The Next Frontier of Healthcare Business Process Outsourcing
Outsourcing within the healthcare industry is already the norm, but the processes that organizations are willing to outsource is shifting. MarketsandMarkets projects that healthcare’s business process outsourcing (BPO) market will grow to $276.79 billion by 2021, with an annual growth rate of 10.2% between 2016 and 2021.
The Evolution of Outsourcing
For decades, payers have benefited from outsourcing functions that were considered less critical to their core business models. Now, they are increasingly willing to outsource additional processes including those in the middle and front offices.
Payers who want to outsource have different options. John Hurd of NTT DATA explains, “The latest trend is BPaaS: Business Process as a Service. Service providers are able to provide an end-to-end solution for either the entire health plan or just a component of the health plan.”
Most payers have outsourced at least some processes. Thanks to the shift towards value-based care and provisions in the Affordable Care Act (ACA) that require insurers to cut administrative costs, many are leveraging outsourced solutions for numerous processes, such as claims, member services, contact centers and enrollment fees.
Major Benefits of Outsourcing
For payers, the benefits of outsourcing are substantial. Outsourcing allows smaller plans to better compete. Hurd says, “Outsourcing is allowing smaller, regional plans to think and act nationally and globally. It allows these plans to have some of the scale of a larger national plan.”
BPOs can move the needle because healthcare organizations are confronted with something that they don’t necessarily understand, at least not completely.
But both large and small plans can benefit from outsourcing. Hurd points to a number of major advantages, including:
- Cost savings—especially as BPOs have aligned incentives to create efficiencies to keep their process costs low (in addition to decreasing costs for clients)
- Performance improvements as measured by patient ratings
- Staff flexibility during times of increased output—such as open enrollment—removing the need to hire temporary workers
- Rooting out other functional problems to suggest solutions
- Acquiring the skills to apply robotics and machine learning to processes, improving long-term efficiency
Customer Experience: The Next Frontier of Healthcare
The ACA has also placed customer experience at the forefront, an area where BPOs can bring a great deal of value. Austin Ridgeway of HGS says, “To put it bluntly, the healthcare industry as a whole has traditionally lagged behind other industries when it comes to customer experience and understanding of how to service customers via their preferred engagement channels.”
To this point, BPOs have the ability to transfer their knowledge and experiences with other industries to help adjust to this new challenge. “BPOs can move the needle by shortening the learning curve and improve the client’s speed to market with new impactful engagement strategies,” Ridgeway says, “because now healthcare organizations are confronted with something that they don’t necessarily understand, at least not completely, and they can rely on an experienced partner to help them through this adjustment.”
“Provider groups are also starting to look at how they can engage with patients to improve health outcomes,” Ridgeway explains.
“They’re leveraging call centers to improve patient outcomes through post-acute follow-up, post-surgical follow-up or outreach for patients with chronic conditions to promote adherence to post-discharge procedures, prevent readmission and decrease catastrophic events.”
What This Means, In Brief
INDUSTRY AS A WHOLE
Outsourcing allows payers and provider groups alike the opportunity to easily reach their goals without reinventing the wheel. By leveraging BPO capabilities, it’s possible to save time and money while increasing competitiveness and improving healthcare outcomes. While organizations of all sizes benefit, it’s the smaller regional organizations who stand to benefit the most.
With the rise of social media, consumers have a bigger say in the healthcare conversation. The recent focus on customer experience and improved health outcomes (with the intent to decrease recurrence and readmission) indicates that the industry is listening to consumer needs.