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Transforming the Health Plan Service Model

October 3, 2012
by Karthik Ganesh
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Health plans will need to manage a patient’s data holistically and seamlessly integrate with other critical players

For the longest time, health plans were considered “high quality” if they passed four basic criteria:

  • administered benefits effectively;
  • processed claims quickly and accurately;
  • offered a broad network of physicians, hospitals and additional facilities with fairly aggressive discounts;
  • and provided multiple channels for member inquiries (call centers, interactive voice responses, web assistance, etc.).

Even additional offerings (wellness products, disease management services, personal health records) were only considered important add-ons to ensure the health plan continually moved up the value chain in terms of services offered. Today, however, none of these services are considered differentiators anymore—they are merely core necessities that are now important to even compete in the industry. 

Changes in the industry landscape are forcing health plan leaders to reevaluate their value proposition while continuing to execute effectively on these core competencies. There is additional pressure on health plans to now be the engine that seamlessly powers the all-important patient-provider relationship. This is the genesis of the notion of the Accountable Care Organization. 

The care management conversation has evolved from being focused on medical management to holistic coordination of care across the benefits continuum. Seamless data exchange with external entities (pharmacy benefit managers, labs, health information exchanges, behavioral health organizations, etc.) is now a must-have to complete. The criticality of interoperability and patient data portability is only going to make this even more important in the future. In a nutshell, health plans will need to manage a patient’s data holistically and seamlessly integrate with other critical players across the healthcare continuum.

For a health plan to position itself for success in a post-reform era, there are four key differentiators that it will need to have: operational flexibility, simplified product “operationalization,” consumer centricity, and a superior integration toolkit.

This is the perfect time for a health plan to embark on a transformation of its core service model, thereby putting itself in a position to capitalize on the service expectations associated with the changing industry landscape. Key strategic imperatives of this transformation should include:

  1. Flawless, cost-effective, execution of core competencies to enable focus on value-added services—This begins with a culture of operational excellence and continuous improvement. Service organizations have leveraged the “Lean Six Sigma” methodology for a number of years now, enabling a strong focus on data-driven decision making, elimination of operational waste and system-assisted productivity enhancements.
  2. Seamless integration capabilities with other healthcare players in order to develop a reputation for business-to-business (B2B) excellence—A key outcome of a revamped B2B strategy is to integrate with “anyone, anywhere.” A health plan can facilitate this via the creation of an integration gateway that funnels all interactions, both inbound and outbound, through a single translation hub. The hub would translate the data being exchanged into a structure/language that is consumable by the receiving entity. This concept is no different than carrying a travel adaptor when traveling to Europe or Asia. The adaptor in this instance serves as a single “gateway” to power electronic devices irrespective of the electrical socket specifications in that country.
  3. The ability to simplify and amplify the patient’s online experience via a revamped business-to-consumer (B2C) strategy—Health plans (especially the larger ones) have spent a lot of money over the last six to eight years on making their websites “consumer friendly.” This has included a host of engagement tools to make their websites a preferred online healthcare destination for consumers. There is just one small problem, though—consumers don’t view their health plans as a healthcare service provider. Patients expect their health plan to simplify the administrative aspects of the interaction in a manner that is extremely intuitive; if they have healthcare questions, they would much rather go elsewhere. A key aspect of the revamped B2C strategy should be to “remove the clutter” from the existing websites and ensure they are very specifically focused on key drivers of patient inquiries.
  4. Creation of an information management platform where multiple kinds of healthcare data can coexist and be holistically analyzed (in addition, each platform should be shareable with a diverse base of data consumers)—On the information management front, it becomes increasingly important to have a data warehouse that will accept and house medical claims, pharmacy claims, lab, biometric, behavioral health claims, health risk assessment and electronic medical record data in a singular location, thereby creating the ability to compose and analyze a comprehensive patient profile across the critical aspects of the benefits continuum.

Reduction of infrastructure footprint; leverage cloud technology; and reconstruction for scale, security and reduced operating costs—Shrinking the infrastructure footprint and rebuilding for scale and security require health plans to start thinking like a technology startup that in this case also needs to be very mindful of patient privacy requirements under the Health Insurance Portability and Privacy Act (HIPAA) and data security. While moving the infrastructure to the cloud is on the IT strategic plan of most health plans, very few have actually made the move. A “private cloud” is one way to approach this need. Private cloud technology will enable health plans to dramatically shrink their infrastructure footprint while significantly enhancing operational scalability. This can be done while also maintaining very high privacy and security standards.

Execution of the above-mentioned imperatives is less complex than one may think—all it takes is for health plans to take off their “we’ve always done it this way” hats and embrace strategies that have worked extremely well in other industries. 

With health plans across the country burdened with legacy systems and processes, embarking on a service model transformation can be a very daunting strategy. However, with the industry in flux, this is the perfect time to reinvent the service model to ensure a flawless execution of the “block & tackle” aspects of the service operation while positioning your organization to seamlessly embrace and execute the changes currently impacting the industry.

Healthcare reform and other industry changes over the last few years have either paralyzed organizations to the point where they do not want to embark on a wrong strategy or empowered them to embrace these changes and use them as a catalyst to drive a broader transformation. By choosing the latter approach, it will allow the health plan to position itself for service success, regardless of industry direction.

Karthik Ganesh is executive vice president, COO, and CIO of QualCare, Inc., Piscataway, N.J.


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