Better for brokers: New England health plan uses IT initiatives to build strong broker relationships

Health Management Technology, April, 2004 by Tom Hamel, Larry Rapisarda

A strong relationship with the independent broker community is fundamental to the success of small to medium-sized healthcare payer organizations. Building and maintaining these critical relationships, however, is no easy task, and outdated IT systems and processes can seriously hinder progress. For example, health plans that retain paper-based and stove-piped financial systems struggle to ensure accurate and timely commission payments. Others wrestle with broker demands for advanced selling tools and real-time information.

Harvard Pilgrim Health Care (HPHC), one of New England's leading health plans, has embraced, not resisted, technology as a platform for building stronger broker relationships and delivering innovative offerings to the market. The health plan implemented an automated financial system and leading-edge portal technology to fulfill three objectives:

* streamline commission calculations;

* enable on-demand electronic commission statements;

* accelerate commission payments via electronic funds transfer (EFT).

Building a Solid Technology Foundation

The introduction of online broker statements and EFT commissions were part of a broader HPHC initiative to automate our financial systems and enhance service to our members, employers, providers and independent brokers through on-demand access to plan and health information. In 2000, we implemented Oracle Financials, consolidating two general ledgers into one and improving our overall financial reporting and business intelligence capabilities. The solution also provided the foundation for our new broker commission capabilities.

Broker commission calculation is a complex process, impacted by factors as diverse as plan coverage and geographic boundaries. At HPHC, much of this process was done manually. Moving forward, we needed a solution to automate the commission process. Our goal was to save time and administrative dollars while reducing the potential for calculation errors--a winning proposition for HPHC and our brokers.

Today, we use Oracle Incentive Compensation to calculate and manage broker commissions. Our broker relations department downloads and reviews sales and commission data for a specific month, and gives a single command to produce three reports: one for accounts payable, authorizing the release of funds to brokers; the second for paper-based commission statements, for brokers requesting them; and the third for the portal, where brokers can access their commission information online instantly.

Portlet Provides Market Differentiation

In 2003, HPHC launched a new reference portal as part of our goal to become an eHealthPlan and deliver improved service at a lower cost. HPHC's portal, built on Oracle Application Server technology and Netegrity security technology, is the "front door" to our transaction environments, which serve 800,000 plan members, 22,000 providers, 4,700 employers and 1,000 independent brokers.

The creation of the New England healthcare market's first online broker commission portlet was an important component of the portal and a unique differentiator for HPHC. Our new financial system created a common platform through which we could funnel and process all commissions.

Brokers can now view commission statements online and on-demand, no longer having to wait for monthly paper reports. We can also deliver the information in a format they can modify for their own internal reporting processes. Under the paper-based system, brokers who needed to use commission information for internal reports had to manually enter the data into their own systems--a time-consuming process that presented opportunities for keying in errors.

Shortly after deploying the commission portlet, HPHC established EFT payment of commission checks. The feature, combined with the new financial reporting system, has reduced the commission payment cycle by one week, or 25 percent. Brokers are paid faster and more accurately, building goodwill in this vital community.

HPHC continues to bring innovation to its broker relations initiatives. In December 2003, we introduced an online tool that allows brokers to instantly access small-group rates and renew accounts electronically--another leading-edge service that saves our brokers time and distinguishes HPHC in its market.

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Tom Hamel is the manager of broker relations, and Larry Rapisarda is the chief technology officer, at Harvard Pilgrim Health Care, serving the New England states.