With health insurers feeling pressure from all directions (new regulations, consumers, rising medical costs), technology is becoming an even more important asset than it was before for carriers. At Blue Cross Blue Shield of Minnesota (Eagan, MN, $1.8 billion in assets), John Ounjian, chief information officer, says that his company is leveraging IT to meet the ever-higher expectations that customers have of their insurance provider, while also working to reduce costs.
John Ounjian, chief information officer, Blue Cross Blue Shield of Minnesota
I&T: You have said publicly that insurance companies must get away from the one-size-fits-all mentality when it comes to customer service. How is Blue Cross Blue Shield of Minnesota doing that? What are some of the challenges associated with moving the thought process and practice of an organization?
John Ounjian: The healthcare industry traditionally moves rather slowly and has not understood market segmentation well enough. The industry has adopted a "one-size-fits-all" mentality in that it provided products and services, then waited to see who would purchase or use them. Rather than asking the customer, "What do you want?" we said, "Here it is." To move from this approach requires a fundamental shift in thinking.
Strong customer service can build sales and visibility as companies try to distinguish themselves from competitors. Blue Cross Blue Shield of Minnesota realizes it must adopt a more customer-centric approach and is personalizing the service experience. We must understand how our members want to do business with us. One member may prefer to interact via e-mail, another by phone, and yet another via the Web.
We must be able to connect with our customers via all those means and must improve the service experience by offering multiple channels into their health plan.
The advent of consumer-driven healthcare is changing the industry across the board. We must focus on improving the quality, speed and security of customer service offerings. We know large employer groups view customer support as a major consideration when selecting us as an insurer. As a result, customer relationship management (CRM) is now a core business function at Blue Cross Blue Shield of Minnesota. We plan to further develop our service offerings with the bulk of solutions in place this year. By offering innovative solutions, we can better meet the heightened expectations of our key stakeholders.
I&T: What are some of the challenges that you have with many of the newer insurance regulations, including HIPAA? How did you prepare the company's IT before the HIPAA regulations were finalized? What still needs to be done now?
Ounjian: At Blue Cross Blue Shield of Minnesota, we have viewed the challenges we face with the newer insurance regulations as opportunities to build a foundation for the future. HIPAA requires that healthcare claims and inquiries use certain transaction codes.
HIPAA presented challenges due to the interdependency of payers/ providers on the implementation of transactions and delays in the publication of the final HIPAA regulations. For instance, we have collaborated with large payers/providers on an independent HIPAA certification program and established a HIPAA clearinghouse to assist providers with compliance.
To prepare the company prior to finalization of HIPAA regulations, we took a proactive approach by developing an implementation strategy based upon the existing Department of Health and Human Services (DHHS) schedule and obtained buy-in from key payers/providers.
We have leveraged HIPAA as a springboard for administrative cost reductions and business process improvements. We knew we needed a fundamentally different architecture than we had. HIPAA is a critical underpinning of our e-business strategy and as a result we are building a new infrastructure composed of loosely coupled components. Still-to-be-done testing: the migration of trading partners to new HIPAA standards, and contingency planning.
I&T: The health insurance industry is being squeezed from many sides (rising medical costs, consumer/public resentment, newer regulations). How is Blue Cross Blue Shield of Minnesota using IT to control (or reduce) administrative costs? Can you share any quantifiable results? How is IT benefiting the customer?
Ounjian: Certainly the healthcare industry as a whole is under more scrutiny and pressure than ever before. The power of technology is that it can help define how we are going to interact with individuals. In the healthcare industry there is a growing demand for convenient, personalized healthcare information. Information technology can help make this information more readily available and provide more efficient and targeted customer service through vehicles such as self-service Web sites and e-mail. On the back-end, technology can streamline or consolidate customer databases, which in turn improves accuracy and saves money.
Blue Cross Blue Shield of Minnesota is using information technology to help control costs by providing Web-based self-service offerings and establishing platforms for direct relationships with stakeholders that enable the delivery of health improvement products and services, ultimately "making a healthy difference in their lives."
I&T: Many health carriers have developed portals for customers. Does Blue Cross Blue Shield of Minnesota have a portal for its customers? If so, how do you make sure that your portal(s) can properly address the concerns and needs of your constituencies (consumers, corporate policyholders, doctors/hospitals)?
Ounjian: Yes, Blue Cross Blue Shield of Minnesota has developed portals for each of its stakeholder groups: agents and brokers, consumers, providers, and employees. Input was obtained from the various stakeholders to ensure the portals are user friendly and provide the needed information.
I&T: Is Blue Cross Blue Shield of Minnesota using technology to communicate with doctors/hospitals over the Internet for claims submissions or referral approvals? If so, how has it gone? Have you been able to quantify a return?
Ounjian: Blue Cross Blue Shield of Minnesota definitely plans to further leverage the Internet going forward. Currently, one large provider group has the capability of submitting claims over the Internet and that capability will be expanded in 2003.
Over 50 percent of our provider referrals are now submitted via our Web-based provider application. Hospital admission notifications are also done over the Internet. The vast majority of claims submitted by providers are electronic submissions. In 2002, 25.5 million claims were submitted electronically. versus five million paper-based.
I&T: It has been said that the insurance industry is competing with the Amazon.com's and the FedExs of the world when it comes to the public's perception of customer service. How is Blue Cross Blue Shield of Minnesota responding to the challenge?
Ounjian: Certainly the public's perception of service is shaped by the level of service in other industries such as retail and banking. And there is no doubt service is becoming increasingly important in today's market.
Companies that deliver on their promise to get the job done and keep the customer abreast of progress every step of the way are to be emulated.
Our efforts are focused on delivering customer-focused business solutions such as 24X7 self-service offerings.
In information technology, we are building a new infrastructure that will help to revolutionize how we conduct business with our major stakeholders. We have a multi-channel service center that integrates voice, e-mail, and Web interactions from self-service offerings. Through such offerings, we are providing more efficient and targeted customer service.
Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio