Blue Cross Blue Shield of Michigan's 2020 AWARD FINALIST CASE STUDY : Best Achievement in Operational Excellence to deliver Business Transformation

Read this article about Blue Cross Blue Shield of Michigan , one of our finalists, in the category Best Achievement in Operational Excellence to deliver Business Transformation, selected by the independent judging panel, for the 2020 Business Transformation & Operational Excellence Industry Awards program.

BCBSM's BlueFIT

Blue Cross Blue Shield of Michigan (BCBSM) is the largest and most trusted provider of health insurance in Michigan, serving company and government-sponsored group plans, individual plans, Medicare and Medicaid through traditional preferred provider arrangements, health maintenance organizations and health savings account plans.

Early in 2015 and facing a challenging and uncertain industry landscape, BCBSM initiated a multi-year enterprise effort to reduce costs and improve performance — Strategic Business Transformation (SBT).  IT Application Maintenance and Support, a critical component of enterprise operations with a cost baseline of $60 million offered cost reduction and performance improvement opportunities, and BlueFIT the Blue Future of IT was launched.

Critical feedback from two sources – IT customers and IT employees – revealed clear dissatisfaction in both groups. Customer dissatisfaction was rooted in high costs and lagging delivery times. Employee dissatisfaction resulted from inconsistent work drivers and challenges to prioritizing responses.  The CIO set a cost reduction goal of $8.4 million (14% of the cost baseline) while simultaneously improving performance and service by comprehensively applying lean to leverage best practices, eliminate low-value work and increase transparency to customers.

BlueFIT was rolled out in four Waves, over 18 months.  Although the IT team members possessed the necessary technical expertise to perform their jobs, BCBSM’s Continuous Improvement Unit (CIU) partnered with them to teach them how to use the deep set of analytic tools and ultimately how to work lean. That partnership began with the CIU leading the work and quickly transitioned to the IT team driving the implementation, with CIU as coaches.

Robust diagnostics provided a comprehensive opportunity list. Through assessment, the team identified six key Design Levers that would provide essential relief to IT employees, lowering the cost of delivery, allowing them to improve the way they work and enhancing their job satisfaction and performance.

1. Optimize work-driver intake
2. Enable efficient delivery of enhancements
3. Standardize tools and definitions of work drivers 
4. Improve the alignment of resources and work   
5. Initiate ongoing performance huddles
6. Reduce context switching

Implementation required an approach to address both processes and the cultural mindset within IT. Lean had to be implemented without major changes to technology, and also required understanding what was needed to build continuous improvement capabilities with the IT organization and leverage BCBSM’s established Cultural Beliefs.

An important component of success was winning the support of more than 700 IT employees who were affected by the transformation. To that end, the initiative itself was employee branded – as “BlueFIT,” the Future of IT at BCBSM. The branding was supported through workplace posters and the intranet, building momentum as the implementation progressed.

The project exceeded its goals — administrative cost reductions exceeded target by 30% and key performance metrics improved by 20% or more.  Equally important, 50 IT team members were trained as Lean Coaches and Change Agents for future projects. And motivated employees formed the IT Continuous Improvement Community of Practice, meeting quarterly to collaborate on problem-solving common issues.

Business Transformation & Operational Excellence Industry Awards 2020