Blues Plans Reap Benefits of Online
With the help of Selectica, Inc., two of the nation’s leading Blue Cross and Blue Shield Plans have harnessed the power of the Internet to deliver dramatically improved service to millions of customers. Although the two plans are pursuing differing online strategies, both are confident the eBusiness solutions they’ve developed will generate benefits far into the future.
Last spring, Blue Shield of California—the state’s second largest non-profit healthcare firm—deployed an online guided product advisory built on the Selectica Interactive Selling System platform. The application helps individuals and families choose the health plan that best meets their needs.
A continent away, Blue Cross and Blue Shield of Florida recently launched an enterprisewide system designed to power online quoting operations. The Selectica application is being used by internal sales representatives to simplify and accelerate the process of choosing, configuring and pricing complex, employer-based insurance products and services.
The different approaches underscore the flexibility of San Jose, California-based Selectica’s industry-leading eBusiness software and reflect the range of enhancements available through online automation. Significantly, both Blues plans intend to eventually augment their existing applications with the capabilities the other now enjoys.
Helping Consumers Make Better Choices
In California, the primary objective in creating an online advisory system was to help customers make better decisions when it comes to choosing a health plan, says Brian Clinch, director of individual and family plan sales with Blue Shield of California (BSCA).
“Our research has shown that most consumers find choosing the right health plan to be a very difficult and cumbersome experience,’’ Clinch says. “Too often, people have no idea what they’re buying. And only when the time comes to use the plan do they realize it’s not what they wanted.”
To address the problem, BSCA and Selectica developed a guided product advisor within BSCA’s mylifepath.com Web site that leads users through a series of questions to determine the type of health plan that best suits their needs. By factoring in the individual’s family circumstances, life style, budget and healthcare preferences, the software points the customer toward the plan that most closely matches their requirements from Blue Shield’s two HMOs and seven PPOs.
“Our goal is to provide a site that truly allows members and non-members to better manage their own health,’’ says Alan Gellman, vice president of eBusiness for BSCA. “We not only provide important information fast, we’ve also created new ways for people to take meaningful action based on the knowledge they’ve learned.”
Clinch says that use of the application has greatly exceeded expectations since the system went live in April 2001. The company initially anticipated that around 1,400 users monthly would access the system. In fact, nearly 7,000 consumers are using the advisory each month. And the conversion, or closure, rate on visitors who access the site has been running at between 20% and 25%.
“That’s pretty darn good,’’ Clinch says, adding that the site has unquestionably increased BSCA’s sales “substantially,” although he couldn’t say by how much.
Currently, the guided product advisor is not linked to an online enrollment and quoting system. Once the online recommendation is made, the company follows up with an enrollment application sent through the mail. However, linking the advisory to an enrollment system to create a seamless, end-to-end online system is a primary long-term objective for BSCA, Clinch says.
“We’re extremely pleased with Selectica and the application,’’ Clinch says. “It’s easy to use, easy to maintain and it’s providing an important service to our customers. Essentially, what this tool does is enable consumers to become much more engaged in the process of purchasing their health plan. We think that’s an important factor in ensuring our members are satisfied with the choice they make.’’
Reducing Quote and Rating Errors
At Blue Cross and Blue Shield of Florida (BCBSFL), the objective is similar, although the approach differs significantly. In Florida, the Selectica application is powering a sophisticated enterprisewide system that sales representatives use to generate rates and quotes for employer-based products and services.
The application went live in early September. Jan Esposito, BCBSFL’s director of information technologies, says that she’s confident the system will dramatically reduce quote errors once it is fully operational and all sales representatives have become familiar with the application’s capabilities.
“We wanted an application that would have a centralized storage of data and that would be accessible by external entities without requiring software on their desktops,’’ Esposito says. “Selectica fit the bill. One of the software’s most important benefits is that it is extremely easy to make changes in existing products and add new products. You don’t have to take the application down.”
BCBSFL officials estimate that Selectica’s software will allow the company to provide potential customers with up to $20 billion in online quotes annually, and help secure approximately $2 billion in online sales. BCBSFL has annual revenues of about $5 billion and insures approximately 2.8 million people in the state.
Joyce Kramzer, a group vice president with BCBSFL, says Selectica’s solution, which is being used by company underwriters and sales reps for both new and renewal policies, will eventually be made available to external brokers.
“Healthcare insurance rating and underwriting are extremely complex tasks, and our large volume of sales compounds that complexity,’’ Kramzer says. “We’re extremely enthusiastic about the level of automation that Selectica brings to this process. They’re a company that has the experience and resources to deliver precisely what we need.”