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Organizational Realignment

Cost Management

Shared Services

Health Insurer

Situation

 

A regional health insurer and Medicare manager sought to grow market share in the federal and state government markets and reduce administrative costs.

 

Key Challenges

 

  • Determine the extent of the market opportunity

  • Asses leverage of existing business development and product offering capabilities

  • Identify opportunities to reduce costs through organization structure, business processes, and staff reduction

  • Organizational resistance to proposed changes 

 

Rapid Deployment Solutions

 

  • Conducted competitive analysis of market size, dynamics, and opportunities for expansion and profitability.

  • Developed financial simulations to determine sensitivity revenues and costs to market share, process costs, and claims management experience.

 

Strategic Solutions

 

  • Determined opportunities to reduce operational costs

  • Developed Shared Service model

  • Redesigned business process and authorizations

  • Eliminated duplication in Line of Business administrative functions

  • Consolidated functional support in Finance, Technology, Marketing, and Human Resources

 

Functional Focus and Impact

 

  • Corporate strategy

  • Competitive positioning

  • Organizational structure

  • Finance

  • Human Resources

  • Information Technology

  • Marketing

  • Administrative cost management

  • Activity based costing and zero based budgeting

Results

We utilized activity based costing and zero based budgeting to clearly represent process, service, and functional costs. Client successfully realized more than $20mm in first year cost savings by implementing a shared services support capability.