case study

BlueCross/Blue Shield of Tennessee
Achieving Results through Imaging/Workflow and Process Redesign

BlueCross BlueShield of Tennessee is a large, multi-line health insurer with approximately 2.9 million members and 4,300 employees. The company competes in a highly aggressive environment that requires they continually seek ways to improve service and reduce costs.

Objective

BlueCross BlueShield wanted to maximize the benefits associated with implementing new imaging and OCR technology. They engaged the Robert E. Nolan Company to assist them in this initiative.

Current Environment

A series of related projects are underway to successfully deploy new technologies and redesign the associated processes. These integrated efforts offer the potential for significant cost and cycle time improvements. The key technologies being deployed are: document storage and retrieval, which has been implemented; OCR/ICR, which was the primary focus in 2000; and automated workflow, which is the principal focus for 2001. This case study describes the phase of the project directed at replacing the ten-year-old OCR capability.

The goal of the plan’s executive management is for the operations staff to drive the technology deployment. Management believes true transformation of the claims operation occurs when technology is correctly deployed and the staff "reinvent" their own operations.

Strategy Implementation

Management selected five cross-functional teams to participate in the redesign process, involving more than 100 operations and IT employees. The teams were assigned to the following tasks:

1. Front-end process redesign
2. Claims process redesign
3. Management practices redesign
4. Organizational redesign
5. Systems selection / design

Each team met between six to eight hours per week for approximately eight weeks. During these meetings, the teams successfully completed the design work and implementation was completed six months later.

Project Results

Results of the project include significant improvements in customer service, cycle time and quality.  Key benefits from the project include:

1. Annual cost savings of approximately $6.4 million
2. A streamlined process that is simple to train and understand:
   1. consistency across systems, product lines
   2. eliminates manual/unnecessary activities (reduced 150 steps to 20)
   3. reduces re-routes (reduced number of sorts from 37 to three)
3. Achieve 24-hour turnaround time goal
4. Improved quality and customer service
5. Reduced administrative cost—estimated at approximately $6.1 million per year—a 90% improvement over the original stretch

Key elements that contributed to the success of this project include a high level of employee and executive involvement, a well-defined strategy, clear and agreed upon stretch goals and an integrated process redesign and technology deployment effort.

Steps Eliminated Through Process Redesign (red boxes)