The Future Must Be Less Wasteful, More Collaborative
Misaligned policies, medical necessity screening tools, and incomplete clinical data are chief contributors to rising claims denial rates. They’re a challenge that costs hospitals and health systems nearly $20 billion per year, according to a recent study. The costly problem is also an unnecessary one, since more than half of those denials are ultimately overturned.
This represents a significant waste of time and resources for both payers and providers, which ultimately touches the member, or patient, with frustrating delays, unexpected and rising out-of-pocket costs.
The healthcare industry simultaneously wrestles with how to deliver more affordable, patient-centric care across all areas.
Payers and providers are each turning to artificial intelligence (AI) to drive meaningful change.
The problem – Payers’ and providers’ siloed uses of AI have been compared to an arms race or battle of the bots, as though each side is in a race to the bottom to outmaneuver the other. This doesn’t advance the healthcare industry, however, because it perpetuates friction that was already grounded in misaligned incentives and lack of transparency and trust. These chasms have worsened in recent months.
Health systems, outraged patients, and payers themselves are now all calling for reform – that the “health system does not work as well as it should.” The shared acknowledgement of a broken system calls for a full-on paradigm shift for the industry.
The good news – AI is already being used in shared, more transformative and collaborative ways between payers and providers.
For example, shared use of AI can:
- Analyze vast amounts of claims data to identify patterns and trends, enabling payers to adjust billing policies and providers to refine their documentation and coding practices.
- Provide a common framework for both parties to work more effectively together to resolve issues, which goes a long way in building back trust and improving payer-provider dynamics.
- Create mutual time savings by bundling related prior authorizations into a single transaction.
- Automate appropriate cases based on historically agreed upon medical necessity decisions – up to 83% faster determinations in a national health plan time study.
Improvements are exponential when shared instances of AI are also used more proactively, aligning payers and providers on appropriate reimbursement decisions before the appeals process is initiated.
AI transformation – creating alignment earlier in the revenue cycle to prevent unnecessary denials on the back end, in this case – is easier said than done. That’s because it requires “rewiring,” according to a McKinsey report.
For companies to capture maximum impact from AI and other innovative technologies, they must execute comprehensively across six pillars, according to the report.
- Align senior leadership on a business-led digital road map
- Ensure they have the right talent
- Fine-tune the operating model to increase the “metabolic rate” of the organization
- Make technology easier to use
- Enrich and increase accessibility of data
- Maximize value capture by managing the transformation (change management)
And the above pillars must be driven by the entire C-suite, not just one or two roles.
What this means for payers – The size of the opportunity suggests leaders must be ready to respond to competitors who are first to successfully implement AI tools. For example, it would be an uphill battle if a competitor saved 20% on medical costs or administrative costs. Payers must ask tough questions now to prepare their organizations and emerge as leaders.
What this means for the struggling payer-provider dynamic – Health plan and health system leaders must decide if they want to stick to the status quo with siloed AI solutions, or if they want to lead by example with proactive, shared instances of AI instead. With 78% of hospital and health systems saying their experience with payers has gotten worse, it’s clear the problems are not just about saving time or money in the current healthcare industry. The path forward is about changing how both groups work together to create a more resilient future.
Conclusion – There is yet another pillar – a seventh one – for health plans to maximize the impact of AI by embracing a “collaboration is the new competition” mindset across the organization. Payers and providers should explore how they can jointly leverage transformative AI solutions to drive mutual benefits, improve administrative efficiency, and enhance the overall healthcare experience for patients. By taking a more comprehensive and forward-thinking stance on AI adoption, industry leaders can set a new standard for payer-provider collaboration.
