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After labor arbitrage, what comes next?

It’s time for a new healthcare payer model based on partnership

Large national payers have long relied on labor arbitrage in healthcare models to reduce operating costs and worked with traditional outsourcing providers to improve processes. But 72 percent of senior healthcare/pharmaceutical operations executives say that they have exhausted the labor arbitrage model and must look elsewhere for value, according to an Accenture and HfS Research study.

Payers must switch gears to a new partnership model of consumption-based, innovative and flexible arrangements. Payers will need to rethink how they select partners to help them with the short-term goal of cost take out and long-term plans to adapt to digital technology, new reimbursement models and the migration from lower cost labor to outcomes-based labor.

Time to make bold moves

Robotic process automation, analytics and As-a-Service are connected and complementary elements that can deliver progressive levels of business value. All three can reduce cost structure and transform parts of the business that labor arbitrage cannot touch, adding greater value to the sourcing model:

  1. Integrate humans and machines with automation

  2. Automation removes the human element from manual, repetitive and predictable process work to increase productivity. It introduces learning into processes to predict transaction results, providing more insight into business outcomes.

    Accenture experience shows that automation can increase productivity and quality from 10 to 50 percent, delivering direct cost savings. One automation tool improved the quote-to-card process—reducing processing and turnaround time by at least 20 percent. The payer reduced costs and serviced new members more quickly; and members received coverage faster.

  3. Realize intelligent operations with analytics

  4. Payers want to understand how to use their data better to drive out costs, improve compliance and quality, and increase market share. Automation offers a new approach to analytics. It provides higher quality, digitized data for enhanced analysis of payers’ business. This can inform continuous process improvement and large-scale change.

    Access to better operations data for analysis means better insights, which payers need to manage their business. Case in point: Forty-four percent of healthcare and pharmaceutical survey respondents say they plan to invest in analytics within the next 24 months to reach their operations’ objectives, according to the Accenture and HfS survey.

  5. Achieve next-level business value with As-a-Service

  6. As-a-Service brings the next level of business value. While automation standardizes and digitizes processes, and analytics provide visibility into them, As-a-Service moves the focus to flexible, consumption-based models purely focused on outcomes.

    The As-a-Service model is the next step in payer transformation that allows for a flexible, adaptable business model. Technology, data, analytics and talent combine to deliver value through on-demand, highly-scalable, plug-and-play services that eliminate complexity and manual processes. Work is transitioned in hours, not weeks. It is about driving results, not filling seats to process transactions. Relationships move from paying for people to paying for outcomes.

Survival at stake

Only payers that embrace the next wave in managing operations outcomes—the triple play of automation, analytics and As-a-Service—can survive and thrive.

Labor arbitrage in healthcare is dying. So what’s next?
In today’s environment, payers need the triple play of automation, analytics and As-a-Service to survive—and thrive.

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