AI in Healthcare and Pharma
VIEW THE REPORT PAGE
AI in Healthcare and Pharma
VIEW THE REPORT PAGE
Revenue Cycle Management
“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
CMS’ recommended changes for OEP 2021 are likely to impact healthcare payers in multiple ways:
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
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.
A form of monetization, data monetization refers to the use of an organization’s data as an economic asset to reduce costs and increase business value. Organizations can monetize their data by providing third parties data access, commonly referred to as direct monetization, or by using the insights derived from this data to improve their internal processes, known as indirect monetization.
One industry that has seen an exponential rise in data in recent years due to increasing digitalization is healthcare. Health records are increasingly moving to the cloud, and the use of wearables and smartphones has become almost ubiquitous. This digitalization has paved the way for data monetization in healthcare, and it is helping not only to improve clinical services but also realize financial benefits. A strong integration of data with technology is set to revolutionize value-based care and personalized medicine and introduce better care outcomes.
Let’s take a closer look at how data monetization, particularly direct monetization, works in healthcare.
Bilateral data exchange – Among the earliest data monetization models, bilateral data exchange enables organizations to sell their data to one or more parties. It has experienced high adoption over the years, but its scope for disruption is limited, as single entities become data owners, and there is no data-based innovation at an industry level. Such data exchange is also mired in controversy, as highly sensitive patient data flows freely between organizations.
A case in point is the deal inked between Google and Ascension in November 2019 to provide Google access to millions of Americans’ health records. It came under the US Department of Health and Human Services’ regulatory scanner just 48 hours following its announcement.
Open platforms for data exchange – In this model, data providers can sell their data to platform owners, while enterprises can test their innovations using the platforms. The platform owners become data custodians in this case. This model has high potential for disruption, as it facilitates industry-wide collaboration for data transfer. It is gaining popularity among innovators, researchers, and academic institutions for early-phase testing of new products.
Mercy Technology Services’ (MTS) Real-world Evidence (RWE) network is one such open platform. MTS combines large data sets generated by health systems with advanced analytics, and provides insights for thousands of medical products that make it to the market every year. The RWE network allows medical product firms to test their products in real-time and providers to test their clinical decisions to offer better patient care.
Open marketplaces for patients to sell data – The most controversial aspect about data monetization is the sale of patient data without obtaining patients’ consent. Patients are the ultimate owners of their health data, and thus it is highly debatable whether large organizations should be allowed to make money by selling or buying this highly confidential data.
Open marketplaces for patients allow them to directly sell their health data to any party interested in buying it. Open Health, for example, has launched a platform that allows patients to monetize their health data by connecting companies or research institutions with people who fit the criteria for different studies or analytics. Users can share their health records with pharmaceutical companies, health systems, and insurers for a fee. This model is gaining popularity due to secure data exchange practices, and as it helps resolve the ownership and privacy concerns accompanying other models
Open marketplaces for data exchange – In such marketplaces, data providers can sell data, while interested entities can find and access relevant data. The seller retains the ownership, and buyers simply obtain the permission to subscribe to this data. This model serves as a bridge between organizations that possess a significant amount of healthcare data and those that need it. Amazon Web Services (AWS) Data Exchange is one such open marketplace that allows AWS customers to browse through and purchase a variety of data sets offered by data sellers
In our opinion, this model has the highest potential to disrupt the data monetization market in the coming decade, as it facilitates industry-wide collaboration for data asset exchange.
It is, thus, amply clear that in their quest for data, organizations can’t afford to ignore the need to ensure data privacy. The US Health Insurance Portability and Accountability Act (HIPAA) establishes national standards to protect individuals’ medical records and other personal health information. It applies to health plans, healthcare clearinghouses, and healthcare providers that conduct certain healthcare transactions electronically. The debate around data privacy is likely to get fiercer in the coming years, and only data monetization models that can address this challenge are likely to succeed.
What has been your experience with data monetization? If you’d like to discuss your experience or data monetization and how it applies in healthcare, please reach out to [email protected] or [email protected].
On July 21, 2020, HealthEdge announced its acquisition of The Burgess Group, which we recently recognized as a Major Contender on our Healthcare Payer Payment Integrity Solutions PEAK Matrix™ Assessment 2020.
Here’s our take on this deal.
The strategic intent behind the deal
The healthcare payer industry is plagued with notoriously old infrastructure. While healthcare payers are working to increase data transparency, offer member-centric solutions, and adopt a value-based care model, they’re obstructed by high reliance on dated, disconnected, and non-interoperable systems. Cost management is another endemic issue impacting the payer industry. One of the key reasons for this financial distress is the high share of expenditure on administrative costs in the US healthcare system, driven by redundant processing and limited automation. To address these roadblocks, payers are increasingly leveraging a core-admin platform approach.
The interesting fact here is that medical costs account for 80-85 percent of the total payer cost, while only 15-20 percent are admin and IT costs. Payers leave a lot of value on the table when they manage these costs separately. Payment integrity is one of the principal tools to manage medical costs and, hence, is a key functionality that payers value in core-admin platforms. By adding The Burgess Group’s offerings to its own expertise, HealthEdge’s goal is to create an integrated claims processing, payment integrity, and adjudication platform that addresses both administrative and medical expenses.
Another point worth noting is that Blackstone completed the acquisition of a majority stake in HealthEdge in April 2020, giving HealthEdge the financial muscle it required to make the right investments to expand its product offerings and compete with the other big players such as Cognizant (TriZetto), HM Health Solutions, Mphasis, and NASCO.
Unpacking the companies’ synergies
The acquisition offers several synergies.
Ram Jagannath, global head of healthcare at Blackstone Growth and chairman of HealthEdge, has stated that the acquisition of Burgess is a great strategic fit for HealthEdge to enter the large, high-growth payment integrity market, helping address the estimated $1 trillion in wasteful spending in the US healthcare system.
We are positive about this deal, particularly for what it means to the market and current market demand. However, it remains to be seen how HealthEdge leverages this investment, while also mitigating the major concerns that enterprises cite around using platforms, including integration, interoperability, scalability, and user experience.
Platforms that can address medical costs while encouraging data-driven process efficiency are generating growing interest in the market. If HealthEdge can partner with payers to create tightly knit contracts with strong risk mitigation and guaranteed savings clauses, this comprehensive platform can unlock tremendous value for payers. We’ll be tracking this one closely.
Reach out to me at [email protected] with your thoughts on this acquisition or the market in general.
With the world facing an unprecedented health crisis, one group shouldering the brunt of the challenge is our healthcare workers, who are battling the threat from the front lines. Under the circumstances, their interactions with pharma sales representatives have naturally taken a back seat, with many healthcare providers closing down access. This reality is accelerating pharma firms’ shift toward a virtual sales organization, and not only for the short term.
The amount of time, access, and influence hospitals have been willing to grant pharma sales reps has been dropping for quite some time now, and face-to-face engagements have declined significantly over the years. According to a survey from DRG’s 2019 annual ePharma Physician Report, 54 percent of physician respondents said they saw pharma reps in person in 2019, down from 67 percent in 2018.
Source: ePharmaPhysician® US 2019
Today, given the COVID-19 pandemic, healthcare providers, including hospitals and clinics, are increasingly refusing in-person visits from pharma sales reps, and pharma companies such as Biogen and Global Blood Therapeutics have themselves suspended face-to-face meetings. In turn, virtual interactions between reps and healthcare providers are increasing, with BMS, GSK, Pfizer, and Sanofi – to name a few – scaling up the use of remote technology to ensure continued engagement with healthcare professionals. We expect this progress to continue even after the pandemic’s threat has abated.
However, not all pharma firms are well equipped for this shift; there’s a wide degree of variance when it comes to the maturity of their virtual healthcare provider engagement capabilities. Not surprisingly, the many digital solutions that exist in the current market can help them. Several software vendors and IT services providers have developed innovative CRM solutions, such as around personalized engagement, interactive detailing, and live video through intuitive mobile apps and web portals, in order to effectively engage healthcare providers virtually.
In response to the crisis, many vendors have recently begun to enhance product functionality. For instance, Veeva recently introduced new capabilities for remote drug sampling in Veeva CRM Engage Meeting. The company also announced several alliances for digital field engagement.
Yet, going forward, getting virtual sales right could be a major deciding factor for whether or not pharma firms are able to convert extensive R&D efforts and patent wins into commercially successful therapies.
Here are our suggestions on how pharma firms can successfully pivot to a virtual sales :
While healthcare workers are bound to be overburdened and under tremendous stress in these times, this is also a tough time for pharma sales representatives. Assertive sales behavior might come across as being insensitive, but at the same time, healthcare practitioners need to be kept aware of new therapies for ailments apart from COVID-19. Shifting to a virtual model represents a huge change. Engaging with empathy and showing flexibility in working around physician schedules will be paramount in the near term, as pharma enterprises come to grips with what could potentially be a new, or next, normal.
Between 2018 and 2019, the US healthcare industry experienced a five-fold increase in patient data breaches, with hacking accounting for more than 88 percent of them. More than half of the targeted entities were healthcare providers, primarily due to inadequate investments in cybersecurity and the negligence of unsuspecting employees.
Patient data is sacrosanct for the healthcare industry given its highly sensitive nature. In fact, patient Electronic Health Records (EHRs) are priced 10 times higher than credit card information on the dark web. Given that healthcare data is a lucrative target for cyber attackers, healthcare CXOs need a guided approach to secure their patients and enterprises against cybersecurity threats.
Healthcare enterprises are becoming increasingly vulnerable to attacks as patient-centric care takes center stage and care delivery models such as mHealth and remote monitoring become commonplace. So, they must identify their crown jewels – patient data, care delivery applications, and medical devices, among others – across the value chain and allocate their cybersecurity investments accordingly. To do so, they need to contextualize threat intelligence, understand attackers’ behavior and intent, and make appropriate investments in cybersecurity to increase preparedness and reduce response time in the event of a breach.
To hack-proof their estates, healthcare enterprises need to adopt a value chain-led view to identify and alleviate cybersecurity concerns across four areas:
Here’s an example of how a healthcare provider can prioritize its IT security investments in accordance with its business priorities by taking a value-chain view.
Once healthcare enterprises have identified what to do to bolster security across the value chain, they need to think about how to do it. We recommend a three-phased approach:
US-based Trinity Health adopted an enterprise-wide data security strategy in the aftermath of the WannaCry ransomware attack in 2017. It implemented an asset management plan to govern its connected devices and networks to improve its response to adverse events. It also instituted an event response team to isolate, contain, and deploy patches when threats were identified. Realizing that its employees could also be vulnerable targets, Trinity Health initiated exercises to help them recognize and respond to cybersecurity threats. And that’s not all; it also leveraged the National Institute of Standards and Technology (NIST) Cybersecurity Framework to redesign its procurement process, technology and security assessments, and supplier evaluation responsibilities to recover in case of actual emergencies.
In an industry committed to digital transformation and increasingly embracing patient-centric care, healthcare providers must devise a well-thought-out cybersecurity strategy to protect their crown jewels across the value chain. This is the only way they’ll retain patients’ trust, drive brand value, and ensure better outcomes for all stakeholders involved.