If you do a Google search on ‘Healthcare costs US” you can expect to see about 455,000,000 results (in 0.48 seconds). Healthcare costs and expenditures are top of mind for almost everyone: the Government, Doctors, Health Plans and Patients.
As recently as three years ago, Robert Berwick (the former Chair of the Center for Medicare and Medicaid Services) and his colleague published an article in the Journal of the American Medical Association titled, ”Eliminating Waste in US Healthcare”. They wrote, “In just 6 categories of waste–overtreatment, failures of care coordination, failures in execution of care processes, administrative complexity, pricing failures, and fraud and abuse–the sum of the lowest available estimates exceeds 20% of total health care expenditures.”
To Newgen as a technology company one category stands out in particular. It’s the category for Administrative Waste and according to Berwick et al. it represented between $107 billion and $389 billion in wasteful spending in 2011. I couldn’t find an updated figure from 2015 (please share if you can find it, but I will bet $20 bucks that the number has not meaningfully changed). Berwick et al. define Administrative Waste as, “the waste that comes when government, accreditation agencies, payers, and others create inefficient or misguided rules. For example, payers may fail to standardize forms, thereby consuming limited physician time in needlessly complex billing procedures.”
As a company which is firmly entrenched in automating business processes and eliminating wasteful work, we constantly hear variations on this example. We meet folks at Health Plans who are still using MS Excel to manage Claims or Appeals Cases. We speak with supervisors who have to lead a daily morning meeting to assign work manually and stay on call while on vacation. We advise functional managers and leaders who have no visibility on compliance rates until the end of the month. Almost always, we come away from these meetings with the feeling that Health Plan employees are burdened with non value added work and are unable to focus on their highest priority tasks. Even simple process improvements would help in bending the healthcare cost curve.
So let’s switch gears a bit and talk about banks – which are similar to Health Plans in that they also reside in a highly regulated, complex and consumer driven environment.
What happens when you walk into a bank in McLean, Virginia? Okay that’s a trick question because you probably haven’t been to bank in a while. Because now you do everything banking related on your phone or on the web. You have access to your money and information at a click of a button. Your bank has standardized forms and processes to manage your day to day transactions and sophisticated systems to alert you when issues come up. And this makes life simpler for your bank as well. No more managing paper forms and deposited checks that may walk away from someone’s desk. No more worrying about spending millions on mailing alert letters that reach you a week after someone has taken your Amex on a shopping spree. No more wasting time and energy on manual transactions that are risky and high cost.
That’s because banks have re-wired their business processes to reflect the reality. But when did this transformation occur? The impact of the financial crisis, cyber threats and consumerism over the last decade has forced banks to find ways to reduce waste and allocate funds towards reducing risk and meeting their compliance requirements. Sound familiar? Since the early 2000’s banks have proactively been using BPM and ECM tools to manage their caseloads, to take paper based processing out of the equation and to standardize their decision making by utilizing Rules Managers and Business Activity Monitors. We have worked with banks who have successfully implemented BPM and ECM enterprise-wide after seeing big gains in one or two departments.
Back to all the Health Plan folks reading this. I appreciate that you have stuck around this long. I would like to leave you with the conclusion from the Berwick article and also a question from me.
“The greatest technical challenge in removing waste from US health care will be to construct sound and respectful pathways of transition from business models addicted to doing more and more to ones that do only what really helps.”
And the question.
Now that technology is not a barrier and cost-effective, agile vendors like Newgen can partner with Health Plans like yours, why are you still managing your claims, appeals and contracts on outdated systems like paper or MS Excel or even email? Please share your thoughts with us.