AHIP 2016 Highlights: Top Healthcare Industry Execs Discuss Data Integration Challenges & Discuss Priorities

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AHIP 2016 was held last week in Las Vegas, NV at the Wynn hotel & casino. It was an excellent turnout from an attendee audience perspective solid representation across payer and provider organizations as well as business and IT participation from departmental manager to CEO and vendor community support. Below are the insights and outcomes of an executive roundtable meeting that discussed data integration challenges and opportunities in healthcare hosted by MarkLogic, a leading operational and transactional Enterprise NoSQL database provider powering numerous healthcare digital transformation projects and data silo integration / aggregation strategic initiatives for payers, providers and health IT vendor platforms.

The following research and information is summarized and de-identified to respect the confidentiality of the executive roundtable audience and their respective organizations. The organizations represented included market leading payers, providers, health IT vendors and consultants. Audience titles ranged vertically from director to CEO and horizontally from clinical, administrative, financial, product, operations and IT functions. The prevailing executive roundtable observation and summary insight, after more than 90 minutes of discussion and debate on individual healthcare industry themes and use cases was that, breaking down data silos and developing an enterprise data layer or hub is fundamental to achieving any one of these strategic initiatives and use cases that are essential to our ability to innovate, modernize and survive.

The executive roundtable topics were sourced in part from the Healthcare Executive Group (www.hceg.org) 2016 Top Ten List (https://hceg.org/hceg-top-ten/) and direct industry field interactions. The HCEG 2016 annual forum is scheduled for September 12-14th in New York City.

While there are many levers to flip and knobs to turn to lead healthcare into the modern era of the new digital health economy, this executive roundtable discussion was primarily focused on the underlying data integration challenges holding back innovation created by decades of departmental purchasing of proprietary, standalone point solutions and developing or implementing applications using rigid relational technologies requiring expensive and resource intensive extract, transform and load (ETL) processes.

The stimulus for the executive roundtable audience provided a categorization of broad healthcare market initiatives shared across geographies and lines of business focused on the strategic themes listed below:

  • Client Management
  • Consumer Engagement & Retention
  • Data Enablement & Infrastructure
  • Network Management
  • Payment & Reimbursement
  • Population Health & Medical Management
  • Quality, Accreditation & Compliance

The executive roundtable audience was asked to score and prioritize the degree of impact and importance data integration has on the strategic themes and initiatives listed above. The response scoring methodology, principles and process leveraged techniques from an acclaimed book on leading innovation called, Nail It then Scale It: The Entrepreneur’s Guide to Creating and Managing Breakthrough Innovation, by Nathan R. Furr and Paul Ahlstrom.

Some typical or common use cases aligned to the strategic themes / initiatives listed above were provided the simulation stimulus into give the executive audience context in their scoring consideration for data integration impact and importance. Use cases included, but were not limed to:

  • Client Management Use Cases
    • Client (group) contract management / search
    • Client (group) onboarding
    • Client (group) premium payments
    • Product & policy administration
  • Consumer Engagement & Retention Use Cases
    • Consumer360 / Vision 2020
    • Member communications
    • Provider search
    • Online enrollment / exchanges
  • Data Enablement & Infrastructure Use Cases
    • Enterprise data layer / digital transformation hub
    • M&A integration
    • Provider interoperability / health system integration
    • Mainframe migration
    • Re-platforming home grown apps (3rd party app conversions)
  • Network Management Use Cases
    • Provider contract management / search (FFS and VBR)
    • Provider network management (enrollment, credentialing, etc)
  • Payment & Reimbursement Use Cases
    • Billing, payments and collections (premiums)
    • Reimbursement (FFS, ACO, VBR, MACRA, etc.)
  • Population Health & Medical Management Use Cases
    • Care management, Disease Management, Utilization Management
    • Risk management / stratification
    • Data analytics / reporting
  • Quality, Accreditation & Compliance Use Cases
    • NCQA accreditation, audit & compliance
    • URAC accreditation, audit & compliance
    • STARS accreditation, audit & compliance
    • HEDIS audit & compliance
    • Fraud, Waste & Abuse and Special Investigations Unit (SIU)

The results of the executive roundtable audience scoring and prioritization the themes and use cases are below. The criteria for a minimum investment for an individual theme or initiative were $20 and the total budget available per audience member was $100. Investment per theme or initiative could be any amount between $20 – $100.

  • #1 Data Enablement
    • Average index score of $42.15 investment contribution
    • High = $50
    • Low = $25
    • Insight: 70% of the audience put some form of investment in this category. This was a high frequency and high average monetary contribution area of priority for data integration.
  • #2 Network Management
    • Average index score of $35.00 investment contribution
    • High = $60
    • Low = $20 (minimum investment)
    • Insight: 25% of the audience put some form of investment in this category. This was a low frequency but high average monetary contribution area of priority for data integration.
  • #3 Consumer Engagement & Retention
    • Average index score of $32.50 investment contribution
    • High = $50
    • Low = $20 (minimum investment)
    • Insight: 90% of the audience put some form of investment in this category. This was a high frequency but average to below average monetary contribution area of priority for data integration.
  • #4 Population Health & Medical Management
    • Average index score of $30.63 investment contribution
    • High = $40
    • Low = $20
    • Insight: 70% of the audience put some form of investment in this category. This was a high frequency but average to below average monetary contribution area of priority for data integration.
  • #5 Payment & Reimbursement
    • Average index score of $30.00 investment contribution
    • High = $40
    • Low = $20
    • Insight: 80% of the audience put some form of investment in this category. This was a high frequency and below average monetary contribution area of priority for data integration.
  • #6 Client Management
    • Average index score of $26.25 investment contribution
    • High = $40
    • Low = $20
    • Insight: 25% of the audience put some form of investment in this category. This was a low frequency and below average monetary contribution area of priority for data integration.
  • #7 Quality, Accreditation & Compliance
    • Average index score of $20.00 investment contribution
    • High = $20
    • Low = $20
    • Insight: 15% of the audience put some form of investment in this category. This was a low frequency and below average monetary contribution area of priority for data integration.

In summary, there was strong agreement among executive roundtable participants that data infrastructure investments and enhancements were needed before additional application, investments and enhancements. To be specific, most executive roundtable participates agreed that their organizations needed an enterprise data foundation that is transactional, not just another static data warehouse, to integrate data across disparate sources and formats to run our business on before organizations could truly improve application performance, utilization and ultimately customer experience and satisfaction.

About MarkLogic

For over a decade, organizations around the world have come to rely on MarkLogic to power their innovative information applications. As the world’s experts at integrating data from silos, Mark Logics operational and transactional Enterprise NoSQL database platform empowers our customers to build next generation applications on a unified, 360-degree view of their data. Headquartered in Silicon Valley, MarkLogic has offices throughout the U.S., Europe, Asia, and Australia. For more information, please visit www.marklogic.com.

MarkLogic is a registered trademark of MarkLogic Corporation in the United States and/or other countries. All other trademarks mentioned are the property of their respective owners.

About HCEG

The HealthCare Executive Group is a national network of select healthcare executives and thought leaders, who navigate the tactical and strategic issues facing organizations today and provide a platform that promotes healthcare innovation and the development of life-long relationships. Originally the Managed Care Executive Group (MCEG), The HealthCare Executive Group (HCEG), was founded in 1988 by healthcare executives looking for a forum where the open exchange of ideas, opportunities for collaboration, and transformational dialogue could freely ensue. For more information, please visit www.hceg.org

Author: Bill Gaynor, Healthcare National Director at MarkLogic Corp.

Common Sense Health Service Purchasing: Medical Shopping 2.0

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Introduction

In a world where consumers can quickly and easily compare costs and buy nearly any item they desire online from cars to plane tickets it is safe to say that consumer’s expectations around the purchasing experiences are higher than ever. However, it’s not just the retail sector that has figured out how to streamline these web-based and omni-channel encounters. Online banking, travel, hospitality and other service-oriented organizations have been quick to follow its lead. Yet the health care industry has lagged far behind in these efforts. There are many reasons for this delay, including the following factors:

  • Health care pricing is incredibly varied and involves a complex interplay between each provider’s negotiated rates with the payer and the consumer’s own benefit design and deductible balance.
  • Provider bills are reconciled and payments are received weeks or even months after service is rendered through the claims submission, adjudication and reimbursement process with the insurer.
  • Health care decisions were not always as consumer-driven as they are currently. In the days of HMOs and other restrictive plan designs, providers and payers served as gatekeepers often deciding where, when and what kind of treatment was best for a patient.
  • In the recent past, the insured’s cost share for utilizing health care services was significantly lower. Most of the insured’s cost resided in the premium payment. With little or no financial out-of-pocket responsibility at the point-of-service, consumers were decidedly less concerned about comparison shopping for care.

Shining a light on cost variation and avoidable utilization

There is no doubt that consumer concerns about their rising share of costs and experience dissatisfaction are well founded. Many experts in the industry will admit that there is widespread pricing failure and lack of a common sense experience across the traditional health care system. Cost variation within and among payers, providers and geographies is widespread. One Blue Cross and Blue Shield Association report shows that costs for knee and hip procedures can vary by as much as 313 percent. Another industry report shows that for MRIs, the most expensive hospital in the nation has prices twelve times as high as the least expensive hospital. However, cost variation also plagues the ambulatory care side of the industry. Certain out-of-network providers bill up to 100 times more than other providers for the same services. Research shows that 71 percent of emergency room visits could have been avoided through consumer selection of more appropriate, lower-cost care options.

Transparency tools fall short

Many health plans have certainly attempted to make health care service costs and decision-making better for consumers. Most payers have implemented some type of transparency tool for their members. However, there are problems inherent in using this approach as a standalone band aid approach that addresses a symptom (unknown price estimates pre-service) and not the root cause (pricing failure in health care, known and reliable prices pre-service). These tools are not electronically actionable or transactional, and are often inaccurate, resulting in surprise consumer EOBs that dismantle consumer trust and confidence instead of building it. That’s because pricing information in transparency tools is often based on batch, not real-time, data, regional allowed amount averages at worst, or at best, historical paid claims costs. However, even historical claims payment information can easily become outdated as provider contracts change and it is more limited in its usefulness in rural areas, where a health plan may only have a small sample size of data. Consumers inherently doubt and distrust the accuracy of price quotes or estimates that are not immediately transactional or binding.

Many consumers also find these first generation price transparency and cost estimating tools limited in relevance for everyday health care needs. That’s because many of these tools are geared towards high cost acute services. Most also lack instant gratification transaction processing capabilities and pricing assurance. Perhaps it’s not a surprise then that while industry surveys show that 98 percent of health plans say they offer cost calculator tools, only two percent of members actually use them.

Addressing the shortfalls of today’s fragmented system

Consider the convenience and value of the real-time e-commerce purchasing approach compared to the traditional health care shopping and transparency model. In the traditional model, consumers have to seek out information from different stakeholders and avenues. There is no consistency, convenience or sense of ongoing engagement. Consumers may turn to their health plan for information about network providers and benefits, search for provider reviews on third-party websites or by asking friends and family, and then utilize transparency tools to approximate their costs. Then they must contact providers directly to confirm network status and schedule office visits. Finally, payment itself can be a complex interplay between point-of-service payments such as copays and additional balance payments submitted via mail after benefit reconciliation is complete, and this process typically takes more than 30 days.

This fractured and disconnected traditional process can only be understood through research and heavy lifting from consumers actively seeking out information from all of these stakeholders in a variety of different ways. Expecting consumers to navigate through this maze of information seeking and experience is clearly one reason why health care has failed to effectively engage, activate and influence consumers enough to significantly move the needle on cost and quality. This legacy process is disjointed, frustrating and time-consuming. As a result, many consumers will simply give up trying to make an informed decision and will select providers based on factors such as geography and availability.

Using e-commerce strategies to enable health care purchasing modernization

In order to support consumers throughout their entire health seeking journey, health care organizations must borrow from retail and other sectors with proven consumer engagement strategies and successful histories of transforming into digital enterprises. The global e-commerce industry saw impressive growth in 2014 with goods and services worth $1.5 trillion bought by shoppers via desktops, tablets and smartphones. Experts also predict that e-commerce sales will reach $3.5 trillion within the next five years.

Given the successful reach and consumer familiarity with the model, health care organizations should consider implementing a similar e-commerce approach that has a foundation of real prices and precision payments. Gartner analysts have predicted, By 2018, precision payment will replace value-based contracting as the bleeding edge of payment reform. Within the optimal e-commerce model, health care consumers can actively consider, compare, purchase and share experiences with various care options across different settings (e.g. telehealth or physical setting hospital, ambulatory center, urgent care, primary care, retail clinic). One leading company has already developed a viable, accessible and simple approach to doing just that.

The SpendWell Health e-commerce platform is a benefits-integrated, transactional consumer solution that allows consumers to easily access a service catalog with known prices and choose the health care services they want and need. SpendWell forges a direct digital connection from consumers to providers, giving health plans a new avenue to demonstrate value and create more informed, value-conscious members. Using this web and mobile health purchasing resource, consumers can make care decisions and purchase services with trust, confidence and no post-service effort.

Gartner analyst research has also linked the need for a personalized experience in medical policies and practices to precision payments. Precision medicine and precision payment are tied to each other in order to achieve the systemic changes that will improve the overall health and economics of the medical system. The Gartner research continues to exam these transformational dependencies, Precision medicine will fundamentally alter the institutions, vendor community, processes and technologies used in the payer industry to establish medical policy, authorize services and complete medical necessity review the gradual change from retrospective reimbursement mechanisms, typified by fee-for-service reimbursement and concurrent payment systems in value-based care, will move to prospective payment specific to a member’s current and future medical needs. Precision medicine, if combined with a new payer competency in precision payment, offers a new way of provisioning care that is appropriate to the individual, of high quality and financially effective.

The buy now button for health care

It’s also important to note that the moment of purchase is a very powerful part of an e-commerce approach, converting consumer interest into action and initiating a transaction to move the process forward. Transparency tools alone do not address this phase. To understand why it’s so critical, we can examine the potential parallels with today’s most successful retail models. A consumer may read product reviews on Amazon to compare the cost and quality of a particular product, and then immediately (and easily) make a purchase. In this way, the buy now button serves to help close the decision-making loop. Similarly, an e-commerce approach to health care services like the one developed by SpendWell supports consumers from consideration to evaluation, purchasing and post-purchase perceptions. It converts initial interest into an actual transaction with recurring options, just like auto-refill at a pharmacy but for health services and products.

 

Author: Bill Gaynor

SpendWellHealth.com

Healthcare 2016 Game of Thrones Shift: Consumer is King, Payer is Hero

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2015.09.22 - KingSetting the Stage

For those of you not familiar (or more appropriately heavily addicted binge watchers) with the hit series Game of Thrones on HBO, it is a story about the rise, fall, shifts and drifts of power within and between kingdoms, families and characters in a fictional medieval period. Make no mistake, even with all of the current technology and decades of knowhow available, the current healthcare system and process is feudal and the experience is draconian overly complex, hard to access and navigate, confusing and costly to all stakeholders. Consumers feel like they are being left hanging in the stocks (a medieval punishment device) in the town square when it comes to the current experience and costs associated with their health benefits and related purchases.

The good news, we are on the verge of emerging from this archaic, high resistance to change era into the next golden age of healthcare. E-commerce is the key that ignited change in other major industries (ex. banking and retail) and led to a significant spike in growth, improved experience, better efficiency and reduced costs. E-commerce and medical shopping are poised to have that same impact on healthcare.

Crossing the Gulf of Grief – Consumerism initiative driving healthcare

According to CMS Office of Actuary, of the $2.9 Trillion spent on healthcare in 2013, $381 Billion of that came directly out of consumer’s pockets for expenses other than healthcare premiums. While a significant portion of the $381 Billion was spent on co-pays, an increasing amount was spent on full cost healthcare from credit, debit, cash accounts or HSAs.

Continuing with the Game of Thrones analogy, the up and comers in a kingdom called Mereen are trying to create a better, more equitable society by challenging legacy cultural norms and the existing ruling factions. The citizens of Mereen are separated from the current centers of power think government payers, commercial payers and providers–by the Gulf of Grief. I liken healthcare consumers to the citizens of Mereen. The Mereen citizens are starting to realize their power yet struggling with becoming more self-governed and having increased voice, influence and decision making abilities. Sound familiar

Just like the citizens of Mereen, healthcare consumers will have to cross the complex, confusing and surprising currents of the Gulf of Grief to become sufficiently self-directed with less than exact information and imperfect navigational tools unless E-commerce, medical shopping and retail principles are more widely adopted by payers and providers.

Price, quality and access transparency to support the consumer experience

According to recent studies, 88% of healthcare consumers want to know their out-of-pocket costs before receiving health services. Only 46% of consumers are happy with their CDHP, HDHP benefits. The lack of insight into the true total cost of care pre-service is the #1 point of dissatisfaction among healthcare consumers. These data points above, as well as other indicators, point to an increased need for E-commerce and medical shopping initiatives.

By example, annual enrollment is a huge administrative burden on payers and confusing to most consumers. It makes sense to improve it. In my opinion, a disproportionate amount of resource investment and focus, especially in public and private exchanges, has been placed on enabling online benefit shopping and elections which typically happens 1-time per plan year. Would consumers rather have an online, more retail experience for shopping, comparing and electing their benefits Sure.

But, do consumers better prefer and need an E-commerce or medical shopping retail solution for how they utilize their benefits over an online enrollment solution Yes, consumers prefer E-commerce and medical shopping over online enrollment is what my informal user experience research shows. If the name of the game is to attract, acquire and retain policyholders for payers and patients for providers, then the benefit utilization experience is the primary area needing investment focus, improvement and automation. Commercial healthcare consumers on average access and utilize their benefits 13 times per year. Using the logic above of 1 enrollment experience versus 13 or more utilization experiences per year, wouldn’t logic indicate that payers and providers should prioritize and focus more resources on E-commerce and medical shopping initiatives.

If this is true, why are a disproportionate amount of payer resources tied up in online enrollment projects The answer is regulation. An online enrollment experience is mandated for public exchange benefits hence the resource prioritization on it. Lesson to be learned, healthcare and many other heavily regulated industries (ex. banking) typically do very little voluntarily in advance of regulation. That is why 9 states have or are considering transparency initiatives. That number is expected to grow. I contend that a transparency tool doesn’t go far enough in meeting the needs and expectations of healthcare consumers. The E-commerce platform will leapfrog traditional transparency tools and modernize traditional provider contracting, claims infrastructure, collections and payment processing which could save the healthcare industry $235 Billion.

Bend the cost curve in both medical and administrative expenses

PwC notes three factors that serve to “deflate” the 2016 medical cost trend: (1) The Affordable Care Act’s looming Cadillac tax on high-priced plans which is accelerating cost-shifting from employers to employees to reduce costs; (2) Greater adoption of virtual care technology that can be more efficient and convenient than traditional medical care; and (3) New health advisors helping to steer consumers to more efficient healthcare.

With respect to 2015, Milliman found the cost of healthcare for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $24,671, up from $23,215 in 2014. The 2015 family costs works out to $2,055 on a monthly basis. Total employee cost (payroll deductions plus out-of-pocket expenses) increased by approximately 43% from 2010 to 2015, while employer costs increased by 32%. Of the $24,671 in total healthcare costs for this typical family, $10,473 is paid by the family, $6,408 through payroll deductions, and $4,065 in out-of-pocket expenses incurred at point of care. Overall, the U.S. healthcare economy is seeing increases in premium rates and drug costs, and decreases coming from efficiencies in virtual care and choosing lower cost options.

The primary drivers of cost reduction in most industries, including healthcare, are automation, competition and multiple or alternative channels of consumption or distribution. According to MDLive, a leading telehealth solution provider, 90% of PCP visits can be addressed by telehealth. SpendWell Health has observed 12 27% lower health service prices by providers participating in E-commerce marketplaces with upfront patient responsibility collections versus traditional network contract fee schedules and collections. An E-commerce or medical shopping solution with embedded telehealth has the potential to impact approximately $101 Billion of U.S. healthcare spend. Using these market principles and applying them to healthcare provides strong supporting evidence for E-commerce or medical shopping with embedded telehealth being one of the best and nearest term approaches to improving consumer experience and bending the cost curve.

About SpendWell Health

SpendWellTM is the leading health care e-commerce solution that empowers insured consumers to shop, compare and buy routine health services at actual prices. SpendWell’s online marketplace integrates benefit plans, removes consumer anxiety about surprise bills with upfront payments, eliminates patient collections risk for providers and reduces administrative inefficiencies and costs for payers. SpendWell transforms the traditional health care model for consumers, providers, employers,health plans and administrators into an online retail experience. SpendWell’s nationwide community of providers includes medical, dental, vision, behavioral health, chiropractic, alternative care, imaging and more. SpendWell is a wholly owned subsidiary of Cambia Health Solutions, Inc. Learn more at CambiaHealth.com. For more information about SpendWell, visit SpendWellHealth.com.