Traditional Healthcare BPO Sourcing Will be Tested as Never Before

Rohan-KulkarniBy Rohan Kulkarni, VP of Commercial Healthcare Strategy & Portfolio, Xerox
Twitter: @Xerox

Growth in healthcare spending in the United States is slowing down, however it’s still growing and continues to outpace gross domestic product (GDP) spending by several points. Revolutionary trends are emerging for all healthcare service providers (i.e., payers, providers and pharmaceuticals), that will guarantee radical shifts in how these providers serve their patients, as well as how business process outsourcing (BPO) vendors serve their healthcare clients.

What’s behind this growth? It’s NOT the “usual suspects” such as large employers or big pharma. It’s consumers: Healthcare reform has added 19 million newly insured individuals to the marketplace, many for the first time ever. Global management consulting firm Oliver Wyman says consumers are literally creating a new market — one that Oliver Wyman calls “Health Market 2.0” and estimates will capture roughly $1 trillion in healthcare spending.

We’ve seen the impact of “consumerization” in different industries. Over the years, retail and telecommunications have witnessed game-changing impacts on how businesses have been created by demand — like Amazon and Vonage — or have evolved – such as Walmart’s embrace of eCommerce.

Consumers Use Healthcare Differently
The transformation of healthcare has already begun. Consumers are using healthcare exchanges to choose their payers; they consume care, almost literally, with wearables, ingestibles and telehealth. Consumers now want a Zappos-like experience when they interact with their healthcare providers, insurers and hospitals.

Consumers show little patience for the old way of doing things. The status-quo of accepting any insurer that was offered, or agreeing to any treatment that was ordered, won’t be tolerated by these new consumers of healthcare. They are demanding as to what they want and how it is delivered.

This change is not temporary. It is largely driven by Millennials’ notion of how the new economy should work. With Millennials coming of age, we should expect this evolution to continue and push the transformation further – including the way BPO gets done.

New Expectations, New Roles for BPO


Expectations by these new consumers are forcing healthcare service providers to shift focus, change how they develop products and how they go to market, and to fashion and manage consumer experiences. These providers will concentrate on core capabilities so they can deliver differentiated solutions based on quality of care. Payers will develop low cost/high value plans.

Most healthcare consumers have probably never heard of a “Chief Patient Experience Officer,” but lists more than 4,500 such positions, including at prestigious institutions like The Cleveland Clinic and Johns Hopkins. So it’s no surprise there are more Chief Patient Experience Officers in 2015 than 2014. The consumerization of healthcare has essentially forced this position to be created. As the core medical services and offerings are enhanced, it is equally important to ensure a seamless integration with support functions such as customer service, claims management, and medication adherence. Functions like these enable a differentiated experience that is critical to success in the new health economy.

This shift in focus by healthcare service providers has a significant impact on their business process outsourcing paradigm. They will look for fewer partners who are able to provide complete and integrated solutions, and then compensate them based on outcomes instead of transactions. (See table above.)

We can debate when the paradigm shift will be complete. However, the shift has begun and that changes how people consume healthcare, which absolutely changes the administrative economics for healthcare service providers.

This article was originally published on Xerox Blogs and is republished here with permission.