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Health Care Reform Author: Chris Giancola, MBA, and Ned Simpson Last Updated: Sep 7, 2017 - 10:11:01 PM

Health Insurance Exchange: Best Practices from the Massachusetts Connector

By Chris Giancola, MBA, and Ned Simpson
Oct 3, 2009 - 8:42:45 AM

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( - On September 9, 2009, in a speech to a joint session of Congress, President Barack Obama addressed the topic of healthcare reform1 and outlined his position on many of the key issues within the debate. During the speech, the President expressed his support for a mandate for individual Americans to carry health insurance – likening it to the automobile insurance required of all licensed drivers in the United States. More recently, the America’s Healthy Future Act2 has also sought to require all Americans to have coverage, either through an employer, an individual policy, or through a government-underwritten plan such as Medicare or Medicaid.

In order to make the individual mandate practicable, consumers must be able to shop for health insurance in a way that they are not able to today; with prices and benefits clearly available and comparable. To solve this challenge, the President called for “a new insurance exchange – a marketplace where individuals and small businesses will be able to shop for health insurance at competitive prices. Insurance companies will have an incentive to participate in this exchange because it lets them compete for millions of new customers.”

In 2006, the state of Massachusetts enacted its own health insurance coverage mandate, for both individuals and employers with more than ten employees. With the law came the creation of the Commonwealth Connector Authority, an agency responsible for “connecting” residents to insurance via a health insurance exchange. CSC was selected to design, build, and launch a first-of-its-kind website to facilitate this new marketplace, and the lessons learned from its rapid implementation and successful adoption can be applied to similar efforts being considered today at the federal level.

To address the needs of both fiscal responsibility and unsatisfied demand, the health insurance mandate is an option being promoted by both the President and by the recent America’s Healthy Future Act submitted by Senate Finance Committee Chairman Max Baucus (D-Mont.). The bill would oblige individuals within certain income guidelines to purchase their own health insurance either directly or with subsidies provided to those deemed eligible. Small employers are also included in this mandate with “pay or play” rules which require them to pay a financial penalty for each employee not insured, or to provide health insurance coverage.

Ultimately, these changes seek to reduce the number of uninsured U.S. residents and to ensure more participants bear some responsibility for the financial cost of doing so. To help control the costs of these changes, the free-market concept of the marketplace is one possible solution; one tried with measurable success in Massachusetts.

The Massachusetts Connector: a Health Insurance Marketplace
In April of 2006, Republican Governor Mitt Romney signed into law the first individual health insurance mandate in the nation. The key elements of this law were3:

An individual mandate – all residents who can afford it must have insurance.
An employer mandate – all employers with more than ten employees must offer insurance and pay a reasonable share of the cost.
A new agency – named “The Connector Authority”, a new agency was created to establish policy, source subsidized coverage, negotiate with carriers, implement provisions of the law, and “connect” residents to insurance through a health insurance exchange.
To fulfill its mission, the Connector issued an RFP to the private sector to assist in forming its strategy for creating such an exchange so that Massachusetts residents could comparison shop for, and purchase, the insurance they would now be required to carry. After a competitive selection process, CSC was chosen to be the Connector’s partner in this groundbreaking effort.

The challenges facing both the Connector and CSC were significant, not the least of which was that such an exchange had never been built before and so no reference model was available to build from. The law set an aggressive schedule that required the exchange to be “live” in five months, and the team faced the intense scrutiny of both the public media and political special interests. Finally, the consumers in the intended market were primarily organizations and people who had not had to know anything about health insurance, and who would now have to make purchasing decisions – broad education would be needed.

The CSC team worked with the Connector to overcome these challenges. Immediately, CSC formed a multi-disciplinary consulting team with expertise in health insurance, web and portal technical architecture, state government and public sector operations, and website hosting. Clear goals were set, and there was an early focus on building consensus among the key stakeholders in the Commonwealth on how to achieve these goals.

Flexibility was critical, and collaboration was the only means to ensure that the inevitable changes would neither delay the project nor cause cost overruns. No state authority of its kind existed anywhere in the United States, and so the Connector needed a partner that could adapt to changes and listen with an open mind. CSC arrived with few preconceived notions and participated with the Connector’s new project management office to define the principles and processes that would shape it long after the launch was completed.

Meanwhile, looming over the effort was the aggressive schedule: there were to be only five months from inception to initial roll-out of the new health insurance exchange. In order to meet this seemingly impossible deadline, the CSC team focused relentlessly on tasks, managing to a project plan with daily milestones for four months.

Frequently, in the design and construction of new business applications and websites, stakeholders can lose valuable time debating visual design elements. CSC and the Connector escaped this common trap by avoiding the mistake of committing to a visual design before the functionality of the health insurance exchange was determined. All prototypes of the health insurance exchange were free of graphics and style, allowing the definition of what the marketplace would do and offer to become more important than what it looked like. This approach drove out additional requirements that would have likely remained undiscovered until later in the effort and caused the predictable delays and rework that plague many information technology projects. Once all of these functional requirements were built into the prototypes, only then did CSC leverage its award-winning netExperience practice to create a visual design concept and interaction design with a clean look-and-feel which would be inviting, intuitive, and familiar to the new health insurance consumer.

To speed implementation, commercial off-the-shelf technologies were used: a prepackaged portal would serve as a means to present site visitors with a common visual experience, while a content management system would allow the Connector’s staff to update existing content and to create new content sections of the web site without the need for custom programming – saving time, resources, and cost.

While the initial release of the Connector portal satisfied the needs of the individual for comparison shopping and purchase, the second release sought to add capabilities targeted at employers. However, because employer-sponsored health insurance offerings have many additional requirements, such as those mandated by Federal and State agencies like the IRS and the Commonwealth Health Insurance Commission, many new considerations appeared that were not encountered in the initial release. CSC responded successfully and used the same techniques of separating functional design from visual design, while working under the same intense time pressure of the initial launch.

Measures of Success
Since its successful launch in May of 2007, the Massachusetts Connector has demonstrated measurable success from a wide variety of perspectives. From a management perspective, the health insurance exchange being delivered both on-time and on-budget, in just five months’ time, was a success both for CSC and for the fledgling Connector Authority. The Connector is maintained by a small staff, and is adapted quickly to market changes as a direct result of its flexible technical architecture. From consumers’ perspective, they have an easy way to compare plans’ premiums, deductibles, and copayments, and to purchase insurance, likening its simplicity to or other ecommerce websites.

Also, the Connector was recognized as a winner of a 2007 InfoWorld 100 award by the InfoWorld Media Group at leading industry analyst International Data Group (IDG).

But perhaps the most important measure of the Connector’s success could be this: in 2007, the number of uninsured Massachusetts residents was 600,000. Today, that number has been cut by two-thirds, reduced to just 200,000 in two years’ time4. The Commonwealth of Massachusetts, the Connector, and CSC have shown that when health insurance policy is coupled with meaningful change in the way consumers purchase health care, positive results can be achieved.

Chris Giancola, MBA, is a Principal Consultant at CSC and a Product Manager for the New England Healthcare Exchange Network (NEHEN)
Ned Simpson is a Principal Consultant at CSC and was a Project Manager for the Commonwealth Connector Project

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