If You Build It: They Will Come

Ray Kinsella heard whispering. "If you build it, they will come," the voice told him. So, he plowed under his corn and built a baseball field. Locals parked their cars alongside the road and watched him. "Damn fool," they said. Ray put up stadium lights, built bleachers, and waited. The following year, Shoeless Joe Jackson and several other deceased legends emerged from the corn for a casual game of baseball. And it wasn't long until the winding roads of Nowhere, IA were filled with fans – coming to see for themselves this mystical Field of Dreams.

In the real world, Kim Bellard had a hunch. "If you build it, they will come," he thought. So, as vice president of indemnity and special products at Highmark Blue Cross Blue Shield (Pittsburgh), he formed a team and built a Web site. Competitors sat back and watched him. "Damn fool," they probably thought. "Who buys health insurance online?" The following year, Highmark went live with the site. Several companies have since emerged from the physical world, in search of an electronic health plan. But the question is: Will the winding roads of Cyberspace ever be filled with customers?

Teaming Up And Moving Forward With The Business
In 1996, Pennsylvania Blue Shield and Blue Cross of Western Pennsylvania consolidated to form Highmark Blue Cross Blue Shield. Both Blue Shield and Blue Cross have been in business since 1939. And today, the Highmark combination has more than 11,000 employees in two headquarters – one located in Pittsburgh and the other in Cant Hill, PA. The company has no shareholders, owners, or investors. But, more than half of all Pennsylvanians use Highmark for coverage.

Historically, the Blue Cross and Blue Shield Plans in Pennsylvania have, in aggregate, returned 90 cents or more of every premium dollar in benefits spending. In the years when Highmark's annual income exceeds its expenses, the company adds to its reserve fund – as a safeguard to customers, subscribers, and members. Highmark keeps enough money in its reserve fund (monitored by Pennsylvania's state regulators) to pay claims for several months in the event of a fiscal or public health emergency. It's probably safe to say that Highmark, as a business, is solid, much like the 1919 White Sox with Shoeless Joe himself (prior to the Series, that is). But the company is far from content.

At the end of 1998, the Highmark executive team had a World Series-type vision. It focused on three issues: becoming more consumer-oriented, providing a greater degree of choice and convenience, and establishing more relationships with more consumers. The solution was mass customization. "Mass customization was a nice concept," relays Bellard. "But it took us a long time to figure out how to translate that concept into a product or technology relevant for health insurance."

The team at Highmark spent most of 1999 in search of this technology. Through research, Bellard and company discovered a significant trend in CRM (customer relationship management): Web automation. "The Web is a natural environment in which to provide CRM," says Bellard, "as natural as Yankee Stadium." Beth Bierbower, vice president of program management at Highmark, agrees. "Computers are oftentimes more effective at assimilating and evaluating the potential value of a customer and making appropriate offers." Technology search: over.

The CRM Product, Play By Play
The Information Technology group at Highmark conducted research through various research houses, such as Gartner and Forrester. They went through a request for proposal process, and within five weeks, Highmark had made its decision. "We decided to go with Selectica (San Jose, CA) because its solution, the ISS (Internet Selling System), was very customer-oriented," says Bierbower. "We also took comfort in the fact that Selectica had already been deployed in companies such as BMW, Hewlett-Packard, Cisco Systems, and Dell." With the ISS, Highmark created BlueChoice (pronounced blue-e-choice). Coverages offered through BlueChoice are group-based.

Employers sign up and provide Highmark with the names, dates of birth, and social security numbers of their employees. Highmark then customizes a BlueChoice home page for each employee. Individuals can log on to the site, fill out an enrollment form, browse different health plans, and select the one that best suits their needs.

Highmark began installing Selectica's 100% Java- and thin client-based ISS at the end of January 2000. It started with an Oracle engine that allows these members to come online and view the possible benefits. Next, Highmark installed Selectica's ACE application suite. The business logic for all processes was defined in the ACE Studio application. The ACE Enterprise Manager stores all business logic and acts as a central command station. It distributes processes and trades data between the Web server and the ACE Enterprise server. ACE Enterprise is the product configuration tool that allows members to choose the coverage that best fits their needs. Highmark calls this tool the Blue Selector. Members are asked to rank key attributes in order of importance. "For example, is a low co-pay or a low payroll deduction more important to you?" illustrates Bierbower.

Once potential members have ranked all attributes, they are asked to click the "submit" icon. The ACE Quoter (a centralized quoting system in the ISS application suite) writes the information to tables and generates several health plan choices. The recommended plans appear from top to bottom, in the order that most closely fits the preferences submitted. (And, should employees have questions relating to any of the coverages, they can send an e-mail to Highmark through the BlueChoice messaging center.)

When potential members select the coverage plan they want, they must review all information submitted…including social security numbers, dependents, and primary care physician. If the information is accurate, members click the "select" icon. "Once submitted, the application is pending until the employer can review it," adds Bierbower. The employer then clicks "okay," and the information goes into an ID card batch process that runs on a nightly basis. After the cards are printed, the ACE Quoter sends the information, in a flat-bound file format, to Highmark's membership system for storage. (Highmark would not comment on its back end systems, but did note that the Selectica ISS integrated seamlessly with the mainframe system the company currently uses.) "The Highmark membership system then automatically feeds information to the billing system," explains Bellard, "and we all go our merry own way."

Employees, Vendors, And Systems – Working Together
BlueChoice offers up to 16 different plan choices and a wide range of assistance with each choice. Everything – from pre-sale marketing, to employees, to online enrollment, to post-enrollment materials (specific health plan brochures) – is delivered through the Internet. The site even has an electronic signature where the logon (required to open the site) acts as a signature accepting the enrollment. "It's entirely Internet-based – entirely paperless," notes Bellard. "But it was not an off-the-shelf application."

According to Bierbower, "Selectica had to adapt several applications to our needs. This required integration with both legacy and other Web applications." Highmark's typical back end system is integrated with its membership system and its group data repository (where employer information is stored). The ISS had to integrate with each of those, as well as the HTML pages on its Web site. Highmark also had to create an Oracle database for temporary storage while the transaction was being conducted. Highmark also purchased an application from BroadVision (Redwood City, CA). This application houses content and enables Highmark to "push" the content to the member base. The BroadVision system was integrated with the Selectica ISS.

Because of this integration, Highmark did not have to hire additional employees to handle BlueChoice customers. "We have 11,000 employees, and they do everything from issuing bills and collecting premiums to supporting IT," explains Bierbower. "And they do all this for the Web site, as well."

In fact, with Web-based automation, there is significantly less paperwork to process. There is actually no data entry and very little manual intervention – thus reducing the time it takes to process an application. In a typical enrollment process, the employee would fill out the application and give it to human resources (HR). The HR department would then review it and mail the application to Highmark.

Bellard says it could be two weeks before the application is processed – even longer if it's a busy enrollment time for the employer. With BlueChoice, the employee can enroll in the morning, the HR department can review the application in the afternoon, and the ID card can be printed that evening. "BlueChoice has cut the enrollment period from at least two weeks to one day," states Bierbower. Automation also eliminates time lost due to application errors.

"In the paper world, an employee could forget to put something on the application, or might enter a wrong number here or there," explains Bellard. "In that case, the HR department would send the application back to the employee." With BlueChoice, the system does not allow the employee off the enrollment page until everything is correct.

A Game Plan For The Future
Highmark went live with the site on May 1, 2000. Since then, the company has trained several of its customer service representatives to handle Web-related calls. BlueChoice has been the largest CRM step Highmark has taken thus far. According to Bellard, "It was essentially a 13-week project resulting in the nation's first fully Web-based, fully customized, and fully integrated healthcare program.

"Part of the drive behind this was all the talk of how the CRM market is becoming more retail-oriented," explains Bellard. "If this is true, we think the result will be employers moving toward the defined contribution approach." Defined contribution plans allow employees and employers to make contributions to individual accounts. The balances grow over the years with new money and investment earnings – similar to savings accounts. Therefore, they are more easily explained and understood by plan participants. "Employers will either limit how much they're going to pay toward health insurance (and let employees choose different options) or get credit back," says Bellard.

Highmark is simply trying to target employers who offer Internet access to their employees. And the company is acquiring more and more members with each passing month. Bellard does not expect everyone to be ready for this program right away. "But they will come," he says.

Bellard anticipates more customers will join in January 2001. "That's when most of our customers enroll," he notes. As for the future of BlueChoice, Bierbower says Highmark is just trying to keep people interested and cater to their needs. "Once you get into this game, it doesn't stop!" she adds.

Questions about this article? E-mail the author at StacyG@corrypub.com.