A design thinking approach to care and performance for the · [ Design thinking approach to care and performance ] regulatory and clinical complexity. This allowed the health plan

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.



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



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



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



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.



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



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



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



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



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



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



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

http://nexus.som.yale.edu/design-mayo/?q=node/87

http://centerforinnovation.mayo.edu/jack-and-jill-rooms/

http://www.cio.com/article/3063152/healthcare/design-thinking-for-healthcare.html

http://www.managedcaremag.com/archives/2003/12/health-plans-begin-address-chronic-care-management

https://cvshealth.com/thought-leadership/cvs-health-perspective/benefits-care-management

http://www.managedcaremag.com/archives/2003/12/health-plans-begin-address-chronic-care-management

https://hbr.org/2015/12/design-thinking-can-help-improve-care-for-the-elderly

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Documents

A design thinking approach to care and performance for the · [ Design thinking approach to care and performance ] regulatory and clinical complexity. This allowed the health plan