way for a more sustainable business and establishes a stronger competitive advantage. Payers will be able to weather the dynamic changes in healthcare and better adapt to industry pressures, whether due to regulations, costs, and/or talent. Either way, the time to make the case for increased automation is now.
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Meet the author
  1. Leah Sheveland, Partner, Healthcare

    Healthcare Leader with over 15 years of management experience. Specialized in leading cross-functional teams in the areas of payer operations, Medicare Advantage, retail health expansion, and strategy definition. View bio

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