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)
Results
- 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