The Numbers Make Sense for Today’s By implementing options for print and mail services, healthcare
Economic Environment providers can focus on their core strengths, potentially reduce
costs and strategically plan for a future that allows for secure,
Healthcare organizations have clear fiduciary responsibilities
electronic exchange of health information and ultimately
to facilitate earnings growth for investors. Succeeding at this
better client care.
in a fiercely competitive business climate requires that firms
maximize available capital and deploy capital that enable Current State Print and Mail Service Models
both organic and acquisition growth initiatives. Healthcare in Healthcare Organizations
payers are increasingly outsourcing their print, mail and
Operating Models
related document services as one means to help achieve
these objectives. One of the benefits is that organizations that Most healthcare organizations use a distributed model to
outsource their print and mail services can better maximize support print, mail and related document services. The model
and redeploy capital assets. Document services are capital- typically includes the following components:
intensive functions that require significant ongoing investment
• Production print (e.g. billing statements and routine
with little identifiable or captured direct benefits in terms of
mailings)
driving top-line growth. More often poor quality document
• Print on demand (e.g. test results, patient records, ad-hoc
services capabilities take away from top line growth.
mailings)
• Specialty print (i.e. for color documents and other inserts
Healthcare organizations must communicate effectively and
to be included in distributions)
on a timely basis with their members and providers. This is
• Electronic communications and fulfillment
driven by both an objective for consumer satisfaction and by
• Mail operations (i.e. to gather, process and distribute
extensive regulatory mandates. Print and mail services are an
mailings)
important function but the production of the communications
(primarily print) is generally not a core competency for most Typically these operations are not centralized nor is it
healthcare organizations, nor should it be. Appropriately, possible to ever fully do so. Redundant and underutilized
this function could be accomplished more efficiently and production print and mail operations can create significant
effectively by someone with core expertise in this arena. overhead costs. Adding to the complexity is that many
healthcare organizations have grown through acquisition
The potential benefits healthcare organizations can gain and the delivery model for their print and mail services
from improving the operational efficiency and effectiveness has grown and fragmented in a similar pattern. There is no
of their print, mail and document services operations is simple way to centralize and manage these operations, and
not insignificant. While it is possible to gain some benefits most organizations do not have the bandwidth needed to
from internal process improvement efforts, outsourcing is undertake these efforts.
increasingly a viable means to maximize and extend these
gains. The range of savings is 15-25%, based upon EquaTerra’s Correspondence Types
current projects and previous deals completed.
There are many types of correspondence that healthcare
organizations generate and distribute as part of their normal
course of business. Adding to the complexity of document
services, each type has different levels of regulatory oversight,
process, retention and communication requirements. There
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are several member document types: EOB (explanation of –– Leverage third party expertise, divest capital assets
benefits); individual premium bills; system-generated letters; and offload operational management requirements.
and additional information requests (i.e. student status forms, –– Requires, most likely, multiple service providers to
letters, etc). There are also several provider document types: support different services and geographies.
single claim check/remit; bulk check/remit; capitation remits/ –– Invest to upgrade and improve document services
capabilities as required.
checks; encounter reporting; system-generated letters; and
–– Access to innovation and economies of scale more
general provider communication letters.
difficult via centralization.
current state situation. Ideally any improvements will extend –– Mitigate risks associated with fluctuating document
services volume, improperly addressed document
and improve the existing organization operating model, limit
handling and management requirements, etc. This
service disruptions and leverage systems and information
approach is better able to address changes resulting
technology capabilities. Below are four options available to from acquisitions, divestitures and other business
buyers: change events.
–– Receive prorated investment costs made by
Buyer Options to Address Print, Mail and the service provider for operations and process
Document Services Improvements improvement, often at a lower total cost.
• Status quo –– Leverage service provider best practices for further
–– Live with it as is. Make incremental improvement to innovation and transformation.
distributed operations over time.
Key Benefits from Document Services
• Internal process improvement/move to shared services
Outsourcing
environment
–– Gain benefits from economies of scale, Healthcare organizations can achieve financial benefits when
standardization, consolidation of new investments. migrating from a traditional to a fully outsourced print and
–– Drive consolidation efforts and address change mail services solution. In addition, by implementing a solution
management needs.
that gains access to third party capabilities and technologies,
–– Fund any required staff, IT and facilities investments.
the buyer can focus on their core strengths. One of the
–– Treat investments as capital expenditures.
challenges will be for healthcare providers to adopt and
–– Maintain risks associated with fluctuating document
meaningfully use certified electronic health records within the
services volume, improperly addressed document
next decade. Today, we are still using paper. Forms are filled
handling and management requirements, etc.
out in triplicate. The introduction of electronic medical records
• Facilities management outsourcing
will reduce error rates, improve care and provide significant
–– Undertake partial outsourcing, for example, to a print
services provider or a provider that can take over savings. Addressing the print and mail challenges of today will
production and mail facilities. position healthcare providers to clear their agendas to work
on their IT plans and strategy for obtaining electronic records
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capabilities. And, it is likely that the print and mail service Organizations can overcome these barriers. The key is to
providers will have a part in the creation and/or execution of address them early and “head-on”. An inability to successfully
those solutions. address and overcome these challenges indicates an inability
to successfully execute on the overall outsourcing effort.
This is not to imply an outsourcing effort is a quick or easy
solution. Outsourcing of any type is always easier “on paper,” One of the common reasons for failure in document services
and document services outsourcing is no exception. A outsourcing is an inability by those initiating the project to
requirement to make outsourcing work is that the key parties gain and maintain adequate executive commitment and
must understand their requirements and obligations as part sponsorship. The same holds true with other key business unit
of the effort and address them. Stakeholders must participate stakeholders.
in the planning, transition, execution and management of any
outsourcing effort. It is not just CXO’s whose active support is required for major
document services outsourcing efforts. All stakeholders must
Key Challenges to Document Services have active buy-in, regardless of whether it’s gained via direct
Outsourcing or coercive support. When undertaking a multi-business unit
or multi-regional project, the key stakeholders are multiplied
There are many potential barriers that healthcare
many times, particularly if distribution channels or business
organizations must address when planning and undertaking a
models differ. This is often the case, for example, in healthcare
print, mail and related document services outsourcing effort.
payer organizations that have grown through acquisition.
The following are some of the most common barriers.
While a complicating factor, it is one that business change
• Inability to define a solid, realistic and defensible business owners must address.
case.
• Lack of business unit stakeholder and executive support This challenge highlights the need for a robust change
or interest. management plan that addresses effective communications
• Incomplete understanding of how to account for to many different business and operational leaders. The
all relevant regulatory requirements if activities are
requirement is to validate and sell the potentially conflicting
outsourced and/or a misperception that it is not possible
goals of improving internal and external customer service
to adequately address them.
while lowering operating costs.
• Perception that improved operational efficiency and
maintaining good customer service are incompatible
Key Message for Stakeholders
goals.
• Inability to identify viable service providers to effectively The key message is that efficiency and customer service are
deliver the required savings and benefits.
compatible. Even for customers that prefer to have it done
• Inadequate understanding of required change
the way it has always has been done, there is a potentially
management requirements.
better way. Below are more key points to keep in mind when
• Inability to “sell” change effort inside and outside the
educating CXO’s and stakeholders on the benefits of print and
organization.
mail outsourcing, as well as the requirements to make it work.
• Culture of inertia.
• Select a service provider that has exhibited expertise
in comprehensive print, mail and related documented
services outsourcing in the healthcare industry.
This is a bifurcated market with many small, legacy
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document, in any form whether physical or electronic, for any purpose. 6024_052009.