Marlon Dauner grew his company by focusing on two things—the bottom line and customer satisfaction. Amanda Barber reports.

Thirteen years ago, five people stood together and decided to make a difference in the healthcare insurance industry. Under the guidance of Marlon Dauner, Preferred Health Systems was formed. Today, the company employs close to 240, but the company’s goals have remained the same—to increase enrollment and generate financial return.

Marlon Dauner

Preferred Plus of Kansas, a licensed health maintenance organization in the state of Kansas, was the first company brought into the system. The next two companies, Kansas Health Plan, a network provider, and Preferred Health Care, a PPO, were added in 1995. From the foundation those three companies built, Dauner developed Preferred Health Systems Insurance, a life and health insurance company.

“In 1996 we started Preferred Health Systems Insurance Company,” said Dauner. “From 1994 to 1997 we doubled our membership, reaching peak enrollment of 153,470 insured members and more than 60,000 PPO network members in 2001. The growth in insured members was due to a combined growth in Preferred Health Systems Insurance Company and Preferred Plus of Kansas.”

Although the significant increase in enrollment supported the company’s two main goals, it was not a controlled growth. The company’s service levels suffered because employees were not being hired and trained fast enough. “We struggled to keep our costs under control,” said Dauner. “We eventually acquired some technology so we could handle our claims and member service functions more efficiently.”

Managing growth
In 2000, Dauner and his team implemented programs to streamline the company’s efforts, both in claims processing and customer service. With the help of a consulting firm, Preferred Health Systems implemented a system that sped up the processing of claims, getting them through the system much faster.

“At the same time, we looked at how we could improve our customer service functions,” said Dauner. “We upgraded our call center activities. We enhanced our ability to monitor and track calls because our employees had instant access to the information they needed to answer customer questions.”

Dauner then invested in the development of disease management programs. “We want to keep our members healthy so those occasions, when they do need to access our services, are fewer,” he said. “It helps us from a financial perspective and from a health status standpoint for our membership.”

Dauner said a number of conditions, such as diabetes and asthma, create problems for members when they are not in control of their health. Preferred Health Systems’ disease management program goes hand-in-hand with a new program that allows members and physicians to accumulate rewards points based on how well they meet healthcare requirements.

“Members can generate points by participating in health club sessions a certain number of times over a designated time frame,” said Dauner. “Physicians can generate points by making sure they refer people to the services they need, even if they are not physician services, and to refer to contracting providers when appropriate. The focus of this is to treat the member as a true customer in the same way they would be treated in any other business.”

Sharing information
Improving customer relations, especially between physicians and members, is an important factor behind many of the company’s innovations. For the past six months, Dauner and his team worked to develop a process that allows physicians to supply members their health treatment protocol information via the Internet.

“Our physicians communicate with each other, but they communicate in a language unknown to the member,” said Dauner. “We’ve developed protocols that will be conveyed in layman’s terms so members will understand what’s happening, what they need to do to improve their health, and what the physicians will be doing to assist them.”

The program will also be tied to the referral process physicians already use with each other and hospitals in the member network. Preferred Health Systems will have an Internet portal members can have access to and authorize release of their information. Physicians and claim administrators will also have an easier time of exchanging patient information while conforming to HIPAA regulations.
Dauner said the biggest challenge he faces today is what gives his company an advantage in the marketplace. On one hand, Preferred Health Systems is local, and because of its small size, there aren’t as many resources to draw from. On the other hand, being small means he and his team can be much more responsive to their client base.

“We can make changes and adjustments to our processes to meet our member needs in a timely manner,” said Dauner. “We have also adopted a philosophy I’ve adhered to for years. We are in a service industry, and we have customers. The customer is not always right, but they are always the customer.”