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Catholic Healthcare West

Many complex interrelationships and transactions are required for any single health care experience.A collaborative approach supported by an integrated information infrastructure is necessaryfor all constituents to achieve their common goal: better medical outcomes for less cost.

In today’s health care environment of managed care plans and consumer-directed health products (CDHP), payers function as the processing hub for most transactions, whether they are requesting authorizations, inquiring about eligibility, submitting a claim, accessing a knowledge base for leading practices, looking for a suitable physician, or checking the status of a claim. Managed care organizations seek to gain operational efficiencies through the use of automated interactive communications channels, especially the Internet. They hope to provide an acceptable level of personalized service while eliminating expensive personto- person interactions. Increasingly, payers are turning to the Internet to provide self-service alternatives to consumer interactions with service representatives. Their efforts are directed toward simplifying the administrative process and making it easier for consumers – including plan members, employers, providers, and brokers – to do business with them. Payers want to be more open and available, with on-time schedules set by consumers. Payers also want to develop and support attractive and distinctive product offerings that differentiate them in the marketplace. Not least, payers want to improve the health of their members, both for the members’ own good and because it costs less to insure them over the long term.

From this perspective, the word “consumer” takes on a broad meaning, since every constituent of the health care process is a consumer to another constituent. Depending on the circumstance, providers can be consumers. Plan subscribers – “members” – are consumers. Employers are consumers. Each group deals with its own realities day to day, and each possesses unique concerns and requirements. Payers are expanding both the depth and breadth of their Web offerings to meet the needs of these varied constituents. They are continuing to increase their capabilities, offering constituents the ability to complete a variety of administrative transactions online, such as checking eligibility and claims status, updating personal medical and demographic information, requesting information on insurance products, or accessing health and wellness materials. Providers (business partners such as physicians and hospitals) are still the focal point for most of these self-service efforts, but an increasing number of payers have created new CDHPs as a method of differentiating themselves from competitors and are embedding their offerings directly onto employers’ Internet portals to meet the needs of other constituents as well.

Why Are Payers Investing in Self-Service?

Fewer calls translate into less administrative cost associated with inquiries and lead to less rework elsewhere – fewer rejected and reprocessed claims, for example. Fewer calls also generally indicate happier customers – providers, members, and patients. Recognizing the unique needs of these constituents and designing self-service portals to meet their needs within their time constraints increases customer satisfaction.

Everyone wins when administrative tasks are streamlined and information is made accessible. Providers, whether a small practitioner or a large hospital, conduct customer service functions at a comparatively intimate level – one phone call or face-to-face encounter at a time. In a physician’s or specialist’s office, multitasking clinical or administrative personnel deal with patient inquiries. Even large medical centers incorporate customer service into the many functions handled by their business offices. The benefits of reduced costs and increased patient satisfaction associated with reduced call volume and less staff time devoted to administrative duties can be significant for the provider, but harder to quantify. Payers, on the other hand, conduct customer service in a far more organized way. They possess large call centers and automated response systems that routinely measure their volume and performance.

The highest volume of inquiries to payers happens over the telephone, either person to person or through interactive voice response systems.

Most commonly, inquiries to payer member services concern eligibility and benefit verification. In addition, providers and members will call to determine claims status or to follow up on claims rejections or denials. Eligibility, benefits, and claims issues generate the vast majority of calls, usually about 70 percent. Other calls from members concern general items such as changes in primary care physicians, changes to addresses and other fundamental data, or questions about lost ID cards. Other calls from providers usually relate to referrals and authorizations. Getting constituents to submit queries about these routine functions on the Web can significantly reduce administrative costs by reducing the full-time equivalents at call centers who would otherwise handle these requests by phone.

Payers who have established access points, or portals, to conduct transactions with other constituents over the Internet have measured a direct relationship between transaction volume on the Web and telephone service calls avoided and better member/provider retention and reduced administrative costs. Most payers, for example, calculate that an average telephone inquiry costs them $10 to $12, compared with 10 cents or less for a Web transaction.

Self-Service Objectives

When considering self-service functions, the payer is most often the enabler or hub of transactions between other constituents, sometimes with the provider acting as intermediary. This is driven by the recognition that payers have both the economies of scale and the capital budgets to develop these hubs across many providers. Therefore, payers need to set their priorities for self-service transactions and let those priorities guide technology investments and development efforts. Self-service initiatives should seek to:

• Increase competitiveness of the payer’s health plans and brands. Payers need to leverage their technology investments toward increasing market share and growing business. Brand image can be enhanced by being perceived to constituents as a digital health plan that is more efficient to do business with.
• Improve constituent satisfaction by providing the right information to the right constituent through convenient communication channels, wherever and whenever it is needed.
• Decrease administrative and medical expenses. The first and most obvious priority is to streamline transaction processing through automation of claims and renewal processing, and self-service functions. Reducing SG&A (sales, general, and administration) represents perhaps 20 percent of the potential financial benefit from Web-enabled interactivity with constituents. Tackling the remaining 80 percent, by far the largest potential cost saving, means reducing the cost of medical care through interventions such as patient self-care, disease management, access to formularies, increase in generic utilization, and other functions. Reducing medical costs is the next frontier, toward which a great deal of creative and strategic thinking is being directed.
• Achieve these objectives in the most cost-effective manner possible, with solutions that are flexible, quickly implemented, and simple to maintain. Payers are looking toward recently mandated HIPAA standards for information interchange, and open architectures and component-based solutions to help them get the most value from their IT and process redesign investment.
• A high-level marketing view of an insurance plan’s lifecycle illustrates the kinds of constituent interactions that meet these objectives (see Figure 1).

Figure 1. Constituent Self-Service Interactions

Constituent Self-Service Interactions

Awareness

Payers market their health products very differently to consumers and to employer groups. Selling to employer groups usually involves relatively few but very detailed interactions, such as responding to requests for proposal. These interactions are normally handled by sales representatives or insurance brokers conferring directly with employers. Developing portals for the buy-side of the payer’s business also reduces the payer’s cost of sales. These feature-rich portals are designed to operate with known customers (registered agents) and to allow brokers to scan across the full range of products offered by payers to develop programs and plans that can be customized for their clients. Internet sites help to create better consumer awareness of the payer’s products, and technology-enabled marketing efforts allow payers to send targeted product offerings directly to consumers.

Need and Buy

Self-service consumer Web sites let prospective customers examine profile information, select and configure health insurance products, get quotes, and enroll online. Payers seek to create a one-stop shopping experience for consumers, allowing them to buy not only traditional medical insurance, but also a prescription plan, vision plan, dental plan, and even enroll for fitness programs. Web connectivity is the key channel for the high level of interactivity required to configure, buy, and conduct the varied transactions of a CDHP. Without Webenabled information exchange and automated transaction processing, CDHPs would be too complicated to be practical. Handling a high volume of such transactions requires a communications medium and calculation tool that supports current products and allows for the creation of new products.

Product and Service

Plan members receive personalized product and service information on a timely basis through a variety of channels, but increasingly through email. When it comes to arranging for health care services, payers and providers have slightly different agendas. Providers want to have a direct relationship with consumers, without interference or mediation by the payer. Patients, too, generally prefer a direct relationship with the hospital or physician. But payers have an interest in getting involved in the provider-patient relationship, partly to steer patients to cost-effective treatments and providers, but also to collect clinical data and usage patterns that will help to guide policies, product offerings, and leading practices in the future.

Payers are also looking beyond SG&A reductions to the truly significant cost benefits that can be realized by reducing medical costs through payer interventions such as disease management. Today, nurses offer proactive disease counseling, for example, contacting diabetes patients to remind them to monitor their blood sugar levels. Many of these HIPAA-compliant interactions could be migrated from the call center to the Web, with nurses emailing reminders and patients emailing results back. Such a system incorporates alerts so that a nurse can follow up with a patient whose blood sugar level deviates too far from a prescribed range. Virtual communities, supported by the payers, offer patients access to educational information, and a forum for sharing their experiences.

For the provider, payers provide online eligibility determination and service authorization. A physician scheduling surgery for a patient, for example, must first receive the payer’s authorization. Through the payer’s provider portal, the provider submits an authorization request that includes a procedure code and the patient’s medical and insurance information. The system responds venin real time, determines if the patient is eligible for reimbursement, and approves or denies authorization to provide care. Many large health plans also offer prescription benefits. Consumer selfservice functions allow plan members to renew their prescriptions online. In the future, electronic prescribing will enable physicians to send a prescription electronically to the plan’s pharmacy benefits manager, receive guidance about the plan’s copay rules regarding name brand and generic drugs, and forward the appropriate prescription to a local pharmacy for fulfillment.

Payer member services also provide information to members at the front end of the process. This information includes critical facts about eligibility, benefits, and instructions on how to obtain covered services (including the information members must have at registration and scheduling stages). The responsibility for communicating this information and ensuring that members understand these issues is critical to success throughout the entire continuum. Patients or members without the proper information can create serious delays and other problems for payers and providers. Processes such as benefits verification, registration, and scheduling depend on patients providing proper information, for example, for coordination of benefits.

Payers are offering value-added functionality, such as provider directories and physician search engines. Consumers can search for physicians based on any number or combination of criteria, including location, specialty, medical school, and hospital affiliation. Once a plan member finds a physician, payers would like to provide the functionality to schedule an appointment through its online system, but physicians are resisting giving payers such unrestrained access to their medical records.

Payers are also trying to become trusted resources for medical and diseaserelated information. Patients can look up a disease or medical condition and get current and reliable information and advice regarding symptoms, pathology, and accepted treatments. Since patients are more likely to respect medical information coming from academic institutions such as the Mayo Clinic or trusted third parties, payers are contracting with health content providers to supply this resource, either through the payer’s own Web site or often through links specific to the plan’s brand and solely for the use of its members.

Using online self-service functions, a consumer might renew a prescription, register for a fitness class, look up health information, chat with a clinician, and visit a virtual community for new moms. The payer wants to be helpful to plan members, to add value to their relationship, and to be known as a trusted health brand. From a marketing perspective, this new level of interactivity helps to develop satisfied, loyal consumers and cross-selling opportunities.

Pay and Collect

In the past, most pay and collect processes were paper transactions between the provider and the insurance company. These transactions are migrating to new channels. Most very large providers, such as hospital chains with thousands of claims per day, send their data in batches through high-volume electronic data interchange channels. Increasingly, smaller providers, such as physicians’ offices, are submitting claims through the Web. Smaller providers who may deal with many insurance companies but don’t want to train their front-office staff to handle dozens of different Web interfaces (and as many ways to enter claims) can sign up with vendors who provide a single front end to many different payers. Often, payers put in links to such vendors to facilitate claims processing for their in-network providers. Patients can go online with the payer to get status of claims and payments, copay amounts, explanation of benefits, and other information. Employer groups and members can set up direct payment of premiums to the payer and receive monthly electronic statements.

Renew

By far, most health insurance is purchased and renewed by employer groups, not by individuals. A Web-based mass marketing approach targeted to individuals and small businesses isn’t appropriate for very sophisticated buyers, each representing tens of thousands of employees. Pricing and service options can be quite complex for such plans, so traditional in-person communication channels work best. Creating an overall satisfactory and interactive experience for all constituents helps to assure loyal customers more eager to renew their insurance for another term.

The Current State of Self-Service

Health plans now are offering a much wider variety of online functions for members. Capgemini’s most recent payer Web site survey compared online member functionality available in 2003 to functions available the previous year (see Figure 2). The survey shows a marked increase in the number of sites allowing members to access plan performance information, request enrollment applications, access formularies, contact customer service representatives, and request replacement ID cards.

Figure 2. Recent Changes in Member Functionality

Webmasters say that their Web site plans include continued development of self-service options and eventual migration to a portal infrastructure and user interface. Their long-term vision is to enable true personalization and customization for each constituent at the transaction level. They aim to make benefit and product information specific to each member’s individual plan design and health information needs.

Leading (though still relatively rare) practices include: personalized health reminders; tools to manage consumer spending accounts; provider quality, cost, and decision support tools; debit card technology; and treatment cost estimator tools.

Medical management is another emerging area of online functionality. The majority of Web sites now offer some online medical/disease management capabilities. Leading Web sites selectively reach out to those members identified as at risk, distributing online disease management programs that are customized and well integrated with current care management programs aligned with these diseases.

The past year has also seen continued increases in the level of online functionality offered to providers (see Figure 3). The majority of Web sites now allow providers to access formularies, medical or administrative policies, and clinical guidelines, and to check status of claims and eligibility. More Web sites allow providers to submit claims electronically, though the percentage of payers offering this function remains small. Capgemini’s Managed Care Benchmarking Study discovered that many payers place terminals in the offices of their largest providers for direct data entry; those providers, therefore, may not need Web-based access if those terminals are working well.

Figure 3. Recent Changes in Provider Functionality

Providers seek solutions that Web-enable rote administrative functions and those that typically require calling a customer service representative. Welldesigned Web sites recognize that, as important as it is to make this functionality available, the tool must be readily accessible, provide comprehensive information, and deliver accurate data. Leading (but still relatively rare) practices include secure email messaging between patients and providers, online appointment requests, and online medical records with direct links to detailed health information on the most frequent tests, recent visit histories, immunizations, allergies, and problem lists.

Payers are also adding and enhancing self-service functions for employers and brokers. Offerings for these customer groups have traditionally lagged behind those for members and providers – in part due to lower demand from these constituents and in part due to limited availability of vendor applications. Capgemini’s Managed Care Benchmarking Study found that many payers offer brokers direct, automated access to pricing and benefits information, which may reduce the need for Web-based broker functionality. More Web sites now allow employers and brokers to access publications and enroll members online. Interestingly, the proportion of Web sites offering online quotes to employers and brokers has declined in the past year. This may be due to HIPAA privacy and security requirements that limit the degree to which employers, in particular, can access private health information.

Webmasters are working with employers to ensure that they are delivering capabilities to simplify the benefits administration process and identify emerging employee needs. They indicate that they are developing online reporting tools, premium payment, real-time quote analysis, and billing information for employers. For brokers, they are developing tools and applications that both simplify the process of supporting an employer and make it easy to do business with the plan. Specific examples include online inquiry and commission statements, group proposal processing, sales lead generations, and enrollment and maintenance.

Implementation Phases

The goals of phase one are to provide constituents access to administrative functions and to develop the infrastructure that will migrate as many transactions as possible to the Web (see Figure 4). Phase two extends Web-enabled functionality to support new products and enhance constituent interactivity. Phase three combines the power of high-volume transaction processing with Web connectivity to deliver a broad range of personalized services.

Figure 4. Implementation Phases of Self-Service Functions

Implementation of self-service and channel migration needs to be carefully managed. Typically, no one person or department oversees the entire Web implementation or takes a holistic view of how to move transactions from the call center to the Web. As a result, multiple communications channels become disjointed and inconsistent. Today, a plan member may get different answers to queries regarding account balances, coverage rules, eligibility, and other items from different channels. Moreover the structure of the customer interface may vary from one channel to another. Consistent transactions and hierarchies of functions lead to a consistent look and feel across all channels. They also allow information objects, connection types, and integrations to be reused among multiple channels.

Implementation Strategies

In building self-service Web functionality, payers have a choice of three approaches, each with its virtues and faults. In practice, most payers mix and match implementation approaches to achieve their goals.

Traditional Custom Development Via Low-Level Programming Languages

This approach uses low-cost tools, but requires highly skilled people to do the programming, which can be time consuming. The initial rollout of a Web site can be slow, and maintaining it to stay current can be cumbersome. However, this approach has lots of flexibility and permits a high level of customization and differentiation. Small health plans have often used this approach for first generation sites where they generally have less time and money to develop complicated transactions.

Integrated Portal Development Environments

In this approach, portal development tools speed Web site implementation via code wizards and reusable templates. Fewer and less skillful resources are needed to create desired functionality with integration tools and information objects than to write code from scratch. Web sites are faster to deploy and easier to maintain. Differentiation is still high. However, developers must invest in the development tools and in the training to teach their IT staff to use them. Larger health plans often use this approach, since they desire lots of flexibility and functionality, a high degree of differentiation, and have the money for the tools and the staff to get the job done.

Packaged Solutions

Small to midsized health plans can get broad, rich functionality quickly with packaged solutions, but may sacrifice some flexibility, and differentiation from competitors’ offerings can be lower. Packages have been developed to perform specific functions. For example, packages are available that handle administrative functions like eligibility and benefit checking, claims submission and processing, provide health content, or search directories to locate physicians. Often, it is less expensive to buy a package than to develop a custom application, but often there is still a significant cost to integrate the package with the payer legacy data. Some of these packaged solutions also include hosting services, where the payer pays a service fee to an application service provider to host the site functionality. The vendor utilizes packaged solutions to provide the desired functionality with constituents and can also brand the site with the payer’s logo.

Beyond the Front End

Most of this discussion of self-service functions has focused on how information is presented to constituents – the front end of the payer’s information system. Often, the most complex and costly part of building any information system is the integration of consistent information across many applications. Tying these functional applications to the core system is where payers reduce administrative costs and gain incremental revenue improvements. The core system has traditionally not been connected directly to the Web, but has provided static snapshot data. The latest direction is to implement a Web services architecture that communicates between the front and back end. An enterprise application integration (EAI) layer, or “middleware,” passes requests for information to the core system, and passes information from the core system to the Web through constituent portals. The use of portals lets multiple channels use the same user interfaces and information infrastructures. Much of the complexity and cost of offering a highly functional and richly featured Web site comes from developing a robust EAI and Web services architecture, but this is precisely what generates true value – if they come, they will stay.

Focusing Investment on Meeting Objectives

Some self-service functionality that payers have sought to provide in the past doesn’t fare very well when tested for relevance to the following objectives:

• Increase market share;
• Improve customer satisfaction and retention;
• Reduce administrative costs;
• Reduce medical costs; and
• Accomplish all the above in the most cost-effective manner.

For example, many managed health plans have expended great efforts to put medical content on the Web, enabling consumers to learn about a disease – to look up the indications, contraindications, and efficacy of prescription drugs, and access other, patient-oriented information. But payers have not typically been viewed as a trusted source for this information. Studies have shown that providing this information probably does little to reduce medical costs and contributes very little to customer satisfaction. In the near term, selfservice efforts need to focus on reducing administrative costs by migrating expensive telephone interactions onto the Web. In the longer term, Web-enabled self-service holds promise of addressing a much greater opportunity – reducing the cost of medical care through care management and disease management, and helping consumers to make wiser health care decisions, and take a more active role in managing their health outcomes.