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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)


  • 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

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