Oracle technology a prescription for Medscheme`s success

In its quest for excellence Medscheme, a leading healthcare funder and medical scheme administrator in Southern Africa, has chosen Oracle`s database technology and e-business applications to transform to a successful e-business environment.

Its investment in Oracle`s technology enables Medscheme to provide the best service to its extensive customer base of more than 2,5 million beneficiaries.

This has resulted in Medscheme moving even further ahead of the pack of the top health fund managers and medical scheme administrators in Southern Africa. Medscheme.

Medscheme provides a comprehensive service to medical schemes including administration, scheme management and managed care initiatives.

Medscheme, which recently won the SA Non Listed Company Award, is the leading company in Southern Africa in the volatile and dynamic medical aid industry.

The group, which pays out more than R800 million for claims each month, has evolved from a medical scheme administrator to an integrated health fund manager. With more than 50 contracted schemes and a growing number of beneficiaries, Medscheme has an approximate 34% market share Integrated IT, using best of breed products, is a major strategy and one of Medscheme`s most important assets, enabling the company to add value to information gathered in processing healthcare claims. Without this ability, the Group would have remained just another medical scheme administrator.

Medscheme`s IT systems were designed with specific purposes in mind and form the building blocks of an unequalled healthcare IT system.

Medscheme has a highly sophisticated Oracle-based data warehouse - one of the largest healthcare data warehouses in the Southern Hemisphere and the foundation for the group`s managed care initiatives. The storage space on its IT systems is three terabytes.

Putting this into layman`s terms, if each claim was an A4 page and they were be placed lengthways end-to-end, it would circle the circumference of the world almost twice.

Medscheme`s decision to significantly enhance its e-business was part of its strategy to provide the best service to its customers.

Becoming a player in the Internet environment meant the company had to undergo rationalisation in different areas, such as the IT budget, and the integration of data, database and applications together.

At the outset Medscheme needed systems that would ensure effective and accurate receipt of claims to facilitate paper and electronic capturing into Medscheme`s PULSE database system. The company`s equity system also needed to be managed.

Most importantly Medscheme needed to ensure the efficient processing of millions of claims, which form the backbone of the business.

"We needed to use technology to leverage value propositions and be a differentiator in the market, plus drive efficiencies," says Hankie Vogel, IT Director of Medscheme.

"It was taking several weeks to process around 56% of eight million claims and we needed to process more claims faster and electronically. We also needed to improve service by speeding up productivity.

"In today`s competitive e-business environment the initial investment and the total cost of ownership (TCO) are two of the most important elements in the sale of a database platform.

"We needed to undergo rationalisation through the Internet environment and use technology to leverage value propositions, to become differentiators in the market and to ensure efficiencies. We also needed a scalable solution - a solution that can scale to our anticipated growth.

"In transforming to an e-business, companies cannot isolate the process of improving efficiencies, making savings and improving productivity from the automation of IT. They are one and the same and if companies get these two right they can achieve scalability and add value."

According to Kelvin Reynolds, national accounts manger for Oracle SA, selecting and implementing e-business solutions is a complex and highly challenging task. "And maintaining e-business solutions at the cutting edge requires constant attention to ever-changing business processes and technology advances.

Medscheme chose Oracle as it offers the complete platform, applications, and services necessary to help companies and entire industries transform to e-business.

"Other solutions focus only on web-based purchasing, ignoring the benefits of moving the entire supply chain to the Internet. Companies that use multiple point solutions are forced to cobble them together, facing an integration challenge that is costly and time consuming," says Kelvin Reynolds, national account manager for Oracle SA.

According to Vogel Oracle is already on the Internet, having converted every Oracle enterprise software product to work as an Internet application, which can be viewed and manipulated on a PC or other network appliance via a browser.

"Oracle`s technology is the broadest and most comprehensive available. This aligns well with our overall strategy to use technology to leverage value propositions and be a differentiator in the market, plus drive efficiencies," says Vogel.

"In choosing a partner to help us meet our goals of adding value and improved service, Medscheme investigated the market for an application that would scale to the projected growth of Medscheme - given our intention to list on the JSE," comments Vogel. "Oracle technology is definitely scalable.

"We believe Oracle`s scalable solution is sustainable and the most comprehensive offering in the market today. To assure a high level of service, convenience, and scalability, Oracle was the clear choice," says Vogel

"As demand grows, our business grows. We needed to forecast how we`re going to grow our systems to support the business. Oracle enables us to do that.

"Scalability, stability, and reliability are the three big advantages of Oracle.

"Oracle`s global coverage allows us to understand what is happening in markets around the world. This adds great benefit to Medscheme in terms of what will be important in the local market into the future."

Then in order to integrate data, the database and all applications together, Medscheme needed a specialist, such as Oracle.

"Application integration is a top priority as companies adopt Internet technologies," continues Reynolds. "For example, integrating Web store fronts with back-end inventory management and order fulfilment applications is mandatory in order to remain competitive."

Medscheme is using Oracle`s Oracle-based data warehouse, Oracle`s Forms Developer, Oracle Reports and Oracle CASE tool Designer 2000, supplied by Oracle SA.

Medscheme purchases its Oracle products and solutions through Oracle`s certified partners including IOCORE, CCH, and Unihold.

"By opting to use an Oracle-based data warehouse, Medscheme has a real prescription for success in the virtual world," says Reynolds. "The Oracle data warehouse is central to personalising the customer experience.

Medscheme`s customers can now request information simply by clicking a link on a dynamically generated Web page. "That`s where a good data warehouse and the right tools make the difference. At Medscheme Oracle provides that difference," comments Vogel.

Oracle Forms Developer enables Medscheme to build efficient, scalable applications, perform data manipulation from within stored procedures, enabling sets of updates, including updates to multiple tables, to be sent to the server in a single round trip. This reduces network traffic and improves performance.

Oracle Reports provides complete flexibility in formatting data, while

Reports Developer supplies the capabilities needed to quickly build Web reports based on data dynamically served from the database.

Medscheme uses the Oracle CASE tool Designer 2000 to manage the company`s entity relationships.

Medscheme`s huge membership base provides it with in-depth details of one third of South Africa`s healthcare transactions. "We are using Oracle technology optimally to derive business benefits and uptime for business continuity," says Vogel.

Medscheme is currently running three Oracle environments for production, development and a data warehousing. The company currently has around 318 million rows in their Oracle database tables.

The production environment is Unix based and hosts two Oracle databases of size 615GB in total. Medscheme`s Decision Support Systems (DSS) infrastructure running on the Oracle database and Siemens Pyramid Servers MPP provides an ideal platform for making decisions.

The claims table alone has 320 million records and is growing daily. The data from all the integrated IT systems is transferred to Medscheme`s sophisticated Oracle-based data warehouse, which is housed on a separate Unisys ES 5000 computer with 648 GB of hard drive disk space and 12 X 250 MHz processors each with 512 Megabytes of RAM.

There are several applications flowing from the mountain of information stored in the data warehouse. Some of these are:

• Customised management information is extracted for each medical scheme in the form of monthly detailed scheme reports.

• Management information for use by Medscheme`s top management for strategic planning and marketing.

• The development of clinically sound integrated managed care products is based on information analysed in the data warehouse.

• The ability to accurately determine clinical risk provides Medscheme with a huge opportunity in terms of risk underwriting.

• Medscheme`s Healthcare Indicators, a quarterly publication of trends in the healthcare industry, are compiled from the data warehouse. This publication can be accessed from this website.

• Medscheme uses the Oracle CASE tool Designer 2000 to manage the company`s entity relationships. Programmes are written using the Oracle Developer 2000 language and Medscheme`s stored procedures are written using PL-SQL.

Using Oracle technology has enabled Medscheme to provide the best service to its customer base.

Being able to process 320 million records and retaining five years of history provides Medscheme with the perfect infrastructure to solve any anticipated customer claim query.

Medscheme`s architecture also allows it to replicate the information to eight regional offices to increase performance and customer satisfaction.

"Oracle technology and services are proving valuable in Medscheme`s quest for excellence," continues Vogel. "The tangible results that Medscheme is deriving and can expect to gain from its e-commerce environment, built with Oracle`s solutions are:

• more efficient operations from the OLTP environment,

• better IT operation,

• stronger financial results as a result of reduced costs,

• clearer understanding of customer needs/interests and

• improved business decision making."

Owing to its e-commerce environment Medscheme is now processing claims in 24 days and intends dropping to16 days, plus the number of claims processed electronically has now increased to over 50%. The other arena that has benefited is Medscheme`s call centre, which has derived costs savings and improved customer care. The call centre is now handling 22 000 calls a day.

Medscheme is planning an upgrade of their database server to Oracle8i, which comes with many additional data warehousing features, including materialised/summarised views.

Medscheme is also considering Oracle partitioning once the upgrade is done. "These plans for the future can only improve Medscheme`s operational efficiency internally and customer satisfaction externally. "Medscheme has now set a new standard in healthcare funding and claims administration in SA," Reynolds adds.

Vogel concludes: "In alliance with Oracle Medscheme will be able to add additional value to information gathered in processing healthcare claims."