Health Payer Survival Kit for a Suffering Economy
The analyst firms are predicting the healthcare sector to be almost recession proof, yet I am aware of layoff announcements in healthcare organizations in recent weeks.
As an astute leader in your healthcare organization, you’re scanning the headlines to find beacons to guide you through the economic doldrums. One can’t help but notice that the messages for the healthcare sector span the spectrum from hopeful and encouraging to dire.
Here’s my survival kit for health care payers: Efficiency, Accuracy, and Agility.
Efficiency: During lean economic times, it becomes critical that your organization focuses on its core business—and that it do so in the most efficient, cost effective manner. Inefficiencies should be squeezed out of every process to maximize what are undoubtedly thin operating margins. Pay attention to what you do, and do it well.
This is a terrific time to review administrative processes to ensure hard-won revenues are not eroded through redundant or bloated processes. You’ve been thinking about business process improvements, implementing best practices, finding opportunities to streamline, automate, or right-source your operations. Now is the time to follow-through on these plans.
Accuracy: Pursuing efficiency and forgoing accuracy will backfire. It may cost your organization $1.50 - $3.00 to adjudicate a claim on first pass (depending upon electronic or manual receipt, and whether the claim requires any pended and manual steps); but it will cost five to ten times that much to re-adjudicate that claim on grievance or appeal. The additional costs for re-work will be highly manual investigation and audit, and may result in no change to the claim payment status if you can justify and document the processing steps.
The old cubicle complaint echoes here: If we didn’t have any money in the budget to do it right the first time, how come we have five to ten times that amount to re-do it? Often-times, because the re-do will be mandated by regulatory or contractual compliance requirements (in addition to the need to restore the good will of our customers).
Now is the time that the costs incurred improving efficiency and accuracy will be more than repaid in reduced administrative overhead.
Agility: In addition to ‘sticking to our knitting,’ health payers should prepare to quickly adopt and administer new requirements for eligibility, benefits, and network contracting. Under the current administration, it is highly likely that each of these components may change in the near future.
Congress is already considering legislation that will change Medicaid eligibility requirements, lifting poverty-level guidelines to make Medicaid available to any laid-off workers. Benefit packages and products may also be re-defined to meet changing definitions of minimum required healthcare. CMS has recently expanded approved drugs for treating cancer patients. Provider reimbursement may change to encourage an interest among practitioners to pursue roles in primary care.
Even without mandates, the pool of the uninsured may grow as workers continue to be laid off. These remain a source of new revenues if you can out-enroll your competitors for the additional lives while reaching deeply enough into this pool to ensure you appeal to more than the most needy enrollees.
Marketing and sales messages and channels will need to adjust to address individuals in a more consumer-oriented market-place. Back-office business logic and work flow will need to support new benefits packages, products, and reimbursement arrangements.
Now—while large projects such as HIPAA transaction code set 5010 and ICD-10 implementation dates have been pushed further into the future—Now is the time to address your most pressing needs through Efficiency, Accuracy, and Agility. Often, funding for these kinds of projects can be built from their attendant cost-reductions.
