The healthcare industry is under immense pressure from regulators, competitors, consumers, insurers, employers and legislators to improve care experiences and better manage costs. These challenges are daunting, but a promising new approach to healthcare management looks like an important part of the solution.
Healthcare networks and hospitals operate complex enterprises supported by countless vendors, systems and technologies. Like most of healthcare, management of this support matrix is fragmented, often with little strategic, fact-based data to help ensure that these systems are generally operating in the top 25th percentile or higher. Even more importantly, most existing management practices may miss important innovations that could yield dramatic outcomes.
But by applying a Champion – Challenger model to key operating systems such as Revenue Cycle Management, healthcare providers can stay on top of important developments while managing costs and ensuring the highest level of service. The Champion – Challenger model has performed for other industries. It’s now making its way into healthcare, where the demand for better solutions is more intense than ever.
In technology, IBM is a pioneer and a leader in Champion – Challenger methodology. According to their overview, the model is defined this way: “The champion-challenger job step evaluates a model and compares it to one or more challengers. After the system compares the results, the best model becomes the new champion.” IBM goes on to explain the steps they take to mount an evidence-based test environment where two or more models are pitted against each other and measured against a control group to identify and select best performance. This is a cyclical process that then begins again, ensuring that no model ever falls into the “the way we’ve always done it” category. Constant innovation and high performance are vital to survival in the technology industry. The same maxim now applies to Healthcare.
Earlier this year, Loyale Healthcare was selected to participate in a Champion-Challenger test by a nationwide healthcare provider. Working against a group of nearly every other Patient Financial Engagement solution providers, we were able to experience for ourselves just how effective this management strategy can be. During the test, we and our competitors were expected to meet a number of operational or outcome-based requirements according to a strict protocol designed to prove which solution was best suited to the provider. In a nutshell, this protocol entailed five phases:
5 Step Champion – Challenger Implementation Blueprint
1. Identify the Problem – Before the contest began, the healthcare company conducting the challenge analyzed the conditions they believed called for improvement. These included: 1) outdated legacy vendors and technologies; 2) Doctors getting complaints from patients about their financial experiences; 3) Accounts Receivable getting lost in the system, leaving valuable dollars on the table; and 4) Patients were interacting primarily on paper, with little or no digital engagement.
These conditions led to two key problems – patient collections were well below industry standards and a “clunky” collection process was causing negative patient financial experiences which were impacting physicians. These problems were exacerbated by the fact that the company had an aversion to change. They were also concerned about the security implications of new systems and the availability of experienced vendors to walk them through the process.
2. Identify Requirements – Based on their analysis of the problem, the company determined that its high-level requirements were to: 1) Provide clear, customized patient communications; 2) Communicate early in the patient’s care journey; 3) Reach patients on all media; and 4) Remove barriers to payment.
They had also determined they wanted to develop a platform foundation capable of incorporating multiple inputs to effectively address the patient’s entire care experience. A platform that could adapt and scale as the business’s aggressive growth strategy took hold.
3. Identify Best-in-Class Competitors – Using broad-based industry research and trusted industry referrals, the company identified several companies offering revenue cycle, patient billing and related solutions. Each of these was then evaluated for its ability to meet the company’s overall requirements, with performance criteria that went into meticulous detail. The top two competitors were then selected to participate in the challenge.
At this stage, it’s important to note that vendor selection can be a critical asset when working to overcome organizational resistance to change and other objections. The impressive credentials of the challengers in this competition went a long way toward persuading reluctant stakeholders that this investment would indeed yield positive financial and competitive benefits.
4. Build Experiments, Then Track and Analyze Results – Here the unique style and culture of every Healthcare organization comes firmly into play. Every Provider has unique characteristics so it’s important to find out what works best for each. At the same time, it’s important to be open to acknowledging failure. Timely course corrections are often the surest path to success.
With the problems it wanted to solve in mind, the company considered the performance characteristics of the preferred solution to develop a standard dashboard that compared experiment groups with control groups. Using these apples-to-apples comparisons, the company was able to easily see not only which vendor was outperforming, but where solution enhancements could improve performance even more.
5. Be Decisive and Remain Critical – The Champion-Challenger model brings rigorous, evidence-based analysis to selecting the right solution partners for crucial operating systems.
When the work is done, the evidence points to the right partner. The performance metrics that were used to make the initial comparison then become a long-term measurement device, which can be adjusted and reapplied as operating or market conditions demand.
Champion-Challenger in Merger and Consolidation Scenarios
Nowhere is the potential value of Champion Challenger more evident than in a merger. Whether they are small or large, such as the merger of Catholic Health Initiatives with Dignity Health to form CommonSpirit Health or the Advocate Health – Aurora Health union. All will benefit from the outcome and evidence-based principles demanded by the Champion-Challenger model. The same strategy is equally practical in healthcare markets such as Ambulatory Surgical Centers, Physical Therapy, Autism Treatment, Anesthesiology, Oncology, Dentistry and countless others where financial sponsors and other aggregators are rapidly consolidating using aggressive M&A models. These all present a perfect opportunity for the champion – challenger process.
In these scenarios, stakeholders from the acquired and acquiring systems compare and consolidate their research and requirements to develop success metrics that target the ideal outcomes envisioned for the combined entity. And because this protocol is inherently iterative, they are able to exercise opportunities for modifications as the challenge advances.
Practical Applications for the Champion-Challenger Model
For many healthcare companies, the idea of engaging with two or more vendors in the same function simultaneously may seem too outlandish to consider. The company we worked with on the challenge we described above would disagree.
As a result of this process, this company has seen near-immediate improvements in cost, revenue and patient satisfaction. Its outlook for all performance metrics is higher than originally projected. And the company expects to achieve ROI in year 1, weighed against the cost of mounting the challenge and engaging its winning providers.
For healthcare providers considering a Champion-Challenger test of their own, the following vendors are offered for your consideration in each of the disciplines listed. These companies have significant market share and strong operating credentials. Each should provide the other with suitably competitive capabilities to ensure a satisfying outcome for all.
Performance to Meet Healthcare’s Present and Future Challenges
At Loyale, we believe the healthcare industry will respond successfully to the demand for better transparency, improved patient experiences, better care outcomes and lower costs. We also believe that other challenges await us in the years ahead. The Champion – Challenger model gives providers the tool they need to make smart decisions now, and to continue critically evaluating their operations as conditions change.
I’m pleased to report that my company, Loyale Healthcare, prevailed in the Champion – Challenger contest I’ve shared in this article. We’re grateful for the opportunity, but mindful that we’ll need to keep earning our spot. Healthcare providers everywhere should hold their vendors to such a standard. By creating a competitive arena for select key vendor partners even after initial selections are made, partners are compelled to continue bringing their A games and top-box results for Healthcare Network customers.
Kevin Fleming is the CEO of Loyale Healthcare
Loyale Patient Financial Manager™ is a comprehensive patient financial engagement technology platform leveraging a suite of configurable solution components including predictive analytics, intelligent workflows, multiple patient financing vehicles, communications, payments, digital front doors and other key capabilities.
Loyale Healthcare is committed to a mission of turning patient responsibility into lasting loyalty for its healthcare provider customers. Based in Lafayette, California, Loyale and its leadership team bring 27 years of expertise delivering leading financial engagement solutions for complex business environments. Loyale recently announced an Enterprise level strategic partnership with Parallon including deployment of its industry leading technology to all HCA hospitals and Physician Practices.