Healthcare insurers are facing significant challenges when it comes to keeping their costs under control in Asia.
According to The Economist, projections for healthcare spending in the Asia Pacific region are expected to continue to increase in 2017 – China by more than 14%, while Thailand, Indonesia, Malaysia and the Philippines are all likely to see double-digit increases. So with the annual spend continually going up, we must seriously ask what can be done to ensure companies and their members still get real value for their healthcare spend.
One of the more impactful solutions is to implement an efficient claims management process – developing strategies that work for both large and small insurance companies that cut costs, reduce fraud and deliver a consistent and efficient service to customers. Of course, one size does not fit all when it comes to claims management – but there are some key features that should be considered when choosing the correct tool for your business.
So let’s look at these in detail.
Claims management: What you should know
The traditional patient-doctor relationship is gradually being replaced by one where the patient receives diagnosis and treatment from a team of healthcare professionals who are specialists in their fields. The goal here is to deliver the service in the most effective manner.
The traditional patient-doctor relationship is
gradually being replaced by one where the
patient receives diagnosis and treatment
from a team of healthcare professionals
who are specialists in their fields.
Using clinical pathways is one element of this approach. Having the ability to deliver consistent and efficient levels of medical care and treatment ensures costs will rarely (if at all) be unexpectedly high. And cost savings can be substantial – a 2015 US study of one particular hospital concluded the use of pathways in lung cancer treatment resulted in a 37% reduction in costs.
The same is true when a standardised approach to procedure coding is in place – once everyone is on the same page with regards to the terminology and coding practice, the process becomes more efficient.
There are other methods of increasing efficiency and controlling costs. Focused provider networks and fee schedules for example are ways to deliver a more financially cohesive service. By building strong relationships with providers in your network and establishing fixed-fee schedules for the many procedures in advance, your organisation will be able to have a greater degree of clarity and control over provider expenses.
The review of available data and intelligence is important as well – and a great method of claims assessment and forecast. Proactive utilisation management enables this, and is useful in determining resource levels and giving organisations the ability to plan ahead as much as possible in an effort to remain efficient and cost effective.
Everyday savings: Pillars of an effective claims management process
With a claims management process in place, there are cost savings opportunities in several everyday practices.
- Pre-authorisation that works: Good claims management will give the foundation for the implementation of more robust pre-authorisation mechanisms. Pre-authorisation of patients and treatments enables a further method of cost control since all tests, procedures and consultations are anticipated and within the process. It also means the right treatment is given at the right time and that can result in shorter stays in hospital, thus reducing inpatient costs.
- Efficiency in settling claims: As there are many stages to be completed when settling a claim, making sure that each stage is as efficient as possible translates into a cost saving. Advances in software applications that can be used to manage claims settlements mean that there are now products on the market that automate the processes. As well as the contracting of providers and their reimbursement and claims settlement, technology solutions can be applied to member eligibility, billing, medical and care management, customer service and even reporting. By replacing multiple processes of claims settlement with an effective one-stop software function, insurers can achieve speedy settlements with both patients and providers.
As well as the contracting of providers and
their reimbursement and claims settlement,
technology solutions can be applied to
member eligibility, billing, medical and care
management, customer service and even
- Reduction of fraud and abuse: The Coalition Against Insurance Fraud states that fraudulent claims in global healthcare have increased by 25% since 2008. Losses through fraud and error cost the global healthcare industry in excess of USD 487bn annually according to the World Health Organization (WHO) – so the impact of not having control over fraud and abuse can be serious. Therefore being able to reduce your organisation’s exposure to fraud is a key method of controlling unnecessary expenditure. Fraud in this sector essentially breaks down into three key areas:
- Member fraud: This includes identification theft and identification sharing. This can be identified and guarded against by using various system checks.
- Member and provider fraud: This can include arrangements between the member and provider to defraud the insurer and share the payment, but can be countered by using the claims management technology to review outcomes and perform provider profiling.
- Provider fraud: Such as inappropriate or excessive services; treatments that do not comply with the diagnosis; services that are charged for but not performed; treatment billing that is for more complex procedures than have actually been performed; and the provision of other services that are not required medically. These fraud events are often able to be negated by processes such as pre-authorisation, claims systems controls, and the use of regular reviews of outcomes and profiling of results.
- Ending inefficient practices: Insurers in the Asia Pacific region have identified a number of inefficient practices that drive up their costs – 72% of insurers report overuse of medical care due to practitioners recommending unnecessary treatments; 49% tell of underuse of preventive services such as wellness programmes; and 43% state that expenses are increased by members of healthcare plans requesting inappropriate or excessive levels of care. Regulating physicians, controlling patient requests and promoting wellness initiatives are all efficiencies that, once adopted, will bring cost savings.
- Consistency in clinical decision making: Using data gathered through utilisation management means that methods of practice can be established for a consistent approach to treatment plans – mitigating the risk of clinical error. In turn, this results in less reparative treatment or compensatory payments.
- Quicker processing equals lower costs: The longer a claim is in process, the more it costs a company. Having a claims payment system that expedites those payments in an efficient manner means that the insurer can make significant savings. Using procedure coding and proactive operational models has been known to save between 5-10% on overall healthcare costs.
Using procedure coding and proactive operational
models has been known to save between 5-10%
on overall healthcare costs.
Moving forward with greater efficiencies
We know costs of providing healthcare have rocketed in Southeast Asia. So more than ever before, implementing an effective claims management process for your organisation is a matter of priority.
There are many positives to be gained by having such a system in place – from boosting efficiency in how your healthcare is delivered to members, to enhancing the way relationships are conducted with your provider network. Add to that the streamlining of fee management as well as increasing the capability to detect fraud and abuse – and the case is clear.
So isn’t it time to let your company be proactive when it comes to cost reduction?