To survive the rapid increase in healthcare costs, payers need to focus on slimming down medical and administrative costs, a new analysis from McKinsey & Co. says.
The Sept. 23 analysis, "The gathering storm: An opportunity to reorder the healthcare industry," breaks down ways providers and payers can emerge from the pandemic stronger and weather increasing costs.
McKinsey analysts say payers have an opportunity to lead the transformation of care by adding more value-based care programs and transitioning care to more convenient sites, like home care and virtual care.
The analysts also advise payers to improve their own organization's productivity, including making internal processes more efficient, adding artificial intelligence and focusing on performance management.
"Beyond their own four walls, payers should seek ways to help reduce the 25 percent of national health expenditures spent on administrative expenses," the analysts write. "Known interventions could lower the level to 18 percent, a goal that payers are well placed to pursue in their role as orchestrators of the healthcare system."
Read the full analysis here.