Health insurer HCF will beef up its real-time analytics capabilities under an ongoing core system transformation project.
The firm is the first in Australia to take up an IBM smart analytics system that will enable it to speed up existing processes while building out its capability into new areas such as analysing a mix of structured and unstructured data sources.
Chief information officer Patrick Shearman told iTnews that HCF was currently in a "testing phase" of the system after rolling out the platform in July.
"We're finding that a lot of the reporting that we were doing before [is now] faster," he said.
"A lot of reporting that we had coming out the next day will now come out within an hour or two. It's helping to speed things up."
The new analytics platform is effectively a Netezza box set up to perform data analytics in its own memory as well as in a dedicated partition of HCF's new IBM z114 mainframe.
Shearman said that it was traditionally too expensive to contemplate the type of analytics that HCF is now pursuing.
"The traditional charging model is processing-based — the more you process, the more you pay IBM," he said.
"That made it prohibitive to do quite a bit of this work in terms of what we had [in place]."
He did not go into detail about the new price model HCF had secured with IBM, other than to say it was "different" and no longer a barrier to scaling out analytics capability.
HCF started transforming its core claims processing engine "a number of years ago" and intends to stick with the incremental transformation "until 2018 or so", according to Shearman.
"We're not going through this big bang approach of investing hundreds of millions of dollars into this stuff," Shearman said.
"We're just doing it gradually and incrementally over a longer period of time. The strategy is to replace these things as we feel the need to."
A large part of the transformation to date has been re-engineering its claims system so that members' transactions are processed faster.
Ancillary claims — for example, for dental and chiropractic work — are processed in "real-time", though they are monitored to prevent "inappropriate claims" from being immediately approved.
"There's certain types of claims which we deal with at a significant size, which we wouldn't pay straight away — they need to be investigated," Shearman said.
"The claims engine will process those and put them on hold to be looked at."
HCF uses a software tool called Lombardi to transition those claims between staff members and to track "whether [the claim is] going to be paid or rejected".
It also uses ILOG to manage and implement claims-related business rules, and has a long-standing SPSS implementation for predictive analytics.
All three firms — ILOG, SPSS and Lombardi — were acquired by IBM between July 2008 and the end of 2009.
Though HCF had a hardware relationship with IBM going back to its switch to a Z800 mainframe in 2002, IBM's software buys meant HCF has suddenly became a significant software customer for the company.
"By default we've ended up with a software relationship with IBM that we didn't have before," Shearman said.
The latest deal struck with IBM, covering the Smart Analytics/Netezza implementation, is worth "multi-million dollars".
Shearman said the gradual transformation of HCF's IT systems is in support of the firm's desire to move beyond being just a health insurer.
"Being proactive in helping keep our members healthy is something that we're very keen on and a lot of this investment is built around that," he said.