Category: Healthcare & Life Sciences

How Analytics and Automation Can Help Health Plans Improve Medicare Advantage Star Ratings | Blog

Customer analytics and automation solutions can be a key differentiator in helping health insurers achieve better Medicare Advantage (MA) Star Ratings with changes that emphasize the customer experience coming by 2023. At a time when delivery of high-quality healthcare services is a priority and competition is intensifying, taking the right steps now can make a difference for both providers and patients. To learn more, read on.     

Why the MA Star Ratings are important

Health care quality and MA enrollments have significantly improved since the Centers for Medicare & Medicaid Services (CMS) introduced a five-star rating system in 2007 that scores each plan’s performance across numerous measures over a prior 18-month period.

The major goals of the MA Star Rating program are to incentivize insurers to improve their performance and to help patients compare and choose high-quality plans. These Star Ratings have become a crucial yardstick to help beneficiaries select the best plan for themselves.

As a result of the program, more customers are enrolled in higher-quality health plans. According to Medicare, MA enrollment has more than doubled in the past decade, with 26 million Americans currently enrolled this year.

What led CMS to change the ratings?

Over the years, the criteria used to assess plan performance has become more stringent, with CMS changing the cut-point levels to achieve the ratings across 47 different measures. Even after raising the standards, average scores have improved, reflecting a continued push by providers to improve the quality of services.

The Star Rating divides the measures into separate categories and assigns a different weight to each area. In May 2020, CMS increased the weight given to measures related to customer experience, such as patient experience, complaints, and barriers to receiving care, from 35 percent of the total score last year to comprising nearly 60 percent of the overall rating by 2023.

CMS made this change to encourage plans to provide the best service to beneficiaries, resulting in better engagement and health outcomes.

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Patients’ Experience and Complaints Measure: These reflect beneficiaries’ perspectives of the care they received

Measures Capturing Access: These reflect processes and issues that could create barriers to receiving needed care

How does this impact health plans?

The changes in the Star Ratings can bring significant value to plans in the following ways:

  • Increased revenue – Better Star Ratings can lead to an increase in member enrollment, resulting in higher revenue
  • Financial incentives – CMS offers financial incentives in the form of bonus payments known as Quality Bonus Payments (QBPs) to plans that achieve high star ratings. In addition, the share of savings that plans must provide to enrollees as the beneficiary rebate is tied to the plan’s rating. Plans that are awarded four or more stars earn a five percent bonus payment. They also receive higher rebates that are returned to the members in the form of supplemental benefits or lower premiums
  • Improved customer engagement – By improving their ratings, plans also benefit from higher plan renewals and lower attritions while driving down operational costs

Insurers will have to strategize differently to understand how the rating changes affect them. For example, a plan that currently has the highest 5-star overall rating but average scores in customer metrics will see a decline in its overall ratings if it maintains similar scores in 2023 because of the increased weight given to customer-related metrics.

For plans that have ratings below 5-star, this change represents a big opportunity to significantly increase their overall ratings by improving their customer metrics.

What’s next?

Currently, nearly all plans use customer analytics and automation in some capacity to drive customer engagement. Following the changes in Star Ratings, the creation of a personalized, seamless experience across the customer journey that result in holistic engagement should be the end target for plans to realize the maximum benefits.

As competition in the health plan landscape intensifies over expanding their MA customer base, lowering the churn rate, and generating more revenue, efficiently leveraging analytics and automation solutions will become the key differentiator. Here are some ways users can gain a competitive advantage by using technology:

  • Deploying automation solutions to optimize call center operations that automate script/process tools and eliminate the repetitive tasks to support high-call volumes. This will allow human agents to dedicate more of their efforts towards high-priority customer segments to improve the customer experience and reduce operations cost
  • Leveraging analytics solutions such as customer journey analytics, channel analytics, and sales analytics to analyze customer history and behaviors for enhanced member segmentation and profiling. This will allow the plans to have seamless omnichannel outreach and engagement initiatives across different member segments

In the short term, existing analytics and automation solutions will need to be optimized and scaled to enhance customer engagement. Moving forward, customer analytics and automation will need to be integrated and deployed across the value chain of health plans to realize the full potential.

The ball is now in the court of health plans to capture this opportunity and turn the new Star Ratings in their favor by taking the right steps. While the outcome for health plans remains to be seen, these changes will certainly improve the member experience, especially at a time when delivery of high-quality healthcare services is a key priority.

To share your experiences on the CMS Medicare Advantage Star Rating changes, contact  [email protected] or  [email protected].

Healthcare Interoperability is Coming – How Your Enterprise Can Navigate the New Rules | Blog

With the deadline for the first phase of the healthcare interoperability rule coming July 1, are enterprises fully prepared to accommodate the changes and the interoperability mandate as a whole?

Our three-part blog will guide your organization through the regulatory implications, implementation approach, and future opportunities. To learn more about the evolution of interoperability and the challenges enterprises face in deciphering the new regulations, read on.

After decades of trying, interoperability is getting closer.

The Interoperability and Patient Access final rule has provided the impetus needed to finally bring together data from healthcare payers, providers, and health information technology (HIT) vendors for patients to easily access information and coordinate their healthcare.

Announced in 2019 by the Centers for Medicare & Medicaid Services (CMS) and The Office of the National Coordinator for Health Information Technology (ONC), the final rule laid down definite protocols and data standards to comply with unified data transmission between members, payers, and providers.

Healthcare enterprises originally had until January 1, 2021 to implement the Interoperability and Patient Access final rule. However, concerns over COVID-19 led CMS to push back the deadline for meeting the requirements, giving them until July 1, 2021 to comply. The regulation has provided a necessary push to healthcare enterprises for building a strong IT foundation to spur smooth data transfer among stakeholders and healthcare organizations.

So, what’s the buzz about? What does healthcare interoperability mean?

Simply put, interoperability is the capability of healthcare systems and applications such as Electronic Health Records (EHRs), Electronic Medical Record (EMRs), and claims data management systems to converse with each other and have an effortless information exchange. The vision is for members and patients to be able to access their healthcare data at their convenience.

Healthcare enterprises have been trying to implement interoperable systems within their infrastructure for decades. But many challenges and restrictions regarding technology immaturity and technical and financial debt have restricted them from achieving full interoperability. This started to change in the early 2000s with technological advances and a legislative push toward interoperability.

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What changes are coming for healthcare enterprises and healthcare IT vendors?

To help healthcare enterprises achieve the goal of making health data accessible to members or patients from anywhere, CMS and ONC have put forward the following key provisions:

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What are the biggest challenges healthcare enterprises face to interoperability?

Below are the major hurdles enterprises will need to overcome to implement interoperability:

  • Misaligned incentives: The incentives of the stakeholders are misaligned with the goals of interoperability. For example, every HIT vendor currently sells proprietary systems. If interoperability becomes a reality, the customers will no longer encounter proprietary lock-in and will be free to choose any vendor. As a result, interoperability would dilute the competitive advantage of the HIT vendors and cannibalize their existing revenue streams
  • Complementary technology enablers: To avoid large upfront investment from each stakeholder, the entire technology framework might be cloud-driven. A host of APIs would need to be developed to enable information sharing between the common platform and the numerous proprietary databases currently used. Similarly, a secure API ecosystem would have to be implemented for external data sharing
  • Security of data: Enterprises might require third-party app developers to create their own branded applications for accessing health data. However, there is no regulatory authority over third-party apps and their use of protected health information. Also, with interoperability coming into play, the entire healthcare database might be located at one central platform, making it an easy target for cyber attackers

Interoperability is a journey and an opportunity for healthcare enterprises to assess and remodel their infrastructure. A strong interoperable infrastructure will ensure that healthcare enterprises reap the benefits of their current investments in the long term – enabling them to handle any future technology or industry changes.

To lead the industry, healthcare enterprises need to look beyond the areas defined in the regulation and also focus on a scalable, robust IT architecture, a security-led ecosystem, and the role of analytics in the long run.

To read more about interoperability and emerging opportunity areas in healthcare, read the next installations in our blog series, where we will talk about the interoperability framework and areas of investment for healthcare enterprises. Please feel free to reach out to [email protected] to share your experiences and questions.

The Prescription to Evaluating Telemedicine is Using a Holistic Framework | Blog

Telemedicine became an essential tool for delivering healthcare services remotely during COVID-19. But was this growing trend of virtual doctor visits truly effective, and will it continue post-pandemic? Current evaluation systems present many limitations to determining how well telemedicine is performing. A more comprehensive framework is needed to get the RX to success. Read on to find out what is needed.      

With telemedicine adoption surging and gaining greater acceptance by physicians and patients, determining the quality of the services provided has become critically important. Moving ahead, providers must have satisfactory answers to such lingering questions as: How do you effectively evaluate telemedicine? What impact do all the stakeholders involved have in the evaluation?  Are the current evaluations extensive enough to cover all factors?

While telemedicine usage skyrocketed due to the unavoidable circumstances of the pandemic and provided many immediate benefits, we now need to understand if its usage will continue in the long term as normalcy returns.

In comparison to in-person visits, telemedicine is more complicated, especially when considering the additional stakeholder responsibility involved from payers, providers, policymakers, technology providers, and consumers.

Beyond the care outcome that is usually gauged in typical face-to-face appointments, such factors as implementation, delivery, and repeatability must also be rated to determine the true value of telemedicine.

The need of the hour is creating better, extensive, and holistic evaluation frameworks that take into consideration most, if not all, of the dimensions that affect the overall care and patient experience delivered virtually.

Obstacles to overcome

Telemedicine evaluation frameworks and methodologies have been evolving. However, the sluggish rate of telemedicine adoption and skepticism toward its practice until now has delayed the progress in creating a more comprehensive evaluation framework.

Also presenting obstacles to a more holistic approach are the considerable variations in focus areas and the narrow and isolated scope of evaluation, such as those only considering specific clinical areas, measuring patient satisfaction, evaluating technology, assessing cost and efficiency, etc., separately.

While piecemeal evaluations catering to specific aspects of the telemedicine continuum help gauge a particular aspect, they cannot effectively capture the wider and more complex horizons of telemedicine.

A better holistic framework that encapsulates all evident and latent aspects starting from defining the needs of telemedicine care to measuring long-term health and experience outcomes is needed.

Telemedicine evaluation elements

Telemedicine providers need to look deeper than healthcare outcomes and consider the more abstract elements like patient and provider satisfaction, usability, and repeatability. The framework currently used by the Institute for a Broadband-Enabled Society (IBES) uses patient control, clinical quality of care, organizational sustainability, and technology capabilities as its factors.

Another example of a framework, which stems from academic roots, uses an assessment model looking at three dimensions based on functionality (consultation, diagnosis, monitoring, and mentoring), technology (modes, network design, and connectivity), and applications (treatment modalities, medical specialty, disease types, and sites). All such frameworks tend to take a certain perspective of a technological lens or care-outcome focused framework.

Six areas to consider when building or updating telemedicine evaluations

A framework for evaluation must span across the entire gamut of possible action points while looking at all the potential barriers and bottlenecks. The below framework attempts to cover the many diverse factors that are indispensable to telemedicine’s success.

Key Elements: Holistic Telemedicine Framework

telemedicine

Everest Group (2021)

  • Medical and human – This includes looking at health outcomes, the number and type of medical conditions, the nature of medical services provided (diagnosis, treatment, wellness advice, etc.), and the spectrum of care provided. Also to be evaluated are all the interacting human entities that play a part in healthcare delivery, such as provider staff and expertise, non-medical staff, technical teams, support, and maintenance personnel
  • Behavioral – This covers the behavioral aspects of the patient/client and provider such as awareness, perception, satisfaction, acceptability, adaptability, and other elements that encompass how involved stakeholders respond and react to a telemedicine application should be rated
  • Organizational – All aspects defining and involving care provider, patient, payer, administration, and technology structure need to be graded. This includes evaluating the leadership, organizational culture, workflows, hospital information systems, teams involved, etc.
  • Technological and knowledge – Technology tools and the technical knowledge that enables telemedicine to thrive should be reviewed, including the information systems, databases, platforms, software, applications, security systems, and other technological infrastructures in use. Also to be rated are the knowledge constitutes of interoperability, data quality, systems speed/performance, maintenance, and support, etc.
  • Economic – Elements relating to the economic and financial aspects that include financial performance, investment returns, financing business, and economic impact are all aspects to take into consideration
  • Regulatory, legal, and compliance – Evaluation of resolutions involving reimbursements, state and federal laws, compliance, privacy issues, medical legalities, technological compliances, and other legal/regulatory issues are all factors to be looked at

Organizational leaders need to step back and look at the complex structure in addition to their individual functions to gain a holistic understanding and reach the larger goal of building a successful telemedicine practice.

By expanding the view to these key areas, organizations will gain a more accurate picture of the effectiveness of telemedicine and be able to determine whether it will be sustainable in everyday instances moving forward.

Everest Group’s recent research, Unpacking the Rise of Telehealth, captures key insights of the telehealth market, covering trends across adoption, technology, and service provider dynamics. Please drop us your thoughts and reach out to us for a conversation at [email protected] or [email protected].

Keys to Developing a Successful Population Health Management Strategy – Unified Data Can Provide Full Patient Picture and Improve Outcomes | Blog

The US spends more on healthcare than other developed countries but has the worst health outcomes of high-income nations. One solution for improving this dilemma is applying Population Health Management (PHM).

PHM is a process used to improve the health outcomes of the broader population by utilizing resources in predicting and preventing diseases, identifying at-risk clusters and those in need of proactive intervention, and promoting the health of the population through integrated care techniques.

The healthcare models of countries such as France, Germany, Italy, Spain, and Japan are carefully designed to control costs and produce better outcomes. Most healthcare enterprises in the US have now recognized this need and are taking mammoth steps to embrace population health initiatives.

Important data sets required for population health

The core of population health management lies in accessing and analyzing healthcare data, including claims data, data present in Electronic Health Records (EHRs), wearables, Social Determinants of Health (SDOH), and social media.

The key to developing a successful PHM strategy lies in being able to access all of this data rather than specific chunks. Different types of data sets come with varied challenges. While claims data is easily accessible, it lacks the details on behavior, outcomes, reactions, and responses that are needed to create an end-to-end picture of the patient.

Meanwhile, data available in EHRs is highly important in terms of insights but still difficult to access. Even with recent regulations, not all the data present in the EHRs that is relevant for clinical research will become accessible.

The end-to-end platforms available for PHM can integrate data across devices and aggregate and analyze this data to ensure access to a complete patient record, thereby enabling better decision making.

What are the current challenges to adoption?

Despite the advantages of PHM, interoperability and current reimbursement models present obstacles.

Population health management solutions rely on the underlying data to create significant health interventions. Healthcare data doubles every 80 days, yet most of this data isn’t accessible. A lot of the data in the EHRs is unstructured, which makes it difficult to extract. Even with the recent interoperability mandates from the Office of the National Coordinator for Health Information Technology (ONC), not all the data will become accessible. A lot of the research-grade data that is relevant for complex interventions won’t be accessible immediately and eventually will be rolled out.

Changes also are needed in reimbursement models. Current healthcare models are based on the principle of fee-for-service, which are more focused on promoting volumes and dealing with illness than delivering value by promoting overall health. There is very little incentive to implement preventative and holistic care strategies, engage with patients, and encourage them to take charge of their health.

Creating a successful PHM strategy

Here are a few measures that organizations can take toward PHM success:

  • Integrate PHM with the broader interoperability strategy – This will draw the maximum benefit out of the available pool of data. It is a journey that requires both long-term and short-term strategies that are informed by data
  • Take proactive steps to include risk-based contracts and bundled payment models – These are critical to first understanding the costs of care. This includes adopting value-based payments and understanding the cost implications in a population health management setting, which means looking beyond single episodes with patients
  • Actively invest in integrated care solutions – These integrated care solutions bring together all parties involved in delivering healthcare, coordinate their services by sharing information, and transform healthcare into a seamless experience for the patient. Increasingly, this care is moving away from emergency department visits and lengthy hospital stays to more accessible and less costly settings in homes, schools, and at work. Technology adoption is critical to delivering this level of “connected health”
  • Invest in patient engagement as an essential part of the broader population health strategy – This will help organizations capture and utilize patient-generated health outcomes data, enable patients to participate more actively in their health outcomes, make regular wellness initiatives a part of their daily routine, and further improve medication adherence

How have you planned your PHM strategy? To share your experiences and learn more about PHM, reach out to Priya Sahni, [email protected].

The Changing Face of the CRO: Becoming the Everything Store for Decentralized Trials | Blog

On February 24th, 2021 we saw an announcement of one of the largest mergers/acquisitions that the CRO space has ever witnessed. ICON, the Dublin-based global CRO, announced that it has entered into a definitive agreement to acquire rival North Carolina-based PRA Health Sciences in a deal valued at US$12 billion. The deal, which makes the combined entity the second-largest CRO, next only to IQVIA (itself a merger of IMS Health and Quintiles), is one of the many instances of the rapidly consolidating CRO industry, accelerated by COVID-19.

Pushing the gas on decentralized trials

While there are a lot of potential synergies in this acquisition, such as minimum overlap in terms of geography, deeper therapeutic capabilities, and broader service offerings, one important takeaway from this acquisition echoed by Dr. Steve Cutler, Chief Executive Officer of ICON, is the shift towards Decentralized Trials (DCTs).

With decentralized trials gaining importance, thanks to the pandemic, there has been an increasing focus from CROs to shore up their capabilities and develop an integrated solution. For instance, Bioclinca and ERT recently announced a merger that enabled the combined entity to provide holistic solutions in eCOA, imaging, and clinical trial management solutions. ICON, through this acquisition, has set out to achieve an integrated offering in DCTs as well. It seeks to combine its home health services, site network, and wearables technology with the mobile health and connected health platforms and other real-world data solutions from PRA Health Sciences.

Becoming the everything store for decentralized trials

Traditionally, a CRO was considered a business process service provider, managing trial operations in regulatory, safety, and clinical conduct. Very few offered technology solutions along with business process services as this was often considered the forte of product vendors such as Oracle Health Sciences and Medidata. However, with the pandemic halting clinical trials, stakeholders analyzed how to restart paused clinical trials by virtualizing certain components of the trials through some short-term fixes, such as use of eConsent and eCOAs solutions, resulting in an uptick in DCTs.

Initially, partnerships had been the preferred route for CROs to support DCTs, for example, the Covance partnership with Medable wherein Covance’s patient and site interface would be powered by Medable’s DCT offerings. However, the recent M&A activity suggests that CROs are now considering adding product capabilities to enable DCTs by acquiring product players (such as what Bioclinica did with ERT) or by acquiring CROs with strong technology capabilities to support such trials (such as ICON and PRA Health Sciences). The result – offering a one-stop-shop solution to support DCTs, as highlighted in the visual below.

Figure 1: A one-stop shop solution for supporting decentralized trials

A one-stop shop solution for supporting decentralized trials

The advantage of such an integrated solution is that it augments the CRO’s value proposition to conduct DCTs – integrating platforms, services, site networks, and data capabilities, all into one place. Such CROs can now provide patient recruitment, engagement, and retention services (which has traditionally been their stronghold) using the underlying DCT suite through which the patient can enroll, record clinical outcomes, and engage in video consultation with the doctors/physicians. Additionally, they can also provide auxiliary support services, such as the provisioning of devices used for remote patient health monitoring and offering home nursing services aimed at reducing or eliminating patient visits to trial sites, medical record review services to check for completeness, accuracy, and compliance of medical data, and remote CRA services to oversee the DCT.

Implications for CROs

While, at first, the advantages of an in-house DCT suite seem to improve the value proposition for the CRO, it is also pertinent to note that in this scenario, CROs are also competing directly with DCT product vendors such as Medable and Science 37. The key challenge for CROs would be in convincing clients who still hesitate, while adopting technology offerings given their business process services heritage.

CROs aiming to walk down the acquisition path should keep the following pointers in mind:

  • Innovate or perish: CROs would be competing directly with product vendors – an industry notorious for innovation. Investments aimed at improving the product quality, product enhancements, and fixing issues would be critical to win client trust
  • Incorporate success stories: Showcasing client success stories and case studies will reduce client hesitation to adopt the one-stop DCT solution and drive increased product uptake
  • Offer innovative commercial constructs: Traditional ways of contracting (for example, per study or volume-based constructs) may not work with DCTs. While offering clients a BPaaS construct, check for risk-sharing agreements as clients appreciate vendors who showcase skin in the game

Looking into the crystal ball

The DCT space is ripe for disruption and the string of M&A activities shows the increasing emphasis that CROs are putting on DCTs. As efforts to improve the value proposition intensity and innovation ensue, the industry can expect more tuck-in acquisitions and even some mega-mergers, such as ICON and PRA Health Sciences, to continue well into the future. What are your thoughts on this? Let us know at [email protected] and [email protected]

Amazon HealthLake: A Step Further in AWS’ Healthcare Strategy | Blog

It’s been close to a month since Amazon Web Services (AWS) announced Amazon HealthLake at its 2020 annual (and virtual) conference. After observing the reactions from various industry participants, we thought it was time to offer our opinion.

Amazon HealthLake is a HIPAA-eligible service that aims to support interoperability standards and further drive the use of big data analytics in healthcare and life sciences. The service is essentially a data lake tailored for the healthcare and life sciences industry. It will aggregate an organization’s data across various silos and disparate formats into a centralized AWS data lake, and automatically normalize this information using machine learning. It will be capable of identifying each piece of clinical information and tagging and indexing events in a timeline view with standardized labels so they can be easily searched. This structured data can then be offloaded to a service such as Amazon SageMaker to train machine learning models for advanced analytics. HealthLake will also structure all the data into the Fast Healthcare Interoperability Resources (FHIR) industry standard format to enable data sharing throughout the organization.

Exhibit 1: Amazon HealthLake

Amazon HealthLake

Source: AWS (https://aws.amazon.com/healthlake/)

What’s in it for the healthcare and life sciences industry?

This is definitely a positive step for AWS to showcase an industry-specific solution for its clients and prospects. Amazon HealthLake provides a contextualized solution for addressing some critical challenges the healthcare and life sciences industry is facing, namely working with siloed, unstructured, and incomplete data stored across multiple systems, lab reports, medical images, insurance claims, and time-series data (for example, heart ECG or brain EEG traces.) Putting data at the center of the business allows the development of innovative products and services and provides the opportunity to revolutionize business models. AWS’s approach enables healthcare industry professionals to focus on mission-critical activities while it manages the data complexity.

Some of the key use cases for HealthLake include:

  • Payers – HealthLake will help health insurance companies predict more accurate insurance premiums, design data-driven insurance policies, and carry out effective claims management by bringing together a complete view of a patient’s medical history.
  • Providers – Healthlake can integrate with other AWS machine learning and analytics services, like Amazon SageMaker and QuickSight, to improve efficiency and reduce hospital waste. Some of the core use cases include population health management, clinical decision support, revenue cycle management, scheduling optimization, reducing unnecessary procedures, and addressing privacy and security requirements.
  • Pharma/Biotech – Clinical researchers are struggling with ever-increasing volumes of data from trial sites, patients, CROs, and other vendors, as well as from newer resources like EHR and wearable technology. HealthLake can help life sciences enterprises revolutionize data-driven R&D, advance clinical research with predictive analytics, and enhance pharmacovigilance.

HealthLake fits perfectly in Amazon’s data-hinged healthcare strategy

Amazon is aiming to transform healthcare by putting a well-developed range of integrated technology solutions supported by a second-to-none data asset, similar to its disruptive approach in the retail industry with low costs, high customer convenience, and a great recommendation engine. A key prong of its strategy is healthcare cloud computing, as payers, providers, and life sciences enterprises adopt more cloud computing services to stay on top of the rising volume of patient data.

Amazon HealthLake is another sign that AWS views healthcare as an industry with massive growth potential for its cloud services. AWS has been steadily rolling out HIPAA-eligible computing tools over the past few years in a race with Google Cloud and Microsoft Azure as the industry cloud war intensifies in the nascent healthcare cloud computing space. ​In 2019, the company announced Amazon Transcribe Medical, a voice transcription service for physicians that inputs text directly into medical records. In 2018, it introduced Amazon Comprehend Medical, a service that uses AI to mine medical records for information that can be used to improve patient treatment and reduce costs.

While AWS’s long-term strategy for healthcare is anyone’s guess right now, it will certainly be an interesting player to watch as well as an exciting one to partner with and compete against.

It’s Time for IT Operating Model Transformation in the Medical Device Industry | Blog

As the world is working to contain the spread of COVID-19 through safety measures and vaccine development, the medical device industry also is starting to show signs of recovery from the pandemic’s impact. The decline in elective procedures hit medical device organizations’ revenue hard in the first half of 2020. But increasing demand for COVID-19 diagnostic tests is stabilizing growth and compensating for the negative impact on routine testing procedures. To support growth dynamics and ensure a stable recovery, initiatives focused on cost reduction and operating margin optimization are the top priorities for most medical device organizations. For example:

  • Stryker is looking at organization-wide cost transformation for better margin expansion.
  • Medtronic announced its restructuring plan to save up to US$475 million per year.
  • Baxter expects to achieve an operating margin of 23-24% by 2023 through cost optimization.

 How can IT operating model transformation help?

To achieve significant cost savings, medical device companies need to scale their digital transformations to reap maximum benefits, which mandates IT operating model transformation. Based on a recent survey we conducted with 200 CXOs, 80% of firms that adopt an IT operating model transformation believe they’re on their way to establishing market leadership in their respective industries, expanding to serve new market and customer segments, and achieving over one-and-a-half times more cost savings than those that haven’t initiated a similar transformation. An enterprise-wide IT operating model transformation could help medical device companies realize cost benefits and maintain a competitive edge in the market.

Yet, according to our 2020 research, nearly 78% of enterprises fail to implement their digital transformation as envisioned.

What are medical device companies doing wrong?

Most medical device companies that are transforming IT achieve success in running pilot projects but fail to realize the same impact across the breadth and depth of their enterprises, because they equate IT transformation with either technology overhaul or operating model transformation, instead of pursuing them together. Exclusively focusing on technology transformation fails because it is a siloed approach that relies too much on technology without integrating the necessary operating model changes. On the other hand, changes in only the operating model result in superficial restructuring of business units that are focused on driving tactical and incremental efficiencies, eventually leading to a plateau phase. Clearly, companies need to embrace a balanced focus on both technology and operating model transformation to scale and sustain the transformation benefits.

What’s the best approach to IT operating model transformation?

The exhibit below is a framework that outlines the strategy and solution elements that enable an IT operating model transformation. Medical device companies can leverage this framework as a blueprint to design a holistic, best-in-class approach across both strategy and solution design.

Everest Group’s Target IT Operating Model Framework

Everest Group's Target IT Ops model framework

When creating the strategic roadmap, medical device enterprises should articulate a vision statement that ties together both business and IT objectives, and also carefully consider how to communicate the vision across the organization. Building an adaptable and agile organization that is resilient and collaborative is instrumental in this long journey, as 70% of enterprises believe organization structure is a barrier to scaling digital initiatives. Furthermore, effectively resourcing the IT operating model transformation and monitoring performance through cross-functional, outcome-based business metrics are keys to its success.

To complement the well-defined strategy with a strong solution framework, medical device companies should establish a strategic partner ecosystem with a fit-for-purpose portfolio of vendors. Traditional IT sourcing partnerships with a cost-centric model should evolve to a value-adding, strategic model focused on driving innovation and enabling business value. To truly scale the digital transformation and break up siloed investments, they should identify strategic partners that will equip them with the right talent, and scale the adoption of relevant next-generation technologies, so that – together – they can drive innovation with a common objective of achieving the defined vision.

As medical device organizations embark on their IT operating model transformations, we suggest a three-stage approach:

  • Lay out the building blocks by painting an organization-wide vision and introducing the agile way of working by building integrated multidisciplinary teams.
  • Enable the IT organization with the right solutions to become a business value orchestrator.
  • Scale the impact by synchronizing effects across solutions and constantly monitoring progress through well-defined business metrics.

Please share your views on IT operating model transformation with us at [email protected] and [email protected].

BioClinica and ERT to Merge: Perspectives on Potential Synergies | Blog

On December 10, 2020, ERT, a clinical end-point data solutions company, announced its merger with BioClinica, a clinical trial management and imaging solutions company. The goal of the resulting enterprise will be to integrate the best of both worlds – ERT’s expertise in electronic Clinical Outcomes Assessment (eCOA), therapeutic expertise in cardiac safety and respiratory, and clinical endpoint measurement through wearables, with BioClinica’s expertise in imaging and clinical trial management solutions. The merger will equip the combined company to deliver data analytics, insights, business intelligence, virtual patient visits, and technology solutions to its clients.

In analyzing this development, we’ve taken a look at the hottest topics in the life sciences industry right now – decentralized and virtual clinical trials.

Virtual clinical trials – a revolution catalyzed by the pandemic

A virtual clinical trial is one in which certain parts of the clinical trial are conducted outside a clinical site, such as patient consent capture, trial data capture, or patient monitoring through sensors or wearables. The benefits to the pharmaceutical company include cost savings, better patient recruitment and retention, and improved data quality.

Earlier this year, we published a blog predicting that the 2020s would be the decade of virtual trials. It seems we were way off the mark – by about nine years. The year 2020 has already seen its fair share of virtual trials, as clinical trials that were put on pause due to lockdown restrictions were rescued by being converted to fully virtual or hybrid trials, such as cases in which clinical experts visited patients at their residences to collect vitals or samples, reducing delays.

#NoGoingBack

The virtual trial momentum isn’t temporary, and there’s increasing focus on virtual trials, even among investors. Not only this, many in the industry have pledged to preserve the progress they’ve made in clinical research due to the pandemic, including virtual trials.

On the same day the news of the merger was announced, the Decentralized Trials & Research Alliance (DTRA) was formed to unite stakeholders with a mission to make clinical trial participation widely accessible by advancing policies, research practices, and new technologies in decentralized patient-focused clinical research. Companies that are part of this alliance include technology vendors such as Medidata Solutions and Oracle Health Sciences, pharma companies such as Pfizer and Roche, CROs such as Parexel and Syneos Health, and others such as Amazon and the US Food and Drug Administration.

M&A and investment activity has increased, too. For example, Medable and Science 37 each received funding during the pandemic to advance their virtual trial offerings. And in November 2020, VirTrial, a telehealth platform for managing decentralized and virtual clinical trials, was acquired by Signant Health, a Clinical Trial Management System (CTMS) vendor, thus augmenting its virtual trial capabilities.

Clearly, virtual trials are a ripe area for M&A and investment activity given their disruptive capabilities and benefits. And we continue to expect more acquisitions, funding, and collaboration in this space in the near future.

What this all means for the merger

Our recently concluded PEAK Matrix assessment on clinical development platforms pointed out that BioClinica’s Cloud platform for clinical development does not have the capability to support virtual trials; we said it needed to invest in remote monitoring and eCOA capabilities to deliver on virtual trials. However, the solution does have a broad set of capabilities in the clinical, regulatory, and safety value chains.

As a result of the merger, however, BioClinica will be able to offer virtual trial capabilities to clients. ERT is one of the leading eCOA providers and through its wearable and sensor data capture capabilities, it is well positioned to conduct virtual trials in certain therapy areas. And it will be able to use the BioClinica Cloud offering to give clients a holistic clinical development experience, a win-win-win for ERT, BioClinica, and their clients.

Exhibit 1 shows the combined solution landscape.

Exhibit 1: The merger synergies

bioclinica

The merged entity will be able to showcase an end-to-end clinical development platform with enabling layers for virtual trial conduct. This move is definitely the right direction, at the most opportune time, and is just another sign of increasing interest in decentralized and virtual trials.

What are your views on this merger? Let us know your thoughts at [email protected] and [email protected].

Clinical Development End-to-End Platforms: Are We There Yet? | Blog

As part of our research for our recently published Clinical Development End-to-End Platforms – Vendor Landscape with Products PEAK Matrix® Assessment, we noted a distinct accelerating trend: product vendors are increasingly branding products end-to-end clinical development platforms. Product vendors are consolidating all of their clinical development point solutions into a unified platform: Accenture INTIENT, Cognizant Unified Clinical Platform, IQVIA Orchestrated Clinical Trials, Medidata RAVE, Oracle ClinicalOne, TCS Advanced Drug Development (ADD) platform, and Veeva Vault are all being pitched to clients as end-to-end clinical development platforms.

Definition of a clinical development end-to-end platform

An end-to-end clinical development platform includes all of the solutions necessary to perform clinical/safety/regulatory activities with unified data layers that ensure the data is in sync, rather than in siloes. Exhibit 1 is our view of an end-to-end clinical development platform, which consists of digital touchpoints that allow various users access and support core modules to perform clinical startup, conduct, and closeout; regulatory; and safety activities. It also includes tenets that make it a platform, such as modularity, scalability, interoperability, and supporting a unified data integration layer.

Exhibit 1: Everest Group’s view of an end-to-end clinical development platform

end to end clinical development platform

Pharma enterprise view of an end-to-end clinical development platform

Spoiler alert: Pharma enterprises aren’t convinced.

The potential benefits that vendors tout include fewer data silos, lower total cost of ownership, and a rationalized product landscape, which reduces the need for integration and custom development activities.

We agree that these are pretty solid business cases for adoption. Except, pharma executives don’t believe it. Through interviews with 25 pharma stakeholders engaged in clinical development and buyers of clinical trial products, we found that an astonishing 92% aren’t convinced that an end-to-end clinical development platform currently exists. And that presents the next big challenge – only 28% of these organizations would opt for an end-to-end platform if it existed.

The reason? Credibility.

These buyers say that, though the vendors are marketing products as end-to-end platforms, they believe the platforms lack functionality such as modularity, a unified data layer, or interoperability even within their own suite of solutions. They are yet to be convinced about the RoI of adopting such a platform. Buyers further say that most vendors struggle with a support services organization that’s in line with the unified platform view. That means that the support organization is still organized in silos, and the platform users would still have to contact individual solution proof of concept individuals with issues they need solved, thus diluting the benefits of a unified platform.

Other challenges buyers cite include:

  • A preference for a best-of-breed approach: Buyers prefer established leaders for individual components, as they don’t believe that a single vendor is considered best-in-class across the clinical product suite.
  • Maturity: End-to-end platforms are relatively new, and buyers lack conviction about their functionality.
  • Aversion to rip and replace: Buyers are resistant to change and hesitant to replace existing, well-performing systems with a new system.
  • Existing long-term commitments: Some pharma enterprises already have long-term commitments with their current clinical product vendors, which deter adoption of a single-vendor system.

So, how do product vendors drive adoption of an end-to-end platform?

Clearly, convincing buyers to adopt an end-to-end platform is going to be an uphill challenge. To drive adoption, vendors need to embrace a multi-pronged approach:

  • Build from the ground up: Vendors need to realize that simply taking existing point solutions and connecting them together to form an end-to-end platform won’t work. Rather, building one from the ground up will greatly enhance interoperability, offer ease of use, and improve user-centricity.
  • Build business cases: Vendors need to create success stories and case studies for a platform-led approach to help influencers build a business case for adoption. The articulation of business benefits, future technology roadmaps, and showcasing testimonials will move the conversation on end-to-end platforms.
  • Co-innovate: Invest in building relationships by exploring improvements in platform capabilities and user centricity, while striving for interoperability, flexibility, and modularity to help drive adoption.
  • Find innovative commercial constructs: Pivot the pricing options to risk-sharing or outcome-based constructs. Also, given that the needs of big pharma are different from small and mid-sized pharma, consider differentiated commercial constructs to increase reach.

Driving change takes time. And because enterprises are change averse, they’ll need a lot of convincing before they can start to think seriously about adopting a single platform for all their clinical development needs.

In your opinion, what will it take for the industry to move the needle toward end-to-end clinical development platforms? Please reach out to us with your views at [email protected] and [email protected].

Health Insurance Open Enrollment Period (OEP) 2021: Key Changes, Challenges, and Opportunities | Blog

“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” – Charles Darwin

Charles Darwin’s famous words aptly describe what healthcare payers need to do in the times of COVID-19. The pandemic’s disruptive nature has forced the industry to accelerate adoption of many concepts –  such as telehealth – that had earlier been considered at least half a decade away from becoming mainstream. The changes that the US Centers for Medicare and Medicaid Services (CMS) has proposed for the health insurance Open Enrollment Period (OEP) 2021 are a clear indicator of these transformative times. The objective of these changes – such as the expansion of telehealth coverage, more transparency through regulations such as the Interoperability and Patient Access rule, and changes in risk adjustment / star ratings calculations – is accelerating the CMS toward its goals of universal coverage, transparency, member satisfaction, interoperability, and resilience.

As the OEP is a time when healthcare payers strategize about how to increase their enrollment numbers (in the short term) and achieve operational and business transformation (in the long term), it is imperative that payers not only understand the upcoming changes but embrace them through the right investments. OEP 2021 becomes effective November 2020, so healthcare payers are in the midst of the planning season.

In this blog, we take a look at the key changes CMS has proposed for OEP 2021 and analyze their impact on healthcare payers.

Exhibit 1: OEP 2021 proposed changes

Key changes suggested by CMS for OEP 2021

The impact of CMS-proposed changes on healthcare payers

CMS’ recommended changes for OEP 2021 are likely to impact healthcare payers in multiple ways:

  • Shift in membership and profit pools: The change in healthcare payers’ membership bases due to factors such as rising unemployment (which has reduced the employer-sponsored plan base) and the enrollment of End-stage Renal Disease (ESRD) patients in Medicare Advantage (MA) plans is likely to increase healthcare payer costs.
  • Member transparency and control measures: OEP 2021 has a slew of changes aimed at ensuring transparency through data sharing with members/patients via APIs and third-party apps. These changes include mandating the use of Real Time Benefit Tools (RTBT) for Part D plans and rules requiring plans to disclose the measures used to evaluate network pharmacy performance. It is clear that the CMS wants health plans (particularly MA Part D in this case) to invest in technology, data sharing, and reporting to enable the next phase of member-centricity in healthcare.
  • Medical Loss Ratio rebates support: Administrative Loss Ratio (ALR) / MLR has always been a pain point for healthcare payers, as an unfavorable ratio implies refunds and complex readjustments. With the CMS offering some rebates to payers in terms of how they calculate MLR, payers are likely to invest in improving care delivery initiatives.
  • CMS reporting dilemmas: With the CMS pushing healthcare payers to share actual member/patient experience data for Star Ratings and Risk Adjustment score calculations, healthcare payers will need to invest more in member satisfaction.
  • Shifts in health plan benefit inclusions: Telehealth services are only one set of inclusions that payers need to think about incorporating in plan benefits. Many other areas merit attention, such as member support, personalized communications, reorganization of provider network, and plan tiering.

How can payers navigate the changes and what are the likely sourcing implications?

While OEP 2021 is just another milestone for the CMS to drive healthcare efficiency, it is also notable that the changes are happening in the backdrop of the COVID-19 pandemic. The timing presents healthcare payers with both challenges and opportunities. In fact, industry experts believe that if ever there was a time for payers to change, it is now. This means that payers need to prepare strategies quickly to navigate the CMS-proposed changes, as well as changes arising from the COVID-19 disruption. The strategies will, in turn, lead to changes in their sourcing practices, thereby creating opportunities for outsourcing them to service providers.

Exhibit 2 lists the strategies that, we believe, healthcare payers will adopt in the coming months and the sourcing implications for each of them.

Exhibit 2: Payer mitigation efforts and sourcing implications

Payer mitigation efforts and sourcing implications

For the outsourcing and third-party vendor community, this is the right time to help mitigate the impact of OEP 2021 and the pandemic on healthcare payers. Service providers should align their offerings with payer needs.

If you’d like to know more about OEP 2021 and its wide-ranging impact, please read our recently published viewpoint Open Enrollment 2021 Primer: What to Expect and How to Navigate in the Wake of COVID-19. You can also reach out to me directly at [email protected] if you have any questions or observations.

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