Strategic Thinking for Leaders, The Systems Thinking Approach
A design thinking approach to care and performance for the · [ Design thinking approach to care...
Transcript of A design thinking approach to care and performance for the · [ Design thinking approach to care...
A design thinkingapproach to care and
performance for theChief Medical Officer
An EXL whitepaper
Written by
Dr. Gerald OsbandChief Medical [email protected]
1 © 2016 ExlService Holdings, Inc.
[ Design thinking approach to care and performance ]
In light of that drive for efficiencies, CMOs
need to provide health plans with insights
into innovative problem solving. CMOs
must align the health plan with a broad
base of members with diverse health
situations and needs. This alignment
requires a high level of thought leadership
and innovative problem solving. The
developing field of design thinking is a
new area in which a CMO may engage
in order to more astutely provide cost
effective and quality focused clinical
programs and services.
Design thinking is a new strategy for
solving complex problems through a focus
on end-user needs and requirements
in order to more fully understand a
problem and develop comprehensive and
effective solutions.1 For a CMO faced with
a changing healthcare market that means
retooling organizational processes with the
health plan member in mind. It requires
identifying and understanding customers’
latent needs and challenges.
Design thinking at work in health
In 2008, the Mayo Clinic became one of
the first institutions to employ the design
thinking method to enhance their patents’
clinical experiences.2 The clinic’s Center
for Innovation (CFI) uses design thinking to
revamp patient clinical experiences. Using
a design thinking approach, the Mayo Clinic
found that while the physical examination
is only a brief part of most patient
The health plan Chief Medical Officer (CMO) has a wide range of responsibilities, including strategic planning and development, operational management, financial planning, investments, compliance, and quality improvement. As the health insurance marketplace shifts towards value-based reimbursement and integrated products and services, the CMO is pressured to improve performance and innovation while controlling costs.
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[ Design thinking approach to care and performance ]
to control costs. After multiple iterations of
designing and testing new processes, the
CMO and team identified ways to reduce
expenses through improving the budgeting
process, optimizing service delivery, and
proactively setting metrics for management
of the expected process improvements.
The regional health plan provider saw 15%
savings in administrative costs.
In another example, a CMO and consulting
team collaborated with a design thinking
approach to improve the claims intake
process. After interviewing end users, they
learned that having the same personnel
manage claims for all products was
unmanageable. After several rounds of
prototype testing, the CMO’s team created
three specialized intake groups based on
appointments, the exam table itself is an
uncomfortable place for Q&A with doctors.
From this they built a new exam room that
separates the physical examination from a
collaborative space where the patient and
physician can discuss results or questions.3
As design thinking becomes more prevalent
in healthcare, CMOs should follow suit by
implementing it into health plan processes
and care management programs. Because
this approach identifies problems and
solutions as part of the process, it is
especially useful when problems have been
poorly defined in the past or previous efforts
have failed.
Some health plans have already
successfully employed design thinking. In
one case, a regional health plan struggled
Align target marginand budgetestimates
Serviceoptimization
Finalize pricingand budget
Execution andprocessimprovement
Development of enterprise targets by executive council
Identify underlyingactivities for in-scope
Identify costs for each activity, including staffand vendor costs
Engage in forums todiscuss opportunities to adjust service levels
Prioritize opportunitiesby function based on the agreed upon servicelevel and cost to serve
Develop plan to close gaps and impact defined levers
Finalize budget andenterprise targets
Five year view ofenterprise performance based on pricing decisions to date
Actuary will provide specific pricing-based analysis
Develop KPIs with leading and lagging indicators
Owners drive actionsto address gaps
Track accountability for execution and impact realization
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[ Design thinking approach to care and performance ]
regulatory and clinical complexity. This
allowed the health plan to better allocate
resources, meet regulatory requirements
and reduce costs associated with
transferring calls between agents.
There are multiple scenarios where health
plans have benefits from design thinking.
This strategy can be a powerful problem
solving tool for health plans, particularly
in areas such as care management and
revenue optimization. This paper will first
explore the design thinking process and
then highlight several areas where design
thinking can play a key role in member care
and operational excellence.
Implementing design thinking into healthcare processes
For CMOs looking to launch a design
thinking approach, the first step is a
research phase that involves empathetic
engagement with stakeholders, whether
members or plan employees depending on
who is directly affected by or involved with
the area that needs to improve.
Empathy is a crucial ingredient in design
thinking and requires understanding
stakeholders’ experiences, thinking
process and values, according to the
Institute of Design at Stanford University.4
This allows CMOs to truly dig into the root
problem. CMOs should draft their problem
To identify and articulate key expectations, problem areas/concerns through in depth understanding (said, unsaid)
Refine and/or optimize/redesign; Feedback loop
Prototype potential solutions; validate key assumptions and map back to desired outcomes
Generate multiple ideas to achieve desired business outcomes
Translate our understanding into client centric business outcomes across all stakeholders
Discovery
Design Thinking Key Objective
Interpretation
Ideation
Experimentation
Evolution
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[ Design thinking approach to care and performance ]
statements (such as “transferring new
customers between agents is decreasing
member satisfaction”) with the end user in
mind. CMOs and their teams then should
workshop scenarios and processes that
address the greatest number of needs
and can be accomplished within the
organizations constraints (such as time and
budget).
Next, the team uses a prototype process to
test it on a small scale, using feedback and
testing before implementing on a larger
scale. The prototype might go through
several iterations of testing before it is
implemented.
A structured design thinking process for the CMO • Identify and articulate key expectations,
problem areas, and concerns through in-
depth understanding
• Strategize with a wide range of stakeholders
to better understand customer needs
• Translate understanding into client-centric
business outcomes across all stakeholders
• Link low-level processes to quantifiable and
qualitative business outcomes, operational
risks and customer metrics
• Generate multiple ideas cross-functional,
cross-vertical solutions to achieve desired
business outcomes
• Prototype potential solutions; validate key
assumptions and map back to desired
outcomes
• Refine and/or optimize/redesign a feedback
loop to track performance and capture
lessons learned
Design thinking and care managementCMOs can apply design thinking across
a range of care management processes.
Because more than half of healthcare
spending is on behalf of people with
multiple chronic conditions,5 teaching
self-care benefits both the patient and the
health plan, yet average member program
participation rates linger at 25% on average.
For example, one company used a care
management plan to help members
of their health plan manage chronic
conditions such as epilepsy, lupus,
multiple sclerosis, Parkinson’s disease,
and rheumatoid arthritis. The goal of the
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[ Design thinking approach to care and performance ]
plan was to increase patient knowledge
about their conditions and teach them
self-management skills in order to avoid
unnecessary trips to the hospital. Each
person who enrolled in the plan was
assigned to a nurse who regularly assessed
their knowledge and self-management
skills. The company studied more than
16,000 patients to evaluate the care
management plan. They found that those
enrolled in the care management program
did not see a measurable increase in
their health care costs, while those who
were not enrolled saw increases between
$16,000 and $18,000 a year.6
Starting points to initiate an empathy-based
approach to solving a problem:
• What does your care team do today to
engage members to enroll and participate in
care management programs?
• What is the role of population health
management in improving outcomes and
reducing health care spend?
• Are care managers aware of the impact and
value their work has on improving member
outcomes and reducing costs?
• What are the redundancies or inefficiencies
across different programs?
• Are outcomes linked quality metrics for
revenue optimization?
With results like that, it’s easy to see why
a CMO might spend time and resources
creating innovative care management
plans. And there are many opportunities
– numerous potential areas in care
management that CMOs can develop and
integrate using design thinking. Here are
several examples:
Lowering costs on chronic conditions
When Kaiser Permanente researched their
health plan costs, their study revealed that
15% of members accounted for 35% of
costs, and that these members had one or
more of the following chronic conditions:
diabetes, asthma, congestive heart failure,
coronary artery disease, and depression.
As a whole, plan members averaged 250
hospital days per 1,000 members a year.
But diabetics were hospitalized at a rate
four times that. If those same diabetics
also suffered from chronic depression, that
figure doubled again to 2,000 hospital days.
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It cost Kaiser $4,000 more per year to treat
a diabetic than to treat the average patient.
Using design thinking, Kaiser discovered
that these members lacked proper
tools to manage their conditions. Kaiser
invested in a Care Management Institute
and leveraged a design thinking process
to divide plan members with chronic
conditions into risk categories, with the
lower risk members receiving most of
their treatment and ongoing care through
their normal primary care providers.
Higher risk members were assigned care
managers who arranged a series of visits
that included self-management training,
environmental controls, and tracked
medications.
Kaiser had good results: Over four years,
overall medical costs went up, but diabetic
patients stayed steady at a cost of $4,000
more a year than average.7
Medication adherence: a misunderstood care management technique
Part of care management is helping
patients adhere to their medication
schedules. Adherence can be particularly
difficult for the elderly: In the United States,
40% of people over 65 take more than 5
medications a day8, which creates major
adherence challenges as the number of
medications, timing, and various doses
can be confusing. In this example, design
thinking was used to create a service to
simplify medication dispensing for the
elderly.
Many solutions have been presented to
help people remember their medication.
These solutions range from reminder
apps on mobile phones to basic pillboxes
labeled with the days of the week. Using
empathy as part of the design thinking
process, a study found that none of these
solutions fully addressed the patients’
needs. Pillboxes still required too much
organization by the patient, and reminder
apps still required the patient to look for the
pillbox and take the right pill – plus have
the ability to use a smartphone.
Using design thinking to define a new
process, the group came up with a
service that delivers all of an individual’s
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prescriptions packaged into daily packs
labeled with the time of day that the patient
needs to take them. The packages can be
separated so the patient can take a small
set of pills with them as needed.
Finding care management talent
The decreasing pool of nursing talent
in the United States is one barrier to
care management, as nurses are often
employed as the care managers in
these programs. To overcome this
challenge, CMOs should evaluate the
care management capabilities of a wider
network of global clinical professionals
from countries such as the Philippines,
South Africa, and Colombia.
Design thinking can help evaluate these
new professionals as resources for
care managing, health and wellness
assessments, and other areas of care
delivery.
The opportunity is to frame the right
problem to identify for solution-building
across the care continuum. The following
are starting points to initiate an empathy
based approach to end users in regards
Inclusive participation with more collaboration around solution design
Support for non-standard solutions, creative approaches; strong support for ability to deal with ambiguity
Share information, resources and risk across stakeholder
Modular, flexible solutions and variable pricing models
Creatively combined integrated capabilities
Test-implement-refine modes
New global operating models
Focus on business outcomes beyond cost and SLAs such as growth, profitability, and risk)
Higher complexity and member centric
Link to ongoing technology transformation
Global process standardization – intelligent, automated, controlled
Shift to “As a Service” models
Multiple stakeholders and reducing competing expectations
The COM part of global transformation
A paradigm shift in expectations...
From a Clinical Operations Management (COM) solutioning perspective, CMOsare seeking highly customized, complex and integrated solutions
is changing how clinicians areevaluating resource management
CMO driven
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to current processes in care management
across CM and DM programs:
• What are the most effective speed to
market programs under the ACA?
• What does your care team do today to
engage members to enroll and participate
in care management programs?
• What is the role of population health
management in improving outcomes and
reducing health care spend?
• Are care managers aware of the impact
and value their work has on improving
member outcomes and reducing costs?
• What are the redundancies or
inefficiencies across different programs?
• Are outcomes linked quality metrics for
revenue optimization?
Design thinking and revenue optimizationMost health plans use measurements
such as Medicare Advantage’s Star Rating
to give scores to variables and decide
which ones to improve. Because the Star
Rating compares plans and distributes
payment based on performance, CMOs
are particularly focused on raising scores
as part of revenue optimization. In this
case, revenue optimization in health plans
involves figuring out which variables
are performing best, and which ones to
tweak to increase the overall return on
investment. For example, a CMO might take
a look at all scored variables and decide to
invest time and money improving the lower
metrics. But upon careful consideration,
investing less time and money to greatly
improve the medium-ranked metrics might
be more effective in optimizing revenue
and raising the overall health plan score.
Using design thinking in revenue
optimization usually includes a diverse
group of stakeholders coming together
to consider care performance, member
satisfaction, analytics, and reporting. The
CMO should consider consulting clinicians
in addition to financial and executive
associates. This diverse participation
will reduce the typical siloed approach.
Because the revenue optimization issues
affect the organization as a whole, it makes
sense to give these disparate groups the
opportunity to work across functional
lines to define issues and discuss possible
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solutions. Design thinking allows each
stakeholder group to submit their own
revenue optimization viewpoints and
discuss how to develop the solution
prototypes for the entire organization.
Once the team is assembled, there are
several different strategies that health plan
CMOs can use to optimize revenue. They
include retaining and growing membership,
and managing performance-based
payments by assessing quality outcomes.
It is just as important to understand the
health plan member population and their
unique care requirements.
Design thinking can be used to understand
the health plan member and view each
one as an investment to be optimized.
In addition to the care management
techniques discussed above, optimizing
member-level revenue involves thorough
health risk assessments, continued
vigilance for health status changes, and
a focus on member satisfaction and
retention.
Navigating HEDISIn addition to the Medicare Star Rating,
health plans often use The Healthcare
Effectiveness Data and Information Set
(HEDIS) to measure and report their
performance. HEDIS offers insight into
Approach• Fragmented, siloed efforts rather than an optimized, holistic approach• Redundancies in star rating and HCC RAF programs
Measurement: Limited ability to capture and efficiently leverage accurate data, including member risk profile(for HCC RAF) and HEDIS
Lower ratings, bonus and rebates associated with Star and HCC RAF• Lower ratings: Majority (51%) of the MA plans have less than 4.0 Star rating in 2016 and won’t earn a bonus
• Lower revenues • An MA plan that has 3.5 stars is forgoing $40M per 100K MA
members by not improving to 4.5 stars (EXL estimate) • Foregone risk adjustment payment due to errors (average error
rate estimated to be 20-30%)
New competition: 309 new plans entered the market in 2015, adding to the 1,636 continuing plans
Recent negative financial results• BCBS (3.5 stars, $400M loss)• Major health plan (3 stars, compressing profit margins)
CMS star rating changes: Continuing changes to the rating methodolgy, formula and bonus and rebate schedulesGrowth of MA enrollment: The CBO estimates MA enrollment to grow from 17 million today to 22 million in 2020Impact on other plan types: Commercial exchanges expected to experience similar pressures as MA plans
Challenges in improvingCMS Star Rating & HCC RAF
Dynamic nature ofhealthcare landscape
The Medicare Advantage market is facing multiple challneges that areresulting in lower revenues
What problems need to be solved?
Market problems
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[ Design thinking approach to care and performance ]
many different types of data, but one that
can benefit through design thinking is
gap identification. “Gaps” are disparities
in healthcare amongst different groups
of members, and reducing those gaps
typically focuses on improving health plan
engagement for racial, ethnic, or linguistic
minorities.
CMOs can reduce gaps by using empathy
to discover the clinical needs of a member
and come up with processes to help
improve that member’s health status.
Working with the care coordinators inside
the health plan organization, the CMO
can ideate, prototype and test broader
identification tools for gap documentation
and opportunities to engage the member.
Typically a full medical record review is
done to close the gap, which can reveal
additional metrics to avoid future gaps.
Quality measurement and optimizing the new systemAs healthcare moves towards a value-
based reimbursement system, CMOs are
instituting quality metrics to complete
the required reporting on their plan.
Recently, the Centers for Medicare and
Medicaid Services (CMS), commercial
plans, purchasers, physician and other care
provider organizations, and consumers
worked together through the Core Quality
Measure Collaborative to identify a core
set of quality measures that payers have
committed to using for reporting. While
2016 is a transition year, the Core Sets
will be applicable next year to minimize
redundancy and reporting errors in health
plans and regulatory entities.
What are the Core Measures?
• Accountable Care Organizations (ACOs)
• Patient Centered Medical Homes (PCMH)
• Primary Care
• Cardiology
• Gastroenterology
• HIV and Hepatitis C
• Medical Oncology
• Obstetrics and Gynecology
• Orthopedics
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[ Design thinking approach to care and performance ]
For many health plans, the data required
for metric reporting resides in their claims
systems, member records, immunization
registries, and other systems. For Medicare
Advantage programs, participation in these
quality metrics is applicable to their Stars
rating. For all plans, compliance with the
Core Sets requires significant numbers of
specialized personnel to obtain, review,
analyze, and report the results.
Because this new measurement system
affects reimbursement, it is a revenue
optimization challenge for the CMO. It
is important for the CMO to understand
where the reportable data initially enters
the plan’s system, so the original research
phase should include those individuals
who gather and manage that data. It is
critical that any solutions arrived at through
design thinking facilitate this data capture
and integrity. It is also important that the
CMO addresses the question of how to
ensure reportable data is easily accessible
for analysis and review. Design thinking
solutions applied to the overall quality
reporting process should support both the
dissemination of reporting results as well as
solutions realized to improve the process
of data entry and access.
A new way of improving healthcareDesign thinking helps CMOs completely
retool organizational processes that
are ineffective or will become obsolete
with new healthcare changes. The
method replaces traditional health plan
management tactics with creative and
innovative problem-solving and long-range
planning. Traditional strategic planning
may no longer meet the requirements
for today’s rapidly-changing healthcare
environment, especially one in which
reimbursement hinges on value-based
metrics. Design thinking offers CMOs a
new tool to solve care management and
revenue optimization problems, and helps
them generate solutions that benefit both
the end users and the health plan.
Traditional strategic planning may no longer meet the requirements for today’s rapidly-changing healthcare environment
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References
1. Healthcare, Volume 4, Issue 1, Pages 11-14 Jess P. Roberts, Thomas R. Fisher, Matthew J. Trowbridge, Christine Bent
2. “Mayo Clinic: Design Thinking in Healthcare.” Yale School of Management. http://nexus.som.yale.edu/design-mayo/?q=node/87
3. Mayo Clinic Center for Innovation website http://centerforinnovation.mayo.edu/jack-and-jill-rooms/
4. http://www.cio.com/article/3063152/healthcare/design-thinking-for-healthcare.html
5. Sipkoff, Martin. “Health Plans Begin to Address Chronic Care Management.” Managed Care. December 2003 http://www.managedcaremag.com/archives/2003/12/health-plans-begin-address-chronic-care-management
6. “Benefits of Managed Care.” CVS Health. https://cvshealth.com/thought-leadership/cvs-health-perspective/benefits-care-management
7. Sipkoff 2003. http://www.managedcaremag.com/archives/2003/12/health-plans-begin-address-chronic-care-management
8. Weintraub, Rebecca and Jose Colucci Jr. “Design Thinking Can Help Improve Care for the Elderly.” Harvard Business Journal. https://hbr.org/2015/12/design-thinking-can-help-improve-care-for-the-elderly
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