BYOD for Healthcare Payers

 

 

As with many industries mobile has become a dominant, disruptive force.  The Radicati Group performed a study in 2014 and found that mobile devices in use, including both phones and tablets, will grow from over 7.7 billion in 2014 to over 12.1 billion by 2018.  The statistics are staggering:

•                    2015:  205 million estimated mobile apps downloaded (Gartner)

•                    2015: 51% of the population have a mobile device (GMSA Intelligence)

•                    2015: 72% of all page views via mobile device (GMSA Intelligence)

•                    2018: 84% of the world population will be using mobile technology (Radicati Group)

•                    2018: average of almost two mobile devices per mobile user (Radicati Group). 

•                    2018:  If you take into account purchasing power in developed vs. undeveloped countries, many mobile users in the US could have 3-4 devices!

 

Members have become so reliant on mobile applications in their everyday life they now expect payer access anywhere, at any time.  Employees also expect to be able to perform their jobs using mobile devices.  This is especially true for those that travel and perform business from remote sites.  Bring-Your-Own-Device (BYOD) programs address these market trends for payers.  BYOD brings great potential benefit but comes with significant constraints and risks. 

Benefits include:

•                    Consumerism programs can benefit from providing access to member services via mobile

•                    Mobile access can be a great differentiator leading to higher member satisfaction and revenue growth, especially in Medicare STAR rated programs      

•                    Letting employees utilize their own mobile devices significantly reduces capital outlay, depreciation cost and risk of technical obsolescence for payers

•                    Employee mobile access can increase employee engagement and job satisfaction

Constraints and risks include:

•                    A poor mobile experience can damage member and/or employee satisfaction

•                    There is cost and complexity involved in managing duplicate infrastructure and applications

•                    Security

·                     HIPAA provides penalties but little guidance on PHI security methods and the mobile security market is immature

·                     Controlling security on mobile devices can be difficult on payer owned devices, more difficult on BYOD devices

·                     It’s not just managing the download or access of data through controlled applications, it’s access to data in any form including in transit (i.e. cell towers, Wi-Fi), at rest on company servers, at rest on mobile devices and through the life cycle of the mobile device (i.e. active / authorized, post termination, theft, etc.)    

So what is required to build a successful BYOD program in the payer world?  Many organizations see the BYOD program as an extension of IT infrastructure.  Isn’t it just extending access to applications through mobile devices? The answer is a resounding no.

Although many business applications are web based, mobile web browsers do not have the same maturity and often can’t be used effectively on mobile devices.  Moving to native mobile OS applications (i.e. iOS, Droid) provides more functionality, but requires development and maintenance of duplicate applications.  Building cross-platform applications is an option, but requires unique skills and development tools.

There is also the issue of user experience across platforms.  Members and employees expect to have a similar experience and usability across channels.  If the mobile user experience is poor or inconsistent with other channels it can seriously damage customer satisfaction.  In fact, it could drive additional calls into customer / technical support raising the cost of operations.  This is the exact opposite of its intended effect.

In regards to the infrastructure, managing the platform requires unique skills and technological controls to meet HIPAA requirements.  Data at rest inside the payer network already has HIPAA related controls.  Logical access is controlled at the application layer.  The infrastructure security gap comes in regards to data in transit to the mobile device, mobile OS layer and device storage level data access.

First, Profile based rules should be downloaded to the device enforcing basic, required controls in the mobile device UI.  This creates consistency in security enforcement and multiple layers of logical security to protect PHI.

Applications should be placed on the mobile device to manage the entire PHI life-cycle of the device.  Data should be encrypted in transit and at rest on the device.  Applications, data and access rights should be controlled remotely by the payer organization.  In this way the data can’t be read without having the proper rights as granted by the payer, even if the device is stolen.  Rights, applications and data can be removed from the device at any time by the payer (i.e. job change, termination, theft, etc.)       

BYOD programs don’t just extend existing applications to mobile devices.  Mobile is a new channel with unique needs and capabilities.  It ties into the payer brand and has a significant impact on customer and employee satisfaction.  Managing it properly can be a differentiator.  Managing it poorly can significantly hurt employee and customer satisfaction.

 

If you need assistance in planning, implementing or outsourcing your BYOD program contact:

healthcare@igate.com 

We manage mobile application development and BYOD programs for the best known insurance organizations in the world.  Our customers range from middle market to the Fortune 500.

 

David Lung is a Director in IGATE’s Healthcare Services practice.

 

Healthcare Payers: Impact of Pay-for-Performance (P4P)

In the zeal to reduce healthcare costs one thing has become self-evident.  Payers have been targeted as change agents due to their influence on the industry.  Is it fair?  Is it the right place to pioneer change?  Everyone has an opinion.  The truth is opinion doesn’t matter much.   

ACA, patient sentiment and industry trends have shaped the current environment and the expectations are set.  As the baby boomers age, Medicare and Medicaid expenses were always expected rise.  However, the rate of Medicare and Medicaid is outpacing expectations.  Government based health payments now exceed commercial sources giving them more power and influence. 

One of the key drivers of change in this environment is moving from “fee-for-service” to “pay-for-performance” (P4P).  Debate over the virtue P4P is heated, lengthy and won’t be discussed here. If this is your interest a great place to start is:    

·         http://www.unitedhealthgroup.com/~/media/UHG/PDF/2012/UNH-Working-Paper-8.ashx

·         http://www.mhpa.org/_upload/35.%20The%20Coming%20Impact%20of%20Payment%20Reform%20on%20Medicaid%20Health%20Plans%20(Jay%20Sultan).pdf

·         http://healthjournalism.org/blog/2015/01/hhs-faces-daunting-challenge-in-moving-away-from-fee-for-service-payment/

·         https://www.healthcatalyst.com/hospital-transitioning-fee-for-service-value-based-reimbursements

·         http://www.medpagetoday.com/PracticeManagement/Reimbursement/49742

An undisputed fact is that P4P is not the traditional model for most healthcare systems.  It is not the model that was used to build processes and software that run in the payer world. P4P requires significant changes to technical infrastructure. This impact has gone largely unpublicized.  This problem weighs heavily on the minds of payers. 

P4P requires definition of performance measures (KPI’s), many of which haven’t been well defined yet by HHS.   Even if meaningful and well defined, they would still be hard to implement.  John O'Shea, MD, visiting fellow in the Center for Health Policy Studies at the Heritage Foundation stated in an interview with MedPage Today’s Joyce Frieden:

"I don't know where these [alternative payment] models are going to come from," O'Shea continued, noting that in a previous job on Capitol Hill, "I did a fair amount of work developing alternative payment models for specialty care and these are not easy to design and implement."     

Once KPI’s are defined all payer processes must be adapted to accommodate collecting quality data from providers, calculating KPI’s, tracking performance and paying claims based on said KPI’s.

This requires new contract vehicles, new analytics models, tools, advanced analytics software and changes to core software systems.  The real cost impact of these changes won’t be known for some time.  But payers have to make these changes now to meet business and regulatory requirements.    

So what’s your story?  How is this change affecting you?  I’d love to know.

 

IGATE has experts to lead payers through this daunting task.  With 14 years in the healthcare payer BPO/ITO world we serve some of the best names in the industry.

If you want to discuss ideas or options in moving to pay-for-performance (P4P) contact me directly or send an email to:

healthcare@igate.com

 

David Lung is a Director in IGATE’s Healthcare Services practice.

 

Does the annual enrollment period impact STAR ratings and enrollment numbers?

In 2009, CMS began aggregating the domain level quality scores into an overall STAR rating for Medicare Advantage plans and made available to beneficiaries. Beginning in the 2012 enrollment period, contracts were incentivized to receive a high rating through rating-dependent reimbursement schemes.  But what has been the real effect of these changes on payers?

According to market data, after 2010, there has been a significant increase in plan ratings.  This has narrowed reimbursement gaps.

What has become painfully clear is that seniors are paying close attention to the STAR ratings.  STAR ratings directly impact enrollment.  In fact, authors affiliated with CMS conducted a study of almost 1.3 million Medicare beneficiaries. They found a positive relationship – a one-star higher rating was associated with a 9.5 percentage point increase in likelihood to enroll. (SEE “http://media.jamanetwork.com/news-item/higher-quality-rating-for-medicare-advantage-plan-associated-with-increased-likelihood-of-plan-enrollment/”)

This number is actually conservative.  IGATE, a large BPO/ITO vendor in healthcare, has experienced one Payer’s enrollment drop between 30% - 40% based on their STAR rating!  How?  CMS in their push for quality actively promotes moving to 5 STAR plans.  So much so they offer a “5-star Special Enrollment Period” that lasts almost a year allowing members to switch to any 5 STAR rates plan.

One key measure used in the STAR rating system is “customer experience with the plan.”  Remember the phrase “there’s no chance to make a second good impression?” A member’s experience starts with the Annual Enrollment Period (AEP).  IGATE’s experience fixing the AEP can have an immediate and long lasting impact on STAR ratings.  Of course, getting a 5 requires a commitment to 3-4 other key measures (depending on MA vs. Part D).  But without a positive AEP experience, a Payer is doomed from the start.

If you need to boost your STAR rating contact to discuss AEP in a Box at:

healthcare@igate.com 

This proven service is the key to success at one of the largest payers in the country.

David Lung is a Director in IGATE’s Healthcare Services practice.

 

How to Assess Underperforming Sales Teams

The question was recently asked:
What would you do if you managed a group of sales reps who in 7 months only produced less than 5% of their annual quota?
One of the responses suggested "sacking the whole team and starting over." Interesting thought, maybe necessary, but very "shoot from the hip".
It's rare that an entire sales team is underperforming. Look at all aspects of the role first to find the real cause of the problems before blowing up your organization.
Ask yourself these questions:

1. Is your product / service truly competitive in the market? If not, it doesn't matter who you have in sales.
2. Is your brand new to the market? If so it's not realistic to expect immediate results. It takes time to create brand awareness.
3. What is your sales model?  If it is relationship selling based and starting from ground up it will take time to build relationships.  Hiring sales people with existing relationships can help.  This being said, I’ve never seem a “magic rolodex”.  It gets the door open but doesn’t mean companies will buy.
4. What is the average sales cycle time for your product or service?  If 7 months or more then there may not be an issue.  If 60-90 days then there is a big issue.
5. Do they have the proper lead systems to drive pipeline? If you are asking them to play marketer, appointment setter, closer and relationship manager their bandwidth will be severely limited.
6. Do they have proper motivation through leveraged pay?  
7. Did you hire junior sales people to save money? Experienced sales people, in my experience, drive 2X – 4X the sales of junior sales people.
8. Are any salespeople making their targets?  If not the targets may be off.  It’s unlikely that the entire team is missing their targets.  Your position requirements might also be off systematically bringing in unqualified people.

Although not an exhaustive list, this would be a good start. 

You may have to replace people, but don't throw out the "baby with the bathwater". Start looking for new candidates. The first person you replace will send a clear message to your team. If that doesn't motivate them then start replacing as soon as you can.

Just don't stop forward progress in your pipeline by scrapping everything until you are sure it's the people. It may be the process or their tools

BPO Pricing Simplified

The BPO market can be confusing when it comes to pricing.  As BPO providers mature into core business processes it is becoming even more complex.  It’s starting to look like “anything goes”, but there is some reason to the madness.

There are three basic models for BPO pricing:

1.       INPUT / OUTPUT:  Traditional services based pricing.  Pay for units of input and maximize output (i.e.  hours, FTE’s).

2.       ACTIVITY / VOLUME: Pay per unit of activity within a volume range (i.e. transactions, documents, scans, calls). 

3.       VALUE / BUSINESS OUTCOMES: Pay based on the value a service provides.  Often a hybrid of the activity / volume model and performance measures (i.e. claims processed within 3 hrs, issues resolved in single contact).  It could also be based on a percentage of savings or growth (i.e. increased sales, reduced cost per transaction, reduced aggregate procurement spend).

An entire book can be written on the variations of these models in practice.  That being said, the slate is usually wide open.  BPO vendors often entertain any model they feel comfortable with in terms of risk, quality performance and reasonable profitability.

Here is a simple process to follow when talking to your BPO vendor:

1.       Decide what processes make the most sense to outsource.  These usually bubble up easily based on organizational strategy, pain, cost and capabilities.

2.       Define your strategic goals for the process.  Are you looking for growth, quality improvement, scalability, reduction in cost, innovation or consistency in cost per transaction?

3.       Define who you feel should take ownership and risk for that process.  Not just execution quality but process innovation, design, performance, outcomes, etc.  The more risk you want the BPO vendor to take, the more value you want them to add, the more control they will want over the process.

4.       Now define a proposed pricing model based on the above attributes.

The outcome will best represent your expectations and significantly simplify BPO vendor discussions.    

 

Consider these links:

http://www.outsourcing-law.com/2012/05/four-%E2%80%9Chot%E2%80%9D-deal-structures-and-pricing-models-in-sourcing-of-bpo-and-kpo-services/

http://www.offshoringtimes.com/Pages/2006/BPO_news1255.html

http://www.siliconindia.com/shownews/BPOs_see_better_revenues_through_new_pricing_models-nid-46430-cid-2.html

http://www.internetviz.com/psjblog/2012/07/outcome-based-engagements/

BPO: Going Deep and Wide Requires Commitment

Business Process Outsourcing traditionally has focused on high volume, low value activities.  Labor arbitrage and streamlined processes created price and process efficiencies: 

“The traditional cost centers such as HR, finance and accounting and some low-value, high-volume customer-facing functions have been the most frequently outsourced activities. In such services, reducing cost has been the objective, though the means of achieving that have evolved over time.”

 (http://www.offshoringtimes.com/Pages/2006/BPO_news1255.html)

Many companies have already outsourced cross-functional support processes.  In addition, the cost of global labor is eroding margins for BPO firms. So how are BPO providers responding? 

One method has been moving the focus to core business process outsourcing.  This will deepen the customer relationship and divert discussions from “savings” to “value”.  Value can be anything:  Market agility, scalability, global delivery capability, etc.

I often hear the words: “We want to go deep and wide.”  Yet there is little tolerance for taking on anything but the highest margin work.  In my experience with IBM going “wide” requires investment on both sides.  Customers will want the BPO provider to take over processes that THEY HAVE THE MOST TROUBLE WITH, high margin or not.  If it was easy and cheap for them to manage why would they outsource it?

Is it a matter of BPO firm contract profitability measurement?  Is it a myopic view of relationships?  My experience is customer portfolio measurement provides better outcomes for service companies.  It measures the profitability of the relationship, not individual contracts.  It allows for taking on a broader selection of processes from customers, with different margins, to lock in customer trust and relationships.  It shows the commitment of the BPO vendor to the benefit of the customer.

Don't let past experience inhibit growth!

In recent months I have discovered a disturbing trend.  There is a vicious cycle where economic risk has caused executives to become very conservative.  They are avoiding taking risks to grow their company, blaming their actions on their "experience".

Webster defines experience as:

"a :  direct observation of or participation in events as a basis of knowledge"

OR

"b :  the fact or state of having been affected by or gained knowledge through direct observation or participation"

I contend that experience is not static.  Experience is based on many variables that change over time.  Cultural norms, economic conditions, business practices, technologies available and the legal / regulatory environment are just a few.

Executives count on their experience to drive decisions.  It provides a base of stability to feel empowered, important and valuable.  It is the executive "comfort zone".  Challenging that experience means challenging the very essence of executive value.  Or does it?

It is far easier to say "no, that business is not profitable" than to say "how would you make that profitable under today's environment and would it be sustainable".  Yet how many times in the last ten years have companies redefined ways to drive profit out of their business?  Too many to count.

This is where I see opportunity lost.  Who is going back to re-review industries, processes, growth ideas and business models in light of changed variables?  These ideas are intellectual capital that has already been invested in that could drive growth.

There are numerous examples in history:

The steel manufacturing market was considered "saturated" and having "high barriers to entry".  The Japanese said "what if we use the arc furnace to recycle scrap steel?"  This fundamentally changed the process, profit margins, the supply chain model and removed the barriers to entry.

The beer industry was a highly localized, fragmented industry.  It was when Adolphus Busch in the early 1870's asked "how can we keep beer fresh to transport it long distances".  Pasteurization was applied to the process opening the door to national distributing and national brands.

Buying a software company in its "mature > decline" life cycle was once considered a catastrophic mistake.  Computer Associates thought "this is when the purchase price is lowest; what if I buy them and fund only required maintenance through the end of life".  This increased margins, severely reduced sales expenses (buy existing customer base) and provided instant brand recognition.

An outsourcing example for today:

Healthcare Payers (insurance) have been consolidating for years.  Providers started a few years ago but are in the midst of a long cycle of consolidation.  Labor intensive process like coding, collections, billing and transcription have been outsourced for decades.  Most of this work is done regionally by small businesses.

One might say "But given the labor involved margins are low."  True, if you follow the traditional labor model. 

What if you consider your company a "business process outsourcing" company instead of a "services" company.  Reduce the use of labor through automation (natural language processing) for electronic coding.  Buy the receivables at a discount (very common) and make arbitrage between the buy price and collections.  Integrate with the provider's billing systems to handle bill generation and automate distribution processes. This fundamentally reshapes the profitability of the business.

Now, take the lead from Computer Associates, BUY YOUR CUSTOMERS.  Quickly buy up the local / regional revenue cycle companies.  Eliminate overhead through centralization of administration and processing but keep the local sales rep's for their relationship.  Rapid growth and low cost of sales.  Oh, and a stronger national brand.  Now I'm getting excited!

So now you have a profitable, high volume, national business line.  Economies of scale and automation provide high margins.  A large customer base and geographical presence provide create a strong national brand.  Now cross-sell and upsell those customers and grow to the next level.



"No" is too easy.  Relying too much on experience can be detrimental.  Re-assess opportunities and reshape your experience frequently to grow the business and your career.