MAY 19-22, 2014 Orlando World Center Marriott

Orlando, Florida

The 2014 Blue National Summit is a program of the Blue Cross Blue Shield Association, an association of independent Blue Cross and Blue Shield companies. © 2014.

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY

Alan Jones Director, Product Operations Blue Shield of California

David Murray Senior Manager, Product Operations Blue Shield of California

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 2

“We have to shake things up.”

Contents

– The Grand Experiment “Can this really work?” – The Considerations “What work makes sense to move?” – The Consolidation “Where are the redundancies?” – The Economics “Where should the work live?” – The People “How do we design the new job roles?” – The Testimonials “What do the people that went through the process have to say?”

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 3

“Could we combine functions of 3 historically distinct areas into one highly effective team?”

The Grand Experiment

Operations Support Legal Quality Assurance

Product Operations

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 4

“It seemed like the ‘conveyer belt’ among these areas warranted creating a single team.”

The Grand Experiment

Operations Support Legal Quality Assurance

Review and Analyze Cycle Changes

Create Benefit Language

Review Benefit Language

Submit Filings to Regulatory Agencies

QA Product Implementations

Review Benefit Language with

Clients

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 5

“Looking across the 3 business pillars, what major challenges were we facing?”

The Considerations

1. People Hourly production staff Narrowly defined job roles Lack of growth and advancement opportunities Heavy reliance on “institutional” knowledge

2. Process Siloed departments and multiple handoffs Redundant activities across multiple functional areas Everything drops to paper

3. Technology Reliance on unorganized shared drives No automated tracking or inventory controls Multiple, disconnected systems, all requiring manual entry

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 6

“Deciding factors to target what work should move to a shared services model.”

The Considerations

Eval

uate

and

bal

ance

ser

vice

pro

file

dete

rmin

ants

Skill Profile Determinants

Process Profile Determinants

Develop Service

Evaluation Profile

Advanced degree, certification or specific experience

Industrialized

High Volume activity

Measurement Profile Determinants

Discrete measurement of “Widgets” produced

PGs/SLAs defined

Transition Profile Determinants

Risk Profile: High/Medium/Low

BSC Mission Critical

Non customer facing

Labor intensive activity

Distinct Handoff

Standardized

General business analyst skills

Technical Skills

Healthcare industry skills

Create Web Narratives Program Benefits Product Quality Audits Create Legal Docs Portfolio Cycle Implementation Create SBCs/Mandates

Make Shared Services Decision

Balance various

aspects of profile

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 7

“The 3 critical questions we asked ourselves.”

The Considerations

1. Can we do it? • Service Profile decision determinants: Skill, Process, Measurement and Transition • Evaluate and balance service determinants to make sourcing decision

2. Should we do it? • Build the business case:

- Does it make financial sense? - Does it support BSC goals? - Can it be completed in a timely fashion?

3. May we do it? • Are there legal implications? • Is HR aligned on job roles? • Is management mature enough for a transition?

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 8

“In order to create a manageable scope we focused on the top 5 critical areas.”

The Consolidation

Create SBCs and Narratives

Portfolio Cycle Implementation

Custom and ASO Group Implementation

Product Quality Assurance

Facets Product Operations

Create Base Medical SBCs

Create Portfolio Iterations

QA Portfolio Iterations

Distribution to vendors and portals

Cycle Changes review and analysis

Benefit Language Creation

New Product Installation into Core Systems

Benefit Language Creation

Custom Filing

New Product Installation into Core Systems

QA Portfolio Iterations

QA Portfolio Implementations

QA Custom and ASO Implementations

Facets Product Requirements

Facets Product Governance

Facets Product Quality

“In looking at the details underneath each workstream, the similarities became apparent.”

Quality Assurance Language Creation Installation & Configuration

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 9

“We had to get really detailed in order to make it really simple.”

The Consolidation

We broke down the processes into detailed playbooks (over 40 detailed process playbooks and diagrams)

We then turned those processes into cross functional sketches that could be consumed by the business and stakeholders

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 10

“The economics of California required looking at shifting locations of where work is done.”

The Economics

San Francisco

Sacramento/EDH

Lodi

San Francisco salaries are 12-15% higher than Sacramento and Lodi Highly paid hourly employees in San Francisco were doing lower-level production work Sacramento and Lodi facilities had capacity to support additional operational positions

Product Operations Functions were spread across three BSC locations in Northern CA

Prior to creating the Shared Services Organization:

Location Employees*

Lodi 4

Sacramento/ El Dorado Hills 16

San Francisco 21

total 41

*Employees impacted by consolidation of functions

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 11

“We created a recruiting strategy to shift target positions to our Lodi office.”

The Economics

Sacramento/EDH

Lodi

Held Town Halls at local colleges and law schools to attract top business and legal talent

San Francisco

Location Employees*

Lodi 15

Sacramento/El Dorado Hills 15

San Francisco 8

total 38

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 12

“We blew up the old job profiles and created new cross-functional roles.”

The People

New Job Families Accountabilities

Language and Filing

Draft documents for legal approval and complete filings with Regulatory Agencies

Product Operations

Analyze group/portfolio requirements and finalize configuration and implementation in product systems

Product Quality Ensure products are configured correctly in systems and artifacts are free from defects. Test design and execution

Language & Filing Expert

Language & Filing Senior

Language & Filing

Intermediate

Product Analyst Lead

Product Analyst Senior

Product Analyst

Intermediate

Product Quality Lead

Product Quality Senior

Product Quality

Intermediate Product Analyst

Associate Verti

cal A

dvan

cem

ent

Lateral Growth Drive Product Operations

Deliver Improvement

Stakeholder Mgmt.

Expectations of the new roles: • Roles hit our targets with guidelines and solid judgment • Everyone needs to be tech savvy and look for improvement opportunities • Dedicated focus to managing key stakeholders and quality assurance

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 13

“In 12 days, we received 339 applications from 126 candidates.”

The People

Kaiser Blue Shield of CA United Healthcare

Dignity Health Sutter

WellPoint

McGeorge School of Law

CA Dept. of DMHC Attorney General’s

Office CA Office of Public

Defender Carroll & Associates

HP AT&T PG&E

Genentech Triage

Consulting

Industry

Big Business Legal

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 14

So, did it work?

What do the numbers say?

CREATING A SHARED SERVICES ORGANIZATION TO INCREASE EFFICIENCY AND QUALITY 15

The Testimonials

Robert Shanahan Tye Dubose

Stacey Shelly

MAY 19-22, 2014 Orlando World Center Marriott

Orlando, Florida

The 2014 Blue National Summit is a program of the Blue Cross Blue Shield Association, an association of independent Blue Cross and Blue Shield companies. © 2014.

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