Although information management (IM) is something that every organization needs to master as a strategic capability, convincing executive leadership to make the investment in time, resources, and money to do so can be challenging.
Making the Case for Information Management
In the first place, IM is typically owned by IT -- strike one. Unless the technology organization is lead by an exceptional CIO/CTO, odds are the work they do is perceived as plumbing by their business counterparts and they’re viewed as order takers who simply scramble to respond (and unsuccessfully at that) to whatever the business asks for.
On top of that, IM is usually conflated with the business intelligence (BI) or enterprise data warehouse (EDW) tools that help enable it—strike two. Although IM wouldn’t exist in the modern organization without such tools, an effective IM program is about much more than simply this or that platform.
Finally, BI and EDW vendors themselves often don’t go beyond selling features and functionality to the organization—strike three. They usually know their products inside and out, but try to get them to speak to end-users about the business impact or value of their SKUs, i.e., the tangible business problems their products solve, and it’s a different story.
Given these three factors, in order to make an effective case for IM, business value has to be front and center, communicated in terms that a business executive understands…not an easy thing to do, especially for folks like IT and technology vendors, who are unused to operating in that sphere. But doing so is critical to the success of the IM program, so there’s no avoiding it.
And although there’s no one-size-fits-all approach that works at every organization, in the rest of this post I want to sketch out an example of how an IM program could be framed in business terms for a “hot” industry right now: health payers.
A Business Case for Agile IM
I’ll start with some background on what you would expect to see in terms of IM at most health payers and then walk through some key areas of business impact IM would want to address to be successful.
IM has the following broad footprint at the typical health payer:
- Insured data -- demographic and medical information about each insured
- Enrollment data -- information about the plan details for each employer group and insured
- Claims data - information about each claim event processed (whether or not is was ultimately paid or rejected)
- Billing data - information about payments received from insureds and made to providers
At most health payers worth their salt, the IM capability does a pretty good job delivering up these kinds of data to the business, e.g., end-users can get information about claims based on insured ids, payments made to a given provider or set of providers during time period X, or which insureds share given medical or demographic characteristics.
But when we talk about agile IM -- delivering information regardless of functional or system silos to meet dynamic business needs or in response to rapid marketplace shifts -- it’s a whole other ballgame, particularly at smaller or private health payers.
Given this broad brush sketch of IM at health payers in general, I see two key business needs in the marketplace right now, both of which demand agile approaches to IM: utilization management/disease management and medical spend.
Utilization Management/Disease Management
Utilization management/disease management (UM/DM) is responsible for influencing how insureds consume services in order to generate optimized health outcomes. For example, insureds suffering from a chronic disease such as diabetes: medical interventions will not typically cure diabetes, but they can substantially lessen its negative effects -- and lower the cost of care required by the insured and billed to the insurance company.
So if a heath payer can increase the likelihood that an 80-year-old diabetes patient regularly tests his sugar, takes his meds, does leg exercises, and takes foot baths, they can decrease the likelihood that he’ll undergo limb amputation. The cost of intervening to encourage these preventative behaviors is substantially less than the cost of amputation, not to mention the profound difference it makes in the insured’s quality of life.
But in order to consistently and effectively intervene in this way for chronically ill patients, a health payer’s UM/DM function needs timely access to relevant, up-to-date information from across the organization.
For the diabetes patient in the previous example, the insurer would need to know that he hasn’t been filling his scripts regularly, has been ordering testing strips less frequently than he should, and recently saw his general practitioner for leg pains and numbness. All of these triggers taken together would indicate to a UM/DM analyst that they need to reach out to the patient and intervene to encourage him to manage his diabetes more effectively.
The only way a health payer will have any chance of enabling this kind of UM/DM in a systematic, cost-effective way is to build a robust agile IM capability. Without the ability to bring together information from across functional areas and transactional systems and coordinate it in meaningful ways (often in response to rapidly shifting business requirements), UM/DM will be unable to consistently find the insureds who will most benefit from their interventions and drive down costs for the insurer.
As you might imagine, medical spend is tightly integrated with UM/DM: after all, how well a health payer does UM/DM will directly affect how much it spends on medical procedures for its insureds. And given the cost of treating the complications of chronic diseases versus the cost of early intervention and preventative treatments, the value proposition here is enormous…not to mention the substantive positive social benefits associated with encouraging wellness rather than profiting from sickness.
But UM/DM is by no means the only way a payer can reduce its medical spend, of course. Improving its subrogation function, for example, can also dramatically reduce medical spend. Agile IM’s ability to bring together information from across the organization related to a given claim is central to an insurer consistently recouping the expenses it’s legally entitled to.
Furthermore, data analysis to uncover billing and payment errors, fraud, and claims processing mistakes can also significantly reduce medical spend -- and a health payer’s ability to capitalize on all these consistently and cost-effectively will depend in large part on how well it can bring together information from across the organization and coordinate it to facilitate analysis and action.
Realizing the Value of Information Management Agility
As these examples show for health payers, agile IM has many significant business benefits that LOB leaders would be excited to realize at the organization. And while these benefits require the features and functionality BI and EDW tools provide, the business case for agile IM needs to shift focus from the tools themselves to the kind of operational impacts we’ve highlighted here and communicate what BI/EDW tools do, not how they do it.