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Capgemini

Collaboration demands a shift in relationship dynamics and an openness to change. When thisoccurs, payers and providers can join together to cut costs, improve patient care, and increasevisibility.

In a payer-provider collaboration, participants rarely have a problem identifying issues that need to be resolved. The difficulty comes, however, when these two diverse organizations must work as a team to decide which projects will produce group wins and which should be attacked first.

Because payers and providers have a historically adversarial perspective, it is often difficult to agree on mutual projects of interest because of differing business priorities. Collaboration frequently generates value in different areas for the payer and the provider, and in varying proportions. For example, the provider may seek to reduce revenue cycle costs while the payer may be more interested in care management efficiencies.

For this reason, successful collaborations involve an objective assessment of potential opportunities. This helps determine which initiatives will create mutual wins. On the basis of this assessment, the payer-provider group works together to prioritize and elevate projects that will deliver benefits for all involved.

This chapter provides step-by-step guidelines, established by Capgemini, that show a payer-provider group how to create a list of actionable projects that will advance the entire collaborative process.

The Assessment Process

The assessment process offers a comprehensive, systematic, objective approach to help payers and providers identify and agree on which opportunities to pursue. It reviews the environment from the perspective of payer and provider and guides decision making using meaningful measurements. Steps include:

• Defining business imperatives for the collaboration;
• Creating criteria against which to evaluate potential opportunities;
• Identifying potential opportunities to pursue;
• Matching opportunities against criteria;
• Setting priorities; and
• Estimating value to determine if potential benefits justify the necessary investments to implement a solution.

Definition of Business Imperatives

Because most organizations have already made a significant IT investment, they do not necessarily want collaboration projects to focus on IT transformational change. Rather, the focus is typically on operational or process changes, which leverage existing infrastructures and staffing and also tend to deliver quick wins for both groups.

As the first step, the organizations must gain a mutual understanding of their respective strategic, operational, and financial needs. They must also articulate the level of improvement that they each expect to result from the collaboration. This requires a review of the external market and internal operating conditions, financial budgets, and strategic priorities. This analysis helps define both the problems and the potential improvements that both organizations can address through collaboration.

Collaborative Creation of Criteria

The next critical step is the establishment of a set of criteria. This helps the payer-provider workgroup choose potential opportunities that will add mutual value. For example, Highmark Inc. and the University of Pittsburgh Medical Center (UPMC) Health System signed a 10-year agreement to pursue joint information technology initiatives focused on consolidating and integrating operations, decreasing costs, and improving patient care. They defined the following criteria against which to evaluate collaboration opportunities:

• C-Level Sponsorship – Collaboration projects, like most change initiatives, work best when executive buy-in is strong and established early. Any project being considered needs strong sponsorship for success. With the Highmark/UPMC project, both groups enjoyed sponsorship from C-level executives. This gave the project the attention it deserved and permitted the teams to give the requisite time and commitment to work through challenging issues. Capgemini also received a high level of cooperation, which was directly attributable to both organizations’ commitment from the top down.
• Baseline Benefits – As part of due diligence, the payerprovider group must establish some preliminary cost-benefit analyses, such as a minimum ROI to be achieved, or a dollar threshold to be reached by a certain timeframe. This has been used to gauge ultimate project success. By using ROI as a decision criteria, the organizations can weed out opportunities early in the process that are less likely to succeed. The ROI is calculated as the ratio of financial benefit to cost and was, in this example, based only on tangible benefits. Project descriptions must also be included in the analyses, including the issues being addressed, current and future state descriptions, and how anticipated benefits are expected to result from the revised system or process. For example, in the Highmark project, a three-year cost-benefit projection for short-term revenue-cycle initiatives indicated a 3-to-4-to-1 rate of return for the overall system.
• A Win-Win – Because collaboration projects require sponsorship, commitment, and resources from both parties, benefits should accrue for both payers and providers. The benefits will likely be in different areas. For example, collaborative revenue-cycle initiatives help reduce accounts receivable and denials for providers, with lower call volumes for the payers. The benefits do not need to be equal, but both parties need to feel that the benefits resulting from the collaboration are worth their time, effort, and investment.
• IT Investments – Project participants need to quantify a limit on IT spending. For example, Highmark committed $20 million to cover joint IT initiatives with UPMC. This investment covered labor for IT development as well as hardware, software, and other project expenses. Identification of investment helps eliminate projects that may exceed an organization’s budget.
• Leverage Existing Infrastructure – Both payers and providers need to examine their IT infrastructure needs and the setup of both organizations to identify opportunities that leverage existing hardware, software, and technical services. Opportunities that do not leverage existing infrastructure will likely require greater investment and resources to develop workarounds that can be integrated into their organizations.
• Results Orientation – Payer-provider collaboration requires a defined timeframe to pinpoint an early return on an investment, also referred to as a “quick hit.” Both Highmark and UPMC were focused on these quick hits, which were instrumental in creating a relationship of trust and in building project momentum. For example, an early win occurred when the payer-provider group decided to focus on outstanding, aged accounts receivable and develop an approach to focus on these claims with a SWAT team approach. In selecting opportunities to pursue, organizations often prioritize quick hits that can be used to fund longer-term initiatives.
• Broad Benefits to Providers – Because payer-provider collaboration projects typically involve a small group of providers, rather than a payer’s entire universe of providers, solutions developed must be able to be leveraged across the provider community at large.

Establishing detailed criteria accelerates benefits realization for all involved organizations and provides a framework to gauge project results.

Accelerated Solutions Environment

After establishing a set of criteria, Capgemini often uses an accelerated solutions environment (ASE) to facilitate decision making. ASE design sessions are particularly helpful in a payerprovider environment because numerous project details require contribution from multiple stakeholders. Collaboration projects of this magnitude also tend to involve complex issues that require discussion and group consensus, which are easier to accomplish in an ASE.

The ASE is a creative workspace combined with a unique methodology that is used to accelerate business decision making, create innovative solutions, increase productivity, lower risk, enhance stakeholder support, and improve the quality of project delivery (see Figure 1).

Figure 1. A Radically Different Way of Working Collaboratively

In an ASE, project participants usually spend two or three full days instead of many more hours of less productive meetings spread over several months. Because the stakeholders in a payerprovider project are typically management and executives, time is precious. In this way, the ASE presents an ideal environment for payer-provider collaboration.

The ASE sets the stage for productive work sessions. Because the ASE is a structured methodology, it establishes rules for the way the group addresses problems and how they communicate. Because payer-provider collaboration involves people from different backgrounds, it can be difficult to establish a common work pattern. Because payers and providers do not speak the same language, they are unaccustomed to working together creatively.

A sponsor team of payer and provider executives who are most invested in achieving the expected results designs a set of event parameters. These parameters include objectives, deliverables, givens, work to be completed, participants, and required information for participants to do the work. The ASE event is then designed to address mutual business issues, resolve problems, and create breakthroughs.

Using the ASE in a collaboration project yields productivity gains on several fronts:

• Acceleration – Delivery in a two- to five-day design session instead of the typical three to nine months worth of work using traditional methods.
• High performance – Collaborative work drives high performance individual and team results.
• Integration – The large group process allows workgroups to deal successfully with complexity and integration issues.
• Quality deliverables – Iteration and collective design enhance the high quality of solutions.
• Decision making – The facilitated process enables decision making that sticks.
• Knowledge transfer – The collaborative process enables learning and knowledge transfer between workgroups.
• Alignment – Collaboration allows participants to fully contribute to the design and aligns individual points of view around a common solution.
• Sense of ownership – Participants are energized toward implementing what they have designed.

Collaborative Creation of Opportunities

Typically, Capgemini requests data to quantify potential areas of opportunity. Data from both payers and providers is collected and contrasted. For example, in the Highmark/UPMC project, one of the identified opportunities was revenue- cycle improvement. Capgemini worked with both Highmark and UPMC to gather claims information and comparative data to identify problems that the workgroup could attack collaboratively to eliminate rework and reduce pending and denied claims.

As part of this phase, interviews are conducted with each organization, evaluating benchmarks and industry information as a type of reality check to see if an issue truly presents a business opportunity. A series of meetings are crethen organized to present the resulting data analysis. The group subsequently meets to create a list of the top 10 potential opportunities for collaboration.

Potential opportunities can address improvements in areas such as administrative and governance, marketing and sales, health care delivery, internal operations, and information and infrastructure support. The white paper “A Framework for Collaboration: The Process Model,” which covers the payerprovider process model, provides fundamental details about the major processes involved.

During the Highmark/UPMC project, the following opportunities were identified:

Improve the revenue cycle (inpatient and outpatient, including physician’s office) – Efficiently link medical providers with insurers through eligibility, enrollment, denial management, registration, and scheduling processes.

Streamline care management and utilization – Share knowledge and direction in referral, precertification, case management, utilization management, and quality management functions. Objectives include streamlining operations, decreasing medical cost ratio, improving outcomes, adding customer value, and moving to a wellness or prevention focus versus episodic care and medical crisis management.

Enhance patient care through new developments to the electronic health record – Evaluate new development areas focusing on enhancing quality of care to members: point-ofcare applications, clinical decision support capabilities, and the personal health record.

Leverage HIPAA requirements – Both payers and providers can leverage technology work that has already been accomplished to comply with the new rules and regulations required by HIPAA and government agencies to facilitate system improvements.

Match Opportunities With Criteria

During the next phase, payer-provider participants scrutinize opportunities to decide which are worth pursuing. This is accomplished by comparing proposed opportunities to established criteria. If opportunities do not meet the criteria, they do not qualify for inclusion in the collaboration project or the players must change the evaluation criteria. Opportunities that meet the criteria then qualify to be considered during the next step – prioritization.

For example, if the provider requires the payer fee schedule and believes that significant savings will result, the workgroup can determine that even though this does not meet win-win criteria, the cost to the payer is so low that they will evaluate this opportunity anyway. In some cases, the payer and provider groups can agree to do projects that benefit only one side because they understand these projects are investments that pave the way for deeper collaboration in the future.

Prioritization

Opportunities are screened by criteria in order to create a list of initiatives that define the scope of the collaboration project. The next step is prioritizing these initiatives based on their level of difficulty and value. Projects that have high value and are relatively easy to accomplish become prime early targets for collaboration. In this way, the groups can work toward quick hits to propel later efforts and build a basis of confidence that creates group buy-in. The opportunity matrix in Figure 2 illustrates how payers and providers set priorities.

Figure 2. Opportunity Matrix

Specific parameters are established to define what is considered a difficult project to implement. For example, a project requiring three to six months to complete may be considered easy to implement, whereas a project requiring 12 months is labeled as difficult for the purpose of prioritization. In Figure 2, projects 3, 9, 11, 12, and 13 were deemed difficult to implement.

Magnitude of value is another decision criterion. In the opportunity matrix, projects 1, 2, 3, 5, 6, 8, 9, 11, 13, 14, and 15 were deemed to have high value. From the prioritization exercise, the joint payer-provider group can identify which projects make the most sense to tackle first to build a project timeline.

Quick hits are an initial area of focus; teams are assembled to begin work on these projects first. Quick hits have high return on investment and are easy to implement. These initiatives are the focus for preliminary collaboration as these issues offer high value, reduced cost, low barriers, and easy development. Quick hits are usually implemented within 12 months and often serve as interim steps for longer-term improvements.

The next area of focus includes opportunities that are easy to implement but have less impact, such as “best practices” on the matrix. The rationale again is to create early project wins – small efforts with low return that can be accomplished quickly. These initiatives are often requisites for larger future projects. These projects may be characterized by standard practices that have been successfully implemented in the past with demonstrated benefits. In Figure 2, projects 4, 7, and 10 fit this description. Although usually more complex to implement than quick hits, best practices provide a clear road map for improvement.

The next projects to be considered are transformational opportunities – those that show great potential for transforming the payer-provider organizations but require a large-scale implementation effort. These projects are described as large scale and high return, requiring a great deal of effort, cost, technology, politics, time, and resources to receive the full benefit. Projects 3, 9, 11, and 13 in the matrix are transformational. Clearly, creating a track record of success in the short- to mid-term initiatives is essential before embarking on transformational efforts. The short- and mid-term successes build the trust and confidence in the collaboration, which will be sorely needed during the course of a complex, lengthy project.

The last area on the matrix, “don’t touch,” represents projects that are very difficult to implement and show a minimal return – such as project 12. These initiatives usually do not meet criteria and are disqualified.

Value Proposition

The value proposition step quantifies the specific results that the provider and payer can expect to achieve as a result of implementing the identified initiatives. The value proposition step involves extensive data collection and analysis to identify key financial measures, as well as measures of soft benefits such as patient satisfaction, to assess the potential cost and benefit of solution implementation.

When measuring the value of payer-provider collaboration, some benefits are less easily quantified. Financial gains – for example, a decrease in bad debt – are considered “hard” benefits and are easy to measure. Blue Cross Blue Shield of Michigan (BCBSM) and seven providers in Detroit, for example, realized they were sharing the cost of bad debt. By reducing bad debt, a potential net benefit to the hospitals was implied, based on the assumption that access to accurate patient and benefit information and improved provider processes would reduce the total bad debt expense.

The Capgemini team spent time quantifying the cost of working the BCBSM rejections and determined that it cost providers approximately $27 to work a rejected claim. This amount included rebilling efforts and collection agency costs. This provided the group with a benchmark for improvement and underscored the value of fixing the reimbursement process.

Other benefits, however, such as patient satisfaction and creating a positive working environment, are less easy to gauge. Although sometimes difficult to track, “soft” benefits make important contributions to an organization’s overall performance and must be factored into any critical assessment of a collaboration project. In addition, soft measures often have direct and indirect effects on hard measures.

In the Michigan project, BCBSM defined opportunities that included:

• Improve reimbursement by reducing payment rejections and claim denials;
• Increase provider satisfaction;
• Create a sense of shared responsibility with the hospitals;
• Reduce the number of customer and provider inquiries; and
• Build a foundation for future process improvement initiatives.

To quantify the cost of inquiries, for example, the workgroup can track the number of calls made by providers, employer groups, and members to the payer’s customer service department to obtain claims status information. They can then calculate a percentage that could be reduced with faster claims resolution.

Value analysis is an important step to measure the commitment of all parties and to help move the project toward solution design and implementation. As seen in Figures 3 and 4, value analysis creates a view that combines perspectives of all involved parties and directs efforts toward solutions that ultimately lead to increased efficiency, improved service, enhanced clinical quality, and reduced costs.

Figure 3. Example Value Analysis Summary: Provider Perspective

Figure 4. Example Value Analysis Summary: Payer Perspective

Value analysis from the payer and provider perspective defines potential benefits and projected gross value of improvements at various realization levels. In the case in Figure 3, which focuses on rejected claims, the provider enjoys a reduction in bad debt expense as a result of improved access to accurate patient and benefit information. For the payer, fewer claim status calls reduce transaction fees.

Clarify Commitment

After opportunities are defined and quantified, the next step involves clarifying the commitment of individuals who are key to the process being addressed. These people are not the C-level types who were involved in the ASE. At this point in the collaboration project, executive sponsorship has already been secured. Rather, it is important to connect with people who work at the patient or member account level. These people need to spend time further defining the issues at a practical business process level within their departments.

Each side pulls in experts from their specific areas (claims or registration and billing). In some cases, the only budgeted items are capital expenses; people’s time is given freely to the collaboration to ease the process. In this way, project participants view collaboration as an investment, rather than just another project that distracts from daily work. By requiring both payers and providers to allocate employee time to the project, an environment of teamwork is created that fosters a sense of shared opportunity.

In addition, team leaders must lead the initiatives to ensure that subject matter experts are available for meetings. In the Highmark/UPMC case, the vice president of Highmark and several directors were on the first board, and then each of these high level individuals was dedicated to a workgroup. Highmark and UPMC executives made certain that their people participated and were available for later work sessions.

As opportunities are presented, and constituents from both the payer and provider side look at the processes and the quality of information being provided, they can commit to making the required changes. Securing buy-in from payer-provider personnel supports the group’s commitment to the selected initiatives.

Measure Success

Capgemini emphasizes the importance of deadlines and established timeframes for the completion of every step of a payerprovider collaboration project. After the payer-provider group has prioritized the list of opportunities, a timeline is created and the appropriate people from each organization are assigned to smaller workgroups to tackle the prime targets. A project charter is created, with specific goals and timeframes attached. The project charter outlines the difficulty of each problem being addressed and the proposed solutions, allocated resources, and defined deliverables for each initiative.

Once a project milestone has been reached, results are measured, and reports are generated.

Capgemini encourages both payers and providers to continually track and report on the efforts of the collaboration process. By measuring results with data-driven reporting, each task group is held accountable for completing its portion of the project.

Progress reporting also helps ensure that project victories are recorded for all to witness and that projects that aren’t tracking to plan can be redirected or abandoned. Capgemini often recommends that a steering committee be established to perform regular reporting for the task groups. This encourages accountability and keeps the project moving toward established goals.

Summary

The most successful attempts at collaboration use an organized approach to assess the possible opportunities and outcomes. By working through each assessment step, both payers and providers are assured that the chosen initiatives will have maximum impact and will deliver lasting value to both organizations.

Capgemini often uses an ASE to bring together multiple stakeholders and secure executive sponsorship. During these sessions, the joint payer-provider group first creates a set of criteria to measure the outcome of each proposed initiative. Next, both players propose opportunities. An important part of this step is collecting and presenting data to justify each opportunity. Next, the opportunities are matched with criteria to determine which projects will generate a positive, mutual outcome. The resulting opportunities are then prioritized to determine the order for tackling the initiatives. Value analysis also occurs to quantify financial results that both groups will achieve as a result of implementing the identified initiatives.

This step-by-step process helps payers and providers justify the necessary resources to accomplish a large-scale collaboration improvement. By bringing the issues to the actual business units, barriers are uncovered and addressed so collaboration can move forward. It also encourages mutual commitment from both payer and provider representatives. Along the way, there is a constant and ongoing need for progress monitoring so success can be measured to maintain group motivation. By developing a sound business case and prioritizing opportunities, payers and providers can move forward to charter the most appropriate initiatives to control costs, improve health care, and stimulate market share growth.