Humana makes health plan digital. (E-Fusion Conference: Health; Technology).

Companies usually slim down their information technology budgets when they want to lower expenses, but Humana Inc. has taken another strategy: apply more resources to IT to lower health-care coverage costs.

Emphesys, Humana's first completely paperless, digital health plan, lets policyholders enroll and even get advice from a personal online nurse without ever filling out a paper form.

The company launched the program for its 14,000 employees in 28 states in July 2001 and then introduced it to the commercial market, said Joyce Daugherty, vice president for information technology at Humana Inc.

The totally paperless Emphesys plan is available in Memphis, Tenn., and four Texas markets, but Humana is still waiting for financial results to come in that will tell the company how much money the health plan has saved, Daugherty said.

Humana has also launched some of the paperless features in other markets. Automated enrollment, for instance, is available in all of Humana's markets, which include 6.4 million members in 18 states and Puerto Rico. It appears that more of its customers are ready for the product. In April 2001, only 23% of its customers used the Internet, but today about 50% do.

In addition to being paperless, Humana wanted customers to be more aware of health-care costs, so the insurer added point-of-service features to the coverage. Now, policyholders pay the first $500 of service before standard deductibles apply. The company also uses a four-tiered pharmacy benefit plan.