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Digital Transformation: 4 Moves Finance Leaders Can Make to Emerge Stronger

Digital Transformation: 4 Moves Finance Leaders Can Make to Emerge Stronger
Sonia Singh VP of Center for Consumerism at AVIA

In this time of crisis, the U.S. healthcare system has struggled to safeguard lives and suppress the COVID-19 virus, while buckling under financial strains, low consumer confidence, and the burden of persistent clinician burnout. And yet, the industry is experiencing an unprecedented digital transformation. Between regulatory changes and billions of dollars of investment into new disruptors, the stage is set for transformative change.

In the midst of uncertainty stemming from the pandemic, healthcare finance leaders need to partner across the C-suite to make critical decisions about the future. While the core tenets of growth, financial stewardship, and quality remain the same, health systems must tailor their strategies to the unique realities of today’s context.

How can the U.S. healthcare system emerge stronger from this crisis with durable, high-impact strategies? Input from hospital and health system leaders reveals there are 4 Big Moves that center around the goals of winning the consumer to grow share while capturing and delivering differentiated value to stay essential to payers:

1. Own the Onramp

2. Hyper-Personal Care Orchestration

3. Specialty Care Double Down

4. New Work

In the following overview of each of these Big Moves, I’ll explain how finance leaders can apply focus to their investment strategy in digital transformation. We know 89% of senior finance officers plan to make increased investments in digital. These moves can provide a cohesive framework that guides their investment strategy to allow hospitals and health systems to emerge stronger from the pandemic. The hospitals and health systems I work with are looking for ways to reinvent and reimagine their operating model and vision for the future. These Big Moves offer an approach that could guide these critical decisions.

Big Move #1: Own the Onramp

Finance leaders can help to “Own the Onramp” (Big Move #1) with investments and operational changes that enable a flexible supply-demand matching model, oriented toward anticipating consumer demand while allowing for optimization of capacity and existing assets to meet that fluctuating demand.

Owning the onramp allows health systems to win on access by improving convenience and optionality for the consumer across their care journey while optimizing existing assets and opening the opportunity to capture share beyond geographical boundaries.

Big Move #2: Hyper-Personal Care Orchestration

To deliver on Big Move #2, “Hyper-Personal Care Orchestration,” finance leaders can help to grow a health system’s analytic prowess with technologies that lead to a singular view of the consumer. Health systems can then stitch together data about a single individual (not a segment or population) across clinical settings, transactions, behaviors, and health information to deeply know the consumer at an n-of-1 level. Equipped with this data, a health system is better positioned to make consumer-focused decisions that are consistent, persistent, and predictive. They can understand who to reach, what to say when to hold back, and when to deliver unique prompts that will work for that specific individual.

With consumer data as the backbone, health systems must next focus on personalizing digital interactions (text, chat, voice) at their digital front door. By incorporating signals across the various patient interactions, the latest digital technologies in this area continuously learn, creating an ever-evolving personalized experience. They also allow health systems to build loyalty by consistently engaging patients even when they are not actively seeking care.

Big Move #3: Specialty Care Double Down

Big Move #3, “Specialty Care Double Down,” means investing in a digitally-enabled, frictionless experience for patients, providers, payers, and employers. It is concierge-level specialty care involving the patient, specialist, referring provider, and care team, orchestrated by digital. This frictionless experience boosts provider loyalty, increases access, and streamlines scheduling to promote a “closed-loop” referral process. The goal is to eliminate any unnecessary human intervention and waiting and allow multidisciplinary clinical teams to work at top of license. 

Unlike more generalized services such as primary care, specialty care typically requires coordination across multiple clinical teams in and out of the health system (employed or independent physician groups, diagnostic services, surgical facilities, physical therapy, etc.), resulting in a more complex patient journey. Adding to the complexity is the increased number of stakeholders: patients, families, referring providers, specialists, payers, and sometimes employers. Leveraging digital to collect data from and communicate with all stakeholders along the patient journey is the future of specialty care.

In order to execute on this move, analytic prowess again is a prerequisite to understanding the patient from a consumerism, clinical, and social/behavioral perspective. Health systems must then leverage that information to orchestrate expedited workflows and care paths in less acute care settings, even the home. New digitally-enabled models of care must be designed in a specialty- and disease-specific way. 

Also critical to Move #3 is transparent communication and information sharing with the referring provider. To develop referral loyalty and drive volume, health systems must keep a consistent and open line of communication with the referring provider, informing them on the progress of care and eliminating friction. Our financial models suggest specialty care referral leakage results in 10% to 30% in lost revenues, the equivalent of $160,000 per physician and this move reduces that risk.  Ultimately, executing on this move results in driving down costs and improving outcomes to promote value for patients, providers, payers, and employers alike.

Big Move #4: New Work

Finance leaders know traditional healthcare operating models are grounded in manual, labor-intensive processes that reduce operational efficiency and increase cost. These manual, labor-intensive activities are particularly prevalent in various back-office functions. The number of prior authorizations conducted nationally is estimated to have increased by 27% over a two-year period, growing from 143 million in 2016 to 182 million in 2018, according to the 2018 CAQH Index, and yet only 13% of prior authorizations are conducted fully electronically. At a cost differential of $11 per manual submission versus $3 for an electronic one, this represents an enormous savings opportunity.

Big Move #4, “New Work,” starts with a clear commitment to automation at the enterprise level. An effective automation strategy should involve an assessment of current shared functions, including end-to-end clinical asset management, revenue cycle, predictive workforce staffing, provider directory & credentialing management, IT operations, and other operational infrastructure. These functions should be compared and benchmarked not to other health systems, but to what defines world-class operational performance in other industries such as big tech, retail, and finance. These industries have already taken the steps to automate and have de-risked the adoption curve for healthcare. Looking to automation leaders in other industries reveals significant opportunities to institute modernized operational practices that integrate digital and physical operations, and institute a hybrid of human- and machine-based workforce.  

A well-crafted hybrid workforce architecture consists of a core strategy that complements humans with advances in automation to exponentially shift costs out of the system, particularly in labor-intensive, error-prone tasks such as clinical staffing.  Automation that compliments workers (i.e. robotic process automation, machine learning, artificial intelligence, etc.) have the ability to drastically reduce administrative functions while increasing the speed and reliability of tasks.

Executing on “new work” will yield sustainable competitive advantages, allowing health systems to win on margin by re-engineering their operating chassis and associated cost structure, ultimately making the health system essential to payers and employers.

About Sonia Singh

As a leader in AVIA’s Center for Consumerism, Sonia helps AVIA’s health system members frame their strategic vision around the modern healthcare consumer experience, prioritize their business needs, consult on digital opportunities and solutions, and support implementation efforts across the network. As part of AVIA, Sonia has advised several leading health system’s in AVIA’s network on their CRM strategy and implementation approaches. 

Prior to joining AVIA, Sonia was a senior director with PwC Strategy& as part of the healthcare strategy practice where she advised executive teams at top healthcare organizations on their strategy to address the opportunities driven by rising consumerism, technology innovations and regulatory challenges. Her clients spanned some of the nation’s leading health insurers, integrated care delivery systems, wellness providers and new entrants. 

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