How does the CIO of the largest member-owned health insurer in the nation ensure that IT is driving member value? That’s what I asked Steve Betts, CIO of Health Care Service Corporation (HCSC), a $30 billion healthcare plan serving nearly 15 million members across five states. As Betts describes, he uses a combination of organizational design, shared metrics, and purpose-driven goals.
Martha Heller: How have you created a proactive, consultative IT organization at HCSC?
When I joined the company two and a half years ago, I introduced the mantra that in addition to being world class IT professionals, we need to “be the business,” with the goal of creating a deep connections with the business while also maintaining the enterprise scale and standardization of a best-in-class IT shop.
We developed a model based on a set of nine IT portfolio teams that are embedded in our lines of business (group, government, and retail) and in our business areas (claims and customer service, for example). Each portfolio team has an IT leader and a dedicated team of business solution leads, business architects and business analysts who are all focused on a business-centric set of responsibilities. These portfolio teams do not create an IT strategy that follows a business strategy; they work in partnership with their area’s business leadership to create one integrated strategy that covers people, process and technology.
How do the portfolio teams interact with your IT delivery people?
Our IT portfolio teams leverage a set of enterprise services and functions in a matrixed model. Application development, maintenance, infrastructure, architecture, and security are all matrixed across the portfolio teams; they create process standardization and delivery excellence in the context of deep business partnerships. This model reinforces a business focus while maintaining enterprise strength.
How do you ensure that the conversations with your business partners are focused on strategy and innovation?
We’ve done that by beefing up our IT strategy and innovation capabilities. We have a dedicated team for strategy and a dedicated team for innovation, and both are focused on developing new ideas and partnering with outside organizations, such as healthcare incubators and startups. These teams hold monthly innovation forums that bring together our IT portfolio teams and our business partners to talk about how IT can drive new ways to serve our members.
When we get to the point of doing a deep dive into a new technology, like machine learning or artificial intelligence, we conduct that research as a matrixed team. Members from our strategy and innovation teams pair up with members from our portfolio and business teams. This way, we have an integrated team that looks at start-up or incubation opportunities.
You mentioned avoiding a “business strategy and then an IT strategy” scenario. How do you do that?
We have a multi-year planning process, of which I am one of the core members. I work closely with our corporate strategy and planning teams, our business leaders, our IT strategy and innovation teams, and our portfolio leaders. Because we are all involved in the planning process, we are able to bring in new IT perspectives as we refresh our strategic plan. I will admit that it is hard to get the first integrated strategy out there, but once you have it, you can start iterating to bake in IT considerations, including not only innovation, but insights from the enterprise IT functions as well.
How do you ensure that your IT people understand how their work drives business value?
As a healthcare company, HCSC is a purpose-driven organization. So, I look for ways to create a connection with our purpose. We are member owned, so our purpose is to do everything in our power to stand by our members in sickness and in health. Everyone on my team understands our mission, which then gives them license to challenge what we are doing if they don’t think it connects to our purpose.
We are also piloting a joint metrics framework that combines IT activities with business outcomes into an overall effectiveness measure. For example, if we look at the inquiries we receive from our providers (physicians) and our effectiveness in serving them, we measure our performance on the business side: What is the average time to answer? How often are we resolving the issue on the first call? We also look at whether we are we serving those inquiries effectively on the IT side. For each of the three core systems that support that business process, we look at availability, number of major incidents, and time to restore.
Sometimes, we’ve seen business service level agreements (SLAs) dip, but with no system impact. Or we’ve had system incidents but no business impact. The overall effectiveness measure shows how processes and IT are working together to create a business outcome. Neither metric stands alone, which gives us an iterative way to create accurate measurements. The joint metric creates a data rich conversation between business and IT teams focused on improving joint outcomes.
In a digital era, IT people must think differently than in the industrial era. What does that mean to you?
Our approach to thinking digitally has been to move from a process-centric view to a member-centric view. What does a change we are proposing look like to a member? How do our initiatives improve care? When you think about the member (or customer) first, you wind up with an integrated cross functional approach, regardless of the business area you are working with.
Digital thinking also means adopting a very dynamic programming approach, such as extreme programming, where you have a business product owner working with an IT product owner and a small development team. With this approach we’ve been able to create a more deeply member-centric perspective and deliver new products more quickly.
About Steve Betts
Steve Betts has been senior vice president and CIO of Health Care Service Corporation since he joined the firm in 2014. In this role, he is responsible for all of HSCS’s technology needs, and that the technology organization delivers both operational excellence and innovation across the group, government and retail business segments. Prior to HCSC, Betts performed multiple roles, including global CIO, at Aon. He received a BSc in Mathematics and Management Science from the University of Manchester.