Craig Johnson: Healthcare reform increases demand for the advent of insurance exchanges, COOPs and provider owned plans
We’re continuing our blog series featuring interviews with healthcare executives who participate in the Healthcare Summit at Jackson Hole, an invitation-only event in its third year that's designed to be light on formal educational content and heavy on relationship development. In this blog post, we ask Craig Johnson, president and principal consultant of Synthesis Health Systems, to share observations on data management and healthcare IT trends for 2013.
Dodge: What is Synthesis Health Systems’ role in the healthcare industry and what impact do you see the changes in healthcare reform having on your company?
Johnson: Synthesis Health is a strategic IT advisory and consulting firm that is focused on helping healthcare organizations successfully deploy and integrate information technology. Our clients include health plans, healthcare information systems vendors, business process outsourcing companies and public health agencies. One of the things that makes us somewhat unique is that we have deep industry knowledge in both provider and payer information systems.
We are finding a significant increase in demand due to changes in the market and healthcare reform. There are a couple of trends that I think are driving this demand including the advent of insurance exchanges, COOPs and provider owned plans. These are all ‘start-up’ companies with limited precedent and short implementation timelines. Right now I could name a half dozen new ‘health plans’ that have incorporated in the last six to nine months all needing to stand up operations by the end of this year. Most of these don’t have the people and technical infrastructure in house to do it on their own so they are looking to ASOs/BPOs and consulting companies like ours for help.
Healthcare reform is driving the emergence of state-based health insurance exchanges and Consumer Oriented and Operated Plans (COOPs) intended to provide consumers, small groups and other organizations access to health coverage that may not have been previously available. The federal government is pouring a ton of money in to these cooperatives with very aggressive implementation timelines. The struggle is that these plans are starting up with limited experience in health plan operations and even less in systems implementation and ongoing support. The vendor community is rushing to their aid but there is a chicken and egg problem. To meet the aggressive timelines the vendors need business requirements to start implementing but the business processes are still in development and morphing as the plans have only just incorporated. This creates a huge amount of implementation risk and as a result - an opportunity for us.
The second trend that is creating opportunity for us is provider aggregation and the emergence of regional provider owned health plans. We are seeing a lot of regional hospital systems of say five to seven hospitals forming health plans. These are really interesting organizations as they can grow incrementally starting with covering their employees and their dependents and then grow in to the Medicare Advantage and commercial markets. With a large enough network coming from the hospital/provider system they can begin to create a regional integrated delivery system – very cool. However, like the COOPs, they have limited experience on the health plan side and are looking to BPO and consulting organizations for help.
Dodge: What are some of the major IT trends that you’ve seen and that we can expect to see in 2013?
Johnson: I know David commented on the mobile technology trends, so I won’t focus on that but I agree with him that there is a sea change going on their now. On other fronts, I see continued trends towards more and more data sharing and integration between healthcare stakeholders—between providers, payers, employers and other organizations. Just imagine the implications of regional provider owned health plans where clinical and administrative data can be shared across lines for population health, care management and clinical decision support. Enabling this are health information exchanges providing the technology underpinnings that are already maturing in some states—in Massachusetts we’re pretty far along—in other states it’s just emerging. There will be more and more investment in this area to increase the breadth and depth of information exchange. The other big IT trend that I see is the continued investment in Electronic Medical Record systems. Although I think the jury is still out on how cost effective these systems are there is huge money pouring in from the feds to underwrite provider implementation. This has two effects. First is the development of more and more vendor capability and broader deployment within the provider community. At the same time, it is sapping the industry of information technology implementation people – anyone who is good is being picked up by the EMR vendor and consulting companies. It is making it really, really hard to find good people…
Dodge: What other observations do you have around data management as it relates to healthcare going forward?
Johnson: Sure. The thing that I see all the time is that we underestimate how complicated it still is to share data within the healthcare system. Privacy and confidentiality concerns along with complicated data under complicated standards makes it really hard to make what should be easy to get data available where it is needed. I teach on this topic at Northeastern and I’m continually amazed that both clinicians and technologists in the industry are completely surprised by the complexity of sharing even the most basic clinical and administrative data. It is still really complicated business…it’s going to continue to be an ongoing problem for the foreseeable future.
Dodge: What do you think are the most interesting CRM deployments in healthcare?
Johnson: First, I think we are really behind other industries in leveraging CRM technology. If you think about healthcare thru just the lens of delivering medical treatment to patients then we are really missing the mark. The industry is slowly starting to think about delivering services to ‘customers’. Patients, members, clients – whatever we want to call them – are all customers and we need to start treating them like they are. Here are a couple of places that I see where it is easy to see why we need CRM. David’s company, Telcare, is a great example. To be competitive, he not only needs to deliver an innovative technology to acquire market, but he needs to deliver world class customer service to lock those customers in to a long term relationship with Telcare. From the time that you order your first device on-line to managing the order fulfillment process, to troubleshooting problems and doing satisfaction surveys, there needs to be a an integrated, comprehensive customer oriented infrastructure to support the business. Historical DME systems and the like simply don’t cut the mustard anymore.
Health plans (and providers in a similar way) need to start thinking about their members as customers – not just as members. How many times have you called your health plan to be sent from claims to member to clinical services? I want to get a new member card, change my PCP, fix a problem with a co-pay and request a call back from my care manager all in the same phone call without being tossed around. Today, these services are supported by different departments and worse on different systems within the plan. No one has visibility of the breadth of services and issues that I have… wouldn’t it be nice to have a CRM that created visibility in to all of these services and integrated it on a call agents desktop. Plans are struggling to stay competitive as provider networks are overlapping more and more leaving only price and CUSTOMER SERVICE as potential differentiators.
My last example is plan related as well, for years the retail industry has leveraged micro-segmentation and targeting to cost effectively outreach to prospective and current customers. They have leveraged CRM technologies to enable huge increases in sales while dramatically reducing the spend for those sales. We need to be doing the same in healthcare not only with marketing but with population and care management. Most plans today still use the shotgun approach with disease management type programs. We need to be more sensitive to outreaching to the people that need help, are likely to engage in behavior change and do it in a way that will engage the member and invoke that behavior change. CRM technology is starting to be used to do just that… add to that shared risk trends like ACOs and the need for this is heightened. I think the industry is waking up to this and that any risk bearing entity will find they need to leverage these technologies more and more to be competitive.