Improvements in operational efficiency can help healthcare organizations keep themselves off the critical list. With that in mind, in 2000, Harvard Pilgrim Health Care (Wellesley, Mass.) turned to online billing to expedite receivables and boost customer service.
In the late '90s, Harvard Pilgrim ($2.1 billion in 2003 premium) called on its own IT resources to create an online enrollment program that quickly won acceptance from customers. Impressed with the results of the initiative, the carrier considered an online solution to expedite billing - a challenging area for health plans because employers frequently add and subtract employees from their rosters. "We wanted to create a really compelling, value-added customer experience in self-service without passing on premium increases related to administration," says David Segal, Harvard Pilgrim's SVP for customer service and operations.
HPHC evaluated three vendors before settling on Natick, Mass.-based edocs because of the vendor's strong track record for providing e-billing solutions and customer service platforms to health plans. [Editor's Note: At press time, edocs announced that it would be acquired by Siebel Systems.] The carrier also called on Wellesley, Mass.-based consultancy Accelare to make sure the solution would meet the needs of both HPHC and its customers. One of the biggest challenges faced by the carrier in implementing a solution was "to make sure we weren't creating something that would be a pain in the neck rather than a value-add," Segal acknowledges.
The vendors teamed with Harvard Pilgrim IT specialists to customize edocs' technology and integrate it with the health plan's existing online enrollment program. "Our goal was to enable an employer to log on to Harvard Pilgrim Health Care Connect, change their roster or an employee's coverage level and see their bill updated immediately," says Peter Troost, edocs' director of healthcare solutions.
With HPHC's online enrollment system already in place, adding e-billing was, in Segal's words, "a light lift." The carrier added a server, but otherwise needed no new hardware. "We just had to hook this billing tool to our enrollment tool to make it a seamless portal experience for the customers," says Segal.
The system went live in 2000 and has required no major upgrades. According to HPHC, the online billing solution has reduced administrative costs and improved the carrier's cash flow. Harvard Pilgrim's "cash-on-hand" metric, which measures how long the carrier could operate without new revenue, has jumped from 47 days to 80 days since the solution was implemented.
Online billing also is popular with the plan's customers, notes Segal. "Employers can look at their bill beforehand to see what their liability is," he says. "They can check their payment history, so they know what cash has gone out the door."
Despite the solution's appeal, currently only 25 percent of the plan's customers use online billing. The reason, says Segal, is that many larger employers still prefer electronic data interchange (EDI), while some small firms cling to the traditional pay-by-coupon-and-check system. "Any of our employers can pay by whatever method best suits their business process," he says. "We'll continue to market the benefits of online billing, however, and we think the number of employers using it will continue to grow."
Case Study Profile
Harvard Pilgrim Health Care (Wellesley, Mass.; approximately $2.1 billion in annual premium in 2003).
Lines Of Business
Health insurance, including HMO, PPO, POS and Medicare plans.
Edocs (Natick, Mass.) online billing program; Accelare (Wellesley, Mass.) business improvement consulting.
Integrate online billing with existing online enrollment.