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OCR for page 16
Blue Cross/Blue Shield of
South Carolina: Program for
Clerical Workers
Greg Geisler
Prior to the Industrial Revolution, homework was common-
place; it is only in recent history that we have come to expect and
accept the notion of a clustered work force, better known as the
factory or office. With industrialization, clustering became neces-
sary to realize the economic advantages that assembly lines of-
fered in factory settings and to provide the communication net-
work needed to support office functions.
Is this concept of clustering archaic? No, but the utility of this
notion is becoming less of a factor. Continual advances in infor-
mation technology are enabling individuals to be effective mem-
bers of the work force at arm's length at home. This emerging
technology will significantly improve the way in which we com-
municate and, as a consequence, will significantly alter the orga-
nization of the work force.
Reorganization of the work force is not a lightweight matter.
The premise that working at home is desirable and desired by
many may be easily accepted by the office employee, but not so
easily accepted by the manager or employer.
Regardless of the type of work the telecommuter does, manage-
ment is faced with new issues. How do you evaluate the perfor-
Greg Geisler is president of G Geisler Group, Camden, South Carolina, and former
director of the Information Center, Blue Cross/Blue Shield of South Carolina.
16
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BLUE GROSS/BLUE SHIELD OF SOUTH CAROLINA
17
mance of someone who is not in the office? How can you manage
people you don't see? James Connell, of Office Research Technol-
ogy in Pasadena, California, distinguishes two types of manage-
ment: " Some managers fee} that an employee has to be checked all
the time or the employee will goof off. The other attitude is that a
valuable employee will want to do a good job and doesn't need! to
have an overseer. This second philosophy has to be developed if
telecommuting is to work."
Management in general is struggling with the problem of incor-
porating technology and at the same time accommodating em-
ployees' needs and altering management's style. Many busi-
nesses are dodging the issue altogether and advocating the status
quo. Others are jumping in with pilot projects and funding in the
belief that the opportunity lost by delaying is substantial. A third
group is just plain confused and suffering from the widespread
and easily contracted disease of "analysis paralysis."
These symptoms are consistent with the views of Dr. Richard
Byrne, who teaches business executives how to get over the fear
of using computers.
Actually, Byrne says, "Managers are not, per se, afraid of com-
puters. it's really change that they are not in control of that is
frightening. After all, an executive's responsibilities include
keeping things under control. They no more inherently dislike
computers than they dislike a hose] suddenly moving them from
one room to another . . . even if the new room is a suite and over-
looks the ocean. Unanticipated change scares most people, not
just executives."
Byrne also pinpoints three types of attitudes. There is the atti-
tude of the person who hasn't had the technology-induced mid-life
crisis. To put a number on it, let's say this attitude represents
people under age 42. They know that the miter of technologies, of
satellite communications, videoconferencing, personal comput-
ers, and the like is going to affect them directly. They are coming
to terms with this now.
At the other end of the spectrum is what Byrne calls the "over-
56" executive who has a reasonable chance of escaping the new
technology. That leaves the 42 to 56 group. "That's the group
that's in trauma," says Byrne. "They don't want to face this prog-
ress, but they know they have to. To them it's a real problem."
Let me speak for our executives at Blue Cross and Blue Shield
of South Carolina. They are definitely not traumatizes} by the
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18
CASE STUDIES
emerging technology. Our teleprocessing efforts''were initiated in
1973, and telecommuting was introduced in 1978.
It is generally agreed that the sectors of society most directly
affected by the whole information age are professionals and man-
agers. They are the ones who derive the most direct benefit from
personal computers and other new tools of electronic communica-
tion. The motivation behind this entire movement is to improve
the productivity of the white-colIar worker the portion of the
work force which comprises 70 percent of the average company's
personnel expense. ~ believe that this purpose is well founded.
This is not to say that personal computers and the rest of the
technology will have no impact on our clerical workers, but the
potential is not as dramatic as that for professionals. It is simple
arithmetic: Which generates the greatest return, a 15 percent in-
crease in productivity for a $5-an-hour employee or one who
makes $20 an hour?
At Blue Cross we recognize and accept that our professionals
and managers are the target group for the new technologies. Be-
sides, in years past, like most other companies, we have expended
so much of our energy trying to improve the productivity of only
our clerical and blue-collar workers that there is little room for
further improvement, short of replacing them with robots. Just
for the record, we do not intend to do that!
THE COTTAGE KEYER PROJECT
In 1973, it was decided to begin the development of a telecom-
munications network that would tie all of the hospitals in South
Carolina to our corporate offices in the state capital, Columbia.
This network would be the vehicle through which the hospitals
would submit Blue Cross claims directly to us without the need
for hard-copy paper and mail service and without the inherent
delays. As a result, we are now recognized as pioneers in the con-
cept of "paperless" insurance claims and probably have the high-
est percentage of paperless claims submission by any insurance
carrier in any state.
In 1978 our company attempted telecommuting for the first
time. The purpose was to develop a procedure to facilitate the
coding and keying of physicians' Blue Shield claims. As just
noted, we had been very successful with claims submitted by hos-
pitals (Blue Cross claims), but a high percentage of the claims
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BLUE CROSS/BLUE SHIEkD OF SOUTH CAROLINA
19
submitted by physicians were still being handled conventionally.
The doctor was fining out a claim form and mailing it to us a week
later. Upon receipt, coding and keying of the claim was necessary
before it could be processed.
We had no preconceived ideas of project results and did not
establish any rigid goals. No formal monitoring or measuring was
imposed on the original participants. We were primarily inter-
ested in cleterm~ning the feasibility of expanding the project and
observing the attitudes of those affected.
The pilot project began with the selection of a husband and wife
team. This was accidental; we did not seek this exact combina-
tion, but in retrospect, this arrangement turned out very web. The
husband was a manager of one of the claims departments and
quite familiar with the manual claim submission process that we
were trying to automate. His wife was a typist who knew nothing
about the claims process and was not accustomed to sitting in
front of a terminal keying for x number of hours.
Each evening the husband would take home a new stack of
claims that had already been screened and coded any were now
ready to be keyed. In the morning he would return with any
claims that she had completed keying so that the hard copy could
be permanently filed. During the day, at her convenience, she
would key the Blue Shield claims. The next day the cycle would
repeat itself.
The luxury of not having to make a daily round-trip to Blue
Cross is readily appreciated, particularly when young children are
in the home.
The major result of this husband and wife working relationship
was a close and candid scrutiny of the methodology of paperless
claims submission. This constant questioning revealed some seri-
ous flaws, not In the accuracy of the data, but in the ease of use of
the system. The objectivity necessary to spot these flaws did not
exist in the hospitals that had been using the system for the past
five years, nor did it exist with the programmers who developed it.
Since its inception in 197S, the "cottage keyer" project has
grown to include 14 employees who are now considered a vital
element in our claims submission process. The ground rules for
our cottage keyers are that the keyer is responsible for paper ex-
pense; the lease of the equipment, which amounts to almost
$2,500 a year; and is considered a part-time employee. Blue Cross
in turn is responsible for ah maintenance of the computer, contri-
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20
CASE STUDIES
buttons to a pension fund, anc3 payment of 20 cents for each claim
keyed. No other benefits are provided. ~ realize that it may seem
incongruous for a health insurance carrier to deny health insur-
ance benefits to its own cottage keyers, but this policy applies to
aU part-time employees, not just those participating in the cot-
tage program.
We have experienced zero turnover in the five years the project
has been in effect. We have even had our first retirement. In fact,
had it not been for the cottage program, the retiring keyer would
not have been able to continue work at Blue Cross because of a
family situation that required all of her time.
The requirement that keyers lease the equipment is a very di-
rect way of stating that we depend on them and expect a certain
level of performance from them. In other words, the keyer is ex-
pected to key the claims assigned in a timely manner, and the
lease of equipment serves as a constant reminder of this commit-
ment. In the near future this approach will be abandoned. As we
convert from the very specialized machines we are now using to
general purpose personal computers, specifically the IBM PC, as
our vehicle for claims submission and provisions are made for our
cottage workers to purchase these machines at our cost, new rules
wiB be established.
Our cottage keyers and coders are generally women, in their
thirties, with one young child at home. Their husbands work at
Blue Cross with full benefits. The keyers are wed organized and
self-disciplined. They often work odd hours. We will finct them
signed on at 6 a.m. or 7 p.m. at night. Routinely, they work be-
tween ~ a.m. and noon.
Work Toad Statistics
Sixty-five percent of all South Carolina Blue Shield claims are
keyed in cottage; 30 percent of all South Carolina Blue Shield
claims are coded in cottage. Thirty percent of all South Carolina
Major Medical claims are keyed in cottage; 40 percent of ah South
Carolina Major Medical claims are coded in cottage.
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BLUE CROSS/BLUE SHIELD OF SOUTH CAROLINA
Productivity Statistics
21
Standard Hours
Hours Paid Produced Productivity
Tn-office 37.5 2~3.5 76%
Cottage 30.~3 31.3 102~o
We are quite pleased with the performance of our in-office key-
ers and coders. The productivity figures stated above are based
on units produced for hours paid, which means that hours not
worked because of illness or holiday or annual leave have been
included. This makes the comparison with cottage workers possi-
ble since they are paid on a piece rate with no allowance for illness,
holiday, or annual leave.
The standards established at Blue Cross are based on an "opti-
mum day's work," not a "fair day's work." Therefore, we do not
expect performance above 90 percent. When productivity is cal-
culatect as above, using hours paid whether worked or not, sub-
stantially lower figures are of course acceptable.
If we are pleased with our in-office productivity, we are thrilled
with the cottage figures. We expected work done at home to be
below standarci. In fact, at the outset we didn't expect more than
85 percent productivity. The machines used by the cottage keyers
were Texas Instrument Silent 700s, which required a pedal on the
floor and had limited editing capabilities compared with the main-
frame-linked terminals used by the in-office keyers. The home en-
vironment offered distractions, and there was no supervision.
How could there be this jump in productivity?
The best explanation I've come across is the oft-cited experi-
ment conducted by psychologist Herbert Lefcourt. Two groups
were asked to solve complex puzzles and do intricate proofreading
in the presence of a loud, randomly occurring noise. One group
was given a button that would switch the noise off; the other
wasn't. The group with the switch solved five times the number of
problems and made far fewer proofreading errors, even though
not a single subject pressed the button. Thus there appears to be
an incredible motivational value associated with freedom of
choice. The granting of even a modicum of apparent control can
increase people's productivity immensely.
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22
CASE STUDIES
Error Rate Statistics
The in-office keyers had an error rate of 3.0 percent, while the
cottage keyers had an error rate of 0.5 percent.
This statistic seems to lend further support to the above theory.
Otherwise, how can performance be higher in an environment
that lacks Muzak, ergonomic furniture, and scheduled coffee
breaks?
Earnings Comparison
Average Base Lease Benefits Gross
In-office $11,285 $0 $3,611 $14,896
Cottage $17,916 ($2,436) $806 $16,286
Our in-office keyers work an average of 37/ hours a week. They
are paid on a hourly rate with the average take-home rate of $7.59
an hour, which includes additional benefits. This make the aver-
age in-office keyer's salary $11,285 a year. Cottage keyers must
pay a monthly lease of $203 for the computer, which amounts to
$2,436 a year. The cottage keyers make an average of $12.18 an
hour, after deducting for their terminals. Hourly in-office keyers
receive at the company's expense additional benefits, which in-
clude life and health insurance, sick leave, annual leave, and pen-
sion. Cottage workers receive a noncontributory pension.
The cottage employee is grossing on the average 9 percent more
than the hourly employee. This is consistent with the increased
productivity of the cottage worker. Further, the company avoids
certain operating expenses such as additional floor space and of-
fice equipment, expanded cafeteria functions, and enlarged park-
ing facilities.
It can be argued that unequalpay scales for similar job descrip-
tions may be undesirable. We have found the opposite to be true.
Clerical workers understandably have limited promotional oppor-
tunities, but because of the cottage program, the possibility ex-
ists to "advance" to a more desirable cottage position without
having to absorb any new responsibilities. So, again, what could
have been a negative situation has become a positive one.
Another point of contention can be the decision to classify our
cottage workers as part-timers. It should be remembered that our
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BLUE CROSS/BLUE SHIELD OF SOUTH CAROLINA
23
part-time cottage keyers are earning more than their full-time
counterparts. Being classified as a part-time employee carries
with it the privilege of variable working hours and the inclination
to request and to expect this privilege. Consequently, the cottage
keyers exercise this option without any stigma attached. If a
keyer is going to be able to work only 20 hours one week, she
contacts her in-house supervisor and her work load is adjusted ac-
cordingly. Just as Dr. Lefcourt would have predicted, though,
this option is not abused. In fact, it is not uncommon for one of the
other keyers to volunteer to pick up the slack.
Is telecommuting a Trojan horse? We think not. We at Blue
Cross expect to expand our commitment to cottage keying sub-
stantially to include other claims areas, and will be providing a
personal computer or access to one for ah of our professional and
management people.
Those who are still not convinced should be in a business that
technology cannot leverage, like custom cabinetmaking, or have a
market absolutely cornered. Anything less, and these new tech-
nologies are going to be used by your competitors against you.
Representative terms from entire chapter:
cottage keyers
