BCBSF
is expecting to dramatically improve efficiency and integrity,
produce more than $1 million a year in cost savings, lower
its per mail piece cost, and boost its total capacity by
more than three times.
Logistically, the biggest challenge facing BCBSF was the
consolidation of three print and two mail finishing sites
into a single facility encompassing nearly 75,000 sq. ft.
Previously, those five sites were scattered around Jacksonville,
FL.
The
three print sites and one of the mail finishing sites are
operated by BCBSF. The other mail finishing site is managed
by First Coast Service Options (FCSO), a wholly owned, for-profit
subsidiary of BCBS that was created to handle claims and
statement processing for government programs, such as Medicare.
"Initially,
our decentralized approach served us well because our three
print sites, which were aligned with our existing mainframe
data processing resources, were arranged similar to a 'hub
and spoke' pattern around our mail finishing site," says
Dave McMullen, Director of IT Operations for BCBSF.
"We
also liked the idea of multiple sites because it provided
us with redundancy in the event of downtime due to adverse
weather, employee illness or equipment malfunction," adds
Angelo Tauro, who serves as Manager of Outgoing Mail for
FCSO and directs the second mail finishing site.
A
platform for growth
But
the workload for both BCBSF and FCSO continued to expand.
And as the two entities began to rely more on each other
to handle peak demands --the two firms process a wide array
of applications including Explanation of Benefits (EOBs),
summary statements, policy assembly and checks for beneficiaries
and health care providers -- the need for better utilization
of resources, improved efficiency and faster turnaround
times took precedence.
"At
the extreme, our workflow under the previous arrangement
was more than 30 miles long and required the time-consuming
packing and unpacking of materials, the cost and risk of
ground transportation, and the problem of exposing printed
materials to the heat and humidity of northern Florida,
which also resulted in delays due to the need to 're-acclimatize'
materials prior to job completion," says McMullen.
Additionally,
managers at the two firms wanted the FCSO subsidiary to
grow even faster by absorbing work beyond its existing Medicare
contract and the half dozen or so non-government customers
it was already servicing. "More volume at our FCSO subsidiary
means higher profits as well as a lower per mail piece cost,
which in turn enabled FCSO to charge BCBSF less for any
shared services, " explains McMullen.
So
the key first step was to consolidate the existing processing
resources -- which included a wide mix of print, inserting
and presorting equipment -- into a single state-of-the-art
facility, which would enable better utilization of staff
and equipment and help achieve those needed efficiencies.
The
desired benefits surfaced almost immediately. "Now our longest
workflow is less than 30 yards in distance," says McMullen,
"and we've shaved approximately 12 hours off our average
turnaround time by eliminating the need to handle and transport
materials between sites."
The
consolidation is saving BCBSF nearly $1 million a year in
lower real estate costs alone. But BCBSF and FCSO also wanted
a big boost in productivity and capacity and as well as
improved integrity.
"We
were already operating two shifts a day and wanted to reduce
the time required for processing even further," says Tauro,
whose background includes both claims processing and inventory
management.
HIPAA
Compliance a Must
"We
didn't want to buy additional print/mail finishing equipment
or hire more staff just to handle modest amounts of incremental
volume," he continues. "We needed a dramatic increase in
our processing capacity to allow us to absorb new work easily.
Plus, with the demands of HIPAA looming on the horizon,
we needed to assure the absolute integrity of our processing."
HIPAA
-- short for the Health Information Portability and Accountability
Act -- is a new Federal regulation meant to assure, among
other things, that an individual's private health care data
remains confidential.
For
firms like BCBSF and FCSO, the impact of HIPAA centers on
the need to implement technology and procedures to assure
that confidential health care data contained in both paper
and electronic statements and other documents cannot be
misassembled or misdelivered, or otherwise disclosed either
inadvertently or intentionally.
Speed,
integrity and reliability
"Previously,
we had achieved a great deal of success in our inserting
operation by following the 'S.I.R.' formula," says Tauro.
"S.I.R. stands for Speed, Integrity and Reliability and
all three are necessary to achieve sustained levels of superior
throughput."
But
recent advances in technology offered Tauro and McMullen
much higher levels of S.I.R. performance. And both wanted
to upgrade to newer inserting systems, both to help meet
the demands of HIPAA as well as add the capability to absorb
extra work more easily.
The
core of the solution came in the form of four new 14F Series
intelligent inserting systems, two each for BCBSF and FCSO.
These new FlowMaster systems from Pitney Bowes Document
Factory Solutions replace four aging inserters and are providing
both the added productivity and assured integrity sought
by both organizations.
"The
new systems are substantially faster than our existing equipment,"
says Tauro, "and we fully expect to realize a 40 percent
increase in productivity once we complete the 'shake down'
phase, which is nearly complete."
'Closed-loop'
processing
But
just as important as the faster cycling times is the new
level of assured integrity. "All four inserting systems
are outfitted with the innovative Direct Connect filed-based
processing control system, which offers us an unsurpassed
level of mail piece integrity," says Tauro.
"So
we will be able to monitor both applications and individual
mail pieces from the pre-print stage all the way through
the insertion process via a 'closed-loop' tracking system
that we believe is fully compatible with the requirements
of HIPAA."
Additionally,
the FlowMasters are engineered for fast and dependable paper
handling, and feature easy job set-up procedures, which
helps boost reliability and uptime and results in higher
productivity.
FCSO
has also acquired a new Olympus II MLOCR barcode sorter,
which sorts at 36,000 envelopes per hour and is approximately
33 percent more productive than the equipment it replaces,
yielding FCSO the twin benefits of faster processing and
the added capacity to absorb new work.
Just
as important, the new Olympus extends the closed-loop tracking
system another step to final drop-off with the post office.
"We now have a fool-proof 'track and trace' system that
starts with the Mail Run Data File in the print stream,
is updated when it goes through inserting, and is updated
again when it goes through barcode/sorting," explains Tauro.
"So
we can now follow any mail piece from the print stream --
including any and all related pages and enclosures within
that mail piece - throughout the entire production process
-- and assure that the mail piece was assembled correctly
and delivered to the post office."
Rounding
out the equipment upgrade are three new IBM laser printers,
which are being acquired by BCBSF and will help automate
and expand a key segment of business that involves the assembly
of insurance policies and benefits packages.
Previously,
much of this policy-assembly work was manual and entailed
handling dozens of pre-printed forms. Now, the highly automated
process features a virtual print-on-demand capability and
will speed assembly times by as much as 500 percent as well
as offer assured integrity.
Accounting
and charge back issues related to the new equipment and
workflow are straightforward. BCBSF owns the print resources
and charges FCSO on a per use basis. FCSO owns the presorting
equipment and charges BCBSF on a similar per use basis.
And both organizations own the inserting systems separately,
sharing the workload and charging for the use of resources
as needed.
So
virtually every outgoing mail piece is printed by BCBSF,
presorted by FCSO, and inserted by either organization,
depending on the specific application and the volumes involved.
As
for the future, McMullen expects the new print resources
will boost his overall capacity from a current level of
about 100 million print images a year to more than 300 million
images. He also says the new facility has sufficient floor
space to house equipment that can handle about three times
that volume if necessary.
Similar
capacity improvements will accrue to the inserting operation.
Tauro estimates the new equipment and available space will
boost overall inserting capacity by as much as 300 percent,
which means the combined BCBSF and FCSO operations could
easily process an additional 200 million mail pieces a year.
Plus, the new level of integrity provided by the new equipment
gives both existing and potential customers assurance of
a virtually flawless level of performance.
