Reward Management at Highmark

Insurance is all about planning ahead. As the in-plant for one of the largest health insurers in the United States, Highmark's Corporate Printing Services (CPS) operation recently executed well-planned facilities and technology upgrades that leave it extremely well-positioned for the future.

However, the shop's moves—including the relocation and expansion of both of its production facilities; the acquisition of new digital presses and finishing equipment; its transition into the for-profit business arena; and the upcoming launch of a Web-based job submission system—are less risk management and more reward management measures. Highmark's in-plant isn't preparing for the worst; it's hoping for even more of the best.

"While in-plants often face the danger of their companies turning the lights off on them, we have experienced the complete opposite," enthuses Jeffrey S. Taranto, CPS manager. "Our business only seems to grow, we have never had to cut staff, and Highmark has been willing to invest more and more money into us as a proven commodity."

Of course, CPS is earning its successes. Both plants run 24 hours, five days a week, staffed by 18 employees. They print approximately 40 to 50 percent of the parent company's non-transactional printing needs, including sales collateral, manuals, enrollment forms and medical applications.

A Thriving Corporation

Based in Pittsburgh, Highmark employs 20,000 team members to serve 5.3 million health insurance plan subscribers in Pennsylvania, Delaware and West Virginia, and 33.5 million people nationwide through a variety of health and wellness businesses. It reports itself as the fourth-largest Blue Cross and Blue Shield-affiliated company.

This spring, CPS relocated its main Pittsburgh production facility to a new site within the city, increasing plant square footage from 22,500 to 34,145. Its 27,450-square-foot satellite shop in Camp Hill, Pa., moved five miles west to a Mechanicsburg, Pa.-based operation measuring 30,365 square feet.

"Our old facilities had reached total capacity for electrical and environmental regulations, plus we had some water issues, so we had to move to grow," Taranto explains. "And we have big plans: We expect business to triple in the next three years with the continued growth of Highmark Health Services [and its outlying subsidiaries], Allegheny Health Network, Highmark West Virginia, and new for-profit customers."

Construction began in late January/early February and was completed by the end of May, well ahead of the busy fall re-enrollment season.

"We were completely moved into the new facilities by June, and were actually running production there ahead of time," reports Taranto, adding that CPS conducted customer education throughout the process. "There was no true disruption to production and no jobs were lost." The in-plant did depend on, and was grateful for, outside bindery help during this stretch.

Significant Technology Installations

Another motivation for the relocation was to accommodate significant technology installations. The Pittsburgh shop added two new Xerox iGen 150s for a total of five iGens in the facility.

"We are already doing 100 million impressions per year and will easily double that with the new equipment," Taranto asserts.

The in-plant started down the digital color production path a decade ago.

"In 2003, I was charged with cutting our strings to offset," Taranto recalls. "We've had great success with digital color and never looked back. The workflows we've established have reduced turnaround times and cost, and greatly improved quality."

The shop's first digital color printer was a Xerox 2045. "That particular machine was recommended for 125,000 impressions per month, but we did 500,000 easily and kept building off that," Taranto notes.

CPS purchased its first Xerox iGen3 in July 2005, and after a quick $2.5 million in cost savings, Taranto was able to justify a second digital color press by December of the same year. Over time, the shop has added and upgraded units to reach its current count of five iGen digital presses, including three iGen4s. He also anticipates a six-month-or-less ROI for each of the new presses and hints of the likelihood that number six will be installed soon.

'A True Partnership'

"Having a true partnership with Xerox helps us tremendously," Taranto adds, noting that others have noticed that the Pittsburgh shop emulates Xerox's Gil Hatch research center in Rochester. Other recently installed Xerox equipment includes a J75 color digital printer and a ColorPress XC1000.

On the back end, CPS also added more offline finishing to reduce outsourcing of bindery work, as well as reducing unit costs. The Highmark in-plant installed a trio of C.P. Bourg BDFx booklet makers for its Xerox Nuvera black-and-white printers, along with a C.P. Bourg Power Square near-line booklet making system.

Cumulatively, the new equipment has improved production speed, along with workflow efficiency and automation. "We're literally touching the paper once and its coming out the other end, ready for the box," Taranto says. "And because everyone wants everything at the 11th hour, turnaround can be anything from one hour to 48 hours, typically. We do a lot of same-day turnaround."

By continuing to meet near-impossible standards, "we've become our own worst enemy, in a way," he laughs. CPS reps meet with Highmark's creative services and marketing personnel twice a day to discuss jobs.

No job is considered standard at CPS. "We don't turn anything away, from run lengths down to one up to half a million," Taranto says. "The most challenging are the variable-print jobs. People don't understand that there's a lot that needs to be done in the background. You have to presort, and follow a strict and standard order, especially if you're doing a 50,000 run."

Equipped and Confident

Now with newly constructed and fully equipped production facilities, CPS is confident that it can meet the needs of a growing Highmark customer base. Taranto reports that the health insurer is also getting into the medical end with the acquisition of two hospital networks and will bring their production capabilities (and possibly their print shop employees) into the CPS facilities.

Expanding even further beyond Highmark borders, the in-plant will also begin insourcing work and will become a profit center for the first time. It will be producing jobs for other Blue Cross/Blue Shield association plans, as well as for some retail stores. (Taranto cannot release those names yet.)

"I anticipate that insourcing will bring in about $8 million a year, although that is a moving target," he estimates. "We intend to treat every job the same, but obviously our first commitment is to Highmark."

However, Taranto fully expects to fulfill all of the in-plant's commitments without complaint, thanks to painstaking preparation and practically perfected production.

"If you're even thinking about moving into the for-profit arena, make sure that you have state-of-the-art services, that you're already satisfying your [internal] customers, and that you can handle what you're taking on while still meeting the needs of your parent," he recommends. "You have to be perfect—a company rock star—before you take on insourcing. Things can get really ugly if you're not."

New Web Portal

Perhaps the final piece in ensuring customer satisfaction, both within and outside Highmark is the Web portal for job submission that CPS plans to roll out in September. It is the RSA WebCRD solution from Rochester Software Associates, which will automate Web-to-print for print ordering, fulfillment, job ticketing and production management.

"The solution will increase our productivity, expand our capabilities, and bring convenience and ease-of-use to our customers," Taranto asserts. During the summer, the in-plant had set up a few departments as beta test sites.

"It's a robust Web system that I describe as a cross between an Amazon storefront and an iTunes-type store," he explains. "Customers can build jobs, see what they've ordered, get costs and track the job."

Taranto predicts that the system will increase productivity by 75 percent. How?

"Currently, we have an online job submission form that comes to a common queue, and our staff has to re-key every piece of information the customer submits," he relates. "Now the staff can simply reconcile the information."

The portal will enable customers to track jobs without all those typical phone calls and e-mails.

"It took an investment of $110,000, but over the course of a year, you can't even put a price tag on the convenience factor and administrative time savings," Taranto says. Customer satisfaction is priceless.