Highmark, Inc.

Highmark is moving to an EDW through consolidation of data warehouses and a phased approach, thereby making strides toward their ultimate vision.

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Enterprise Data Warehouse Supports Better, Faster Decisions

As one of the largest health insurance companies in the country, Highmark Inc. understands the pressures of serving its customer base, stabilizing costs, and preventing fraud. The $8.1 billion non-profit company, headquartered in Pittsburgh, needed to find ways to understand its cost drivers better so that it could hold the line on premium increases – thereby retaining customers, enhancing its competitive position, and protecting its financial strength. 

The organization has a long history of finding innovative ways to use information technology (IT) to support its operations and report on basic business trends. Years earlier, the company created Health Care Informatics Research and Analysis (Informatics), a group of scientists dedicated to leading-edge research and analysis on health care and insurance issues. Its claims processing operations and financial organization were state-of-the-art, among the best in the industry. Supporting these Highmark departments was a powerful IT infrastructure, including three data warehouses used to track claims information through traditional finance and analytical processes:

  • Adjudicated Claims Experience (ACE) stores adjudicated claims information from the former Pennsylvania Blue Shield part of the organization in addition to other claims. Used primarily to support finance operations and account reporting, this warehouse has run on a Teradata® solution for 13 years.
  • Highmark Information Warehouse (HIW) stores information about adjudicated claims, client and member detail and summary data. Used primarily to provide sophisticated business intelligence to the company's analytics group, this warehouse runs on a Teradata solution.
  • Historical Finance Data Repository (HFDR) stores financial data for adjudicated claims, earned income and cash in addition to summary client and member data. Used for financial reporting, it runs on an Oracle solution.

However, because these three warehouses were created to support the business needs of individual organizations, the queries run through them often produced different, sometimes conflicting, results. The same claims data was frequently stored in each warehouse, creating redundancies and consuming corporate IT resources. In addition, the claims data used for analysis was too dated to produce the type of meaningful results the company needed to make decisions that would enable it to stay ahead of the competition.

These three data warehouses clearly were not the most effective way for Highmark to enhance corporate performance. In 2002, Highmark's Informatics group partnered with its Information Services Group (ISG) and Finance department to plan a new solution: an integrated enterprise data warehouse (EDW) that could share information among those three user communities. In unifying the business information in one high-powered solution, Highmark expects the EDW to deliver the analytical capabilities and research results that will provide new business insight and a single view of the Highmark organization – thereby supporting better, faster decisions.

The first phase of the new EDW, called Medical Experience Subject Area (MESA), is being implemented by Highmark in four phases on a 12-node, 7.7 terabyte (TB) Teradata solution comprised of coexisting 525X and 5380 nodes. Using an extract, transform, and load (ETL) tool from Informatica, Highmark is in the process of populating MESA with claims data. The new warehouse will ultimately store all claim and claim-like (capitation, rebates, etc.) information from initial submission to final payout in addition to the General Ledger and Claims Billing transaction lifecycles. Ultimately, MESA will become an active data warehouse (ADW).When this is complete, updated information will trickle into the EDW on close to a real-time basis, which will allow Highmark to make better, faster decisions based on data that is merely hours old.

Highmark's plans for MESA are based on the company's successful experience building its previous data warehouse solution, the Highmark Information Warehouse (HIW). This data warehouse, which was also built on a Teradata system solution, has already delivered valuable, quantifiable business benefits and is supporting new business processes that were previously impossible. For example, new, in-depth analyses are enabling the company to understand its business and the marketplace better. Fraud detection capabilities are improving, with Highmark recovering more than $9 million in fraudulent payments in 2003 alone – roughly four times the amount recovered in the year before the Teradata systems were implemented. Predictive analysis processes will prevent three times that amount from ever being paid out on fraudulent claims.

The solution is also helping Highmark to provide better service to its members as well as to the companies that procure members' health insurance coverage. Medical management of members' chronic conditions is becoming more proactive – which protects members' health, enhances their workplace productivity, reduces medical expenses, and controls premiums for the coming year. Highmark has used the system to expand profitably into new lines of business. For example, Highmark now offers managed-care Medicare programs for senior citizens.While many other insurers failed with similar endeavors, the data has helped the company make the product profitable, despite the fact that it is offered in Allegheny County, whose population of seniors is the second highest in the country. Highmark has also used the HIW system to pursue new business opportunities in areas such as provider network management services and consulting.

Yet, for Highmark to continue achieving its current and future business objectives, HIW could only be a first step. Highmark needed an enterprise view of operations – one supported by technology that reaches across the three corporate data warehouses. MESA, the project currently under way, will help Highmark build enterprise business applications and deliver an enterprise-wide view of the organization. As the benefits of MESA and the solution become widely known throughout the organization, the MESA support team within Highmark envisions even greater opportunities to use the Teradata solution to help the company succeed. "The solution has been a big benefit to Highmark already," says Tom Tabor, Highmark's chief information officer. "I know that Highmark will benefit from it well into the future."

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