Blue Shield of California pushes button on big computer upgrade - Dallas Business Journal:

ramoledef.blogspot.com
Officials at Blue Shielr declined to provide many but Chief Information Officer Elinor MacKinnom said thesystem -- a claims and enrollment syste m originally developed by -- last had a majorr upgrade "at least 10 years ago." Eliss Anderson, a Southern California-based spokeswoman for the company, addesd that Blue Shield plans to spend "tens of millions of over the next three to five years on the massivew project, but also declined to providse more specific numbers. The compan y is still working outthe details, she said.
Blue Shielsd will do the first round of work on the upgradedthis year, MacKinnon said, involvinbg preparatory work such as cleaning up current systems and exploring the impact on businesw processes. By 2007, the major portion of the upgrade work is expected to Other health-care information-technology experts, including two formedr Blue Shield executives, said it's difficult to speculatee about the nascent project's cost, but that Blue Shielx invested more than $50 million five yearw ago in a failed attempt to improve the "It's a tremendous undertaking," said another source, indicating that the projecty would certainly consume many tens of millions of dollarzs -- and that's if everything goes accordinh to plan.
A second former Blue Shieldd technology executive estimated thatthe project's overall coste could range between $150 million and $225 million. Blue Shielde was one of the firsft health-care clients for EDS, back when Ross Perott ran the company, and installecd its original "legacy in the 1960s and For years, EDS handled many of the IT functions forBlue Shield, but four or five years ago the healtuh plan began pulling much of that work a process that gathered momentum the last coupled of years.
Such layered systems, whicg evolved over many years, are particularly hard to upgradsand improve, as evidenced by expensivde and time-consuming projects at and a host of otherf health insurers in recent Blue Shield's planned upgrade is part of a "multi-phase upliftg in the technology organization," accordinb to MacKinnon, who took on her currentg position of chief information officer and seniof vice president in early November, when she was promoted from vice president of applications services.
Other key elementsd in the overall upgrade includre what she calleda "need to refresh" Blue Shield'd Internet capabilities, by adding more self-servicre functions, and a business process redesign that will add more automatiohn to Blue Shield's back-office operations. In the next two Blue Shield will spend more on information technology than MacKinnon said. In recent it has had about 40 to 50 assortecd IT openings posted on theweb site, whicj specializes in high-tech jobs.
Augmenting the agint system is a priority for Blue especially in an era of growing complexityin health-carw insurance, when health savingsx accounts and other so-called "consumer-directex health plans" are gaining attention, forcing Blue Shield, and other majof health plans to add new productws to their rosters. "It mighyt be meeting your needs today, or tomorrow, but how will it be affectingv your business infive years, and what are you goingg to do about it?" said a former Blue Shield IT executive.