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The COVID-19 pandemic has forced healthcare providers and payers to adopt new ways of working. Simultaneously, a historic drop in healthcare service consumption is stressing many institutions (providers may have lost over $200 billion in the first half of 2020), and consumers are embracing new tools that support virtual and in-home care delivery. Together, these forces are creating unparalleled opportunities for the U.S. healthcare industry to reimagine its current operating model to reduce systemic inefficiencies and catch up with other industries regarding digital transformation.

But providers and payers must also deal with the unfolding crisis in the short term. They’ll be contending with the pandemic well into 2021 — determining the usage, efficacy and side effects of vaccines, to take just one example.

We believe the industry can (and must) address these immediate needs while simultaneously investing in the capabilities required to emerge from the pandemic with new, more efficient models of care and better engagement with patients and members. The key is selecting the right areas in which to invest. 

To that end, we’ve created checklists for healthcare providers and payers around what we view as five imperatives:

1  Take Out Costs

The perennial industry challenge is reducing the cost of care while improving the quality of outcomes and patient experiences. As the figure below demonstrates, the pandemic has not helped. For this and other reasons, providers may need short-term cash-flow improvement to address immediate pressures.

Actions for providers

  • Benchmark operations (including revenue cycle, patient contact centers and the supply chain) against industry peers to identify savings opportunities.
  • Consolidate and standardize clinical and non-clinical applications to reduce IT operating costs. Create strategies for retiring or modernizing legacy applications.
  • Reduce IT costs by moving to the cloud.
  • Evaluate outsourcing non-core operations such as revenue cycle and supply chain operations and moving to outcome- or volume-based pricing models.

Actions for payers

  • Accelerate the implementation of business process automation and self-service initiatives. Develop high-value automation use cases (for example, automate prior authorizations based on business rules and new members’ past claims histories).
  • Increase productivity by automating processes using artificial intelligence (AI) and machine learning, and ensure optimal performance from best-in-class modular applications by making data from core administrative systems available via an orchestration platform.
  • Assess portfolio applications for scalability and support quality.
  • Streamline IT operating models. Automate IT and improve its productivity with DevOps and service management. Move away from project-based software development models to more iterative product-based models. Reevaluate which IT investments will deliver the greatest returns.
  • Move to the cloud to shift infrastructure investment from a capital expense to an operating expense model.
2    Deliver care-at-home

COVID-19 has forced the high-scale adoption of telehealth. Care-at-home is the next evolution of virtual care in which healthcare providers offer a wider range of services virtually. Implementing this imperative will give providers greater freedom to serve patients, optimize total cost of care, and improve patient engagement.

Actions for providers

  • Evaluate existing telehealth capabilities and performance; determine what additional services could be delivered virtually in the home.
  • Ensure the telehealth workflow is integrated into clinical workflows and electronic health record (EHR) systems to capture documentation.
  • Extend virtual care to patients with certain chronic conditions.
  • Create a differentiated care-at-home experience for pregnancy and patients with gestational diabetes and hypertension.

Actions for payers

  • Work with network providers and health systems to incentivize adoption of care-at-home.
  • Streamline referral and prior-authorization processes to make access to in-home care smoother.
  • Work with health systems to generate insight from additional data created, and leverage the insights to create more tailored health management programs.
3    Implement low-touch healthcare

The continued risk of COVID-19 infection is forcing providers to reduce physical contact during care delivery and administrative processes. A critical challenge is delivering a personalized, human experience while practicing social distancing and contactless processes. Naturally, our checklist here applies only to providers.

Actions for providers

  • Expand virtual care. Virtual care anywhere is increasingly possible courtesy of sophisticated in-home monitoring tools; smartphones equipped with high resolution cameras; and even portable diagnostic devices, including ultrasound units. Data from these inputs, plus AI agents, could power direct-to-consumer care, coaching and services. Larger organizations could offer virtual ICU monitoring and remote-care and disease management services for rebranding to smaller and/or rural providers.
  • Redesign office processes to increase patient comfort levels and protect against virus transmission. Areas of focus should include scheduling and check-in; notifying patients; prescreening; checkout; payments; and redesigning the layout of waiting areas to maintain appropriate social distancing, especially for elderly and other high-risk patients.
4    Accelerate digital transformation

Shifts in consumer behavior, combined with regulatory easing and powerful new technologies and their accelerated global adoption, create a perfect environment for change.

Actions for providers

  • Create a broad care ecosystem around existing EHR investments that will enable care anytime, anywhere. This may mean creating a scalable and agile architecture around prioritized use cases such as public health surveillance or remote health monitoring.
  • Implement a digital front-door strategy that delivers a consistent set of experiences for patients regardless of their entry point into the healthcare provider’s system. A robust workflow behind a digital door should integrate patients into the healthcare system and all its offerings at the first interaction.
  • Modernize how employees work from home with automation that enables a paperless office, and no-fax processes.
  • Modernize data infrastructure to get a coherent view of operations; pool clinical and administrative data from payers to disease surveillance systems for faster response to outbreaks; and leverage AI to drive better clinical and operational outcomes.

Actions for payers

  • Provide a simplified member experience to facilitate finding and financing care. Help members select the best value by comparing prices that providers publish under price transparency rules.
  • Modernize and retire any remaining legacy mainframe systems or, failing that, modernize parts of those systems.
  • Transform the IT operating model to align better with the organization’s business objectives.
  • Build new strategies around increased and improved data flows, including greater availability of longitudinal data, and use AI and analytics to identify members and populations likely to be at greater risk for complications from COVID-19. That information can then be used to predict outbreaks and adjust resources accordingly.
5    Improve collaboration

Payers and providers have an opportunity to work together to engage patients to control costs. They can create a model of joint operations to maximize operating efficiency; reduce waste and duplicated effort; maximize information delivery speed; and improve patient care.

Actions for providers

Create a financial recovery roadmap by each payer contract to sustain operations.

  • Embrace digital transformation and start dialogues with payers to prove that this new model of care will reduce total medical costs.
  • Show leadership in discussing broad technology adoption. Many payers are hesitant to implement new technologies such as automation because they are concerned about provider adoption.
  • Leverage interoperability to create true clinical data-sharing agreements.
  • Tap into furloughed healthcare worker pools in collaboration with payers to find quality candidates to care for patients in their homes. Use excess nursing home staffing to provide greater engagement with patients and have a seamless transition from human to digital channels.

Actions for payers

  • Reach out to major contracted health systems and understand the financial impact and resulting imperatives that COVID-19 has created for them.
  • Help providers migrate to a greater share of capitation-based contracts.
  • Create mechanisms to jointly invest in practices, or create value-based programs leveraging new care-delivery models that incentivize the provider community to invest in more continuous engagement with patients.
  • Work with providers to jointly evaluate high-risk patients and educate them about the risks of postponing elective surgeries, screenings and outpatient procedures, and plan to safely conduct those based on preparedness of the health system.

To learn more, see our white paper, “From Chaos to Catalyst: Five Imperatives for Healthcare,” or visit the Healthcare section of our website.