Leveraging Legacy

Although South Carolina Blues sounds like a classic R&B tune, it is actually only two years old. In fact, it's not a tune at all. For Columbia-based Blue Cross Blue Shield of South Carolina (BSBCSC, more than $1 billion in assets), the three words make up most of the URL for the company's Internet offering, www.SouthCarolinaBlues.com.

And with more than 23,000 policyholder and 4,000 provider users, it is one of the most functional insurance sites in the industry and has won seven awards, including a Best-of-Blues Award from the Blue Cross Blue Shield Association.

The site has received recognition due mainly to its functionality. At the site's My Insurance Manager, members can check claims, hospital in-patient/ out-patient eligibility and bill status; view explanation of benefits; change primary care physicians and order ID cards, among other features. Providers can check claims, out-of-pocket expense and eligibility status or make referrals, to name a few. Lastly, insurance agents can go online to get rates for employer groups.

The online access members and providers have to personal and medical information could be deemed a privacy risk, but Anne Castro, chief design architect, BCBSSC, disagrees. "We are very cognizant of privacy and the risk of Internet use," she says. "We use the latest encryption technology. We also make sure that we only give the information that is necessary." For instance, when a provider wants to know the status of a claim, "we don't give the reason why the customer went to the doctor, we just give the claim's status."

"We developed the site to present a way for customers to get information through an alternate channel," says Stephen K. Wiggins, CIO, BCBSSC. "The site will not replace other channels, it will just enhance the service to customers." The site receives more than 8,300 requests for information a day, and of that number, 3,200 "interactions" are self-service transactions where customers find the necessary information and complete the transaction online. Ninety-seven percent of requests are completed without the customer having to follow up with a phone call, adds Wiggins.

For comparison, says Wiggins, "The VRU only answers about 50 percent of customers' questions automatically," meaning 50 percent have to speak with a customer service rep.

Scraping Along

Wiggins and Castro both attribute SouthCarolinaBlues.com's success to its real-time, screen-scraping functionality. "Screen scraping sometimes gets frowned upon, but it is working extremely effectively for us," says Castro. "Everything is in real-time. The secret is, all systems are attached to the legacy. It is a fast deployment because we do not replicate the business rules on the Web server. We let the legacy do the work."

In addition, the company tries to leverage technology development across all of its businesses—the individual and small group (up to 50 employees) division, the major group division (more than 50 employees), managed-care services (provider community) and two HMOs. "We pick a solution and leverage it across all lines of business," Castro says. "We do that rather than allow each group to pick its own technology." For instance, Wiggins adds, BCBSSC has one claims system that is used by all of the business units.

The leveraging of IT assets helps with one of the company's largest IT challenges. "The biggest challenge is meeting the business requirements and leveraging software to meet the business needs in a low-cost solution," says Castro.

The site runs on a Lotus Domino server and is powered mainly by ClientSoft's (Hawthorne, NY) WebPack. WebPack communicates directly to the 3270 system. The VRU also links directly to the legacy and is powered by IBM's (Armonk, NY) DirectTalk. DirectorySmart, a database product from OpenNetwork Technologies (Clearwater, FL), helps front-end systems get information in real time from the legacy systems.

The legacy-based system also has added security benefits, Wiggins adds. "The normal way to break into a computer system is to hack the server," he says. "To hack our server wouldn't do any good because all of the information is on the legacy system."

Outsourcing Out, Insourcing In

With all of the legacy systems, most development is done internally. "We don't outsource very much," says Castro. "We outsource some coding work, but almost all of the development is in-house. The reason is very simple. When we have tried outsourcing, it has been a failure."

As a result, BCBSSC has developed strong project management procedures, claims Wiggins. "We have a development management process that has been in place since 1982, so we have good experience in this area," he says. "BCBSSC has over 100 project managers trained in that process. We manage the relationships very closely."

In order for a vendor to get the opportunity to work with BCBSSC, it must be approved by the technology team and by the business users. "We do a vendor search and then an analysis with the business service group," Castro says.

Wiggins adds, "We believe in competition. We like to have the vendors compete. That helps us get a good price." In fact the company's biggest bargaining tool is itself. "Because BCBSSC has such a large IT staff," of approximately 900, "we can always threaten to do it ourselves."

According to Terry Povey, director of Web business development and chair of the Internet Steering Committee, the number of users of the site continues to grow. "My Insurance Manager has over 500 new members signing-up for service weekly," Povey says. "The site also has over 100 new provider users logging on weekly."

However, Povey says her biggest challenge is educating BCBSSC's members and providers about SouthCarolinaBlues.com and My Insurance Manager.

"We were first to the market with the functionality that My Insurance Manager has," Povey boasts. "The challenge is to get the customers to go to the Internet for service. We are pleased with the numbers, but the number of users is only a small percentage" of BCBSSC's total membership.

The return on investment is hard to quantify, says Povey. "Are the retention numbers higher, or are we saving money?" Povey asks. "I can't give a definite yes, but our sales people say My Insurance Manager is a great marketing tool and it definitely helps us compete with the large national companies, like Cigna."

--------------------------

Make Connections

COMPANY NAME: Blue Cross Blue Shield of South Carolina, Columbia, more than $1 billion in assets.

LINES OF BUSINESS: Health insurance, HMOs.

KEY EXECUTIVES: Stephen Wiggins, chief information officer; Anne Castro, chief design architect; Terry Povey, director of Web business development and chair of the Internet Steering Committee.

IT STAFF: more than 900.

IT BUDGET: approximately $150 million.

KEY INITIATIVES: My Insurance Manager -a self-service site for members, providers and agents that provides real-time, interactive information on claims, eligibility, coverage, referrals, group policy quotes and explanation of benefits. SouthCarolinaBlues.com-home page for all of Blue Cross Blue Shield of South Carolina's information.

IT ARCHITECTURE: IBM (Armonk, NY) mainframes, DirectTalk, Lotus Domino Web servers; Microsoft (Redmond, WA) Windows NT and 2000 workstations; ClientSoft (Hawthorne, NY) WebPack; OpenNetwork Technologies (Clearwater, FL) DirectorySmart.

WHAT IS YOUR GREATEST BUSINESS CHALLENGE?

ANNE CASTRO: "The biggest challenge is meeting business requirements and leveraging software to meet the business needs in a low-cost leveraged solution."

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