When Blue Cross Blue Shield of Massachusetts embarked on its customer relationship management (CRM) initiative four years ago, the Boston-based health insurer could find no other healthcare organization to use as a benchmark.Today, insurers thinking about implementing CRM would do well to examine Blue Cross Blue Shield of Massachusetts as a model for what can be accomplished with a customer-focused business strategy supported by sophisticated CRM technology.

With a corporate promise "to always put our members first" and a CRM application called BlueServeConnect, Blue Cross Blue Shield of Massachusetts has achieved 47.7% member growth over the past three years, as well as a world-class member satisfaction rating of 91% at the end of last year-an all-time high for the company.

"Our CRM strategy is really a business strategy," says Sheryl Balchunas, director of CRM business development at Massachusetts Blues plan. "And CRM technology enables that strategy."

That's an important distinction to make-between CRM as a business strategy and CRM technology. And it's one that many companies fail to comprehend. CRM software solves nothing unless an insurer's culture and business model are supportive, according to Conning & Co., Hartford, Conn., in a study of property/casualty insurers' CRM efforts.

Failure rates and costs of CRM systems-up to $100 million in some cases-are high, according to Conning. "When CRM fails, most of the time it's not because of the technology; rather, it's because of corporate culture, a failure to identify customers' needs upfront, and lack of a rigorous organizational assessment," says Clarence Smith, Conning assistant vice president.

At Blue Cross Blue Shield of Massachusetts, CRM is not simply a technology fix. People are a key component in the company's strategy (see article below). "When we implemented our CRM solution, we wanted to improve the morale of our associates as well as to re-engineer our processes to provide value to our members," Balchunas says.

"So CRM is not just a technology solution, although technology is a big component."

Automating workflows

Shortly after senior management committed to a client-centric business strategy, the company began evaluating CRM technology-and looking for healthcare companies to use as benchmarks. "We said to (CRM) vendors, 'Show us someone that you've (worked with) in healthcare,'" Balchunas says. "Not one vendor could bring us to a healthcare solution. So we ended up visiting banks," she says.

Leading the way in the healthcare industry, in May 1999, the $6 billion health insurer selected Pegasystems Inc., a Boston-based rules automation vendor.

The Massachusetts Blues plan used Pegasystems' technology as the foundation to develop BlueServeConnect, its custom CRM application, which was rolled out in phases from April 2001 to March this year.

"We developed more than 28 automated workflows for our call centers," Balchunas says. Those workflows support basic tasks, such as log-in and security procedures, as well as the types of inquiries members have when they call-changing an address, ordering an ID card, changing a primary care physician, and checking the status of a claim.

Blue Cross Blue Shield of Massachusetts also developed an online reference tool, embedded within BlueServeConnect. The tool enables service reps to find information they need online within three mouse clicks-replacing the slow, manual process of looking up information in butterfly folders. By evaluating work processes, and applying re-engineering principles to them, the company eliminated approximately 1,000 manual steps, says Balchunas.

Additional features

In addition to workflow automation and online reference tools, BlueServeConnect features reporting capabilities, multilevel scripting and a central repository for member contact history.

"We report based on the task within a call," Balchunas says. Therefore, if several members in an account call because they don't understand referral information, for example, the Blues plan can spot that trend and provide education materials to those account members.

With BlueServeConnect's multilevel scripting capability, member service reps receive instructions on what to do and what to say to a member. For instance, Balchunas says, "if a member has a password-protected account, a warning indicator comes up on the screen, which says, 'This policy is protected by a password. You must ask for the password.' Or a proactive service prompt might come up indicating, 'This member has not returned his coordination of benefits letter. Please ask for that information.'"

Contact history

The workflow automation technology enables member service reps to provide better service, since they don't have to memorize so many plan requirements and work tasks.

Member service reps also are equipped with a complete contact history when a member calls. Every contact a member has had with the company is stored in a central database within BlueServeConnect.

"We don't have to go out and create a redundant database that stores information somewhere else," Balchunas says. When the company implemented BlueServeConnect, it developed MQ Series messaging, which pulls information from the mainframe and displays it in a user-friendly format.

Integrating to mainframe systems and back-office operations was accomplished by partnering with Plano, Texas-based EDS to develop the messaging capability using IBM Corp.'s MQ Series. The messaging is the "go-between" from the Pegasystems front-end presentation layer and workflow engine to the mainframe and back again, Balchunas explains. As a result, when a member service rep submits information, such as an address change, the change is made in real-time to the mainframe.

This kind of integration was essential to the company's CRM strategy. "Our strategy is to develop the foundation and expand that across the enterprise and then increase the channels," Balchunas says.

The call center was the initial focus for BlueServeConnect, but the application also was deployed on desktops that support members services-including sales, enrollment, claims, dental and billing. In all, the application currently is running on about 700 desktops.

"BlueServeConnect presents all the information to the member service associate," Balchunas explains. "If by some chance, the member has a question that the billing area needs to answer, the service rep can send a contact question to the billing area-in real time-and billing can respond in real-time."

Even integration with the Web occurs in real-time. Blue Cross Blue Shield launched Web self-service in pilot mode in May, with plans to launch the service publicly this month. "We're not going to go live, and have (a member) hit 'submit' and (the submission) gets dumped into an e-mail box for someone to print out and type into the mainframe. This is truly real-time integration with our mainframe," she says. Also recently launched on BlueServeConnect is a redesigned benefits tool, which eventually will be available to members on the Web.

Replacing the current text-heavy, format of benefits information, this tool enables users to view high-level details of a member's plan-such as inpatient benefits for surgical admission-as well as details on specific benefits, such as the number of visits allowed for chiropractic care.

The tool also has a search capability, and links to referral and authorization requirements, medical policy guidelines for specific services, and other information.

Continued Evolution

Blue Cross Blue Shield of Massachusetts is also developing a provider application integrated with BlueServeConnect, which will enable healthcare providers to verify member eligibility and check the status of pending claims. In the future, the company plans to incorporate its interactive voice response system and electronic mail into BlueServeConnect.

"No CRM solution is a CRM solution if you don't have a plan that supports a continued evolution of knowing your customers better, increasing your access and making the most of every interaction-for all channels," Balchunas says.

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