Best Integrated Relationship -1998 Editor’s Choice Award:
From the editor:
In the Best Integrated Award, we recognize a relationship in which the supplier and the customer have successfully integrated their operations to the benefit of both parties. Unisys has not only provided UnitedHealth Group with all of its data processing, it has done so in such a way that the service is clearly an extension of the customer company.
With this award, we want to recognize the close and beneficial working relationship these two companies have been able to create. We note with pleasure that the relationship has been extended, through added services, which is hallmark of satisfaction on both sides. We wish them many more years of beneficial mutual cooperation.
Fast response to customers is essential to the success of UnitedHealth Group, the second largest managed care company in the U.S. UnitedHealth Group offers approximately 45 different health plans and has ‘upwards of eight to ten specialty companies,’ according to Tom Dougherty, senior executive of strategic partnership management. The company’s outsourcing relationship with Unisys to provide data processing, he says, is helping them meet the demands of their vast network of clients.
“We have customers that we satisfy,” says Dougherty. “They decide on Monday what solution they need, and they want it implemented on Wednesday. Unisys has been very responsive in getting quotes to us and trying to get the service up as fast as possible.”
“Unisys is very much a strategic partner,” says Dougherty. “We don’t call them suppliers; we call them a partner.”
The relationship began in July 1996 with a 10-year agreement to provide data processing services for UnitedHealth Group, located in Minnetonka, Minn..
Unisys handles the health care company’s Cosmos systems, a network of systems that run on a Unisys platform and perform such functions as claims processing and membership management. The outsourcer also operates the IBM-based decision support system which provides ‘massaged data’ to be used in reports and other activities of operating in the managed care industry.
Dougherty says UnitedHealth Group decided to outsource data processing in order to concentrate on their core competencies. The company’s decision also fulfills “a very defined strategy of looking for big players with deep benches that can help us with our technology.” The objectives were to deliver technological advances in a timely manner and to run the infrastructure at the best and lowest unit cost.
The company’s growth rate also was a factor in the decision. Prior to the merger of Aetna and U.S. HealthCare in 1997, UnitedHealth Group was the largest managed care company in the country. They are continuing to grow at a rate of 20 percent per year.
“We are a very dynamic company,” says Dougherty. “So we have requirements that pop up out of the woodwork and need us to move fast. Unisys participates in that.”
The company wanted to be able to grow and/or contract and just pay for the services used. Dougherty says Unisys, in their management role, ensures that capacity is matched to demand without the company having to pay for capacity beyond their actual needs. As part of the agreement, benchmarking determines the best of breed in pricing and function delivery.
Creating a Partnership
That commitment to cost containment was one of the factors in his company’s selection of Unisys as their outsourcing partner, says Dougherty.
Unisys took over UnitedHealth Group’s data processing function, including 59 employees. A few of the employees now serving UnitedHealth Group are on site. The remainder are at the outsourcer’s facility, just 25 miles from where the customer’s major data center was located, a situation that leads to great accessibility.
That accessibility on both sides is one of the reasons the relationship has been successful, according to Dougherty. A management committee meets monthly to review the past month’s performance and plans for the next month. An executive committee, consisting of two executives from each side, meets three or four times a year to oversee the relationship, including solving problems and setting strategic directions.
“One of the biggest things we do to help make it succeed is to treat them as a partner rather than as a supplier,” says Dougherty. “They’ve helped make it succeed because they really look at things in the long term. We really try to resolve any kinds of issues that come up, whether they be financial or performance.”
Dougherty says the value of the relationship to UnitedHealth Group has been the infusion of technology and technological advances and Unisys’ commitment to cost containment. “Each year, we may be spending more money with them, but the cost per unit of what they are giving us continues to decrease.”
Centralization of monitoring and operations is another benefit cited by Dougherty, as is Unisys’ work with the health care company’s people to fine-tune applications. Part of that work is introducing UnitedHealth Group to Unisys’ Clearpath migration, which Dougherty describes as hardware and software that allows UnitedHealth Group to combine some of the systems they have.
“It’s not like a big project that we’re going to take these five different systems and slam them all together,” says Dougherty. “They’re instructing us and helping us and telling us how we can utilize their new hardware platforms and their new software so that we can do that.”
Dougherty says that two of the key elements in UnitedHealth Group’s relationship with Unisys are that it fits the company’s strategic goal to have an outsourcing partner that is a big player in the industry and that Unisys is very responsive to UnitedHealth Group’s needs.
“We’ve had times in the relationship where we have not been happy with either the service or with some of the financial proposals they’ve given us,” he says, “but they’ve worked with us, and we’ve resolved those. So it is a true partnership, in that they’re willing to work closely with us and help us solve the company’s problems.”