In April 2017, TeleTech acquired healthcare BPS provider Connextions for $80m. The acquisition makes healthcare the second largest vertical for TeleTech, expected to reach ~21% of their annual revenue at ~$300m. I spoke with TeleTech recently to discuss the acquisition and their focus on the healthcare space.

TeleTech’s Healthcare Business at a Glance

TeleTech’s healthcare clients include payers, providers, pharma and medical supplies, medical devices and wellness brands. The company supports these clients from 20 domestic, nearshore, and offshore centers and with ~10k associates, including work-at-home. The size of the support population has grown eightfold over the last four years, adding ~2k roles in 2016 alone, including 900 licensed agents to support Medicaid and Medicare open enrollment.

For the top U.S. healthcare plans, TeleTech offers services in consulting, platform design and integration, revenue generation, and member care services. With its long-term client relationship in the space, TeleTech provides enrollment, sales support, member services, provider, and dental and vision services, and wellness outreach. For example, on the consulting side, TeleTech has helped a healthcare payer redesign their training curriculum to reduce the training time and improve the speed to proficiency, bringing cost savings and being utilized by TeleTech staff and the competing vendor agents.

The Connextions Value Proposition

Connextions was part of Optum since 2011 and offers member acquisition, retention, and customer care services to healthcare plans such as Medicare, Medicaid, individual and group, healthcare providers, and pharmacy benefits managers. The acquisition added new logos for TeleTech to reach ~20 core clients in the sector.

The company gains ~4k agents across the U.S. TeleTech expects the deal to add approximately $115m in revenue annually and to be EBITDA accretive in 2017, bringing the total customer management services business to ~$1.2bn by 2018 from the 2016 level of ~$924m (total company revenue was $1.275bn). Connextions also brings its proprietary healthcare CRM bConnected with embedded workflows, HIPAA compliance and security features, and capability to send the caller a microsite with plans comparison. It also extended the services portfolio with healthcare financial member services, back office and claims support, and telehealth.

U.S. Healthcare is the Most In Need of Customer Experience Improvement

The U.S. healthcare industry is behind the leading sectors in customer experience, with customers facing a limited and complicated enrollment process, lack of visibility of benefits, and disconnected support for member services. TeleTech leverages its experience in other industries to identify opportunities for improvement in healthcare. For example, for a medical and health network in L.A., it provides a single hub for information with a unified phone number for patient access to the hospital, clinics, and doctors, with ~40-50 agents offering concierge level services by locating providers based on proximity and past performance.

The open enrollment for Medicare and the private healthcare exchange, which are inherently seasonal, require quick ramp up of licensed agents in January to facilitate the shopping experience and convert leads until mid-February when the period ends. To license an agent for all 50 states costs upwards of $5k, in addition to training. TeleTech addresses this challenge by placing licensed agents to other programs in the off season, offering a work-at-home model, and working closely with schools of licensing agents. As a result, it is able to scale and bring back experienced agents who require less time to train, at a fraction of the cost of a new hire, and have on average a 25% improvement in their conversion rate year over year.

Another approach is employing new channels and technology in the telesales process. For example, for a healthcare client, TeleTech deployed a private chat channel for outbound call agents to offer customers the option to connect on a mobile device or desktop PC and continue the interaction on the digital channel with co-browsing functionality to draw, highlight on the screen, and send documents. On webchat, TeleTech has added historical information for past interactions with the customer, e.g. time spent on the website, pages viewed, and plans selected – thus giving context to the agent. With these chat capabilities, TeleTech experienced an NPS improvement of ~10-15%, better conversion rate than phone sales, and an increase in self-service adoption.

Remote Support Opportunities & Wellness Outreach

The requirements for healthcare providers and insurers are moving gradually to a more comprehensive view of the healthcare experience with strong use of analytics and digital technology. For example, six months ago, TeleTech started a program to provide video support for patients discharged to their homes to deliver a decrease in readmission rates and improvement in patient satisfaction with their healthcare experience. The patient gets a tablet with a video call button directly connecting with an agent who can see the patient in their home and on the CRM platform carry out an inventory of their medications, vital signs measurements, and check on the patient status and notify a care team if required. Beginning with a dozen agents, the company is looking to combine the current onshore and work-at-home model with offshore support.

TeleTech is also looking to wellness outreach as a strong opportunity to increase the value of healthcare and close some of the gaps for healthcare customers. For several clients, it delivers medication adherence, which includes data analysis for gaps in maintenance medication, and engaging the member with a phone call to understand the issue and offer alternatives. In turn, the medication adherence impacts the 40 metrics forming the healthcare plan star rating.

Under this changing perception of the market, and empowered by senior executive support, TeleTech is actively pursuing similar opportunities for a more holistic approach to healthcare services.