Leading with Empathy
ABOUT US
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CEO'S MESSAGE
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Transformation is a word that has been reverberating in the healthcare industry for years, but it has never been more prominent than today. The healthcare market is not standing still, and neither can we. We must all transform, not only our technologies, but also the way we think about our technologies, as well as how we interact and connect with one another and with our customers.
$750,000
Leading with Empathy¬¬
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Contact us
Location: 140 W 25th Street, New York NY, 10011 Telephone: 0123456789 Email: info@ceros.com
www.ceros.com
2019 NASCO ANNUAL REPORT
TRANSFORMING FOR
OUR MINDS. OUR PRODUCTS. AND THE FUTURE OF HEALTHCARE.
our mindS
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IN
OUR MINDs
OUR PRODUCTS
FUTURE OF HEALTHCARE
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CEO'S
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$1,250,000
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LEADERSHIP TEAM
In 2018, I laid out a vision of transformation for NASCO — a vision of what we must accomplish as a company by the end of 2020. NASCO must be more attuned to market needs. We need to share our knowledge and work more collaboratively and cross-organizationally with our plan partners. We need to align our solutions to our plan partners’ business needs and be more nimble and iterative in our approach to those solutions. We need all of our products to be digitally enabled. We must continue being an innovative healthcare technology product company, and we must focus on growth for NASCO as well as for our Blue Cross® and Blue Shield® plan partners.
NASCO is a healthcare technology company dedicated to co-creating digital health solutions for Blue Cross and Blue Shield companies.
Our solutions are developed for the Blues, with the Blues, and we have expanded our digital health portfolio to include products ranging from operational enablement to new innovations in healthcare technology. NASCO continually looks ahead to identify new technologies, ideas and initiatives, and we welcome leading health plans, visionary technology partners and expert talent to join us in advancing the future of digital health for the Blues and their members.
Jim Veiger Senior Vice President, Operations Barbara Bell-Dees Vice President, Human Resources Craig Fagin Vice President, Account Executives and Professional Services Mike Price Vice President, Business Development
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NASCO is transforming our minds by introducing design thinking methods, progressing our Agile development processes, and continuing to expand our flexible delivery models to support our plan partners’ delivery practices. We are transforming our products through cross-functional collaboration to formulate product strategies that will meet the growing needs of healthcare consumers. And we are transforming the future of healthcare by introducing artificial intelligence and machine learning to enhance member servicing and creating a healthcare consortium that is devoted to delivering breakthrough technologies across the healthcare ecosystem. Our success continues to be measured by the success of our Blue plan partners. Our team of talented NASCO associates has made tremendous progress in 2019 to accomplish the transformative goals I set forth, and our Blue plan partners are benefiting from real business value as a result, which is enabling growth in their respective markets. NASCO is living incremental transformation every day. Whether we’re transforming our minds, our products or the future of healthcare together, NASCO is dedicated to developing superior technologies that enable Blue Cross and Blue Shield companies to deliver great service and win in the market. John Ladaga President and CEO
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John Ladaga President and Chief Executive Officer Dan Galdenzi Senior Vice President and Chief Growth Officer Chris Hauser Senior Vice President and Chief Financial Officer David Weeks Senior Vice President and Chief Digital and Technology Officer
Vicki Hildebrand Blue Cross and Blue Shield of Vermont Vice President and Chief Information Officer David Kaercher CareFirst BlueCross BlueShield Executive Vice President and Chief Information Officer Jennifer Vachon Blue Cross and Blue Shield Association Executive Vice President and Chief of Staff
Beth O’Rorke Blue Cross and Blue Shield of Massachusetts Senior Vice President and Chief Information Officer NASCO Executive Committee Chair Bill Fandrich Blue Cross Blue Shield of Michigan Senior Vice President and Chief Information Officer NASCO Executive Committee Vice-Chair Douglas E. Blackwell Horizon Healthcare Services, Inc. Senior Vice President and Chief Information Officer
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John Ladaga President and Chief Executive Officer Dan Galdenzi Senior Vice President and Chief Growth Officer Chris Hauser Senior Vice President and Chief Financial Officer David Weeks Senior Vice President and Chief Digital and Technology Officer Jim Veiger Senior Vice President, Operations Barbara Bell-Dees Vice President, Human Resources Craig Fagin Vice President, Account Executives and Professional Services Mike Price Vice President, Business Development
Copyright © 2020 NASCO Blue Cross® and Blue Shield® are registered service marks of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield plans. All other trademarks are the property of their respective owners.
02 | Nimble. Swift. Agile!
NIMBLE. SWIFT.
There’s an old adage that says, “Before you judge a man, walk a mile in his shoes.” It’s a simple saying that I’m sure we’ve all heard hundreds of times throughout our lives, but it serves as a reminder to always lead with empathy. In order to completely understand the totality of a person, you must take the time to understand his or her motivations, perspectives and experiences. That’s the heart of design thinking — understanding the totality of an issue before coming to a conclusion about a solution.
LEADING WITH
03 | Leading with Empathy
Part of NASCO’s transformation as an organization has been to exercise new ways of thinking — about ourselves, the market and our solutions. In 2019, our teams delved deeper into our plan partner interactions, using design thinking techniques to truly understand the issues they and their constituents were facing before we started to develop solutions to solve those problems. With the design thinking approach, you must immerse yourself in understanding human experiences and uncovering the highs and lows of those experiences in order to deeply explore and comprehend the key problems and opportunities that motivate innovative change. It’s a different and elevated way of collaborating with our plan partners, and we are now able to pivot on this new profound understanding of customer and user problems so we can collaboratively create game-changing solutions for the issues that matter the most. Design thinking sessions also enable rapid prototyping with low fidelity concepts to provide fast fail and quick learning opportunities. NASCO completes these sessions in partnership and collaboration with our plan partners. We are side by side with our customers and their customers, reflecting on what we’re hearing and seeing in the empathy interviews, and working together to improve healthcare experiences wherever we can.
We know that flexibility and speed in delivery are critical to meeting the ever-changing market demands. Like many companies, NASCO recognizes that being agile and integrating Agile principles into our company culture provides a foundation of continuous improvement with a focus on speed and value.
The Agile development methodology, at its core, is characterized by dividing tasks into short phases of work, while frequently reassessing and adapting tactics. Agile projects do not require a clear set of requirements upfront because continual feedback throughout the project shapes the solution outcomes. Every iteration — or sprint — has its own set of requirements to deliver and usually takes two to four weeks to complete, which is significantly shorter than traditional delivery methods.
At NASCO, incorporating Agile principles is guiding more iterative development enterprise-wide (as shown in the picture above), which has enabled us to accelerate our design and development processes to increase organizational velocity and improve speed to market. We have successfully used Agile methods on a multitude of projects: to refresh our product user interfaces, including our membership and claims solutions; to develop real-time events; to produce blockchain business cases; and to update our API catalog, just to name a few. We are also actively engaging with our Blue plan partners on several collaborative Agile efforts. NASCO is supporting new and evolved processes and delivery models — like Agile, Design Thinking and even just altering how we engage with one another — and we are decreasing the cycle time between idea and launch to deliver the same high-quality solutions faster and cheaper.
ENGAGING
While we have been transforming to deepen our relationships with our Blue plan partners, we have also been focused on building more proactive and mature product management capabilities within NASCO by transforming the way we engage with one another.
The issues that health plans are facing do not fit neatly within one specific product domain, and there is an ever-increasing demand for speed and value. Therefore, we are engaging in more cross-functional conversations to ensure greater speed to market, and we are building solutions that address business challenges across traditional product domains, including digital capabilities that enable us to introduce new offerings in a seamless and more connected way. We’re finding ways to engage more deeply with our plan partners — sharing in their customer journey mapping explorations and building empathy for users and
AGILE!
EMPATHY
DIFFERENTLY
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01 | Engaging Differently
customers alike — so that improved experiences become the fabric of what our products support. In addition, we have reimagined our product councils with a focus on more strategic plan representation from both business and technology teams. These councils are engaged throughout the year, influencing the advancement of our product roadmaps and elevating collaboration among plans to a new level. By starting with people instead of solutions, NASCO is changing the conversation with our Blue plan partners so that we are providing the value and innovation they need to win in the market.
NASCO is looking within and beyond the Blue-specific market to better understand overall healthcare market trends, and we’re embracing experiences from the greater marketplace to think differently about how we solve problems. The issues that health plans are facing do not fit neatly within one specific product domain, and the demand for speed and value is ever-increasing. Therefore, we are engaging in more cross-functional conversations to ensure greater speed to market, and we are building solutions that address business challenges across traditional product domains, including digital capabilities that enable us to introduce new offerings in a seamless and more connected way.
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01 | Artificial Intelligence Helping to Connect Member Servicing
02 | Digitally-Enabled Products Helping Blue Plans Win
Digitally-Enabled Products
Health plans are developing member advocacy and concierge service strategies, but technology obstacles — disparate systems, acquisitions and third-party outsourcing, to name a few — are resulting in the disintermediation of members, additional silos and the inability to deliver the right information to members at the right time. While plans are strategizing around member journeys, persona creation and experience mapping, there is a need for innovative technology that can help elevate the member experience.
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Artificial Intelligence Helping TO
(pronounced “ˈā-mē”) is NASCO’s artificial intelligence engine that houses a library of preconfigured business rules and event triggers and uses this information — along with member healthcare data and analytics — to deliver personalized healthcare recommendations to members through Web, mobile, clinical service and call center channels. AI.me enables plans to provide a more holistic, proactive approach to member servicing with the ability to integrate and orchestrate the member experience across all channels. Using both predictive and adaptive models to machine learning, AI.me gathers member result data and makes recommendations for members that become increasingly more personalized and have the greatest probability for success. AI.me can gather information from any data source and can output member recommendations — either reactive, like when a member initiates contact, or proactive through system-level events to initiate member outreach — to any customer relationship or care management platforms, in addition to Web portals and mobile apps. Currently, AI.me has a library of more than 30 pre-configured business rules and event triggers — covering wellness, condition management and gaps in care, to name a few — that is growing quickly as we are rapidly researching and configuring additional business rules and event triggers that align to health plan concierge servicing strategies. Horizon Healthcare Services, Inc. (Horizon) is the first Blue plan to deploy AI.me, and several other Blue plans are looking into incorporating AI.me into their member servicing strategies to provide a more personalized member experience.
For the past few years, Blue Cross Blue Shield of Michigan (BCBSM), like many Blue plans, has been focused on staying one step ahead of disruptors and providing a more retail-like experience for its consumers. As a result, the plan has been navigating added product types, benefits, partners and third-party entities, which has naturally created a more complex experience for its constituents and increased administrative costs.
Through BCBSM’s high performance operating model process, the plan’s individual business team is implementing ® for its HMO business due to the product’s proven effectiveness in the plan’s current books of business and also because of NASCO’s deep understanding of and ability to support the plan’s most complex business easily and quickly. BCBSM started the platform unification launch with its under-65 individual markets to take advantage of the MembersEdge HIX solution automation and integration capabilities, and it will soon introduce group business to take advantage of MembersEdge’s diversified benefit and ASO/ASC feature sets, which will help automate and support the plan’s group growth goals. This move to MembersEdge is part of BCBSM’s overall transformation program, and it will give the plan the ability to respond to individual and group business more effectively, decrease administrative costs and improve the experience for all of the plan’s constituents.
Helping Blue Plans Win
Connect Member Servicing
To remain competitive in its market by protecting and improving the customer experience while still driving out costs, BCBSM realized that it needed a best-in-breed, digitally-enabled enrollment, membership, billing and rating solution that could support its entire book of business. The plan’s constituents want a more unified, connected and transparent experience, powered by a digital product solution. They want more control over agility through business-driven rules and features, and they want to offer and deliver better products and services for their customers to help achieve their market goals.
To remain competitive in their market by protecting and improving the customer experience while still driving out costs, BCBSM realized that it needed a best-in-breed, digitally enabled enrollment, membership, billing and rating solution that could support its entire book of business. The plan’s constituents want a more unified, connected and transparent experience, powered by a digital product solution; they want more control over agility through business-driven rules and features; and they want to offer and deliver better products and services for their customers to help achieve their market goals. BCBSM selected MembersEdge® for its HMO business due to the product’s proven effectiveness in the plan’s current books of business, and also because of NASCO’s deep understanding of and ability to easily and quickly support the plan’s most complex business. BCBSM started the platform unification launch with its under 65 individual markets to take advantage of the MembersEdge HIX solution automation and integration capabilities, and it will soon introduce group business to take advantage of MembersEdge’s diversified benefit and ASO/ASC feature sets, which will help automate and support the plan’s group growth goals. This move to MembersEdge is part of BCBSM’s overall transformation program, and it will give the plan the ability to respond to individual and group business more effectively, decrease administrative costs and improve the experience for all of the plan’s constituents.
AI.me
MembersEdge
The Digital Future is Now
02 | A Business Network Built Through Collaboration and Innovation: Coalesce
A Business Network Built Through Collaboration and Innovation:
With rising consumer expectations and disruptive industry changes, Blue plans are feeling the pressure to transform and reimagine the healthcare experience. NASCO is embracing digital capabilities and developing innovative solutions to enable interoperability between business entities, to leverage data and to automate workflows.
THE FUTURE OF HEALTHCARE
THE DIGITAL FUTURE
to create digital solutions that provide easily consumed, real-time access to information, increase the availability of critical data and generate insights — all of which can enable seamless experiences and support meaningful improvements in health outcomes. Enabled by the introduction of specialty digital delivery teams who are focused on delivering capabilities in an agile way, plus continuous integration/continuous deployment automation, NASCO has organized the conception and delivery of digital assets that will drive interoperability between NASCO, our plan partners and third-party entities. As competition from new healthcare market entrants materializes, NASCO and our plan partners must adapt and develop new capabilities quickly with a modular, plug-and-play approach. We employ digital capabilities so that our products are available as consumable services. We are exposing those services through integration components — or Application Programming Interfaces (APIs) — which can be accessed via the NASCO API Portal, to build custom applications that meet our plan partners’ specific business needs.
To truly prepare for the future of healthcare, you must have the right people working together differently to design innovative products that fuel growth. With the introduction of the Coalesce Health Alliance (Coalesce), NASCO has established a multiorganizational consortium, which is operating as a completely different kind of innovative business network within the healthcare industry.
The consortium — led by NASCO and joined by Blue Cross and Blue Shield of Massachusetts, Blue Cross Blue Shield of Michigan, Horizon Healthcare Services, Inc., HM Health Solutions, Prime Therapeutics and Express Scripts — is initially focused on evaluating the application of blockchain to improve the efficiency and accuracy of member healthcare data exchanges across entities within the Blues’ ecosystem. Using distributed ledger technology — or blockchain — Coalesce has designed a decentralized, consent-driven, distributed accumulator solution to exchange member accumulator data across organizations in real time. Now, when a member goes to the pharmacy, the pharmacy will have accurate real-time information with regard to that member’s deductible, copay and out-of-pocket expenses. And just moments after that member leaves the pharmacy, medical, vision, dental and behavioral health benefit managers will also have accurate real-time information about that member’s deductible, copay and out-of-pocket expenses. The impact to claim processing accuracy and timeliness across delegated benefit managers will result in significant reductions in reconciliation, recoupment and after-the-fact adjustment costs. In 2019, Coalesce completed the Alpha Pilot, demonstrating a working blockchain-based distributed accumulator solution, and the consortium recently kicked-off its Beta Pilot test window with Distributed Accumulator Beta Release 1.0. During this testing phase, seven participating healthcare organizations will evaluate the accuracy, speed and overall capabilities of the Coalesce solution as well as their local system integrations to Coalesce. By forming the Coalesce Health Alliance — with cross-organizational governance and a broad approach to solving problems across the healthcare payer ecosystem — NASCO has the unique capacity to target industry problems collectively and more effectively through introducing, testing and evaluating innovative ideas, technologies and solutions together.
IS NOW
COALESCE
01 | The Digital Future is Now
Consumers expect relevant information in real time through transparent, frictionless interactions, and as the industry shifts to more information-driven models, interoperability and access to data are critical for Blue plans to remain competitive and relevant to their customers. In one example, NASCO is partnering with Google
With the development of the NASCO API Portal, we are changing the paradigm of how we interact with our plan partners. Through the NASCO API Portal, Blue plan developers can view a catalog of our APIs and can begin their development cycle without having to work through a change request process. Plus, NASCO is creating an API community — a managed API platform with API contributors and API consumers for leveraged integration — that will enable Blue plans to share APIs, which could solve third-party integration issues across the healthcare ecosystem.
A Business Network Built Through Collaboration and Innovation: Coalesce
YEAR-END MEMBERS
With rising consumer expectations and disruptive industry changes, Blue plans are feeling the pressure to transform and reimagine the healthcare experience. NASCO is embracing digital capabilities and imaging innovative digital solutions to enable interoperability between business entities, to leverage data and to automate workflows.
MEMBERS IN MILLIONS
The healthcare industry is transforming, and so must we. Our business is changing. To ensure that we can continue to grow in this fast-paced environment, we are continuing to invest in the development of innovative new products, and we are reimagining our delivery models to increase speed to market, reduce the cost of change and improve productivity for our Blue plan partners.
2019
2018
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2016
2015
10.9
9.6
7.1
7.0
5.8
YEAR-END MEMBERS ENROLLED MEMBERSEDGE
DEVELOPMENT INVESTMENT % OF REVENUE
25.3
25.2
24.6
23.3
$313.3
$312.7
$316.6
$318.0
$310.0
TOTAL REVENUE
$ IN THE MILLIONS
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— 2016 —
— 2017 —
— 2018 —
— 2019 —
22%
26.1
02 | Development Investment % of Revenue
04 | Total Revenue
03 | Year-End Members
01 | Year-End Members Enrolled MembersEdge
23%
20%
19%
