By Chad W. Lyne
According to recent figures from the U.S. Department of Health and Human Services, national health expenditures reached $2.5 trillion in 2009, representing 17.6% of Gross Domestic Product and equating to a per capita expenditure of over $8,000. Already representing one of the highest levels in the developed world, spending has been forecasted to grow astronomically during the next decade. By 2019, national health expenditures are expected to reach $4.6 trillion, accounting for 19.6% of GDP and equaling a per capita cost of over $13,600.
While there has been much political debate about how to rein in spending, the simple reality is the American population is aging, insurance enrollment (including Medicare/Medicaid and health exchanges) is exploding, healthcare utilization is increasing, and the cost of delivering medical care is rising. Against this perfect storm, companies in the healthcare industry are challenged to serve more patients and members, to improve the quality of care, and to reduce operational costs.
In particular, recent surveys of healthcare organizations reveal the following priorities:
- Increasing patient/customer satisfaction, with an emphasis on improving contact center interactions to win and retain customers who now have more healthcare choices and options than ever before
- Increasing revenue, with an emphasis on viewing contact center touch points as revenue and profit-generating opportunities through customer up-selling and cross-selling
- Decreasing costs, with an emphasis on reducing facility and labor-related costs without sacrificing customer service levels or satisfaction
Home-Based Agents Answer the Call: Companies across the healthcare spectrum, including insurers and managed care organizations, medical device manufacturers, pharmaceutical providers, hospitals, and other medical care providers, are increasingly relying on outsourced contact centers to achieve the above objectives. Market research from analysts at Frost & Sullivan and Datamonitor shows that healthcare organizations currently outsource more than 30,000 (or 20 percent) of their call center agent positions. By 2013, the outsourced figure is expected to exceed 42,000 positions. In contrast to other industries, such as communications and financial services, privacy concerns and regulatory barriers have prompted healthcare organizations to focus on domestic delivery solutions, with nearly 75 percent of outsourced positions being US-based.
While many of these outsourced agents have historically been located in large brick-and-mortar facilities in major metro areas, a large and growing number of contact center professionals are now being found outside of the “four walls” of a traditional call center. According to Frost & Sullivan, a majority of healthcare organizations are now turning to virtual contact centers with home-based agents. In fact, less than a third of healthcare organizations plan to increase their use of domestic brick-and-mortar agents, while more than half plan to dramatically increase their deployment of home-based professionals.
Good Medicine: While there are a number of factors behind the increased interest in and adoption of virtual contact center solutions, the primary driver is that the home-based model offers healthcare companies benefits not afforded in a traditional brick-and-mortar environment, such as:
Higher quality agents: The demographics of the home-based workforce (average age of 40, over 80% college-educated, with 15 to 20 years of work and life experience) ensure that callers receive the highest quality of service. The attractiveness of a home-based career results in lower agent attrition and more tenured professionals who bring greater empathy and understanding to each customer interaction.
In addition, cultural and language affinities improve the caller experience and oftentimes result in greater efficiency and shorter call lengths. Healthcare organizations utilizing at-home agents report higher customer satisfaction scores, improved issue resolution rates, and greater customer retention.
Greater access to talent: The virtual contact center model removes the traditional geographic constraints that limit brick-and-mortar facilities to hiring within a 30-mile radius. It allows organizations to recruit and hire the best talent, wherever it may be located. This advantage is particularly appealing for the healthcare industry, enabling firms to find professionals with unique skill sets, educational degrees, board certifications, state licenses, and previous health industry work experience.
Lower cost of operation: Traditional contact centers are an expensive proposition. Facility costs, furniture and fixtures, property taxes, utilities, and security expenses can exceed $10 million annually for many large centers. In a virtual, home-based environment, these costs are eliminated, allowing healthcare organizations to focus on their core competencies as opposed to managing a large real estate portfolio. In addition, labor costs for an at-home workforce are also lower, as many employees are happy to trade cash compensation for the benefits of working from home, including not commuting, gas and wardrobe savings, and better work/life balance.
Better operational efficiency:Many sectors of the healthcare industry are plagued with highly seasonal or unpredictable call volumes. Insurers have to ramp-up aggressively for open enrollment periods. Pharma and med device companies face sizable call volume spikes for product recalls, while hospitals, physicians, and lab service companies struggle with staffing for out-of-hours calls. The traditional brick-and-mortar environment is not designed for the flexibility and scalability requirements of the healthcare sector. Facilities are often either overstaffed, resulting in unnecessary expense, or they are understaffed, resulting in long wait times and displeased callers.
The Benefits: Virtual contact centers routinely address these challenges. On the scalability side, companies utilizing at-home agents have been able to rapidly ramp up large programs 75 percent faster because there is no need to acquire and build out new facilities. In one instance, a company was able to scale a program from 50 agents to over 1,100 agents within a 90-day timeframe, a feat that could have required a full year to accomplish using a brick-and-mortar solution.
On the flexibility side, home-based professionals can be scheduled in 15-minute intervals, and staffing levels can be adjusted in real-time to accurately match changing call volumes. In many instances, virtual centers have proven to be 30-40 percent more efficient compared to brick-and-mortar operations.
Healthcare 2.0: The healthcare industry continues to be one of the nation’s greatest sources of innovation and growth. That mindset of innovation is no longer being constrained to developing novel drugs, designing revolutionary medical procedures, or creating new methods for delivering patient care. To succeed in the new era of medicine, companies are increasingly turning to their contact centers as a source of distinctiveness and differentiation. And now with the rapid adoption and growth of virtual contact centers, healthcare organizations have a proven alternative to a 30-year old way of doing business and interfacing with their customers.
Chad Lyne is director of corporate strategy for Alpine Access, Inc., a provider of employee-based virtual contact center solutions and services. Recently named the best contact center and CRM outsourcer for client satisfaction by Datamonitor’s Black Book of Outsourcing, Alpine Access’ clients include ten of the Fortune 100 companies in the financial services, communications, technology, healthcare, retail, travel, and hospitality sectors.
[From the June/July 2011 issue of AnswerStat magazine]