Health Management Technology

Today’s transforming healthcare market is dramatically altering the types of products health plans sell and the way they are sold. According to a March 2006 Forrester report, the individual and family insurance market is growing due to the availability of lower–cost plans and the tax–favored status of health savings accounts. At the same time, cost–shifting by employers and the rise of consumerism are producing a much more engaged healthcare purchaser. Consumers’ service expectations are rising, and they are demanding better products, more real–time information and greater personalization, all for less cost. These market drivers have led some health plans to increase their focus on self–service capabilities, new and lower–cost distribution channels, and enabling technology and tools, much like the financial services industry did a decade ago.

Blue Cross and Blue Shield of North Carolina (BCBSNC), a leader in delivering innovative healthcare products, services and information to approximately 3.4 million members, leads the North Carolina individual insurance health plan market with more than 50 percent market share. BCBSNC recognized that market trends were driving up costs and that it needed to modify its sales and marketing approach. Consumers were demanding easy access, flexibility, customization, speed, and lower–cost solutions, however BCBSNC’s processes and tools were not meeting expectations. Many of the applications being received were incomplete and required either phone or postal mail follow–up with consumers to get all the required information. In addition, there were multiple handoffs in the processing area using an entirely manual process. These issues contributed to an application processing time of more than 45 days. BCBSNC wanted to differentiate itself in a highly competitive market, so it developed and deployed, with the help of Deloitte Consulting LLP, an Internet–based consumer store front, called Buy Online. This service allows individuals or their broker/agent to purchase individual health and other insurance products offered by BCBSNC

The Buy Online Project

The vision for the Buy Online project was to enable North Carolina residents to access and purchase affordable insurance products online through a guided selling and comparative shopping process. Specific goals of the solution included: 1) Creating an innovative, user–friendly electronic application for individual applicants that systematically links to back–end operations; 2) Leveraging technology, including the Web and robust workflow, to target an under–penetrated customer base, grow revenue and gain first–mover advantage in the marketplace; 3) Reducing sales–to–enrollment turnaround time and improving processing efficiency to provide consumers with coverage more quickly; 4) Recognizing premium revenues more quickly; and, 5) Improving management reporting across the entire sales process.

The resulting solution integrated a Siebel–based application, product selection, underwriting and rating tools, and, automated enrollment, premium capture and member fulfillment functionality through a multi release schedule. BCBSNC deployed the initial release of the Buy Online application in December 2003. Today, the solution processes roughly 8,000 individual applications per month, of which about 40 percent are processed and enrolled without any manual intervention.

The Buy Online solution provides the following capabilities:

Guided Selling—The system provides an initial series of questions to individual consumers that assists them with determining which products and benefits would meet their needs before starting the actual application process. This simplifies the product selection process and reduces the number of quotes required to find the most appropriate plan options, including estimated costs.

Application Processing—Once a consumer selects a plan, he or she proceeds to the private and secure online application that collects demographic and medical information. Proprietary business logic validates data entry and presents additional medical questionnaires based on individual responses. BCBSNC’s rules–based technology can evaluate medical questionnaire responses, underwrite and determine final rates, and approve applications in real–time.

Producer Access—Producers (brokers and agents) represent more than 60 percent of BCBSNC’s individual insurance business. Providing access to producers through a secure, password–protected Web portal was a critical requirement for Buy Online, as it would help reduce costs and improve service. Today, producers can access Buy Online remotely with their customers to initiate quotes, track an individual application through the entire underwriting and enrollment process, and manage their personal book of business.

Additional Quoting Options—Once an application has been underwritten and rated, the applicant has the ability to modify plan selection choices to meet his or her budget needs without having to reapply, greatly enhancing the probability that the consumer will purchase the plan and not abandon the application process. In addition, the applicant can select additional product offerings that were presented using previously captured data, which provides new revenue opportunities for BCBSNC.

Payment Capture—Premium collection (binding the coverage) has always been a challenge for BCBSNC in this market segment. By providing online payment–capture capabilities through a credit card interface system, the company is able to reduce collection costs, eliminate administrative rework and increase sales.

My Member Services—The Buy Online application also links to BCBSNC’s existing online member portal, which is designed to allow BCBSNC members to make basic changes to their demographic information (such as name and address), request changes to their insurance coverage, and track their claims or account balances if they have an HSA. Certain benefit changes, such as decreasing the deductible or adding maternity coverage, require additional underwriting. These requests utilize the automated underwriting and application processing workflow functionality, allowing historically manual requests to be handled immediately online.

The Buy Online Advantage

Since the addition of the Buy Online sales channel, BCBSNC has realized a 25 percent increase in the number of individual applications received. In addition, BCBSNC has seen a shift in channel distribution, with a 10 percent increase in the less–expensive direct channel.

BCBSNC receives 85 percent of its direct–sold, under– 65 applications through its Buy Online channel. The data validation and eligibility checks that are in place in the online application mean that these applications do not require manual review to confirm their completeness. In addition, 40 percent of all applications received (almost 3,500 applications per month) are auto–approved, requiring no manual intervention, and the automated enrollment interface allows for more than 95 percent of all applications to go through the enrollment interface automatically.

Before the implementation of the Buy Online solution, up to 40 days would pass from the initial quote to the issuance of an ID card. Buy Online reduced the end–to–end process from weeks to a few days, or less, and increased broker and member satisfaction. In addition, for those applications requiring telephone interviews, the technology reduced the average call time from 10 to 4 minutes per application. Buy Online enabled BCBSNC to redefine the amount of information required to submit the applications to Underwriting, and enforce the business rules throughout the system. This enabled the Underwriting and Enrollment teams to reduce the time spent tracking down missing information critical to their processes. In fact, the system captures all of the information required to complete the process before the application reaches Enrollment.

BCBSNC significantly improved its sales reporting capabilities and the overall management of the sales and application processing functions by storing all of the application, underwriting and enrollment information in a central data repository. The Buy Online application allows for real–time reporting across all departments, including cycle–time, processing errors, close ratios and product sales, by distribution channel and producer.

The Buy Online workflow management tool allows every department (including producers) to enter, track and manage information and activities, significantly improving the speed and effectiveness of communications. Producers previously felt out of the loop about where their clients’ applications were in the process. Today, producers have immediate, online access throughout the entire process from one location.

Conclusion

Buy Online reduced BCBSNC’s application processing and underwriting times more than five–fold. However, there are situations where the underwriting process cannot completely be handled electronically. For those applications that are not auto–approved, the system assists the underwriter through a manual evaluation process, still providing the applicant or producer with the application status. This electronically managed manual underwriting process reduces mail costs and helps improve consistency throughout the underwriting process.

Buy Online enabled BCBSNC to redefine the amount of information required to submit the applications to Underwriting, and enforce the business rules throughout the system. This enabled the Underwriting and
Enrollment teams to reduce the time spent tracking down missing information critical to their processes.

Buy Online enabled BCBSNC to redefine the amount of information required to submit the applications to Underwriting, and enforce the business rules throughout the system. This enabled the Underwriting and Enrollment teams to reduce the time spent tracking down missing information critical to their processes.

As consumers become more engaged in their healthcare purchasing decisions, and demand greater information and transparency, health plans will need to respond with innovative approaches, products and services. Similarly, health plans are challenged to grow in an increasingly competitive market. Technology and the Internet can help to create new, cost–effective options for health plans with substantial benefits. BCBSNC’s Buy Online application is a solution health plans should consider when forming an overall Sales IT strategy.

	Gary Bolt is VP, individual sales, BCBSNC (top left). Brian Keane is principal, life sciences & health care industry practice, and Sahal Laher (right) is senior manager, enterprise applications: Life sciences & health care industry practice, both with Deloitte Consulting LLP.