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There’s no going back to the ways of working before COVID-19’s arrival, say many in the industry. Insurers and PBMs are reducing their footprint as work becomes part remote, part in person.
Five years ago, Prime Therapeutics, a fast-growing pharmacy benefit manager (PBM) owned by 19 Blues plans, realized that its portfolio of leased office spaces had grown expensive and unwieldy. The company’s leaders decided to consolidate its four Twin Cities offices at a gleaming new headquarters in nearby Eagan, Minnesota, and keep seven floors of offices at a location in another suburb.
An analysis had revealed that much of the existing space went unused, so company executives designed the Eagan building with flexible workspaces to encourage collaboration and meeting spaces that could be made smaller or larger as required, says Kim Gibson, assistant vice president of real estate and facilities at Prime. They suspected telecommuting would become a growing trend and felt the new building could accommodate such a transition, she says.
Then the pandemic hit. A change intended to be gradual took place almost instantaneously and worked out better than expected. In a mid-2020 poll, almost all (93%) of Prime’s employees said they were faring well at home, and two-thirds wanted a hybrid arrangement that would allow working remotely part time when the Prime offices eventually reopen.
Thus was born the “hub and home” strategy. Prime recently announced that employees will work from home 50%-65% of the time when reopening occurs, rotating into the office on set days of the week or month. With teams sharing spaces, Prime will be able to vacate the Bloomington offices by mid-2022 when the lease expires, reducing its footprint by one-third.
“To be an employer of choice, we’ve got to listen to our employees and bring the work to them, and I think this hub-and-home model does that,” Gibson says. “I would even say that if we didn’t offer something like this, we might be losing out on talent in the future. I’d say it’s critical to our future. I would suspect other organizations are considering the same.”
Indeed they are. Many health insurers and PBMs have not announced plans, but those contacted by Managed Healthcare Executive® indicated that they are either proceeding with or contemplating remote and hybrid work schedules.
“They’re definitely not planning to get everyone back in the office,” says Lisa Slattery, vice president of accreditation and recognition operations for the National Committee for Quality Assurance (NCQA), the nonprofit accrediting organization for health plans. “We hear some will be selling off properties, reducing footprint and continuing a lot of work from home. A lot of leaders didn’t think things could be as effective from a work-from-home perspective, but they’re seeing this is a viable solution that was accelerated by the pandemic.”
Companies in the healthcare industry that do not involve direct patient-clinician interactions are a microcosm of what is happening nationally. Target Corporation, headquartered in Minneapolis, announced that it will shed nearly 1 million square feet of office space, shifting 3,500 employees into other buildings and having many work from home. Michigan-based Ford Motor Company has announced plans to shed a significant office space.
A survey conducted by PwC in November and December 2020 showed that fewer than 1 in 5 executives wanted to return to the office as it was pre-pandemic. Most (87%) executives expected shifts in their real estate strategy, including consolidations, although many said they would open new satellite locations. Results of a June 2020 Gartner Inc. survey showed that 82% of company leaders intended to permit remote arrangements some of the time as employees return to the workplace.
Blue Cross and Blue Shield of North Carolina is among the handful of companies talking openly about upcoming shifts in their real estate. The company has allowed some office lease spaces to expire and will make real estate decisions based on how employees are working, not on cost.
“We do not anticipate ever going back to the traditional, pre-pandemic way of thinking that being in the office every day is necessary and/or expected,” the company said in a statement. Employees will work remotely at least through June.
Independence Blue Cross faces a major crossroads. In June 2020, it paid $360 million to repurchase its Philadelphia headquarters building, which it sold to Prudential Insurance Co. in the 1990s. The 45-story tower — the city’s eighth tallest building — houses 2,500 employees. Officials say they are not ready to announce plans.
“We are committed to this region and here for the long term,” the company said in a statement. “Purchasing our building at 1901 Market St. last summer was a further demonstration of that commitment.” The company did say employees would return in a phased approach.
Other companies are similarly reticent, perhaps to keep their options open. Optum, the PBM and care services subsidiary of UnitedHealth Group, said in a statement that they are “using this time to listen to our employees at all levels of the organization to best understand their preferences for the post-pandemic work environment. We are not rushing into any long-term decisions.”
A spokesperson for Centene Corporation, a publicly traded health insurer with headquarters in St. Louis, says the company will begin returning a small number of employees to the office Sept. 13. Employee schedules will include remote and in-person time as well as flexible start and end times.
Get the tech right
Erin Feigal, Prime Therapeutics’ chief human resources officer, says that a key part of the reopening plan involved a team designed to connect with employees, collect feedback and ensure that employees felt ownership of the hub-and-home approach. “It was an evolutionary process,” she says.
As a result, 2,200 workers local to Minnesota will cycle through the single Eagan campus, including 700 shifting over from Bloomington, Gibson says. Each team will have its own hub area and can adjust the space as needed on in-office days. Some workstations were replaced with team-centric furniture so that teams can shift tables, whiteboards and video systems and collaborate as best works for them.
Companies looking to follow Prime’s lead should test their technology and have it ready to operate efficiently across divisions, Gibson says. That means getting laptops into employees’ hands and adequately training employees to use video technology. “Gaps in technology will hurt you as an organization if you don’t get that right,” Gibson says.
The other key area to address is expectations, she says. “You have to address new working norms, understanding what expectations are — to show up online every day,” she says.
NCQA, which is headquartered in Washington, D.C., is dealing with the pandemic realignment not only in its role as an accrediting organization but also internally. The organization was unintentionally almost pandemic-ready, says chief operating officer Tom Fluegel. Two-thirds of employees were either part- or full-time remote before COVID-19 hit, and NCQA was preparing to offer an all-virtual option to health plans undergoing accreditation review. By having companies send screenshots and other documentation electronically, the organization has been able to perform accreditation work without conducting onsite visits.
Pattie Graves, human resources knowledge adviser for the Society for Human Resource Management (SHRM), says the healthcare sector and industries in general that perform office work are on the same wavelength. Companies are regularly making inquiries to SHRM about transitioning to hybrid work plans, and she sees no turning back: “I think it’s going to be the future.”