August 2005

Interview with Pat Geraghty

Pat Geraghty is Senior Vice President, Service at Horizon Blue Cross / Blue Shield of New Jersey. Pat has shifted the performance of customer service from mid-tier to best-in-class in the Blue Cross network. In this interview Pat offers insight into his thinking on managing a transformation in customer service and building a purposeful organization, focused on customer advocacy.

Interview conducted by Doug Berger, Managing Partner of INNOVATE LLC.

Doug:

The interviews in the ezine capture the spirit and thinking of executives who accomplish something extraordinary.   Our readers are looking to learn from the nuggets these executives offer – the nuggets that are mined from seeing the world the way you see it and gaining insight into how you think.  Interviews in The Innovators are aimed at revealing the thinking of executives who achieve unprecedented and exceptional business results.

Pat:

I came to Horizon in 1999 from Prudential (since acquired by Aetna Insurance).  Bill Marino appealed to me as a leader because of the integrity he had installed in the organization.  The company had just created a Service Division.  It was an opportunity for me to build something.  I really enjoy that kind of opportunity.

Doug:

You came in with both an ambition and a mandate to be world class in customer service.

Pat:

Absolutely. It was our vision that through world-class customer service, we could distinguish ourselves in the marketplace - by retaining the customers and members and by growing the business through our reputation for quality service. 

Four years ago, our service performance was just below the median across the Blue Cross Association.  There are 62 markets for the Blue Cross Blue Shield brand in the country and our ranking was in the high 30’s to 40’s for member experience.  In 2004 our members rated us number 1.  Across 35 different measures of satisfaction, we come out with the largest differential to our competitors of any Blue Cross Blue Shield plan in the country.

Doug:

When you started and familiarized yourself with Horizon, what were the few things that jumped out at you?

Pat:

For me it was plain

  • assess what was going on in the organization
  • assess the team - the players who were capable of making change
  • challenge people to make change rapidly

Customer service was an extremely fragmented process.  Previously business units had designed their own service platforms, their own rules and guidelines, and their own work flows.  Horizon hadn’t created disciplines around complex activities.  For example, each service team was responsible for all service activities in their small slice of our membership.  If someone was handling claims, they had to handle the full range of claims including professional claims, ancillary claims and hospital claims.  Hospital claims are our most complex and highest dollar and they needed an elevated level of attention.

We needed to create a discipline around handling hospital claims, so we created a central hospital and institutional service unit.  We derived multiple benefits from establishing a discipline around our highest exposure and most complex claims.   

In the beginning, we did not behave like a division; we were more a collection of 8-person teams, with no backup and no cross-training.  Incentive compensation for service teams was annual.  People at the front line need to see things more quickly.  We created cross-team training, team and individual goals.  Compensation was moved to a quarterly basis and based on team, division and individuals meeting goals.  A unity of purpose was greatly enhanced.

Doug:

What else jumped out at you?

Pat:

I was looking for initiative and risk taking in my key leaders. I was looking for people who showed initiative or could be inspired to have that level of initiative.  I was looking for people who would be candid and tell me what was really going on, not just what they thought I wanted to hear.  I was looking for people who demonstrated the ability to change and be flexible, who were open to new ways of looking at things, who weren’t looking for solutions to be given to them.

Doug:

When you started, there was a new organization and you were new to the company.  Was there anything you did to orient people to you … your view of the future, your ambitions and also to your leadership style? 

Pat:

I have been in multiple turnaround situations in my career.  There are certain things that I believe in.  You have to triangulate on the truth.  When you first land in a situation there are a variety of people who want to tell you their version of the truth.  I told my team that I was going to talk to each of their people directly.  We learned to trust each other based on proper use of the information I received from the front line.

People would tell me 'it’s like this.’  I would say bring me the data that supports your point of view.  I found that we as an organization did not use data effectively.  So, pushing for the data got us to the essence of the truth of the situation. 

Doug:

Was there ever a point for you in the early stage, the first 3 months, where you said, I need to publicly tell people how I intend to operate?

Pat:

We have institutionalized town hall meetings every quarter that were initiated by our CEO across our company.  We invest in making sure we’re communicating thoroughly with our people.  We used a town hall session to make the stump speech “here’s what we’ve found – here’s where we think we can go as an organization.”  People reflected back to me the most powerful thing I said was, “we will no longer view ourselves as victims.  We will view ourselves as leaders who are actively engaged in moving the business forward and helping our members have a better experience with Horizon.”  I aimed for people to think ‘how do I advocate for that member I am serving.’

Doug:

Looking 1 – 1.5 yrs into this transformation, that 2nd phase, what were the things that started to jump out at you as -- these are the areas that you really needed to attend to?

Pat:

A continuum of change was something with which people needed to get comfortable.  It was taking the organization’s culture and saying, we’ve had success; we don’t want people to become content. So how do we put in place an organization that continually strives to perform better and learn? 

At town hall meetings, we talked about how the organization chart will be in flux; the system will be in flux.  People got into a mindset that change was going to be constant. 

At that 1.5 year mark, we demonstrated quantifiable, dramatic results improvement.  At the 1 yr mark I made critical changes at the senior levels.  We took an organization that had 2 VP’s and 23 directors, and today has 1 VP and 14 directors.   That VP is from the outside. 

In the 2nd phase, our focus was ensuring we had the right external benchmarks.   This meant looking at benchmarks available across world-class customer service organizations.  We looked at external customer service environments that we should aspire to or bring into our organization.  We broadened our vision about what we were, who we could be, and who is our wider competition.

We moved the organization to a new place where we publicly recognized our top quality performers and rewarded them.  We identified our bottom 10% and developed improvement action plans.  We demonstrated back bone and it supported changing the culture. 

Doug:

Now, 3 yrs into your journey, to what did you begin to attend?

Pat:

I’ve found that organizations get stale having only a staffing pipeline from within.  We continued to blend people who grew up at Horizon with people from other places, adding richness to the management team.

We started to develop a much more finely tuned talent development program.  With our team, we identified people at the team leader and manager levels.  People said ‘I’ve got somebody who’s good; I shouldn’t horde them to my activity.  For their benefit and our collective benefit, they need an experience someplace else in the team.’

Doug:

While you’re not saying it, I’m hearing that in your staff meetings, everyone might zoom in on a decision in a single functional area that has a strategic impact on customer service.  I want to test that with you.

Pat:

I came from a large family.  The dinner table had open debates.  I often say that a 3rd party looking in might have trouble telling that we actually love each other.  There was a lot of passion.  I like to bring that into the work place.  Our staff meetings went from quiet settings where people expected marching orders to a place with vigorous debates.  I don’t want people leaving the meeting saying, “That was a stupid decision,” yet they didn’t voice their dissent.

If the organization is challenged by something, it’s challenged by the fact that it is aligned functionally. Regardless of what structure you employ, there are strengths and weaknesses, so just changing structure is not a panacea.  To address this, staff meetings are attended by a representative from every other key division and we regularly attend other divisions’ meetings.   

Doug:

And then if we look at the most recent era, what would you say you’ve been attending to in the last 1.5 yrs?

Pat:

Excellence.  We have submitted our processes to a variety of competitions outside the organization.  Our outreach has not just been to learn.  Now we’re in a mode of instructing in various settings. Leading discussions at customer service conferences and in panel discussions has been enriching for our folks.   Some have received very nice recognitions. 

We don’t believe our industry is viewed as world class.  We believe that there is room to move; we haven’t reached the end of our growth by being #1 in the Blue Cross member experience.  Trying to be a Nordstrom’s within our industry is really our focus.

Doug:

Now that you’re #1, what are the few things you’re now attending to that are really going to raise the whole bar for everyone?

Pat:

There’s always someplace to go.  In a recent study, we were at the top on 32 of 35 measures.  That gave us 3 measures to look at closely.  One of those measures is proactive outreach to membership.  One thing we’re expanding is a Welcome Call to new members.   Rather than wait for customers to call us with a healthcare issue, we call them and say “welcome to horizon, we’re the member service organization.  Here are some of things that may be valuable to you.  We wanted you to be aware of us.”

We’ve built a pilot where 4 of our folks are physically located at one hospital system, rather than the hospital system calling us on a daily basis with their issues. If hospital billing has a new person sending bills and they’re doing it wrong, problems occur.  Being physically located there, we create relationships, train their new people, and have face to face interaction.  It’s a lot harder to criticize somebody you see than someone who you don’t see.  The early results are very promising.  These examples are manifestations of end to end process redesign that we are employing to key activities across our business.

Doug:

If we can extrapolate from the things you’ve been saying, what would you say are your guiding principles for leading?

Pat:

You have to practice what you preach.  Be willing to roll up your sleeves and show people that you’re not just about delegation, you’re walking the talk; your work ethic is every bit of what you ask of your people. 

There absolutely has to be core integrity to what you’re about.  People need to see that you are not willing to compromise standards or ethics to get to a result.  People need to see that you are going to be brutally candid with them for their benefit.  Bonds get created by being honest, but this is risky business when you first introduce candor that was previously the norm. 

It’s very important to connect at all levels of the organization, to be visible throughout the organization, and to take feedback and input from all levels - from lobby security to the CEO. 

I should have said this earlier, most important is making sure your focus is on your customers. 

Doug:

Is it in your leadership principals to impart these kinds of values to others?  In some other organizations, people feel that there needs to be some overarching guiding values and principals.  What’s your perspective on that?

Pat:

We have core values at Horizon of Caring, Teamwork and Integrity.  There absolutely need to be core principals and values from which people are operating.  What I don’t want that to become and have been very careful not to make it, is a cookie cutter approach to what we want people to be.  We have a very diverse management group and we’re very proud of that.  We have people from all walks of life in our management team who come at it very differently. We share in common that you must practice what you preach.

Doug:

You talked about your entire organization being an advocate for members.  One could hear that in the realm of purpose or in the realm of an organizing spirit for the enterprise.  That’s one of the things that struck me in the course of this conversation.  Is there anything more you want to say about that?

Pat:

One thing that motivates me and our team is that what we make a difference in people’s lives.  It’s not about a claim form across a desk; it’s about a family in need who wouldn’t be able to pay for healthcare if they weren’t insured.  We’re often dealing with somebody at a low point in their life.  What they least need is a hassle. 

We receive a lot of complementary letters and phone calls.  In fact, one part of our group calls them ‘happy letters.’  At town hall meetings, the name of everybody who receives them is put on the screen.  They get posted on boards around the building where people can see who, “made a difference for me when I was dealing with x, y, z.”  We really play up the interpersonal connection of what we do.

Doug:

On one hand some people could look at your business and say the success of your business is your ability to reliably process transactions.   Discuss how you see people’s role having impact well beyond just the transaction of the system.

Pat:

The transaction is a very baseline piece of the operation.  We’re talking to people all the time.  We had 14 million phone calls last year - people who are often in crisis.  It’s empathy that is delivered.  It is the ability to help people navigate a complex healthcare system.

We have an opportunity to take a very proactive position in the healthcare delivery system.  Our organization’s disease management programs help people navigate particular disease states in a more effective way.  All patient data comes together at a health plan.  A patient may see a variety of doctors and go to different pharmacies for different prescriptions.  The health plan has the data to know if pharmaceuticals are contra-indicated.  We can and do play a positive role in the health care system. 

When someone has been diagnosed with a particular condition and hasn’t been back to the doctor in a period of time, we know.  We see women in their 60’s, who aren’t getting mammograms.  We see people not taking the appropriate course for preventive care.  With our ability to do outreach, we send reminder letters to people needing preventive care services and mammograms.  We are sure to include doctors in our communications to our members, their patients. 

Through our provider portal members will have the ability to see data about the physicians they are selecting.  In the near future, malpractice history and outcomes data will be shown.  For example, data on an orthopedic surgeon will show the procedures done, frequency of performance and their results.  Our work is about putting information in the hands of the consumer so they can make informed decisions. 

Doug:

Is there anything else you would like to add?

Pat:

When I landed, I was very tempted to put a cookbook plan together for transforming our service organization.  I didn’t do that.  I allowed space for flexibility around my anchor themes, responding to how things worked and how individuals responded.  Space for flexibility was very valuable in getting as far as we’ve come.

Our team all read “Good to Great” together.  What I liked about “Good to Great” was it felt like a book I could relate to in a personal way.  It was in line with where I come from.  If you have the right set of minds around the table you’ll get the plan you need, as opposed to put the plan together and be micro-concerned about every element.  Allowing the energy, talent, and creative minds to come together to really cook and not have it all force-fed or pre-planned has been critical to the journey.

 

 

Velcro Points

  • Triangulate on the truth when entering new business situations.
  • Changing peoples’ mindset directs a leader’s attention to new places.
  • Making ‘advocate for the customer’ actionable
  • Attend to making a difference in the customer experience as well as metrics of customer service.
  • Have each staff member become an advocate for the customer
  • Build the discipline through training, recognition and compensation
  • Stand in the customer’s perspective to find the changes that eliminate problems and address new areas.
   

©2005 Innovate LLC (all rights reserved)

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