Robotic Process Automation Can Drive Billion-Dollar Savings in Healthcare Claims Processing, says Alsbridge

DALLAS, April 19, 2016 /PRNewswire/ -- Alsbridge Inc., a global sourcing, benchmarking and transformation advisory firm, today predicted that deploying smart robots to improve the efficiency of claims processing can generate billion-dollar savings for the healthcare industry.

"Robotic Process Automation (RPA) offers a cost-effective strategy to significantly increase the rate of healthcare claims automation and drive cost savings," said Rod Dunlap, a Director in Alsbridge's RPA practice. "Insurers struggling to update aging, inflexible legacy systems or grappling with the price tag of new technology platforms now have an alternative option."

RPA applications use rules-based logic to automate the review and resolution of common claims issues. Because they run as allocated resources on local servers and have minimal impact on underlying infrastructure, RPA tools can operate as an extension of existing adjudication systems.  Cost is another advantage – a digital robot that replaces 5 to 10 human claims processors costs as little as $10,000 to $15,000 a year, which includes license fees, deployment and maintenance. Additionally, robotic automations can be developed, implemented and operational in a matter of weeks, providing the flexibility needed to adapt to frequent changes required by mandates and regulations.

"We have helped health insurers use RPA to extend the functionality of existing adjudication platforms and increase auto-adjudication by more than 10 percentage points," says Dunlap. "This represents a significant reduction in administrative expense for individual health insurers as well as for the industry as a whole."

According to America's Health Insurance Plans (AHIP), a national trade association representing the health insurance industry, approximately 80 percent of healthcare claims are now processed automatically. A claim requiring human intervention costs approximately $4 to process, while an auto-adjudicated claim costs approximately $1. Alsbridge, meanwhile, has found that the cost-per-claim with RPA systems can be as little as $1.25. Considering that more than 3 billion healthcare claims are filed each year, applying RPA to extend auto-adjudication rates by an additional 10 to 12 percent can generate savings well in excess of $1 billion.

Health insurers have long recognized the cost-saving opportunity of increased automation, and have adopted various strategies to reduce human intervention in claims processing. One option is to add functionality to existing, decades-old auto-adjudication platforms. Modifying fragile legacy systems, however, is extremely costly and cumbersome. Moreover, constantly changing regulations and insurance guidelines mean that system modifications can be out of date by the time they're implemented.

An alternative approach is to invest in new auto-adjudication platforms that are more agile and effective.  These new platforms, however, can be cost prohibitive and can take several years to implement.

"Health insurers have traditionally been torn between limping along with obsolete and aging technology, or investing in excessively expensive new platforms," said Dunlap. "RPA offers a way to extend the functionality of existing adjudication technology and achieve optimized automation rates."

Note: Alsbridge is an independent advisory firm that does not represent or endorse specific vendors or technology solutions.

About Alsbridge:

Alsbridge (www.alsbridge.com) is a management consulting firm that helps companies reduce costs and enable their businesses by optimizing the way they work with their vendors. With over 300 consultants on four continents, Alsbridge has been a trusted advisor to over 40% of the Fortune 500 and currently advises over 200 clients a year on over $11B in spend. Experienced consultants apply deep benchmarking databases and market insight to help clients engage the optimal vendors for their situation, negotiate best practice terms at fair market prices and improve the way they govern vendor relationships. Alsbridge clients utilize the most cost effective and value-added global sources for IT infrastructure services, network carrier services, hardware and software, application support and development, business processes and cloud services.

SOURCE Alsbridge Inc.

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