As healthcare organizations continue to navigate the impacts of the COVID-19 pandemic, they face a new operating reality. Labor displacement, financial uncertainty and new production demands have disrupted day-to-day operations. 

Healthcare providers, payers and life sciences are seeking technology to help improve workforce productivity. The search has boosted tailwinds for the adoption of automation technology, a core enabler of workforce productivity.

It's important to first define automation before evaluating why and where the healthcare industry has invested in it, as well citing examples of leading startups that leverage this technology to transform healthcare operations.

What Is Automation?

Automation refers to the use of technologies to complete human activities with little human intervention. These technologies, commonly robotic process automation (RPA) and/or artificial intelligence (AI) software, create productivity efficiencies primarily by completing activities in a more efficient and accurate manner.

Among these technologies, RPA is best suited to automating repetitive, high-volume actions that deal with structured data (i.e., transferring discrete data from a field in one application to another). However, RPA alone is limited in functionality and incapable of executing actions in a process workflow that deal with unstructured data and require reasoning, judgment or predictive insight.

To automate these more complex actions, RPA must be paired with artificial intelligence (AI) technologies such as machine learning (ML), automated speech recognition (ASR), natural language processing (NLP) or even optical character recognition (OCR), to unlock “cognitive automation”.

Many modern enterprise automation platforms either leverage or rely solely on cognitive automation technologies to support the automation of hyperspecialized workflows (i.e., recognizing and transcribing speech in a medical encounter).

Healthcare’s Productivity Problem: Why We Need Automation

The healthcare industry has long been plagued by productivity challenges. While many factors likely contribute to this, at its core the sector is a labor-intensive one with a well-documented history of inefficiency. The productivity of provider, payer and life sciences operations has generally lagged relative to other sectors of the economy as a result.

Automation technology presents a logical potential solution to this problem. While automation has been on the road map of healthcare leaders, the industry has historically been slower than others in adopting and scaling this technology, despite a nearly 40% technical potential for automation worth upwards of upwards of $150 billion in possible savings.

This has changed in light of operational challenges brought about by the pandemic, and since 2020 the healthcare industry has not only accelerated their adoption of this technology, but has actually led all industries in increasing their investment into automation programs.

Providers, whose productivity challenges have been exacerbated by large declines in operating margins, job losses and clinical burnout, now list automation as top technology priority, with three times as many hospitals having deployed the technology in 2020, compared to 2019.

Many payers, meanwhile, already had early automation initiatives underway, and the last year was a catalyst to scale and focus these initiatives, particularly in optimizing the member and provider experience. Similarly, life sciences organizations, where many also have existing investments in automation programs, expect to boost investment in automation technology by more than 50% this year to fuel new demand for research and development and production capacity.

Where is the Healthcare Industry Deploying Automation Today?

As healthcare organizations begin to launch automation programs, they have found it prudent to start by targeting functional verticals where inefficiency creates inordinate financial, customer-facing or clinical risk. The workflows within these functional areas tend to have a concentration of administrative and clinical waste, involve a high-volume of repetitive or iterative tasks, and often require misallocated, high-cost labor resources to perform some of these tasks.

We have highlighted some of these areas below and cite a number of vertical automation platforms gaining commercial traction by eliminating the inefficiencies inherent to these areas.

Billing and Payment Operations

Of the $765 billion spent by the healthcare industry on administrative activities each year, $400 billion is spent on the administrative transactions that govern billing and payment related activities between providers and payers.

It is estimated that anywhere from one-third to one-half of this spend can be saved through administrative simplification, in particular by digitizing and automating the nearly 43 billion inter-related steps that comprise these transactions each year. Billing and payment workflow optimization can also yield meaningful working capital and administrative efficiencies, particularly impactful to provider bottom lines and payer administrative cost ratios in light of the pandemic.

Provider revenue cycle and payer claims operations are therefore growing targets for automation efforts. As reimbursement increasingly becomes value-based and transparent, collaborative billing and payment workflows will be important enablers of this shift. As a result, solutions that automate billing and payment data capture, and facilitate bi-directional data sharing, will be best positioned to streamline payment cycles and enable more collaborative contracting.

A handful of automation platforms are focused on these opportunities today, including Olive AI, which is expanding upon its roots as a provider billing-workflow automation solution by automating clearinghouse and payer claims workflows in order to support more integrated billing and payment activity.

Akasa, meanwhile, is a Unified Automation platform that combines natively integrated cognitive automation with human decision support to automate the end-to-end provider revenue cycle process.

Veda is a data management automation platform that is focused on helping payers improve provider directory management, claims, and billing workflows by increasing data accuracy and usability.

Contact Center and Member Operations

Billions of phone calls flow in and out of healthcare contact centers in any given year, with patients, providers, payers and administrators calling one another to fulfill critical care needs, but oftentimes also to expedite basic informational inquiries.

Handling these calls takes more than 10 minutes, on average. In some cases just 20% of these calls are resolved on first touch, compared to an industry average of 74%, meaning this cycle is frequently repeated. To compound this problem, digital and phone-based care activity surged over the last year. This is significantly straining healthcare contact center capacity and also impacting downstream clinical staff, who are often the recipients of follow-up inquiries.

Missing or improperly handling these calls and the insights generated from them can adversely impact patient engagement rates, Star ratings and risk leakage among other financial and operational ramifications.

As a result, healthcare organizations are prioritizing NLP-powered conversational automation tools to help them better manage contact center operations, given that this technology can save nearly 4 minutes per call and 50-70 cents per interaction. Solutions that are able to automate inbound and outbound phone calls, as well as enrich existing data with insights captured from this “off-screen” data, will be best positioned to drive more efficient and intelligent healthcare communication workflows.

Syllable AI is a conversational automation platform for healthcare providers that leverages voice and web-based digital assistants to intelligently fulfill patient inquires and create valuable contact-center capacity by saving contact center staff time.

Meanwhile, Infinitus is a voice-automation platform for pharmaceutical distributors and payers that automates and collects data from healthcare’s nearly 1.5 billion annual business-to-business phone calls, thus streamlining time-consuming eligibility and benefit verification workflows.

Clinical Operations

The pandemic has exposed ongoing physician and nurse staffing shortages and clinical burnout is now accelerating them, as clinicians, already struggling to balance their clinical and administrative responsibilities, contend with new coverage policies and adapt to new treatment paradigms.

These challenges are particularly acute in under-resourced settings. While technology alone will not solve these issues, it can play a role in eliminating the administrative tasks that most contribute to burnout, such as prior authorization, visit documentation and medical record navigation, creating capacity that can be redirected toward delivering clinical care.

Solutions that are able to automate administrative tasks, codify insights from these tasks and then surface high-fidelity, auditable learnings that clinicians trust have the highest potential for adoption.

Today, providers are turning to solutions like digital physician-assistant platform Suki, a Flare Capital portfolio company that aims to reinvent how physicians interact with technology by automating and optimizing the billions of time-consuming clinical notes clinicians document each year using NLP and ML.

Additionally, providers in under-resourced settings have benefitted from platforms like Pair Team, an operational automation platform that combines RPA and services to support Community Health Centers by automating patient engagement and quality-care-gap closure to create capacity and valuable revenue for these providers.

Payers, meanwhile, have embraced platforms like Flare Capital portfolio company Cohere Health, a prior authorization automation platform that combines AI-enabled digital utilization management tools with provider administrative support functionality to eliminate unnecessary steps in the hundreds of millions of prior authorizations completed each year.

An emerging but promising application of automation technology is developing around clinical decision support, particularly analyzing the growing volume of medical images to help clinicians triage care. AiDoc is an imaging decision-support platform that leverages AI to automatically analyze medical images for a range of clinical conditions and surface care recommendations, improving physician productivity.

Pharmaceutical Operations

The biopharmaceutical industry has played a critical role in facilitating our recovery from the pandemic, enabled by the digital transformation that many drug manufacturers, distributors and pharmacists have undertaken to meet new production demands.

The current trillion-dollar industry has seen a continued decline in R&D ROI, since the cost of new drug approvals has increased by 145% over the last 15 years and R&D returns are near all-time lows.

The pandemic threatens to further exacerbate the situation, since over 70% of trials were delayed or canceled due to disruptions in 2020, and nearly a third were in Phase III. As a result, the industry has accelerated its use of cognitive automation tools, particularly in support of drug discovery efforts, where the size of compound libraries and abundance of research data result in an inefficiently iterative discovery process.

Solutions that leverage AI to validate drug targets and/or identify and screen lead compounds more efficiently have recently seen increased uptake. Insitro is a leading drug discovery platform that uses ML to build integrated models of a disease, identify potential therapeutic targets and inform therapy development, streamlining inefficient steps in the traditional development pathway.

The role of the pharmacist and pharmacy administrators has also been elevated during the pandemic. These teams have played a critical role in ensuring that patients continue to receive life-saving medication despite the increased administrative burden placed on their shoulders as a result of volatile drug shortages and recalls, ever-evolving authorization and policy requirements, and the need to fill and manage more medication therapy regimens remotely.

Pharmacy teams need specialized automation solutions like Plenful, a pharmacy workflow automation platform that leverages data centralization and AI with an embedded human audit to identify high-value manual use case targets and streamline prior authorizations, prescription ordering, financial assistance and call center workflows.

Supply Chain, Logistics and Resource Management Operations

Care utilization patterns have also been upended during the pandemic, with a significant uptick in virtual and home-based care utilization, but also surges in inpatient utilization among acutely ill COVID-19 patients. Healthcare providers have struggled to forecast and prepare for these fluctuating surges, while all healthcare organizations have shouldered the burden of mobilizing the resources needed to meet patients in the home or other more accessible settings.

This has exposed the need for more effective operational management solutions to accurately inform resourcing and throughput efforts in inpatient settings as well as facilitate care continuity in home and post-acute settings. As a result, automation solutions that connect, streamline and guide more intelligent transitions of patients and medical equipment across multiple care settings are particularly valuable to healthcare organizations.

Element5 is an end-to-end automation platform for home and post-acute care facilities, offering a no-code solution, automation workflow library and pre-built integrations to help its customers seamlessly manage patient care across multiple settings.

Qventus has played an important role in helping providers optimize operational performance and manage capacity throughout the pandemic, leveraging ML to predict and preempt operational bottlenecks and facilitate more intelligent care coordination across the enterprise.

Scaling Automation Programs

While healthcare organizations are enthusiastic about the potential of automation technologies, scale and return on investment have been elusive for many. Some of the most common roadblocks they have encountered are the lack of a unified enterprise automation vision, outdated technical infrastructure to power automation, limited technical talent to support automation and an inability to prioritize and measure the value of automation programs.

Some of the leading automation platforms in the market seek to mitigate these roadblocks by offering tooling and functionality to address them. In fact, automation platforms that offer the following are best-positioned to support healthcare organizations on their automation journeys: 1) flexible deployment models (on-premises, public and private cloud, etc.), 2) workflow discovery capabilities that can surface high-value automation targets, 3) software development capabilities with low-code or no-code functionality that support “citizen development" 4) performance management capabilities that support auditability and ROI measurement, and 5) a human-in-the-loop design that works in concert with the workforce.

Looking Ahead

Seeking productivity yield and operational efficiency in light of challenges introduced by the pandemic, the healthcare industry has accelerated its operational transformation, enabled by automation technology.

While the pandemic has been an important catalyst to launch automation efforts, in order to start to realize the full value of their automation programs, providers, payers and life sciences organizations will seek partners who can help them scale these efforts vertically, and eventually, horizontally across the enterprise.

Early-stage companies addressing payment and billing, contact center, clinical, pharmacy and logistics workflows will be attractively positioned to solve the immediate needs of the industry and create a foundation from which to scale. Ultimately, those companies that can solve immediate needs and also create the tooling platform to facilitate an expansion of automation efforts will lead the automation revolution.

About the authors

Parth Desai is a principal at Flare Capital Partners, where he is responsible for investing in and supporting a range of healthcare technology companies improving the delivery and quality of healthcare while reducing costs. Parth was previously an investor and member of the innovation team at NewYork-Presbyterian Hospital, a healthcare management consultant at Monitor Deloitte focused on corporate strategy and M&A, and a policy analyst for the State of Massachusetts, where he authored pharmaceutical industry regulations that were signed into law. Parth currently serves on Boston University School of Public Health’s Advisory Committees.

Eric Bowman is a fourth-year MD candidate at Howard University College of Medicine. He has engaged in multiple areas of medical research, and was a Cancer Research Intern at the National Cancer Institute, where he studied rare genetic diseases. As a Flare Scholar with Flare Capital Partners, he has explored how to provide innovation and automation within healthcare to lower costs, decrease healthcare disparities, and provide better patient care.