Why Payers Need to Embrace Design

by Jared Lorinsky, Chief Experience Officer

Healthcare payers are faced with a multitude of challenges when it comes to keeping provider payments accurate, underlying payment rules and data up-to-date, and claims administration running smoothly.  While the solution is multifaceted, embracing design as an approach to innovative problem solving is a vital piece to maximizing payment accuracy and minimizing inefficiency.

According to a recent Gartner research article, “To be successful, payers must become more innovative, more responsive to customer and partner needs, and more nimble and fast. CIOs must, in turn, challenge their own thinking about their organizations, processes and IT systems to expand into new products and operate more efficiently.”

Using a design-based approach to set up your internal teams and develop solutions ensures that your organization will realize significant long-term benefits and growth that are not achievable by pursuing quick fixes to every problem.

Design is how it works

Steve Jobs of Apple was famous for saying, “Design is not just what it looks like and feels like. Design is how it works.” An important area for payers to consider within this context is how payment is managed throughout the life cycle of a claim, and how this information is aggregated and analyzed across insurance products. If we step back to assess payment management as a whole, we can take the necessary measures to improve the workflow, and in some instances, redesign it to increase accuracy and process automation, and begin to develop real-time business intelligence.

When addressing how your claims payment management program operates, it’s important that everyone in your company is open to taking an objective look at defining the problems and analyzing different solutions. Initially, it may be an adjustment for all members of an organization to feel compelled to participate in design. However, when every stakeholder re-examines their current process and evaluates how they want their department to function and improve to meet new payment management goals, you can avoid implementing the same processes that have failed in the past. When you stop playing it safe with old processes that feel familiar, you broaden the scope for success.

How to begin

Design-centric thinking starts with a group of individuals comprised of leaders, influencers, and various subject matter experts across multiple departments committed to discussing how to redesign the claims payment management program. In other words, the change toward design must be intentional and strategic.

One successful approach is to set goals and work backward so that your redesign has a defined objective. It doesn’t have to be a radical goal, such as paying the provider with complete accuracy at the time of service. Instead, it can be a more tangible, short-term goal like reducing manual claims reviews by a certain percentage or reducing recovery audit spending by a specific amount. Choosing a goal that is appropriate for the capacity of your organization is crucial to the success of your redesign project.

Freedom to fail

The design process is iterative by nature. Too often, significant time and money is wasted trying to fix individual processes that will never result in achieving an optimal long-term solution. The stakeholders (also known as the designers) involved in meeting the goal spend their time creating and iterating through change rather than fixing problems.

Therefore, it is critical that those involved have the freedom to fail. Without the freedom to fail, organizations may stick with old practices and play it safe, like going back to the same business partner they have always worked with, instead of pivoting to a new solution if goals are not being met.

The final piece

To truly make this all successful, there needs to be a human element to all of this. A design-focused team does not make decisions based on metrics alone, but rather considers emotion and cultural fit as key decision points for the design process. Your company must be comfortable with the process changes and how they work in your organizational structure, or ultimately you will have trouble with adoption rates and promoting change.

But what does this all mean for claims payment management?

Another area that needs to be considered is alignment across your organization. Every part of your business ecosystem that plays a role in paying claims accurately needs to be included as part of applying a design-centered approach to your payment management workflow. A few examples include:

Claims Operations – This team is heavily invested in processing more claims correctly the first time and automating as many payment rules as possible.

IT and Configuration – They want to spend less time on time-sensitive software updates, data loads and manual processes for payment rules that should be automated.

Compliance – This group looks for increased efficiency to reduce errors on the front end and provide transparent data for any audits that may take place afterward.

Provider Relations – This team needs to provide rationale to the providers with the payment and have a complete record of how the rules applied to the claim when working with the provider. An increase in payment transparency and having the tools to provide information efficiently helps reduce friction.

You want to design your claims payment management workflow to look at all these areas and have the freedom to try new ways to improve the process in an environment where stakeholders from all teams participate and intentionally want to do better.

Red Flags to Watch For

When employing a design approach for your provider payment management program, there are a number of potential problems to keep in mind.

It is common for vendors to offer a point solution as a means of bringing a product quickly to the market, but point solutions are designed to solve one particular problem or issue without regard to other related issues. As a result, you will have different software update cycles performed by different companies and software platforms that were not designed to natively talk to one another. In this state, you remain at a high risk of payment inaccuracy and workflow inefficiencies.

However, that doesn’t mean that a vendor who works with third parties is creating an inefficient platform.  Vendors who integrate high-quality partners into their platform can bring additional value, provided it offers interoperability with the additional workflows. It is critical to review the inner workings of any technology you procure in order to understand how it will integrate into your network.

Another red flag is not understanding the differences in what your internal IT department can provide when compared to a software vendor.  Typically, an IT department has many core competencies, including managing infrastructure, data security, and various critical enterprise software programs.  They are typically not focused on building, improving, and commercializing software that is the best fit for multiple areas of your organization. Therefore, it is important to be thoughtful about how and when to employ internal or external services to meet your new payment management needs.

Also, you should be wary of technology and processes that require your organization to load a significant amount of data.  Using cloud technology enables software and services to run remotely on the Internet, instead of locally on your computer, or in the case of a health plan, locally within their data center.  Well-designed payment management platforms typically benefit from the capabilities of cloud computing, and any process you implement internally should have data built into the design so that end users do not have to spend time loading and maintaining it. Again, maintenance of your claims payment program needs be low, while your partners rapidly load critical data from the industry on a continuous basis. If you need to purchase excessive 3rd-party professional services to manage technology, it’s probably not designed well.

Technology should be able to run on its own with minimal intervention and constant data loading and reconfiguration – manual intervention will likely lead to more errors. Finding software that can seamlessly integrate with your existing systems and will streamline your process is a worthwhile investment that will help increase your bottom line. Furthermore, a platform that can provide you with reports to analyze the data that is flowing through your system can bring additional value to the claims payment process.

Proof That Design Works

In April 2017, McKinsey published a study that found, “Over a ten-year period, design-led firms outperformed the S&P 500 index by 219%”2 This shows that while it may cost more to procure higher cost technology and redesign internal processes initially, over time the efficiencies gained will lead to lower internal costs while external results to the industry – like payment accuracy, medical waste reduction, and provider quality – will significantly improve your organization’s profitability. Your design-thinking team’s job is to build a business case that shows this long-term value to the organization, and to be flexible to change along the way, ensuring you stay on course.


Design-based thinking has been a cornerstone of successful companies across all lines of business. Within the healthcare payment realm, though, an unwillingness to embrace significant change still exists, resulting in inefficient processes that come at a significant cost, both financially and culturally.

Taking a design-centric approach to your claims payment management process and focusing on the best possible system in the long run, as opposed to the fix to a particular problem, ensures the organization will see improved accuracy and, as a result, a better bottom line. Furthermore, by having all stakeholders involved in the process of finding a solution, your employees will be more invested in the process and feel more empowered by the success of the solution.

With benefits that improve your company financials, structure, and morale, a focus on design can turn the frustrations of payment management into a resource for your company’s growth over time.

1 Gartner, Business Drivers of Technology Decisions for Healthcare Payers, 2018, Analyst(s): Bryan Cole, Jeff Cribbs, Brad Holmes, Mandi Bishop, Published: 17 January 2018 ID: G00342008.

2 Agrawal, A., M. Dziersk, D. Subburaj, and K. West (April 2017). Design for value and growth in a new world. McKinsey & Company. Retrieved from https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/design-for-value-and-growth-in-a-new-world