Carrier Confidential: Regence IT Builds for the Future
Related Sidebar: Success by Design: I&T Talks to Regence CIO Cheron Vail
When Regence senior vice president and CIO Cheron Vail first moved to Portland, Ore., in 1999, her house-hunting efforts fell short on one key criterion: obtaining the coveted view of Mount Hood. Since she joined Portland-based Regence ($8.3 billion in 2007 gross revenue) in November 2003, however, Vail's new office has one of the best views in the city. Mount Hood dominates the horizon of Vail's eastward prospect. Vail can also see the hills of southwest Washington from her window, and on her walls are dramatic photographs of Idaho and Utah, the remaining states in which Regence operates.
Regence was formed in 1995 to realize the administrative benefits of federating the Oregon, Washington, Idaho and Utah Blue Cross Blue Shield plans. However, the carrier hit a roadblock in achieving that ambition when attempting to consolidate on a single technology platform. The goal of the initiative, which began in 1999, was to consolidate the four state plans onto TriZetto's (Newport Beach, Calif.) Facets claims system. By 2003, however, only one state -- Idaho -- and only about 10 percent of Regence's membership was on Facets.
Soul Searching
During the soul searching that followed, the carrier's leadership took a hard look at what had caused the initiative to fail and what capabilities would be needed for success in the increasingly technologically demanding era of consumer-directed healthcare. The existing IT organization was naturally held responsible in large measure for the failure, but the failure's causes were symptomatic of a larger problem, according to Vail.
"One of the big mistakes was that this huge systems conversion was viewed as an IT program and not a business program," comments Vail. "There was no strong business buy-in. The project was managed out of the IT division, and in fact the entire Regence PMO [project management office] was managed out of IT — the strategic IT investment never really had a sense of being a strategic business investment."
After a painstaking nationwide search that took many months, Vail was lured from her CIO job at crosstown provider-owned Providence Health Plans to take Regence's IT organization in a fresh direction. Vail would rekindle the consolidation project under the banner of the carrier's multiyear CPSS — Common Platform, Single System — initiative, which embraces all of the systems projects related to moving Regence's entire membership to the Facets platform.
While CPSS would come to dominate Vail's agenda, she says one of her most pressing challenges upon taking the reins of IT was to address the morale of an organization that had borne the brunt of blame for the platform consolidation failure. "I had to assess where the IT department was at, figure out how to get them proud again and then look to some of the real structural changes that would make a difference in the way the business manages strategic IT investment," Vail recalls.
Taken together, those requirements added up to changes that went beyond the IT organization. One of the most important developments that flowed from Vail's analysis was the creation of a new enterprise program management office (EPMO), run by SVP Joanne Long.
"Getting big projects managed by a neutral organization has been a boon," Vail remarks. "A great deal of collaboration and cohesiveness has flowed from the EPMO's creation, and the interaction between IT, the business units and the EPMO has become a kind of triangle for how we manage."
Taking the PMO out of IT also helped Vail's IT organization focus on the CPSS and on building the capabilities and competencies that IT would need to provide into the future, Vail says. But even more important, because project/program management is now a corporate responsibility, the business has taken on part of the ownership and accountability associated with strategic IT investments, according to Vail.
Influencing Business Ideas
But while the business has taken on greater responsibility for technology, Vail's vision for the IT organization emphasizes her organization's engagement with the business not only to effectively manage individual initiatives but to shape strategic direction. "Within the EPMO, both the business and IT have a voice, and so that's one way to get more aligned," she says. "The other challenge was to make sure, outside that organization, that we are integrated with the business to the degree that when they are coming up with ideas, we are sitting at the table with them, able to influence those ideas with technology."
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio
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