Examining the Healthcare Industry Value Chain

Objective

After completing this lesson, you will be able to analyze the Healthcare value chain and how business models are evolving.

The Value Chain of Healthcare Providers

The business value chain of healthcare providers organizations covers on one side the end-to-end processes focused on the healthcare consumer, the patient. On the other side, it covers the generic business processes considering the financial side:

The graphic shows the healthcare value: The patient related processes health engagement to experience, diagnosis to recovery, admission to cash and data to insights and the cost-related processes total workforce management, source to pay and record to report.

Play the video to learn more about the various end-to-end processes illustrated in the graphic.

The Seven End-to-End Processes in Detail

The video provided an overview of the seven end-to-end processes at the healthcare value chain.

Zoom into the following graphic to identify the detailed steps within each process.

The graphic shows the process steps of each process in the value chain. The steps are described in the following text.

From Health Engagement to Experience

The process includes the entire interaction with a patient as part of a special program or treatment series.

  • Onboarding and demand clarification is usually the starting point.
  • Then, the patient’s health restrictions, the general constitution, and the measures taken so far are analyzed. All information and insights that can be used to analyze and evaluate the well-being of patients are collected and prepared so that they are easy for the patient to understand.
  • Based on a good patient engagement, the medical staff can make more informed decisions and adapt treatment as needed. It also helps patients to better cope with health restrictions or chronic diseases in their daily lives.
  • The evaluation of a healthcare provider depends largely on how a patient experiences the treatment process, whether it is an inpatient or outpatient stay. If the patients can be held as customers and if they even recommend treatment in this hospital to their colleagues, friends, and family, the process was successful.

From Diagnosis to Recovery

The process covers all medical steps from the first diagnosis, to the final recovery.

  • The starting point is the diagnostics before undergoing operating procedures and a complementary treatment.
  • For satisfying patient outcomes, the patient must be prepared for the right medication.
  • Also, the patient is monitored during the hospital stay and follow-up appointments. In this part of a process, it's important that all medical data is captured holistically to prevent medical errors and be able to cure the patient.

From Admission to Cash

The process covers all steps that are relevant for the contractual partnership between the healthcare provider and the healthcare customer starting with the admission of the patient and ending with payments received by the payer.

  • If a patient is admitted at the hospital for a planned visit, the process mostly starts with a referral from the patient's specialty physician.
  • Afterwards, the patient arrives at the admission desk in the hospital for registration. All his personal and referral information is then documented before the patient is transferred to the ward or will be sent to undergo different diagnostic procedures.
  • At the time the patient is discharged, and he receives the doctor's letter, the case can be coded and later billed by the account representative.
  • The invoice can then be sent to the patient, in the case of a self-payer, or his insurance company for payment.
  • Also, it can be valuable for the hospital to provide information about special treatment programs or other offers for patients after their visit to build a long-term relationship with them.

From Data to Insights

This is a process of learning by using a mass of data to generate new insights.

  • All data from activity trackers, prevention programs or medical and administrative documentation are orchestrated and analyzed. They have a high value for the healthcare providers organization and must be used meaningfully to fully exploit their potential.
  • The insights help to visualize results, predict courses of diseases, make medical and therapy decisions, and finally act successfully.
  • Unnecessary processes and resource consumption can be reduced. This is cost-consuming and time-consuming for both the employees and the whole organization.

Total Workforce Management

Workforce management includes all process steps from onboarding a new hire to offboarding the employee due to retirement.

  • The holistic view on the workforce supports employees on the one side to know and use the available human resource (HR) services of the organization and apply HR guidelines. On the other side, the HR workforce is empowered to deliver valuable services.
  • The process usually starts with planning and hiring. It continues with learning processes throughout the complete employee lifecycle.
  • Payment and benefits management is processed until the end of the employment and contract closing.
  • Various benefits and development opportunities help to increase employee engagement in the long term and to deliver the highest standard of patient care with top talent employees.

From Source to Pay

The procurement process from source to pay is focusing on everything related to internal and external ordering processes and the logistics coming along with it.

  • Like in all other industries, one goal is to reduce the time per contract creation cycle with new and long-term suppliers.
  • Ordering medical equipment and devices needs a good forecasting based on the available historic and predicted information. The lack of equipment such as medication, protective gear, or surgical materials can have serious consequences for the patient during the treatment process.

From Record to Report

The process from record to report covers all financial and controlling activities.

  • In a hospital, the financial accounting team must for example also monitor for discrepancies between what the hospital billed and what was paid by the insurance companies or the self-payers to finally close a patient visit on the financial side.
  • Financial reports are generated for all the different medical and administrative departments of the healthcare providers organization. These reports enable everyone to generate insights and rethink processes or workflows inside the organization.

Summary of the Lesson

  • The healthcare value chain covers seven end-to-end processes.
  • Four processes are focused on the healthcare customer, the patient: Health engagement to experience (patient engagement), diagnosis to recovery (cure management), admission to cash (order management), and data to insights (learning and analytics).
  • Three processes are related to generic economic criteria of industries: Total workforce management, source to pay (procurement), and record to report (financial management).
  • The main business goal is to maximize the patient outcome and reduce the costs for the healthcare providers.