designing for success

Designing for Success – Medicare Advantage (MA) Operations Division – Operational Design Assessment Copyright 2013 Advanta Healthcare Partners

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Designing for Success Medicare Advantage (MA) Operations Division Operational Design Assessment To maintain their competitive position, the leadership group of a national Medicare Advantage (MA) health insurance company determined the need to reduce operating expenses, improve customer service levels, and ensure regulatory compliance. The goal was to design and implement a solution to achieve a $17 million expense reduction within an aggressive time period.

The MA Operations Division turned to Advanta Healthcare Partners (Advanta) to conduct an assessment and develop a plan to reduce costs by streamlining processes and more tightly integrating existing information systems with business operations, within an 18-‐month time period. Advanta defined a new organizational and operational strategy and created a roadmap and tactical plan to achieve this new strategy. The roadmap identified the estimated costs, benefits and a high level work plan for seven key projects.

Working jointly with the MA Operations Division, our efforts resulted in developing a strategy and plan to achieve the targeted benefits identified by the leadership group.

The Client’s Challenges

The primary challenges facing the team:

• The $17 million cost reduction was originally planned to be completed within a three year time frame, but was reduced to 18 months.

• The MA Operations Division was not compliant or transparent with internal and external regulatory requirements.


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• Customer service levels and satisfaction scores were lower than the leadership group wanted for members, providers and agents.

• The Medicare Advantage industry is competitive as Medicare beneficiaries:

• Have an opportunity to switch from one Medicare Advantage Plan to another Medicare Advantage Plan every year;

• Are able to make changes to their existing plan; or

• Are permitted to terminate their Medicare Advantage coverage to return to traditional Medicare insurance.

The Advanta Solution

Advanta conducted an initial needs assessment that involved the elicitation, prioritization and documentation of the business requirements for the MA Operations Division. Requirements were based upon interviews with key external stakeholders and internal senior leaders, as well as a review of pertinent Federal and State legal and regulatory guidance. The business requirements represented the basis for defining the future state organization and framework for the Operations Division. Advanta coordinated, designed and facilitated various leadership and middle management sessions to identify and define the new strategy, organizational model and the associated business processes. Once the future state was defined, Advanta created a business impact analysis to fully understand the potential change drivers, risks, costs and benefits of implementing the future state. Based on the identified organizational model and the required benefits and targets to be achieved, Advanta developed a Redesign Roadmap consisting of seven key projects. The Roadmap identified the order and sequencing of the projects over the planned implementation time period. Advanta’s team:

• Assessed the current state of the Operations

• Collected business requirements from the Division's key customers

• Identified, analyzed, and synthesized key operational, organizational and financial requirements to be met by the Division

• Compared the Division’s key performance metrics with benchmark data and industry

Advanta Solution:

• Conducted initial needs assessment

• Developed business requirements

• Coordinated, designed, and facilitated various leadership and middle management sessions

• Developed the new future state strategy, organizational model and business processes

• Created a business impact analysis to analyze the future state vision

• Developed a Redesign Roadmap


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experience, and added to the customer-‐driven data

• Established performance targets for the selected metrics, i.e. call center service levels and claims accuracy

• Facilitated a “future state” session to define the vision over time, including key processes, performance metric targets, and organizational model

• Identified tactical business projects with the leaders that would meet performance targets and accomplish the agreed upon vision

• Defined the scope of each project and identified key milestones to reflect the larger operating environment and dependencies

• Developed a tactical roadmap which identified the estimated costs, benefits and a high level work plan for accomplishing each project

The Results

Advanta’s skilled facilitators built the trust of leadership and helped guide the organization through several sessions that defined the business requirements for a future state Operations Division. Deliverables included a Needs Assessment, future state organizational model, and a Redesign Roadmap. As a result of Advanta’s effort, the MA Operations leadership had a tactical plan for achieving the identified performance targets for cost savings, customer service improvement and regulatory compliance. Our activities resulted in:

• A plan to achieve a $17 million reduction in operating costs within 18 months

• The identification of a future state strategy, operational and organizational models

• The development of a Redesign Roadmap consisting of projects to allow the organization to move from the “as is” to the “to be” state

Contact Information Bill Sheats President [email protected] 925.984.7091 cell 925.359.3239 office