Mirka Strano is a dynamic professional with extensive health insurance industry knowledge. In this interview, Mirka shares the insights of Tracy O’Rourke, Managing Partner & Executive Advisor at GoLeanSixSigma.com on Lean Six Sigma applied to International Private Medical Insurance (IPMI), Service Chain Management and Business Development.
1. IPMI (International Private Medical Insurance) is often characterized by a long “service chain” which includes, for example, brokers/intermediaries, the insurers, third party administrators for processing insurance claims or managing the hospital network for the insurer. What tips would you give to health insurers in order to maximize the efficiency of their service chain?
When doing process improvement, consider the impact to the user before making changes. With so many parties involved, it can be easy to lose sight of what works best for the customer. Focusing on the customer experience can be a way to engage in a common goal versus all the constituents focusing on how to make the process better for just themselves.
2. According to a research from Salesforce and The Sales Management Association, 63% of the executives interviewed confirmed that their organizations were ineffective at managing their sales pipeline. What recommendations would you give to a company, particularly to an insurance company business developer, for efficient sales pipeline management?
The sales process should be one of the easiest, but unfortunately, it can be the most complex. We worked with an insurance provider to improve the sales process specifically. Before the process improvement, new customers were sent a 21-page form to complete. After the improvement the form was less than 4 pages. These are the kinds of improvements that can help make the process more efficient and effective.
3. Based on your past experience, how can Lean Six Sigma methods be helpful with business development for an insurance company and can you share some insights on how efficiency in the sales process can lead to higher profitability, more sales, lower costs, particularly for an insurance company?
The bottom line is that if sales process’ are more efficient, the salespeople spend less time on bureaucratic administrative steps, and are freed up to spend more time selling! Sharing how much less time the process takes for salespeople is a pretty concrete measure of improved process performance. In the example above, if a form is only 4 pages vs. 21 pages that could lead to less follow-up for the salesperson and more time looking for new business. Trust me, salespeople want to spend as little time as possible on administrative type work! Or, if you do a time study and determine that the average time a salesperson spends on the new customer on-boarding process is 4 hours per customer and you can get that down to 2, that time is spent looking for more business. We worked with an organization that had such time-consuming processes, their field salespeople could only get out of the office at most 2 days a week! The goal was to get salespeople out in front of the customer 4 days a week, and streamline the administrative process as much as possible. Lost sales are hard to quantify, but the amount of time spent on administrative work is easier to measure and easier to reduce.
4. The report “The making of a digital insurer” from McKinsey published in 2015 mentions how big the challenge for insurers is with regards to digitization, especially considering how customers are more and more used to dealing with companies such as Amazon who are masters of digitization. What are your suggestions to an insurer who wishes to re-organize their processes to introduce digital tools within the company?
The biggest mistake we see is that individuals and organizations jump to automation as a solution before improving the process first. If the process isn’t improved before automation, what happens is that bad processes are automated. So, the process still requires multiple signatures, has redundant steps and excessive hand-offs, and it just gets automated. And now it’s more difficult to change because it requires a technology fix. Ouch! Improve it first, then automate where possible.