Why health organizations should break the health management outsourcing taboo

Outsourcing traditionally off-limits areas offers payers new outcomes that go beyond healthcare administrative cost savings.

Overview

Outsourcing traditionally off-limits areas offers payers new outcomes that go beyond healthcare administrative cost savings

Accenture research shows that more than half of the top 10 US health payers are already or are beginning to outsource portions of their health management operations. Different from clinical care, health management solutions help patients, providers and risk-bearers coordinate and manage health and wellness across care settings.

This data reveals an important evolution. What was once taboo—using business process outsourcing (BPO) for services supporting health care management—is becoming increasingly common. Innovative payers are looking to expand healthcare outsourcing into their health management, including care coordination functions. In this environment, what are the benefits? And which functions should be retained and which should be outsourced to deliver the best outcomes?

Background

It may seem counterintuitive to outsource functions like this, but health payers should not find this unique. This practice is standard—and successful—in other industries. Similarly, high performing health payers can use BPO service providers to help provide new value for core functions that they may not be able to get from internal resources alone.

This forward-thinking perspective is in line with Accenture’s research into the characteristics of high performance BPO. The cross-industry study, conducted with Everest Group and the London School of Economics, illustrates movement to a “cost-plus” BPO value proposition. According to the study, two-thirds of high-performance businesses focus on the potential value of business benefit beyond cost when creating the business case for BPO, compared with only 26 percent of typical performers.

Analysis

Administrative cost reduction can no longer be the sole driver of BPO among health payers. Any organization that thinks this way will likely fall behind their competition. Engaging in health management BPO can drive important benefits for payers and consumers, such as:

  • Improved health program quality and outcomes. Increasing enrollment, engagement and compliance via higher-touch outreach services therefore driving towards lower medical costs.

  • Lower medical costs. Expanding established utilization management approaches and care coordination services to better optimize medical spend.

  • Service expansion. Supporting the improvement of health outcomes and opening up the possibility of generation of new revenue streams through new program offerings.

  • Optimal resource use. Focusing internal resources on the higher value-add member and provider interactions.

Recommendations

While it may be challenging for health payers to move beyond entrenched healthcare BPO perceptions and practices, there is growing momentum and incentive for change. The key is a strategic approach to leveraging sourcing and determining, based on a payer’s own policies and regulatory framework, which functions should be retained and which can be outsourced to a BPO provider.

Typically, health payers retain highly differentiating services such as those requiring entity licensure and/or certification or those involving specialized programs and/or high-acuity/high-complexity case management.

However, there are typically two core types of health management functions that health payers can consider outsourcing. The first is services that benefit from a human touch such as helping with Medicare Stars outreach, post-discharge calls and program enrollment. The other is outsourcing repeatable services such as processing of prior authorization requests, medical necessity review and post-service claim review support functions.

Industry & topics highlighted

Health