Raise Productivity and Lower Costs With Performance Management: A Case Study with Medical Mutual of Ohio
1 Sep, 2004
By: Michael CallaghanThe Business Challenge
Medical Mutual of Ohio is a PPO health insurance company providing customers with access to hospitals and doctors since 1934. Like most healthcare insurance providers, Medical Mutual of Ohio has a medical management team within the company tasked with limiting unnecessary payments to doctors and healthcare facilities. The team comprises nurses who review cases and attempt to manage payment outlays for the insurance company. They are supported by call center agents who primarily interact with healthcare facility personnel, doctors and, occasionally, patients.
Medical Mutual of Ohio was grappling with two big problems. First, the company wanted to improve productivity of the nurses performing case reviews to reduce costs and improve service for those providers and facilities seeking case resolution. Second, they wanted to better understand the cost per case to allow the sales team to effectively price new service level agreements.
The medical management team was dealing with all types of cases—from routine to very complex. The staff of nurses reviewing these cases had varying skill levels. The Medical Mutual of Ohio management team had no way of intelligently distributing work across the staff and measuring the productivity and timeliness of case resolution. Hence, the management team could not identify and manage costs associated with different types of cases. Without the ability to manage work effectively, case backlogs mounted and the call center supporting this area experienced dramatic increases in call volume as providers and facilities increased communication in an attempt to resolve cases. Duplicate calls, duplicate escalations, exaggerated hold times and ultimately increased call lengths were experienced when callers made contact with an agent in an attempt to resolve multiple cases.
It was clear that Medical Mutual of Ohio needed a solution. They needed a management approach and tools to assign work to the right people, turn it around quickly and achieve greater throughput. To do that, the management team needed to gain better visibility into the work. They need to understand and manage work based on complexity and volume verses volume only. What’s more, they needed to measure individual performance based on quality and productivity. Both management and nurses were skeptical that this could be done in their environment, but they were committed to changing the way they manage their business.
Solution
Opus Group addressed the challenges with the Opus Balanced Approach, a blend of process, training and tools. First, the foundation for improving productivity had to be established by getting a handle on work complexity. Opus Group observed every procedure code, the HIPPA mandated code for every procedure or medical “action”, breaking each one into its elemental pieces resulting in 300 discrete activities. The activities were assigned to work buckets with associated complexity levels. The next step was to gather highly divergent volume data from multiple legacy systems that, together with the complexity levels, would be used to forecast workload.
The Opus Suite tools provided the engine for generating the forecast and intelligently distributing work among the nurses. The distributions could be done taking into account service level goals, production goals, training and skill level. Workload and backlog at the individual level made measurement of nurse productivity possible. And, it provided insight into training and cross-training needs, enabling management to improve the skill set of the resource pool.
The Opus Suite tools were also applied to the call center supporting the nurse reviewers. Opus Group implemented a scheduling solution for the call center that accounted for both on- and off-telephone work. Call center agents were effectively scheduled to support the needs of providers and facilities.
In addition to providing the data and tools to address the management team’s goals, Opus Group delivered the training and process enhancements to support the new way of doing business. The Opus team trained the Medical Mutual of Ohio management team on how to manage and measure using the Opus Suite tools. They also trained nurses and call center agents on new workflow and process changes that were made to improve efficiency.
Results were dramatic. Nurse productivity soared and cost per case declined. As case backlogs began to shrink drastically, the volume of calls in the center also began to decrease. At the same time, the scheduling system better anticipated all agent work and more effectively scheduled these agents. Callers began to realize that 12-minute hold times were a thing of the past, and call lengths returned to normal levels.
The stellar results tell only part of the story. Medical Mutual of Ohio was the first insurance provider to receive the prestigious NCQA Certification for outstanding service delivery and healthcare practices. The recognition was, in large part, due to the efforts of the medical management group.
5 Questions to Get Started with Performance Management
For companies in the trenches with new technologies or planning new technology investments, delivering answers to the following five questions can mean the difference between qualified successes and dissatisfied customers.
1. Do You Know How to Measure Productivity?
CRM initiatives have dropped lots of slick, new technologies into today’s contact centers. So many that the question becomes “How can I ensure agents are using the technology effectively and ultimately increasing productivity?”
Productivity is a measurement of the performance of activities, which can range from simple to complex. They can come from multiple sources such as telephone, email, fax or enterprise systems. In these dynamic environments where demands are ever increasing, managers need a better set of tools to take charge of productivity.
Pull Quote: Today’s best performance management systems are built on Activity Based Costing principles that call for a structured approach to identify and analyze center activities
Performance management systems give managers power. Today’s best performance management systems are built on Activity Based Costing principles that call for a structured approach to identify and analyze center activities. Those activities are then married with “time to complete” to produce a universal productivity measurement. Regardless of activity mix or volume, management is able to apply these numbers to better plan work and evaluate performance.
A critical underpinning to realizing the benefits of an Activity Based Costing approach is to make sure the foundation being measured is a strong one. Business processes must be logically ordered and streamlined. Activities must be value-added. In essence, the quantum productivity improvements come first from improving the foundation and then from applying the right toolset to measure and manage on an ongoing basis.
2. Can You Effectively Manage Individual Performance?
The cornerstone of achieving better results in a service environment is managing individual performance. In multi-functional contact centers where agents may be taking several call types, processing various transaction types, responding to email and more, it is often difficult to piece together data that is credible and comprehensive enough to draw strong conclusions and take action. Without this view, problems such as workload imbalances, training needs and motivational issues go unidentified and unsolved.
Performance management systems play an integral role in providing insights to managers and individual agents. Reports from these systems spit out key metrics including productivity, utilization, quality and cost, for each agent as well as for each team. Managers can use these reports to solve problems quickly and motivate agents to extend performance. For individuals, they function as personal scorecards inspiring agents to do better.
For one telecommunications company headquartered in the Midwest, consolidation of five service centers into one virtual center spurred management to raise the bar on overall performance. The work performed at each center was nearly identical, but agents were managed very differently. When center consolidation took place, a performance management system was implemented. Fair and consistent measurement was the goal for all agents regardless of the activities they performed or their mix of work. Results were dramatic. Agents immediately believed in the credibility and fairness of the information coming from the performance management reports. Motivation, combined with management attention on individual problem areas, took this new virtual center to the next level.
3. Can You Predict and Measure the Impact of Change on People?
Managing the people side of a CRM initiative is about managing change. Changes are coming from all directions in today’s contact centers. Some centers are downsizing or regionalizing. Others are consolidating. Almost all are adopting new technologies and new functions. Many companies have attempted to plan for change, but few have done so at the desktop level. Changes are sold at the executive level and at best, implemented at the management level. What’s needed is change on the front line where people execute and success ultimately happens.
The engine that drives changes down to the desktop level is a performance management system, and desktop level change is difficult.Every activity must be understood at a granular level—call types, call lengths, call complexities, call volumes, employee skill sets, scheduling requirements, etc.. Hours of observation and analysis are needed to establish this information before the system can use it to support the planning, management and measurement of performance.Once that baseline is in place, new changes can be planned for and implemented with predictable results.
Planning for change is important. A recent example involves a technology company whose call center was transforming itself into a profit-center. Company executives were expecting a revenue increase in the first quarter. With the same set of agents armed with new technology and their cross-selling and up-selling pitches, agents became flooded with calls. Calls that once took seven minutes were now taking 11 minutes. Extended call times and call backlogs dragged down results and customer satisfaction. This company’s management team did not have an understanding of desktop level activities and thus, could not have predicted the impact of this change in the center.
Without sound predictions from a performance management system, the only path management could see was to increase staffing, which they did. With costs up and sales flat, this initiative fell short of expectations, to say the least.
4. Does Your Training Keep Pace with Needs?
Large-scale strategic changes and even small, daily changes require commensurately important changes in employee performance. Gone are the days when traditional classroom training could address all employee needs. Things happen quickly today. Employees need on-the-job training to improve performance at the point of impact, and action must be taken immediately. Training must be short-interval and reinforced regularly. Performance management systems function as the compass for training delivery when centers meet ongoing change. Specifically, systems provide metrics at an individual and team level that identify issues setting on-the-job training in motion.
Recently, change was happening very quickly at one insurance company’s contact center. A new front-office system had been implemented and classroom training had been conducted. However, the center was vastly under-performing in attempts to cross-sell and up-sell customers on a series of new homeowners’ policies.
A review of the performance management report indicated that as a team, productivity was sharply down. Upon closer observation, 13 new hires were struggling to use the customer product history function in the new system and were extending call lengths and creating backlogs. Desktop level training was quickly developed for this function and agents were trained in a 15-minute conference room session. Results improved immediately. This is a great example of training being executed at the speed of business.
5. Are You Willing to Take a New Approach to Achieve CRM Results?
Often, investment has already been made in initiatives that are under way. For those companies, the most important question to ask is “Have we solved the problem?” If not, there are other approaches to generating the level of contact center impact the business needs. Those approaches do not involve throwing out the existing CRM technology in favor of the new thing. Instead, they focus on getting more out of what’s already in place. Performance management systems help better utilize and manage the people who are driving results, and are best implemented as part of a balanced approach that includes business process optimization and front-line training, to achieve long-term results.
