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Perspectives

Automation Is Sound Medicine for Health Plans — If Taken as Directed

2019-09-05


Health plans may be overlooking the basics when it comes to getting maximum benefit from automating processes. Here’s how to approach automation with clarity and purpose.

We recently surveyed health plans to understand to what extent they are adopting automation, in what forms and to what ends.* Our results indicate that while health plans expect automation to improve processes and deliver better member experiences, they may be approaching automation too conservatively and missing opportunities for savings and efficiencies. Automation can be an effective tool for cost savings and enabling new processes, products and services when implemented as part of a strategy for revamping business and operating models. Yet our findings indicate payers are not approaching automation strategically.

Here are a few findings from our study that illustrate where payers are struggling with automation and where they get it right. As well, we share prescriptions to solve issues for short-term gain and to lay a foundation for advanced automation based on artificial intelligence (AI) and machine learning (ML) in the future.

Benefits are not matching high expectations.

Payers expect automation to generate cost savings and enhance experiences, particularly in provider contracting, medical management and utilization management. Yet automation benefits are proving elusive. That’s because many payers implement automation in silos. Automation silos are expensive because they duplicate efforts and increase the number of automation vendors, tools and maintenance programs to manage. It’s also hard to scale benefits created in a silo. Those factors undercut automation cost and efficiency benefits.

Payers can reduce silos and accelerate automation across the enterprise by establishing an automation center of excellence (CoE) that acts as a clearinghouse and control center for automation projects. Business and tech leaders in the CoE review automation ideas generated by business units and identify commonalities so that one solution can be built and tailored as needed. The CoE can also help identify interdependencies, such as when deploying a tool will require an infrastructure upgrade. This approach improves governance and scalability while making automation cost-effective by reducing licensing costs, avoiding paying for the same automation in multiple areas and flattening the learning curve.

Robotic process automation (RPA) lags among payers — who are already looking to AI and cognitive technologies.

Many payers are looking past RPA to next-generation tools — and failing to see missed opportunities to improve processes and reduce costs substantially in the near term with RPA and a CoE. CoEs can greatly speed bot development and deployment, while RPA is a necessary companion to AI-based tools, such as cognitive computing and ML. Layering cognitive approaches on top of or adjacent to RPA-based processes maximizes straight-through process automation — and its returns.

Mature RPA technology exists for payers to solve friction points and deliver new and simpler, streamlined experiences to members and providers in the very near term. Cost savings and improved member satisfaction are solid pillars on which to invest in modern systems and advanced capabilities. The payer that moves now to embrace this reality with a clear strategy will be well positioned to win new members and market share, even as new competitors enter the healthcare market.

Plans with automation experience are going beyond pure cost reduction.

Payers with more automation experience are looking toward end-to-end value streams. Instead of automating only transactions or specific subsets of a process, these payers are trying to integrate multiple technologies to support end-to-end automation. They are asking for use cases and examples that improve member and provider experiences while simultaneously reducing administrative costs. 

One example of this approach is found in utilization management functions such as pre-authorization of services. Optical character recognition (OCR) technology extracts data from a provider-submitted medical record. RPA enters this data into the case management system. ML can determine whether to approve that request automatically or route it to a physician or nurse for review. This approach reduces manual reviews and increases the speed of pre-authorization processing so members and providers benefit.

The industry moves as one on automation.

Figure 1

Responses about automation, from leadership involvement to availability of internal skills, were remarkably consistent across organizational roles in payers of all sizes. This apparent groupthink, with payers automating the same processes on the same timelines, may be stifling innovative automation applications (see Figure 1).

Payers’ caution is understandable. Early investments have often resulted in automation silos, duplicated efforts and increased costs. Some payers have also invested in bots, only to find industry vendors rendering this investment obsolete by building those capabilities into their core platforms. After those experiences, it’s natural for organizations to look to peers for best practices and lessons learned. Yet payers will miss opportunities to turn automation into a competitive advantage by waiting for one of their peers — or a new industry competitor — to lead the way on enterprise-aligned automation.

Based on our industry experience, we have identified a set of best practices to help payers accelerate or realign automation initiatives to take advantage of today’s best automation capabilities. An organization should adjust and customize these steps based on the progress made in its automation journey to date.

  • Reassess use-case inventory to validate which cases are a fit for automation.

  • Ensure automation is a strategic priority with support and commitment from senior IT and business executives that cascades throughout the organization.

  • Establish joint business and IT ownership of enterprise automation strategies and encourage cross-functional collaboration.

  • Create a governance structure or CoE that enables an enterprise approach to automation. Facilitate visibility and insight into all organizational automation activities, and communication across functional areas including the IT ecosystem.

  • Institute an organizational change management strategy from the inception of automation initiatives and communicate early and often.

  • Use a metrics-driven methodology to identify, evaluate and baseline key processes to ensure the right processes are selected for automation.

  • Design the structure, resource and support models necessary to begin implementation planning as early as possible to alleviate delays and increase speed-to-value.

  • Define and agree on criteria for success at the enterprise and individual-process levels before starting an automation initiative to ensure accurate benefit realization tracking.

  • Ensure internal competencies and capabilities are scalable to support automation once it goes into production after a successful proof of concept or pilot.

  • Continually evaluate emerging technologies, understanding that the tools landscape will continue to rapidly evolve and mature.

*We surveyed 200 respondents across 10 unique payer organizations with approximately 38 plan subsidiaries. The plans represented four membership tiers: fewer than one million members, between one and three million members, three to 10 million members, and 10 million-plus members. Business executives composed 50% of the respondents and 50% were from IT operations.

For more survey findings and our perspectives on them, please read our white paper Applying Automation to What Ails Healthcare and visit the Healthcare section of our website, or contact us.

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Automation Is Sound Medicine for Health Plans — If Taken as Directed