Home » Health Care » Case Studies » Case Study #3954

Health Care Case Study

Case #3954: Administrative Cost Reduction and Service Improvement - Customer and Provider Service Operations

A major Managed Care company was experiencing operating loses and low levels of customer service satisfaction. Service costs had grown beyond acceptable levels and internally measured service levels were below acceptable levels for both Customer and Provider Service.

The CEO asked us to examine these key areas with the aim of saving $3 million in ongoing annual operating expenses, and identifying operational improvements that would result in substantially higher service performance scores.

We began with a 4-week Assessment and Design phase during which a range of savings and improvement opportunities was identified. To achieve the desired goals a 26-week implementation program was developed.

During the implementation the Healthcare environment changed dramatically with the closure of one of the client's major competitors. Enrollment increased as well as customer contacts for education and inquiries. Legislative reaction to the marketplace also had a tremendous impact as they began proposing and enacting legislation designed to protect the consumer. These changes placed a tremendous strain on existing operations as call volumes increased exponentially. Telephone tiering enabled the client to handle a 100+% increase in calls volume and improve the quality of contact without increasing service staff. The costs avoided through managing the increased call volumes at existing staffing levels amounted to just over $3 million dollars per year.

Engagement Highlights

  • Industry:
  • Health Insurance & Managed Care
  • Client:
  • A Single State Managed Care Company (Indemnity and HMO Coverage)
  • 55% Market Share
  • Assignment:
  • Reduce Ongoing Annual Run Rate by at Least $3 million
  • Improve Operational Performance in Customer and Provider Service Units
  • Achieve Sustainable Quality of Service Increases
  • Approach:
  • Detailed Appraisal/Accelerated Implementation
  • Reorganize to Consolidate All Service Units
  • Attack Customer and Provider Service Units Simultaneously
  • Embrace and Integrate Previously Existing Initiatives
  • Duration:
  • 30 Weeks (4-week Assessment & Design, 26-week Implementation)


  • Achieved Annual Run Rate Reduction exceeding $9 million over a 3 year period
  • Staffing Levels Maintained /Quality of Service Improved
  • Quality Service Ranking Moved to Top Quartile

Related Case Studies