Health Care Case Study
Case #3929: Administrative Cost Reduction and Service Improvement - Claims, Customer Service and Member Service Operations
A leading Health Insurance and Managed Care company was dissatisfied with the performance of one of its most important regions. Costs had grown beyond acceptable levels and operations in three customer-facing areas - Membership, Claims, and Customer Service - were not performing up to competitive standards.
The COO asked us to examine these key areas with the aim of saving $15 million in the current year, achieving ongoing annual savings of $20 million, and identifying operational improvements that would result in substantially higher competitive performance scores.
We began with an 8-week Assessment and Design phase during which a range of savings and improvement opportunities were catalogued. To meet the COO's aggressive goals, our 26-week implementation was equally aggressive. Year I savings totaled $22 million and the ongoing annual run rate was $28 million.
Engagement Highlights
- Industry:
- Health Insurance & Managed Care
- Client:
- A Multi-state Region of a Leading Insurance and Managed Care Company
- Assignment:
- Capture Initial Savings in Excess of $15 million
- Reduce Ongoing Annual Run Rate by at Least $20 million
- Improve Operational Performance in Membership, Claims, and Customer Service
- Achieve Sustainable Service Rating Increases
- Realign Organization if Support of Corporate Goals
- Build a Management Team Focused on Shared Business Objectives
- Establish Clear Ownership/Responsibility Relationships
- Design Standard Metrics and Uniform Reporting Systems
- Consolidate Sites and Functions
- Approach:
- Detailed Appraisal/Accelerated Implementation
- Senior-level Task Force
- Attack Membership, Claims, and Customer Service Simultaneously
- Embrace and Integrate Previously Existing Initiatives
- Duration:
- 34 Weeks (8-week Assessment & Design, 26-week Implementation)
Results
- Delivered Year I Savings of $22 million
- Achieved Annual Run Rate Reduction of $28 million (an R.O.C.I. vs. fees of 21:1 over a 1 year period)
- 18 Locations Consolidated into 10 Processing Centers
- Staff Reduced/Quality of Staff Improved
- Service Ranking Moved to Top Tier