R Everest Group Services PEAK Matrix™ for Healthcare Payer BPO Service Providers Focus on Conduent December 2017 Copyright © 2017 Everest Global, Inc. This document has been licensed for exclusive use and distribution by Conduent EGR-2017-12-E-2506 Introduction and scope Everest Group recently released its report titled “Healthcare Payer BPO – Service Provider Landscape with Services PEAK Matrix™ Assessment 2018”. This report analyzes the changing dynamics of the healthcare payer BPO landscape and assesses service providers across several key dimensions. As a part of this report, Everest Group updated its classification of 25 service providers on the Everest Group Services PEAK Matrix for healthcare payer BPO into Leaders, Major Contenders, and Aspirants. The PEAK Matrix is a framework that provides an objective, data-driven, and comparative assessment of healthcare payer BPO service providers based on their absolute market success and delivery capability. Based on the analysis, Conduent cemented its position as a Leader. This document focuses on Conduent’s healthcare payer BPO experience and capabilities. It includes: Conduent’s position on the Everest Group healthcare payer BPO PEAK Matrix Detailed healthcare payer BPO profile of Conduent Buyers can use the PEAK Matrix to identify and evaluate different service providers. It helps them understand the service providers’ relative strengths and gaps. However, it is also important to note that while the PEAK Matrix is a useful starting point, the results from the assessment may not be directly prescriptive for each buyer. Buyers will have to consider their unique situation and requirements, and match them against service provider capability for an ideal fit. Copyright © 2017, Everest Global, Inc. 2 EGR-2017-12-E-2506 Everest Group’s definition of HLS includes the following three segments Healthcare and Life Sciences (HLS) Focus of this report Payer Provider Life Sciences Private health plans Large health systems Pharmaceuticals Stand-alone hospitals Medical devices Public health plans Pharmacists Biotechnology Physician practices Others1 Diagnostics labs Notes There are multiple operating-model alternatives ranging from internal shared services / Global In-house Centers (GICs) to third-party outsourcing. This package focuses primarily on third-party models This package covers vertical-specific BPO within the Healthcare Payer space. It does not include coverage of horizontal business processes such as F&A, HR, procurement, and contact centers 1 includes companies such as healthcare data & information services and medical products distribution Copyright © 2017, Everest Global, Inc. 3 EGR-2017-12-E-2506 Everest Group PEAK Matrix™ Healthcare Payer BPO – Service Provider Landscape with Services PEAK Matrix™ Assessment 2018 Everest Group Healthcare Payer BPO – Service Provider Landscape with Services PEAK Matrix™ Assessment 2018 High Leaders Major Contenders Leaders Major Contenders Cognizant Aspirants Capgemini Accenture Star Performers WNS Wipro EXL NTT DATA DXC Technology Shearwater Health HGS Conduent Concentrix Sutherland Global Services Firstsource HCL CGI Market impact Genpact and value and value delivered) Technosoft Tech Mahindra Infosys Omega Hexaware Syntel Visionary RCM (Healthcare payer (Healthcare payer BPO market portfolioadoption, mix, Low Aspirants Intelenet Low High Healthcare payer BPO vision & capability (Vision and strategy, scope of services offered, innovation and investments, and delivery footprint) 1 Service providers scored using Everest Group’s proprietary scoring methodology given on pages 11 and 12 Note: Assessment for Technosoft and Visionary RCM excludes service provider inputs on this particular study, and is based on Everest Group’s estimates, which leverage Everest Group’s proprietary Transaction Intelligence (TI) database, ongoing coverage, service provider public disclosures, and interaction with buyers Source: Everest Group (2017) Copyright © 2017, Everest Global, Inc. 4 EGR-2017-12-E-2506 Conduent (page 1 of 5) Healthcare payer BPO – Everest Group assessment Measure of capability: Best-in-class Very high High Medium high Medium Medium low Low Not mature Market impact Vision & capability Scope of Innovation Market Value services and Delivery Vision and adoption Portfolio mix delivered1 Overall offered investments footprint strategy Overall Strengths Areas of improvement With capabilities across both Medicaid and commercial plans, Conduent With the separation from Xerox less than a year behind it, the service is one of the rare entities to serve both sides of the market provider experienced a flat growth rate. As things stabilize, the service provider should refocus on revenue expansion as an immediate priority With ~10% of FTEs located nearshore, it is one of the few players in the healthcare space to possess significant nearshore capabilities, providing A skewed focus towards transactional activities, such as CCO, print & it with an ability to distribute the workload as per the client’s need as well mail, and initial claims processing, also poses a challenge. Conduent as service a Spanish-speaking population needs to aim at other adjacent processes in order to move up the value chain and reinvigorate growth With access to a diversified client set, Conduent has access to abundant data set, which can be leveraged to drive initiatives such as population Buyers also pointed out that high churn at the associate level is an area health that the service provider needs to improve Buyers appreciate good relationship management capabilities, stable senior leadership, and robust training programs as key strengths exhibited by the service provider 1 Value delivered score and overall PEAK matrix positioning adversely impacted for those service providers who did not provide adequate information Copyright © 2017, Everest Global, Inc. 5 EGR-2017-12-E-2506 Conduent (page 2 of 5) Healthcare payer BPO – overview Company profile: Conduent is the world’s leading provider of diversified 2015 2016 2017 business process services with capabilities in transaction processing, 1 automation, and analytics. Conduent works with both government and Revenue (US$ million) Not disclosed commercial customers in assisting them to deliver quality services to the Number of FTEs ~10,200 ~11,020 ~10,800 people they serve. This includes multi-industry offerings such as customer care, transaction processing, finance & accounting, and human resources, Number of clients Not disclosed as well as industry-focused offerings in areas such as healthcare, financial services, transportation, retail, and telecommunications. Key leaders Recent acquisitions and partnerships Ashok Vemuri, Chief Executive Officer 2015: Acquired RSA Medical, a health consumer engagement platform Group Chief Executive, Financial Services and Pratap Sarker, and services company, to strengthen consumer engagement and Healthcare experience offerings Jeff Hechemy, General Manager, Healthcare Payer 2015: Acquired Healthy Communities Institute, a healthcare platform, to strengthen its healthcare business and expand offerings Headquarters: Florham Park, New Jersey, United States 2015: Acquired inVentiv Patient Access Solutions (iPAS), an inVentiv Website: www.conduent.com health company, to expand its pharmacy solutions portfolio Suite of services Claims management Member engagement Recent developments Network management Opened its new global headquarters at New Jersey, United States Care management Developed a software-enabled service to help people improve their Payment integrity services medication adherence by quickly identifying the major barriers they face, Care integration & Population health management services and delivering highly personalized support via the communication Medicaid managed care solutions channel that the member finds most convenient and persuasive 1 Represents revenue for 12 months ending June 30 Source: Everest Group (2017) Copyright © 2017, Everest Global, Inc. 6 EGR-2017-12-E-2506 Conduent (page 3 of 5) Healthcare payer BPO – key delivery locations Ohio Anchorage Indiana Virginia Wisconsin New York Montana Illinois Rhode Island New Hampshire New Jersey Maryland Washington Wyoming Missouri Massachusetts District of Columbia Colorado Connecticut California North Carolina Utah Kentucky New Mexico Hermosillo Georgia Alabama Florida Noida Hawaii Ciudad Juarez Santo Domingo Indore Monterrey Manila Guaynabo Bangalore Tennessee Montego Bay Chennai Mississippi Louisiana Kochi Cebu Guatemala City Arkansas Texas Suva Source: Everest Group (2017) Copyright © 2017, Everest Global, Inc. 7 EGR-2017-12-E-2506 Conduent (page 4 of 5) Healthcare payer BPO – capabilities and key clients Key healthcare payer BPO engagements Client name Processes served Region Client since Top 10 national payer client Claims management, member engagement, and care management North America 2016 State-based BCBS Claims management, member engagement, and care management North America 2016 Missouri POS/CCIP Claims management and member engagement North America 2016 Healthcare payer BPO FTE mix by Healthcare payer BPO revenue mix Healthcare payer BPO FTE split by Healthcare payer BPO number of segment by geography delivery location clients by buyer size1 Number of FTEs Revenue in US$ million Number of FTEs Number of active clients 100% = ~10,800 100% = Not disclosed 100% = ~10,800 100% = Not disclosed Network Product management development (1%) Nearshore Care 4% management 5% 8% 20% 38% 70% 54% Offshore