Anudeep Parhar, vice president of technology strategy and planning, Blue Cross and Blue Shield of Minnesota

Anudeep Parhar, vice president of technology strategy and planning, Blue Cross and Blue Shield of Minnesota


Case Study: Blue Cross and Blue Shield of Minnesota

Insuring Healthcare’s Future

Facing the challenges of healthcare reform, Blue Cross and Blue Shield of Minnesota employs analytics to reshape its business.

Healthcare reform will change the way employers and consumers purchase medical insurance. But for health insurance companies, reform requires even more dramatic and fundamental transformation. Blue Cross and Blue Shield of Minnesota, with 2.7 million members, is deploying technology solutions designed to help the company innovate to meet new market challenges.

Teradata Magazine spoke with Anudeep Parhar, vice president of technology strategy and planning, and Derek R. Dunn, director of enterprise data and information management, about healthcare reform at Blue Cross, the company’s vision for the future and the role analytics will play.

How will healthcare reform change your business?

Anudeep Parhar: Think of the healthcare business as a triangle with payers such as us who pay the claims, providers such as hospitals and clinics who provide medical services, and employer groups who enroll their employees. The consumer is in the middle, engaging with each in their healthcare journey. Today our primary business engagement is directly with the employers and the providers and through them with the consumer. This arrangement is expected to change with healthcare reform: The consumer will be empowered to navigate the healthcare system. This is a fundamental shift in the business model, which will impact each and every facet of our business.

At a Glance

Blue Cross and Blue Shield of Minnesota



The Company: Blue Cross and Blue Shield of Minnesota is the largest health plan in Minnesota, with 2.7 million members. The nonprofit company employs 3,700 people throughout the state.

The Challenge: To address impending healthcare reform, Blue Cross wanted to transform its business processes and deploy technology that would help the company better understand and service its customers.

The Solution: By replacing its DB2 data warehouse with a Teradata system, Blue Cross is enabling powerful, high-performing analytics capabilities that will enhance insight into customer behavior and requirements. A new focus on analytics is designed to help the company respond quickly to market change and better serve its customer base.

The Results: The new Teradata Data Warehouse Appliance will empower Blue Cross to more efficiently use IT assets, gain new insight from big data, and create innovative products and services that enhance customer service and satisfaction.

So a big focus will be business-to-consumer (B-to-C) products?

Parhar: Exactly. To compete in a B-to-C market, we need to develop new business capabilities that are more akin to a retail business. We expect new products, services and technologies will emerge to service customers’ healthcare needs. There will be fewer businesses seeking insurance and a larger number of consumers.

Is the insurance industry equipped for that?

Parhar: Not exactly. The current payer IT capabilities are primarily the massive batch, back-office type with very minimal infrastructure to support consumer-centric capabilities such as CRM [customer relationship management] and SFA [sales force automation]. In order to serve our members directly, we need to know a lot more about these individuals and families and their healthcare needs.

The data will be used to define targeted products and services to meet our members’ needs, provide transparency to providers, employers and members alike, and finally to power various healthcare (medical and financial) decision-making tools.

How can data warehousing help you achieve those goals?

Parhar: Given my previous comments, data will play a crucial role in our business’s future. Our strategy is to buy, collect or mine data that we can use to glean business-relevant information. Using the warehouse, we expect to equip our business partners not only with tools to conduct retrospective analysis but also predictive modeling capabilities.

So analytics will be a foundational capability?

Parhar: Yes! Ideally all new business cases will use analytics as the basis for creating business value.

Why couldn’t you make this shift with your old data warehouse solution?

Parhar: Our legacy data warehouse architecture was premised on building the entire analytics stack in-house. We consider the data warehouse to be a core infrastructure and enabling decision support tool, but not a solution itself. Hence, we changed course to buy core data warehousing capability to enable time to market for analytics-based differentiating capabilities.

How did Teradata win your business?

Parhar: We looked at all the usual suspects. But I’ve been very impressed with the technology thought leadership at Teradata and am comfortable with their roadmaps and strategies. Teradata is, by any measure—quality, performance, service—way ahead of everyone else. Finally, our Teradata team is world class and a true partner, an attribute greatly valued in a business relationship.

Derek Dunn: I was looking for a solution that was a true appliance, rather than a contrived appliance where they’ve bundled distinct products and call it an “appliance.” I wanted something where everything is in the box and could grow with us. Teradata offered that, and it helped us shortlist our choices pretty quickly.

“Ideally all new business cases will use analytics as the basis for creating business value.”

—Anudeep Parhar,
vice president of technology strategy and planning, Blue Cross and Blue Shield of Minnesota

Was performance and availability a differentiator?

Dunn: Teradata eliminated many DBA [database adminstrator] activities that we would have scheduled outages around. Things like re-orging and indexing now happen in the background. That improves uptime and availability while keeping the business serviced, and we were able to eliminate two-thirds of our DBA positions.

Workload management was also critical. With platforms like IBM or Oracle, you can tune for transactions or you can tune for warehousing. But you can’t tune them for both at the same time. You must decide which one is a higher priority, and the other dimension takes a hit. With Teradata, the ability to set up the prioritizations and work queues and know that service level agreements can be met consistently was a big deal.

The new system will launch shortly. How are you preparing?

Parhar: We transformed the entire team from top to bottom to enable a forward-looking supply chain for analytics. Derek Dunn, our new director for the analytics team, is partnered with a seasoned enterprise architect and portfolio project manager for our entire analytics portfolio. He also reorganized his team with critical IT roles such as data architects partnered with business data stewards to enable a new level of business alignment.

Dunn: Also, the Teradata Professional Services team is helping us migrate our DB2 warehousing assets to the Teradata platform. They definitely worked with us in a spirit of partnership, which was important.

Are you developing new processes?

Parhar: We have set up a cross-function enterprise business intelligence [BI] council with an executive oversight team to enable alignment at the highest level and a workgroup team with representation from IT, data-producing business units and data-consuming business units, to partner on roadmap activities, following best practices and be intentional about driving value from data. This is real transformation: the concept of the business owning the platform. It’s not an IT project.

Where does big data fit into your plans?

Parhar: I believe the future of the business of healthcare will be driven by solutions powered by large amounts of heterogeneous data in terms of type and source of data. The data needed for decision support will undoubtedly include unstructured or semi-structured data. Until recently, the cost of using this data was too high. But with Teradata acquiring Aster Data, now we expect some affordable opportunities.

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