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Health Care Case Study

Case #9904: Input / Output Operations

A statewide Health Insurance and Managed Care Company faced a number of challenges in its mail and document management operations. Pending rate increases by the Postal Service were projected to increase annual administrative expenses by $3,000,000 and administrative costs were already rising despite an increase in electronic receipt and settlement of claims. Growing enrollment increased inventories during input (opening, preparation, sorting, scanning, correction/data entry). The quality of outgoing items was decreasing in terms of timeliness and accuracy. Efforts to better utilize in-house electronic distribution technologies failed to materially slow the rise in hard-copy costs.

We were engaged to redesign the Input/Output processes, removing redundant and non-value-added steps and implementing industry Best Practices. A key objective of the redesign effort was to establish process focus, ownership and clear accountability.

The redesigned processes reduced handoffs and transfers by 56%, enabling the company to increase processing capacity on the input side by 21% while reducing staff by 7%. Paper printing was reduced by more than one million pages annually. Together these improvements along with maximization of more cost-effective U. S. Postal Service (USPS) alternatives generated annual savings of $2,700,000.

Engagement Highlights

  • Industry:
  • Health Insurance
  • Client:
  • A Statewide Not-for-Profit Health Insurance and Managed Care Company +/- $2 Billion Annual Revenue and +/- 3,000 Associates

  • Assignment:
  • Improve Input / Output Processes and Operational Performance
  • Implement Best Practices
  • Reduce Administrative Costs
  • Approach:
  • Detailed Process Mapping of Current State and Process Redesign
  • Analysis of Process Focus/Ownership Relationship
  • Identification of Industry Best Practices
  • Workload Quantification and Capacity Planning
  • Reduce Paper Output and Replace with On-line Viewing and Reporting
  • Eliminate Redundant Steps and Non-value Added Activities
  • Duration:
  • 50 Weeks (9-week Assessment & Design, 41-week Implementation)


  • Reduced Handoffs and Transfers by 56%with Receipts Up 21%
  • Cut Correspondence Delivery Time in Half and Reduced Staff by 7%
  • Achieved Annual Savings of $2.7 Million
  • Established Clear Accountabilities for Incoming and Outgoing Mail Services
  • Reduced Print by Over One Million Pages Annually
  • Expanded Postal and Bulk Mailing Alternatives

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