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Cutting the Red Tape
Harvard Pilgrim Health Care promotes CRM benefits on billboards; online billing today, self-service tomorrow; "a gratifying measure," says CEO
Posted Aug 2, 2002
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Nearly three years ago, Charles Baker grabbed the reins at Harvard Pilgrim Health Care, one of the oldest non-profit health-care organizations in New England, and swung the company toward a new way of thinking. In a conservative industry mired in red tape, CEO Baker mandated sweeping changes, in particular an online invoice presentment and payment (EIPP) process that would make it easier for members -- patients, doctors and brokers, among them -- to do business with the health care firm. On the front end, the plan called for pouring resources into a marketing campaign, which included print ads, radio spots and billboards, proclaiming Harvard Pilgrim Health Care the customers' champion. On the back end, Baker formed a cross-functional task force to build a portal and high-tech engine for enabling speedy online enrollment and billing. "This became the substance behind the marketing message," says Nancy Ahern, director of marketing at Harvard Pilgrim Health Care. Now Harvard Pilgrim Health Care is rolling out online billing through its member-facing HPHConnect portal. Roughly half of the firm's 5,500 employer groups use HPHConnect to enroll employees. And based on a successful pilot of online billing, Harvard Pilgrim Health Care expects 75 percent of HPHConnect participants will be using the online billing system by the end of the year. Moving complex invoicing and payment processes to the Web is about as close to a win-win situation as you can get in the topsy-turvy world of high-tech. EIPP often achieves a positive return on investment with only a 12 to 15 percent adoption rate, according to a recent Giga Information Group study. "We expect that most companies making an initial investment in EIPP will continue to see a positive return from the investment, with payback within the first or second years," said Penny Gillespie, senior analyst at Giga Information Group, in a statement. Companies not only reap savings in lowered paper costs but also in reduced customer service calls relating to bills and, of course, faster accounts-receivable processing. For Harvard Pilgrim Health Care though, EIPP was all about increasing customer satisfaction. "The internal efficiency we gained alone was enough to drive the ROI on this, but the real win for us was the customer value," says David Segal, senior vice president of customer service and operations at Harvard Pilgrim Health Care.
So far, Baker's customer-centric strategy has paid off. A recent survey of affiliated providers showed a 92 percent satisfaction rate with Harvard Pilgrim Health Care's online transaction services. "Our balance sheet is in the best shape it has been in years, and our service and quality measures continue to be among the best in the industry," said Baker earlier this year, adding, "That's an incredibly important and gratifying measure of our success." The health-care industry is notorious for multiple enrollment forms and a hair-pulling billing and claims process. Most folks dread dealing with health-care providers. Consider the lifecycle of a typically paper invoice: A bill travels to multiple departments for review. Administrators in each department must note new employees, departing employees and benefits changes to existing employees. Departmental changes are handwritten, as are adjustments to the bill. It's not surprising that many paper bills contain errors, thus leading to time-consuming recalculations. But where most providers turn a blind eye to customer needs, Baker saw an opportunity to differentiate his company. He also saw the great promise of the Internet. The first incarnation of HPHConnect was to enable members to enroll online. The second, and arguably more valuable, centered on transactions. Last year, the task force evaluated numerous vendors, including the option of building it in-house. Ultimately, Harvard Pilgrim Health Care chose Massachusetts-based edocs, an online account management and billing software developer, to handle its EIPP needs. Why? Because edocs had a proven track record in the health care industry, touting customers such as Humana and BlueCross BlueShield of Minnesota. Aside from understanding heath care's maze of regulations and special security concerns, edocs had an insider's knowledge about how health-care companies close deals. "With health care, a big part of the year's business is done in small sales windows," says Vishal Daga, edocs industry marketing manager. "Our ability to deliver a solution to market quickly played a crucial role in the decision process." Harvard Pilgrim Health Care and a professional-services firm integrated edocs' eaSuite into HPHConnect, and tested it with a handful of big and small customers. Within a year, the company made the online billing system generally available to its members. "Test the daylights out of it and make sure your technology and business processes work. With a [phased rollout], you'll get a sense if you're creating a problem or not -- that's my best practice two cents," says Segal, adding, jokingly, "The only time I was nervous was when we flipped the switch." Segal maintains that CRM isn't just a piece of technology, rather a sea change in the way the company operates. This means Harvard Pilgrim Heath Care members can expect more in the days to come -- namely, Web self-service. Using HPHConnect, members will soon be able to obtain information about their health benefits, receive the latest information on various health topics and even find tips on how to navigate the complex health-care system. "Those are the bigger things coming down the road," says Segal. "For us, CRM has more meaning as a management discipline." Tom Kaneshige also writes for Line56.com
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