{"id":1476,"date":"2011-08-06T20:30:00","date_gmt":"2011-08-06T20:30:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/healthcare-payor-bpo-landscape_080711\/"},"modified":"2011-08-06T20:30:00","modified_gmt":"2011-08-06T20:30:00","slug":"healthcare-payor-bpo-landscape_080711","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/healthcare-payor-bpo-landscape_080711\/","title":{"rendered":"The healthcare payor BPO situation in 2011: Will Reform shatter a complacent industry?"},"content":{"rendered":"

No living member of the human species knows more about healthcare payor BPO than Tony Filippone (this also extends to other species such as consultants, lawyers etc).<\/em><\/p>\n

\"Imagine<\/a><\/p>\n

Tony "The Governator" Filippone (pictured left) launches his first major report on the state of the healthcare payor industry and the current and future role of BPO services<\/p>\n<\/div>\n

Prior to his reincarnation as an analyst with HfS Research, Tony spent the last nine years of his existence tackling everything from print and document management, to call center ops and real estate management, through to procurement and strategic sourcing, for $60 billion healthcare payor giant WellPoint. \u00a0And now the fella gets to elaborate on his experiences and help sustain the issue of healthcare costs beyond a level\u00a0even more\u00a0riveting<\/em>\u00a0than which young lady Justin Bieber was spotted with last week (no kidding – actually a true fact).<\/p>\n

So without\u00a0further\u00a0ado, here’s the Governator himself with some snippets of what to expect from his new blockbuster…<\/p>\n

The Healthcare Payor BPO Landscape in 2011: Will Reform Shatter a Complacent Industry?<\/strong><\/span><\/p>\n

You\u2019ve probably heard the news: health care costs are rising.<\/p>\n

Since 2002, U.S. health care expenditures have doubled. \u00a0This major increase has dwarfed almost all the major world news stories over the last six years, as shown in Exhibit 1.<\/p>\n

Only the U.S. national debt has received more news coverage than health care costs.<\/p>\n

Thank goodness it edged out news stories on Justin Bieber.<\/p>\n

Exhibit 1: Health Care Costs Dominates News Coverage, 2005-2010<\/strong><\/span><\/p>\n

\"Healthcare<\/a><\/p>\n

Source: HfS Research\/Google, 2011<\/em><\/p>\n

Health insurance has long been the vehicle most consumers use to access affordable care, whether through employers, federal government programs (Medicare), state government programs (Medicaid and CHIPs), or individually purchased coverage.\u00a0 And, despite the value health care payors provide their customers, payors\u2019 processes are complex, manually intensive, and prone to error.\u00a0 One consumer\u2019s visit to the hospital generates substantial legal paperwork, complex approval processes, coordination of benefits with other insurers, and a blizzard of bills, notices, and follow-up calls that require months to resolve.\u00a0 The processes are so poor that a \u201cmini-industry\u201d of service providers thrives on collecting overpayments and underpayments resulting in several pending lawsuits.\u00a0 The American Medical Association believes payment inaccuracy alone costs the industry $17 billion annually.<\/p>\n

To be fair, payors are just one stakeholder in the health care process.\u00a0 Payors, physicians, hospitals, clinics, outpatient treatment facilities, labs, pharmacies, regulators, and medical product companies have conspired to create the greatest dysfunctional customer experience in the modern world (excluding government dysfunctions).\u00a0 No, they have not colluded together with this intention.\u00a0 Rather, by failing to collaboratively find solutions, they have created a politicized, inefficient system. While America\u2019s Health Insurance Plans (AHIP), American Medical Association (AMA), American Hospital Association, Pharmaceutical Research and Manufacturers of America (PhRMA), the Medical Device Manufacturers Association (MDMA), and state and federal regulators have all contributed to substantial improvements in the quality of care, their inability to collaboratively<\/em> drive out administrative costs is downright shameful.\u00a0 The lack of administrative standards and automation is inexplicable in an industry that represents 16% of the U.S. gross domestic product.\u00a0 Why can\u2019t a consumer go online to evaluate the best care provider options, visit the care provider, swipe a smartcard to reveal electronic health records and benefit eligibility, review a posted price list, receive covered services without additional validation or approval, have prescribed medications automatically shipped to her home, automatically pay for all the above, and get an electronic month end summary of benefits?\u00a0 Instead, many consumers have no idea how much a particular procedure costs until months later when the eligibility and billing issues are resolved.<\/p>\n

As unfair as it may seem, health care payors have absorbed the brunt of recent U.S. regulation.\u00a0 The regulation will increase market competitiveness (with health insurance exchanges), intensify administrative cost management (with medical loss ratio maximums), strengthen consumer rights and access (with guaranteed issue, mandates on covered services, elimination of lifetime maximums, and strengthened state insurance regulator powers), and dramatically expand the individual retail market (with individual mandates and financial incentives that may cause groups to drop coverage).\u00a0 Pharmaceutical and medical device manufacturers were hit with higher taxes, but these taxes will likely be passed on to consumers.\u00a0 Physicians and hospitals quietly escaped the blood bath and were left to deploy undefined electronic health records over underdeveloped health information exchanges.<\/p>\n

A Sampling of Report Findings<\/span><\/strong><\/p>\n

It is in this context of industry upheaval, regulatory changes, and administrative inefficiency that we researched the state of business process outsourcing services provided to the health care payor industry.\u00a0 These services include claims and enrollment processing, customer service, analytics, medical management, finance and accounting, procurement, and print management.\u00a0 Here are some findings are regular readers may find interesting:<\/p>\n