AmeriHealth Mercy Uses SAP® BusinessObjects™ Software to Keep Costs Down and Make Healthcare More Available to Those in Need

Insights from SAP® BusinessObjects™ Profitability and Cost Management Application Help Healthcare Network Better Serve People on Medicaid and Medicare

PHILADELPHIA .- SAP AG (NYSE: SAP) today announced that AmeriHealth Mercy Family of Companies is using the SAP® BusinessObjects™ Profitability and Cost Management application to make operations across its network of affiliate plans more transparent. With increased access to timely and accurate information on how the companies’ affiliate plans are managing and investing their budgets, the AmeriHealth Mercy Family of Companies is better positioned to evaluate spending, reallocate resources and keep financial performance steady while expanding services to its members. Part of SAP® BusinessObjects™ enterprise performance management (EPM) solutions, SAP BusinessObjects Profitability and Cost Management is helping the AmeriHealth Mercy Family of Companies improve its financial performance without requiring additional resources.

The AmeriHealth Mercy Family of Companies is a mission-driven organization that touches the lives of more than 6.5 million people in 14 states. The company is dedicated to promoting the management and delivery of quality healthcare to low-income populations covered by publicly funded programs including Medicaid, Medicare and State Children’s Health Insurance Programs (SCHIP). The organization selected the SAP BusinessObjects Profitability and Cost Management application for its ease-of-use. With this intuitive software, business users across the organization can better evaluate regional activities and the factors influencing financial performance.

The AmeriHealth Mercy’s investment in SAP is an excellent example how the use of IT can help promote cost effectiveness. This is also one of the major objectives of the recently enacted American Recovery and Reinvestment Act, which dedicates an entire chapter to using IT to improve healthcare efficiency.

“SAP BusinessObjects Profitability and Cost Management has been critical to our success,” said Jim Shoemaker, director of Corporate Financial Planning and Analysis for the AmeriHealth Mercy Family of Companies. “As our business grew, we reached a point where it simply wasn’t possible to rely on spreadsheets anymore for our various resource- and capacity-planning processes such as cost accounting, pricing or analysis. SAP BusinessObjects software has helped us to manage our information and gain detailed insight into our operations. These key operational areas include call-center data and the information we pull from financial and healthcare applications. For example, by drilling down into costs associated with paper-claims processing, we justified investments in electronic-processing capabilities. As a result, we’ve reduced our claims-processing costs by 10 percent while significantly reducing our carbon footprint. Overall, this is an application that’s helped us evolve, and also one that’s evolved with us.”

SAP BusinessObjects Profitability and Cost Management serves as a central application through which the AmeriHealth Mercy Family of Companies oversees cost accounting, determines charges across affiliate plans, provides pricing support and manages budget-planning processes. It also uses the application to conduct cost analyses for expanding into new markets and bolster growth, like in its PerformRx Pharmacy Business, where revenue has increased by more than 20 percent. With the software, the organization has supplemented annual resource- and capacity-planning processes, providing tools for departments and regional offices to help better plan for their budget and staffing requirements. The application also helps the organization better understand the operations of its different offices.

For example, to evaluate the effectiveness of support calls fielded at the Philadelphia-based call center, the AmeriHealth Mercy Family of Companies must take into consideration the fact that certain offices support customers with special needs or who do not speak English. Since these calls often take extra time, there is an increased associated support cost. SAP BusinessObjects Profitability and Cost Management puts this information into context, interprets what makes one call two minutes and another one five minutes, and provides data to help determine the best path forward for managing the overall call-center costs.

“In this economic climate it’s imperative that organizations get complete visibility into cost and profitability to better allocate resources where they’re most needed and most effective,” said Sanjay Poonen, senior vice president and general manager, Performance Optimization Applications, SAP BusinessObjects Division. “The AmeriHealth Mercy Family of Companies’ ability to optimize its cost and profitability allows it to better serve millions of members without compromising service levels and business strategies – an exemplary approach taken by a leading healthcare organization. SAP leads the EPM market with established solutions like the profitability and cost management software in our portfolio – solutions that are helping numerous customers become best-run businesses – all while other vendors are just getting started with their initial products in this critical area.”