Opportunity
A large health insurer was facing a significant decline in membership within the market it served. Membership rates were trending downwards because the local economy was not producing jobs. Macroeconomic impacts suggested the trend would continue. Leadership came to terms with the market decline and wanted to focus on how it can avoid increasing member costs. However, leadership was unsure of how to get started and did not understand where their greatest opportunities were.
Solution
Consultants were engaged to assess the greatest opportunities to reduce health plan costs, honing in on ways to pass value to members. Leaders from all operational areas were collaboratively engaged to gain a common understanding of business functions and gather existing data. Data was analyzed and associated with business functions to identify over 40 different value drivers. Each value driver was aligned with key financial metrics (e.g. cost per member per month). Each financial metric had many underlying operational metrics that were identified, calculated, and embedded into operational decision making. The health plan managed towards these operational metrics and reported out on financial metrics on an ongoing basis.
Outcome
The health plan had clarity on where to focus to avoid increasing cost for its members. There was a clear understanding of operational, organizational, and financial performance, and how they relate to each other. Specific initiatives were developed and managed towards member value. The company was better positioned to manage its corporate strategy and company operations using data. The engagement reinforced the decision to focus on avoiding increased member costs while “weathering the storm” from economic impacts.