Business operations in healthcare are complicated. That fact is evidenced by changing reimbursement paradigms, information security concerns, and a lack of interoperability within various platforms and applications utilized to capture clinical encounters.
In simple terms, the rules are changing, reputational security risks are pervasive, and big data benefits are limited. The business development leaders at EPIC and Cerner failed to mention their products were originally constructed to be all things proprietary. Data sharing challenges are intensified by a myriad of fragmented bolt-on solutions designed to address specific business functions.
As excellent as many of those products are, they were created by different businesses that never intended to cooperate in a larger vendor community or exchange data.
Interoperability progress in healthcare will be judged by key performance indicators that shine a guiding light on operational performance. Access to more data in real time should lead to improved business outcomes. One metric we utilize to identify root cause issues is denials. Denial statistics provide valuable insight into operational challenges, and if interoperability is advancing, the rate of denials should decrease (in theory).
Claim denials is an industry problem that has increased 20% over the past 5 years. If denial trends provide operational leaders insight into business challenges, why is the problem getting worse?
I attempted to answer a similar question 2 years ago. My theory – a lack of capital – was based on feedback from customers, most of them aware of the breadcrumbs denial trends left behind and frustrated by their inability to do much about it. A lack of capital restricted progress for the following reasons:
- The positions do not pay enough to attract the right talent; current state hiring criteria has more to do with attitude than aptitude.
- Employment policies restrict the ability to source talent nationally – even in case when budget allows to pay better.
- Outside of the shallow talent pool and poor pay, there is not any money to train and educate less qualified staff we are forced to hire.
The absence of financial resources limited access to the right people and precluded necessary investment to motivate and empower the people responsible for delivering results.
Transforming the mindset
This logical conclusion was the genesis of Harmony’s denial prevention campaign. If money is the primary excuse, we can simply show how combining the right talent and process will provide a significant return on investment – a return that can then be used to finance training, improved salaries, or other key initiatives.
As a partner to many leading digital health companies, we see firsthand that technology capability looms as a viable answer to improve performance and lower cost. In fact, much of the limitation of the products available in the market today exist because of end user execution and stale strategy. Our healthcare business leaders are sometimes handcuffed by finances.
My take: those same financial restrictions are largely the result of denials, and using money as an explanation for the status quo is no longer acceptable.
According to Change Healthcare’s analysis across 1,500 hospitals, $407B in charges were denied in 2020. Revenue performance is the glaring negative, but claim denials also impact quality and the accessibility of patient care. The industry’s ability to reverse denial trends is not solved with an influx of cash; change requires a new mindset of innovation and agility.
Innovation is driven by unique competitive forces or cost pressures or rapid expansion. For banking and insurance, it was about gaining a view of the household. For manufacturing, it was based on the need to optimize global supply chains. For retail, it was about lowering customer acquisition costs through the internet.
In healthcare, innovation is required to advance many causes such as interoperability, patient experience, and lowering the cost of care. If you need proof that an opportunity exists, look no further than the 1,400 medtech companies vying to create solutions that are universally adopted. Private equity has a golden track record of identifying opportunity, and while only a few will reach the Gartner upper right hand quadrant, billions are pouring in to create solutions that advance transformation.
Embracing a culture of change
Health systems should learn from the software companies creating these products, specifically the operational cadence of software companies as well as their ability to operate with agility. This requires culturally aligned people capable of embracing change in an environment where they are forced to work together – not by themselves. By together I do mean face to face or in today’s world video to video.
A key indicator of agility is the premise of self-organizing teams with leadership setting the tone by emphasizing the importance of trust and by encouraging vulnerability amongst the team members. It is OK to fail, but fail quick and move on without fear of reprisal.
Meetings should be brief (in IT sometimes called scrums) with the meeting taking place during the meeting – not at the water cooler afterwards amongst a subset of attendees. No disrespectful body language or keeping thoughts to yourself. If you need to say something, it’s time to say it since you don’t have the time for anything else when you are agile.
Many software companies maximize the work that can be produced at every turn by removing procedures and customs that have become irrelevant and automate as much as possible. A healthy and pervasive mood of constructive dissatisfaction exists amongst all team members. If someone ever uttered, “We must do it that way since that is how we have always done it,” they might be given one mulligan. If they say it again, someone would call security and escort them to the door.
That is what embracing change really means, and leadership sets the tone for all of it. Finally, the importance of the people themselves cannot be overlooked.
Assembling the right team & creating accountability
It is true that ordinary people can produce extraordinary results when they are properly engaged, but having the right skills and desire to do the job is essential. Let’s start with communication skills. If we are attempting to increase the velocity at which we produce results, people must be comfortable in openly communicating their disagreements. High performance teams are made up of people who frequently disagree, and then they rally behind the final decision once it is made irrespective of whose decision it was. Disagree and then commit.
There also are high expectations placed on individual performance and output when working in fast paced organizations. Pushing people to perform outside of their comfort level is commonplace, and individuals who don’t cut it unfortunately need to move on; they rarely get recycled into new jobs.
I recognize that comparing healthcare operations to the aggressive culture of software development is a bit of a stretch. After all, software companies often release products that may have a few bugs in them from time to time, but healthcare teams can’t make mistakes while supporting a life or death mission.
That said, the healthcare industry is competitive, and more and more will be demanded from operations over time. It needs to come up with better answers on how to change and adapt like other industries.
It won’t happen overnight, but iterative progress can certainly be made by introducing a new operating rhythm one project at a time. Those projects should be led by people capable of improving the environment and changing the culture while still getting the work delivered.
Having a great consulting partner to help you see around corners will come in handy.