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DPI Client Interview
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The continuous rise in healthcare costs is not on most CEOs' list of favorite subjects. Victoria Buyniski Gluckman is the exception. As owner and CEO of United Medical Resources, a third party administrator of self-funded health insurance programs, the subject of healthcare costs and what to do about them is right at the top of her list.
Buyniski Gluckman launched her company nearly twenty years ago with a concept she developed while working in the public healthcare field. At a time when health insurance cost increases were accelerating rapidly, she saw an opportunity in assisting companies that were electing to go the self-funded route, to help them gain a better understanding of their investment and to get the most out of it. Her new venture would apply her expertise to creating innovative custom-tailored programs, and providing high quality employee service to companies for which managing health insurance was not a core activity. Today, UMR has developed those capabilities to such a degree that it is the first third-party administrator in the U.S. to achieve double certification in both Utilization Review and Case Management from URAC, the body that accredits those areas of medical management.
"I started the business in 1983 when healthcare costs were beginning to go out of sight," she recalls. "I had run two not-for-profits that did healthcare cost management for Medicare, Medicaid and Workman's Comp. While it is difficult to effect any change in government-run programs, I saw an opportunity in the private sector to marry cost control with excellence in customer service and claims management. I thought we could create a service that would help employers to reduce healthcare costs or at least enable them to invest that money wisely. The concept was to get consumers–our clients– involved in understanding and maximizing their purchase power. That was the vision–getting the consumer engaged."
The first test of any entrepreneurial vision, of course, is whether the idea can get off the ground. UMR passed that test, growing steadily, primarily through word of mouth.
The real test, though, is whether the organization can remain strategically focused, the original vision alive and evolving, as the company adds people and grows.
To that end, UMR senior management engaged, over several years, in a variety of strategic planning programs, from a Chamber of Commerce program for the CEO, to AMA and university programs that engaged more of the senior management team. In each case, UMR's key managers would meet on a regular basis in the course of these programs to discuss their progress and ideas. Based on her belief in participatory management, Buyniski Gluckman saw to it that there was an ongoing discussion about the company's future.
Partly because of this, UMR was doing well, yet Buyniski Gluckman felt that there was an opportunity to ramp up growth by engaging an even broader group in a more in-depth discussion of the company's strategic prospects. The company had grown in fifteen or so years to about 400 employees, with roughly $25 million in revenues, and was ready to make a quantum leap forward.
"A couple of years ago, I decided we really needed to kick it up to another level, to get deeper into the organization and get more of our people involved in the vision and the implementation," says Buyniski Gluckman. "I wasn't sure how we could manage a strategy session with as many as twentyfive people in it. So we had an internal team look at a lot of different possibilities, from individual consultants to various types of organizations that offered strategy development services.
"DPI had come highly recommended through associates at the Young Presidents Organization, so our team looked at their approach as well as these other options. wanted more people intimately involved in the strategy process and the thinking behind the strategy. We're not a large company, but we're not a small company anymore either. I needed to engage more people, give more managerial strength to the organization, as well as thinking out a new strategy. The DPI process, in my opinion, is the only way to get that. We really needed to notch it up, to take it to new level, and that's exactly what happened."
UMR's management team selected twenty-five managers and key contributors, from across levels and disciplines in the organization,
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– Victoria Buyniski Gluckman |
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to go through the Strategic Thinking Process, with Mark Thompson, a DPI Partner, as the facilitator. "We went four or five levels down to select the strategy group that went through this process," says Buyniski Gluckman. "They were hand-picked because we felt they would not only be good strategic thinkers, but would also be instrumental in the implementation. These were people who were accustomed to debating their ideas all the way along, and would be comfortable in doing that. The problem was that, for a lot of them, there were parts of the business they may not have understood because they had no regular exposure to them. So to make them effective implementors, we had to have them there, to be part of the total plan, to be able to cross-fertilize and get the best solution based on a broad range of perspectives and areas of expertise." The first steps of the DPI process enabled the group to "download" a complete and concise picture of the company, in its present state, based on the wide knowledge and experience of the participants. This first phase enabled each participant to understand how the company and its various functions had evolved and now fit together as a whole. It was, for most, the first time they had been able to see the company, not as individual functions, but as a collection of integrated processes, each contributing to the service they provide to the end user. The "current profile" developed in this phase then served as a basis to define the "future strategic profile" they would use to shape their strategy going forward. By constructing various views of the future business arena, the group was able to begin to see how it could build on its present concept to create new services that would give them an unmatchable competitive advantage. One of the most compelling steps was the development of a fictional, though feasible, "Stealth Competitor," one designed by a UMR team, that could put them out of business. By envisioning new forms of competition and the new approaches they might take, the Stealth team was able, not only to see potential new competition, but also to develop breakthrough concepts that they could adopt as part of their strategy for the future. Next, a carefully selected team developed what is known as a "Future Supremacy Model," a synthesized view of the future business. This Supremacy Model enabled the group to envision a unique business model that would, within the confines of the rules and regulations of the healthcare business, break the mold, and offer customers value-added services they wouldn't find elsewhere. A defining step in the DPI Strategic Thinking Process is the selection of a Future Driving Force. After developing scenarios for each of several possibilities, the only viable choice for UMR was a Service Concept Driving Force. After all, the company had grown successfully for nearly two decades offering a specialized service. The analysis of alternative Driving Forces such as User Class and Technology only served to reinforce the decision. While a specialized form of information technology is at the heart of the business, it is an enabler, not the focus of the strategy. And while UMR certainly serves the needs of a "user class"–managers of healthcare administration at client companies –it does not serve all the needs of that group. The Service Concept Driving Force would be consistent with UMR's ongoing business and would not necessitate a major strategic shift–none was needed. This decision did, however, help to clearly define the Areas of Excellence they would need to develop in the future to realize their "supremacy" vision. To establish long-term competitive advantage, UMR would need to excel at developing new products, the first of which emerged in the Supremacy step, and providing world class service to its customers. Now armed with a clear view of where they had come from and where they would now go, the team carefully constructed a concise Business Concept, describing the specific shape their business would take going forward. (The definition of the Driving Force is in bold type.) |
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"We will provide world class administration of employer health benefit plans and related services. "We will partner with our customers and their advisors to provide customized solutions based on data and experience to minimize risk, control cost, and promote longterm health at the employer and member level. Our services will be offered to a variety of selected markets and industries allowing us to continually grow without compromising service. "We will accomplish this by offering innovative services through superior customer service by our knowledgeable and motivated associates. "Our belief is that healthy people create happy families and are productive employees." So expressed, this Business Concept provides a clear statement of purpose and the content for a Strategic Filter. This filter would act as a guide as the company faced future choices about the products, customers, and markets it would and would not pursue. Creating it required the group to debate in detail every word and the reasoning behind it. In finalizing this definition the group found the skills of the facilitator, Mark Thompson, to be essential. "It's easy to get caught up in the semantics," says Buyniski Gluckman, "and you may all actually be saying the same thing but saying it in different ways. Mark was very good at ‘calling the question' at the right times, and in helping the group to think through the implications of each decision. Without a skilled facilitator, you could be there for a month trying to get to a conclusion." The power of enabling a large cross-functional team to construct, together, a unified vision was obvious to Buyniski Gluckman. The vision would now be embedded in the minds of a large group of key managers, not just the few at the top. "Some of the things these teams came up with were part of the vision I had some time ago, and I was trying to move the company in that direction. There's a time and place for everything and sometimes the vision can be ahead of the market plan. "So now this relieves me of a great intellectual burden. Instead of one set of eyes, or six, through the DPI process we have twenty-six. Our entire management team knows what we should be looking for and listening to. They know what we should be asking our associates in terms of their own developmental needs. They simply look at the business differently." In the two years since the DPI sessions, the company has been working a defined set of Critical Issues to transform the strategy into a vital, integrated action plan. Probably the most visible of these is a new service currently being launched that had its genesis with the Supremacy team. "The concept of supremacy is practical for a small company like UMR," says Buyniski Gluckman. "We have been able to launch a new service in a short period of time that is a true differentiator in the market. "We have developed a comprehensive service focused on managing the employers' healthcare cost. |
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– Victoria Buyniski Gluckman |
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We know that twenty percent or less of the members in a healthcare plan contribute eighty to ninety percent of an employer's healthcare cost. We also know that several chronic diseases that can be controlled by lifestyle changes make up over fifty percent of that employer's cost. Our new service, UMR mD, is designed to focus on these twenty percent or less members. We are able to identify those who have potential to be high cost claimants. Once they are identified we are able to provide a strategic approach to improve their health outcome, mitigating the employer's health plan financial risk and increasing the employee's satisfaction with their health plan. We have piloted this service with three customers. The interest and demand for it are very high." To enhance the delivery of its services, UMR also has put concerted effort into another Critical Issue–optimizing its strategic information processes using DPI's Managing Strategic Information (MSI) process. This process is a tool that facilitates mapping the internal information streams that have developed over time, and revising those maps to deliver better information faster to those who require it to do their jobs. A third Critical Issue involved revamping UMR's marketing processes, which had previously relied on new clients finding them. With the economy slumping, a more aggressive effort was needed to fuel growth. "As I said, we built the company largely through word of mouth. We needed to make our sales and marketing more effective. Now, through the DPI process we have a very clear definition of the kinds of customers we want to focus on and a plan to find out what motivates them so that we can attract them. The change has been delightful," she says. "Time will tell, but my instincts say that we have had a phenomenal change throughout the company as a result of going through these DPI processes. It was a big commitment of time and money, but if we had the decision to make over again, I know that the team would say that using DPI was a very good decision they wouldn't change in any way–even though the investment initially affected these individual's bonuses. I can't think of a more powerful endorsement," the CEO states. "The company is doing quite well," says Buyniski Gluckman. "In spite of the recent downturn in the economy, in 2004 we will exceed 2003 revenues and profits. Our associates are energized and excited about what we have accomplished. They are even more excited about the opportunities that lie ahead. The DPI process has made a difference, providing the proper focus. However, it is our very talented associates who have made the difference in achieving this high level of success." |
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