UPMC Health Plan Extends CRM Through Brokers

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1 Case Studies, R. DeSisto Research Note 10 December 2002 UPMC Health Plan Extends CRM Through Brokers UPMC Health Plan is a finalist for Gartner's 4Q02 Customer Relationship Management Excellence Award for small and midsize businesses. UPMC demonstrates the importance of extending CRM to brokers. Core Topic Customer Relationship Management: Creating Business Value for CRM Key Issue During the next five years, how will skills, architectures and technologies evolve to enable enterprises to develop moreprofitable customer relationships? UPMC Health Plan is a subsidiary of UPMC Health System. The health benefits company, based in Pittsburgh, Pennsylvania, provides enhanced access products, including health maintenance organization (HMO), point of service and preferred provider organization (PPO) to approximately 374,000 members. UPMC Health Plan members are served by more than 6,500 physicians, in partnership with 80 hospitals throughout western Pennsylvania. UPMC Health Plan combines a direct sales force with a broker network to identify and sell its health benefits products to employers. UPMC had already implemented the Onyx Employee Portal to capture, qualify and route direct sales leads and increase collaboration between direct sales and underwriting. After achieving a level of success with the Employee Portal, UPMC extended customer relationship management (CRM) to its broker network, where interaction often depended on antiquated paper-based processes and hard-to-read faxes. Problem: UPMC identified a number of business problems in the course of expanding and developing the CRM strategy to include brokers and the direct sales force: It took too much time for brokers to get quotes out to group administrators (employers). Broker inventories of plan and enrollment information often were outdated. Business was lost because UPMC was unable to track renewal dates for groups and trigger campaigns during renewal times. UPMC wasn t able to track which competitors or plan prices were causing it to lose business. Gartner Entire contents 2002 Gartner, Inc. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 Paper processes severely slowed down group enrollment after a quote was accepted, which led to dissatisfaction. Objective: UPMC's CRM strategy has several key objectives: Improve broker selling effectiveness and loyalty Convert a higher percentage of preliminary rate quotes into executed contracts Reduce the costs associated with broker quote submissions and the group enrollment process Achieving these objectives required simplifying and speeding up processes, eliminating errors, making it easier for the direct sales force to manage broker opportunities, tracking information to generate more effective marketing campaigns and replacing the antiquated paper-based processes. Approach: UPMC Health Plan's approach delivers on each of Gartner's eight building blocks of CRM. The CRM Vision and Strategy: UPMC Health Plan, under what it calls the Accountable Provider model of operating, partners with physicians and hospitals that provide health services, and the employers and employees it serves. Members are empowered to make self-referrals to a wide range of specialists, including chiropractors, podiatrists, gynecologists, psychotherapists and substance-abuse counselors. UPMC believes that affordable, high-quality healthcare results when medical providers are treated as allies, not adversaries. The Customer Experience: Beginning the enrollment process quickly is important to brokers because it leads to satisfied customers and helps to close sales. Prior to using the Onyx Employee and Partner Portals, the gap between obtaining quotes and initiating the group enrollment process was as long as several weeks during peak enrollment periods. By enabling brokers to obtain instant quotes, UPMC is more likely to be represented when brokers are showing plans to groups and, therefore, more likely to win the business. With assigned UPMC sales representation, problems can be ironed out quickly. The Onyx Partner Portal also streamlines the mailing of enrollment kits that contain vital plan information. Brokers can now select online the number of kits they want to be mailed and have those kits sent automatically to the customer. Organizational Collaboration: The Onyx Partner Portal drives a great degree of collaboration between brokers and direct sales, and between brokers and underwriting. When brokers log on to the portal, they are prompted to submit an employee's group information. The system analyzes the group information and then 10 December

3 generates an instant quote, which the broker can then give to the group. An is automatically sent to the assigned sales representative, and tasks are created for that representative. If a group accepts the quote, the broker marks it in the system so that underwriting can review the group information and the soft quote. Once underwriting is satisfied, UPMC marks the group as active and releases a group number. The group is ready for enrollment. Combining the Employee and Broker Portals enables UPMC to provide a true multichannel CRM solution. In addition to eliminating many handoffs between departments, the Portal also ensures that the member experience is consistent. CRM Processes: The Onyx Partner Portal automates prospecting, quoting and group enrollment processes for brokers, and integrates their activities with UPMC Health Plan's inside sales group. The Web-based Onyx system incorporates a "rating wizard" for the broker network that uses "next/next/next/finish" screens, which greatly simplify processes. By using the rating wizard, brokers can obtain instant quotes, choose plan types, manage sub-brokers, communicate plan information and initiate the group enrollment process. A UPMC sales representative is automatically assigned according to market segment and territory to support each broker sales opportunity. Tasks are automatically assigned for each step of the process. Information: Brokers who obtain instant quotes are required to answer questions at the end of each quarter to close out open leads. UPMC uses this information in a variety of ways. One primary application is to create more-effective marketing campaigns. For example, UPMC uses renewal dates for lost business to trigger targeted marketing campaigns 240, 120 and 60 days before the target company's next open-enrollment period. In addition, the broker has to provide a competitive win/loss analysis that includes the adjusted prices, if market needs dictate. Demographic information gathered from brokers, such as average age, gender, risk level, coverage tier and location, helps UPMC analyze the direction from which its business is coming. Technology: After successfully deploying its Onyx CRM system internally to its 100 personnel in its sales, marketing, underwriting and contracts departments, UPMC embarked on Phase 2 of its CRM initiative: automate the broker channel with the Onyx Broker Portal. Approximately 70 brokers use the Broker Portal. The most-significant customization was the rating wizard that Onyx consultants built. In addition to automating processes, it incorporates a pricing engine for generating soft quotes. The Onyx product was also integrated with multiple legacy systems. 10 December

4 Metrics: Broker-requested quotes, which typically took UPMC five days to process, are generated instantly. Group enrollments in broker-related business are processed up to 75 percent faster than was previously done. Errors are fewer because brokers have instant access to the latest plan and enrollment information. Data omissions are down, as well, because online forms prompt brokers for information. When multiple quotes are produced for the same company, the system instantly alerts brokers and UPMC Health Plan, eliminating cross-channel clashes. At the fulfillment house, business rules ensure that the number of enrollment kits ordered matches the number of members submitted by the broker in the group information form. In addition, automation of broker processes gives UPMC sales staff time to focus on higher-value tasks. Results: Enhanced collaboration between direct and indirect channels has increased the number of opportunities inside sales manages to more than 500 per person per month (for a total of 2,000 to 3,000 leads a month). With CRM, UPMC converts a higher percentage of preliminary rate quotes into executed contracts. Lost business, and the reason for the loss, is closely tracked, and the opportunity is pursued again during renewal time. The time for lead-to-enrollment has been reduced by 75 percent, data entry staff has been reduced by more than 50 percent and membership in Medicare business has grown by 1,000 percent in nine months. Critical Success Factors/Lessons Learned: Avoiding the temptation to shortcut the CRM deployment process because UPMC already owned the CRM technology was a key lesson learned during the deployment process. It also was a primary factor in the success of the implementation. UPMC wanted to carefully develop requirements before developing customization to limit the risk of putting out a product that didn t contain the appropriate functions. As a result, UPMC took eight months to develop requirements, document processes and identify critical data required to support the broker community. The requirement setting was particularly important in this case because UPMC customized Onyx to support its rating calculations. Acronym Key CRM HMO PPO Customer relationship management Health maintenance organization Preferred provider organization Bottom Line: UPMC shows the value of extending and integrating customer relationship management (CRM) to broker and partner channels. The integration with its sales force provides a consistent closed-loop process for managing sales opportunities. Enterprises that have indirect channels should avoid CRM strategies that isolate partner sales and marketing 10 December

5 processes but integrate them with internal functions, such as sales and marketing development organizations. Enterprises should focus on specific partner processes that they can influence that have the greatest effect (for example, real-time rate quotes for UPMC). 10 December