Harvard Pilgrim Health Care

Focus on: Business Transformation

When IT bottlenecks threatened one of the nation’s top healthcare organizations, Perot Systems provided the cure.

The Challenge

Despite an impressive level of member satisfaction and annual revenue of more than $2 billion, Harvard Pilgrim was forced into temporary state receivership in January 2000 after 1999 losses reached $227 million. The problem, in a sense, was brought on by the company’s tremendous success during the past decade, during which Harvard Pilgrim acquired or merged with a number of other managed care organizations. As a result, the company’s IT structure quickly became a snarl of disparate systems that made it difficult to accurately track claims and expenses.

The Solution

Harvard Pilgrim turned to Perot Systems to help untangle its IT infrastructure and claims operations. But before focusing on systems, we focused on strategy and core processes, applying the principles Jim Champy explains in his book, E-Engineering the Corporation. Perot Systems helped Harvard Pilgrim determine what was profitable and what was not, where there was a potential for savings and the possibility for growth. Based on those decisions, Perot Systems, working closely with Harvard Pilgrim leadership, substantially overhauled and streamlined the company’s IT and Claims operations. Harvard Pilgrim placed its Claims department under Perot Systems management and into a single, scalable IT system capable of handling a large number of claims. The results have been dramatically apparent. Claims inventory decreased by 90 percent since January 2000. Call Center response time for Providers improved by 95 percent and increased the financial payment and processing accuracy to a point that meets best-in-class benchmarks in all areas. Now, 100 percent of claims are accessible online within the organization within 24 hours of receipt in the mailroom.

In addition to helping with operational improvements, Perot Systems played a key role in the development of one of Harvard Pilgrim’s most important strategic initiatives. We worked with Harvard Pilgrim to create a secure Web application that allows members to enroll, select a physician, view benefits and eligibility information, update their demographic and family information, and order ID cards online.

Furthermore, employers can approve employee transactions, update employee records, and verify their company’s Harvard Pilgrim roster online, dramatically reducing processing times and increasing quality. In upcoming months, a series of system releases will add functionality that will offer employers, members, and providers a growing array of simple Web-based tools, including claims management, billing, referrals, and authorization of services.

Due in large part to its restructuring efforts and the success of its IT and Claims improvements, Harvard Pilgrim emerged from receivership in mid-2000 and recently reported its fifth consecutive positive quarter.

Currently, more than 700 Perot Systems associates work with Harvard Pilgrim. With Perot Systems’ assistance, the company has acquired the resources to solve pressing problems, the flexibility to handle possible changes within the company or within the industry, and the capacity to accommodate future growth–assets that strengthen Harvard Pilgrim’s long-term relationship with its members and with Perot Systems.