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EVP Lori Beer Discusses Strategy of WellPoint’s Enterprise Business Service Organization

The new organization, headed by former CIO Beer, unites several core business functions to coordinate services at a high level, providing strategic agility and enabling senior leaders to focus on front-end business concerns.

In early October 2010 Lori Beer relinquished the CIO duties that she had held at WellPoint since May 2008 and took on the job of executive vice president of the health insurer’s newly formed Enterprise Business Services (EBS) organization. In her new role, Beer, a 2009 Insurance & Technology Elite 8 Award winner, will still oversee technology but will have an expanded role that unites several core business support functions. In a recent interview, Insurance & Technology asked Beer about the strategy behind her new role.

“We’re trying to get the right outcome for the consumer, trying to look at how we can deliver better and more affordable products and services,” Beer responded. “We believe that bringing these support functions into one unit will allow us to do that.”

WellPoint’s EBS unites five of the company’s core business support functions, Service Operations, Operational Excellence, Information Technology, Information Management, and Sourcing and Supplier Management. WellPoint promoted A.J. Lang to the CIO role formerly held by Beer. Lang, who has 25 years of experience in healthcare, banking and the credit card industry, most recently served as senior vice president of systems delivery within WellPoint’s IT organization.

By uniting the various functions within one organization, WellPoint will be better able to more thoroughly analyze major processes such as claims and enable continuous improvement, Beer asserted. “We’ll be able to pull the various levers to provide efficient and effective services for our members and internal partners,” she said.

Asked whether her new role was essentially an expanded CIO job, Beer said that is a matter of definition. Beer retains authority for overall IT governance. “I also have the account management and engagement with internal business partners to define solutions,” she explained. “A.J.’s technology organization is focused on technical requirements delivery and architecture, right through execution and delivery, as well as growing and supporting partnerships with key service providers.”

However, Beer stressed aspects of her new job that transcend more typical CIO responsibilities. She suggests that the importance of technology to health insurers today and into the future explains why a technology officer is the right fit for an organization like WellPoint’s EBS. “Technology is a huge enabler of the EBS’s mission,” she related. “Thus it’s important to have an understanding of the technology base. As CIO I was serving as chair of our operations council. CIOs are positioned to drive innovation and continuous improvement because the world we live in involves a great deal of integration across functional pieces — we’re used to doing that with systems.”

The significance of the EBS is that while it involves the technology apparatus it also deals with the integration of non-technology business systems, Beer implied. The EBS elevates critical technology considerations along with others to an executive who can interact with senior management.

“When I talk to a business leader, they don’t necessarily want to talk about whether the technology part is working well — they want to talk about end-to-end solutions,” Beer explained. “The EBS gives us the opportunity to look at business processes end-to-end and make sure that we’re pulling the right levers to drive improved efficiency and quality. By having operations, procurement and program management together, we’re able to drive alignment from a higher view.”

Focusing that alignment within the EBS enables P&L leaders to focus on the front end of business, through efforts such as product design and marketing, Beer elaborated. “They are counting on the EBS organization to make that happen — we’re the organization that makes those products and strategies real,” she said. “It allows them to focus on growing the business and supporting customers.”

“Our core strategic objective is excelling on day-to-day execution,” Beer continued. “It allows us to provide capabilities at a business process level without leaders having to worry about the combination of the various pieces that need to be combined — we’re basically delivering the services for them, and how we deliver is what we worry about.”

The EBS will also enable WellPoint to more strategically address customer interaction, and interaction with the individual member, which health insurers have not traditionally focused on, Beer notes. “More and more customers have choice, especially in the context of 2014, with the emergence of health insurance exchange products [as the result of healthcare reform],” Beer said. “We will be better to address meeting the needs of all our stakeholders but particularly the end consumer, in terms of understanding who may be the best healthcare provider, understanding cost and quality, etc. Those things will be extremely important, and as an industry I think we’ll continue to develop better tools for the consumer to navigate this complex value chain.”

To the extent that much of the impact of healthcare reform is yet to be defined, Beer said that WellPoint is focused on the more clearly anticipated effects of ICD 10 — the International Statistical Classification of Diseases and Related Health Problems, 10th revision —which will require all U.S. firms covered by HIPAA to adopt diagnostic codes classified by the World Health Organization (WHO) by Oct. 1, 2013.

However, the uncertainty of the final shape of healthcare reform helps to demonstrate the utility of the EBS, Beer suggested. “When we think about how we will invest in technology, we think about how it will improve our ability as a business to respond to a changing environment,” she remarked. “Whether driven by consumer demand or reform, ultimately it will be a positive impact, and what we’re doing is thinking about how to bake this kind of agility into our capabilities going forward.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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