Case:CrossRoad Bank Belgium(2)

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Contents 1 Introduction 2 Social security in Belgium: the birth of a best practice 2.1 a possible meltdown 2.2 Social Security: the suggested solution 2.3 Social Security: radical vision, incremental implementation 3 Examples of the ICT-driven redesign 4 The network 5 KBSS: how it (IT) works 5.1 IT building blocks 5.2 Information Management 5.3 The IT-principle: The abolition of all paper form declarations 6 Results of the KBSS: 7 Related case study analyses 8 Related educational pages

Introduction

This is the short version of the elaborate Case:Cross road bank Belgium, written for use during the TRIAS MAsterclass 2007.

Back in the eighties, he Belgian social security sector risked a complete meltdown. A so-called Crossroad Bank was erected, headed by FrankRobben. With the careful implementation of a strategic information infrastructure he helped to redesign all administrative processes, thereby reducing the number of paper forms and the length of the remaining forms strongly. This enhanced not only efficiency and effectiveness of the system, but also the quality of service delivery, the level of enforcement and last but not least the legitimacy of the social security system. An international renowned best practice was born.

Social security in Belgium: the birth of a best practice

a possible meltdown

In the mid-eighties of the last century Social Security in Belgium struggled with organisational and informational challenges. For instance, the teachers organized strikes, with growing intensity every year, because their holiday allowances (part of their salary) were paid in September, whereas they should have been paid in May. All sorts of administrative chaos, large scale (possibilities for) fraud, poor service delivery were common practice. A meltdown of the system as a whole became more real, everyday. So, a research committee was formed to come up with a solution.

Analysis concerning the more than 2.000 organisations in the Social Security environment showed enormous lack of coordination. Several problems resulted:

• the organization of the business processes of the social security agencies was not customer-oriented nor harmonized ;

• each social security agency had its own set of paper forms forcing employers and employees to fill in lengthy forms, over and over again;

• the social security agencies ask employees and employers for written information that is in fact electronically available in one of the other social security agencies.

• the socially insured persons and their employers had themselves to look for their rights throughout the social security system and can not count on the automatic granting of all rights on the basis of one declaration.

On the highest political level it was decided that this was the fundamental reason for the forthcoming meltdown. Actually, it was not a meltdown, it was a paper jam! 2000 organisations were in a paper jam, because they produced more paper forms then they could process. Red tape was suffocating the system. Just imagine the logistics of up to 1.000.000.000 lengthy paper forms to be exchanged between 2000 organisations.

Social Security: the suggested solution

Thus, the Crossroads Bank for Social Security (CBSS) in Belgium was created in 1990. At that moment the Belgian Minister for Social Security called on Frank Robben, a bright young member of his political staff, with experience in network technology, law and privacy, to become the director of CBSS.

A new law introduced this Crossroadsbank, giving it a budget and the legal authority to develop an information network, to redesign the information usage of all organisations concerned, to reduce the administrative burden and to enhance privacy and ICT-security. By law it was now forbidden to ask for information from employers or employees, if this information was already available somewhere in the network of the 2000 organisations. All 2000 organisations were not allowed to build their own information networks: every connection to any other organisation had to go via the crossroads bank. This crossroads bank would not store the information in its own databases, but would only connect the receiver of requested information to the original owner of the information.

Social Security: radical vision, incremental implementation

Of course this visionary approach met with resistance. Even though organisations were not reorganised, some CEO’s felt that this was an attack on their autonomy. Frank Robben met with the Minister of Social Security weekly, and was given full and complete commitment. The Minister was convinced of the urgency, because of the possible meltdown, and shared Robben’s vision that large scale informatization of the complete sector was their only chance. There is an anecdote saying that one day a CEO of one of the larger organisations involved, met with the Minister. The man told the Minister: ‘This Crossroads Bank is a very nice concept, Minister, but due to our position I will not let it happen in our organisation’. ‘That’s right, you will not let in happen’, the Minister replied, as he stood up and opened the door. ‘Somebody else will do it in your place, good afternoon’. … This anecdote showed to everybody involved that resistance would not be accepted. With this political commitment Frank Robben started to build up this Crossroads Bank.

Frank Robben decided to build the network, bit by bit, using the redesign of concrete processes as he went along. Every year Frank Robben would receive requests for the demolition of outdated, paper-ridden processes. And every time, he would only bring together those parties of the 2000 organizations, that were directly involved in the work process to be redesigned. Most importantly, he would not strive for the elimination or reorganization of the organizations involved, nor would he allow for structural changes in the social rights of the citizens involved. He would only focus on the creation of electronic information exchange, for the reduction of the number of paper forms used, and the abolition of paper declarations, leading to a fundamental redesign of the work processes (BPR).

Examples of the ICT-driven redesign

Example: CBSS1: Income dependent refund for recipes at pharmacy All Belgians can be granted a reduction on the price of medicines, depending on their financial situation (a means test). To realize this possibility, in the old days all Belgians had a set of stickers, with a bar code on it. The bar code referred to the level of price reduction. Just imagine the paper jam this produces: on about 100 million copied prescriptions a sticker with bar code was attached. The pharmacist would reduce the price of the prescription, send the stickered copy to the Ministry, which would process the 100 million prescriptions, sending the required refunds to all pharmacists. This very expensive, slow, fraud-sensitive process was to be redesigned. Because the process was costly, Frank Robben seized the opportunity to introduce a chip card for every Belgian that went for a recipe to the pharmacy. A separate law, guiding the introduction and use of the chip card, was accepted by parliament. Then, he set up an agreement with all pharmacists, stating that they would buy a certified card reader, to be attached to their own software programmes, which would accumulate all prize reductions, since every Belgian now would identify himself electronically, with the new chip card. At fixed moments, the computerized addition would be sent electronically to the Ministry, which would pay back the provided prize reductions. This not only reduced the number of processed forms with 100 million, but also introduced a chip card for all Belgians. Even after deduction of the costs of the introduction of the chip card (2,5 Euro per person), a necessary component to uniquely identify every Belgian electronically, there were high savings.

Example: CBSS2: Dimona One final example shows the potential, at the moment that all infrastructural components are already in place. During the nineties Frank Robben built this infrastructure: the network, the relevant databases (employers, employees, including all hours they worked, all citizens, etc.), the communication protocol (changing from EDI to XML), the electronic declaration, the call centre, the websites/portal, etc. Now this is in place, still new requests for modernization are being received. For instance, employers met with Frank Robben, asking him to help them to fight fraud. More and more employers didn’t register new employees, thus evading payment of social security premiums. It is remarkable that employers came to ask Robben to fight this, but the fact is that, whereas a little bit of fraud is acceptable, or even seen as a lubricant for the economy, growing levels of fraud not only undermine the welfare state, but also undermine the competitive position of those employers that stick to the rules of the game. In fact, there is no level playing field anymore: employers using fraudulent techniques were strengthening their positions, because they could offer their products at a lower price, than those employers who worked by the book. In close cooperation with the employers and parliament Frank Robben developed DIMONA, a change in the law, introducing a system that forces all employers to register every new employee before they start working. DIMONA is a website application, and only three details are required: the employers’ number, the employees’ number and the employees’ start date? All other information (name of the firm, address of the firm, but also name of the employee, date of birth, marital state, etc.,) is available on the network, so does not need to be asked on the website. Paper forms are forbidden, they obstruct the effectiveness of the system. If necessary an employer can contact the call centre. Since all information is available directly, e-enforcement can now be designed effectively. In this case, inspectors are equipped with a laptop and with online, wireless access to the databases. Whenever they enter a firm, they have the actual situation readily available to them in the databases, and the employer cannot say that the paper form is on its way (which was the trick in the old days, making inspection completely ineffective). An informal estimate suggests that this innovation, which costs approximately only 15 million Euro’s, since most of the infrastructure was already in place, created may be two billion euros annually. (unclear) Most of this money is extra premiums paid, because employers cannot cover up the number of people working for them, anymore.

Example: CBSS3: Proactive service delivery and non take-up Another problem with social service delivery is the non take-up. In particular the poorer and under educated element have great problems finding and establishing their rights. If you’re more or less illiterate, how can you read these complex forms? How can government reach you, when you’re afraid to open any letter from public agencies? On behalf of his Minister, Frank Robben puts a great deal of effort into proactive service delivery: in the network all relevant knowledge of all citizens involved is already available. Why ask citizens to fill in a form to ask for a tax cut, for instance, if you can identify all the citizens that have this right? Frank Robben helped to create an infrastructure enabling many of those rights to now be acknowledged beforehand. So Belgians with no or a low income, now automatically receive reductions on the energy-bill, get automatically the right to travel with public transport, etc. This reduces the level of non take-up strongly and helps parliament and government to actually realise their democratically agreed on social policies.

The network

The crossroads Bank is an information broker for the Social Security organisations in Belgium. It is not a central system where data can be stored but a broker that refers to the data stored in local databases managed by the different Social Security organisations. The Crossroads Bank knows which files about which persons are stored at which local database and which data are stored in these files. They also know who is authorised to retrieve certain data. A supervising board, consisting of members of parliament, science and society, is installed to monitor the retrieval of data. All Social Security organisations were connected one by one to the network of the Crossroads Bank, redesigning their processes.

In total about 2.000 institutions are responsible for the execution of the Belgian Social Security. More than 10.000.000 socially insured persons and 200.000 employers have very regular contacts with those institutions to assert their rights, to furnish relevant information or to pay contributions. At the moment, this is the network that is being served by the CBSS:

KBSS: how it (IT) works

IT building blocks

Having urgency, political/democratic commitment and a clear vision, the question was of course: ‘where to start?’. Frank Robben knew that he needed several, basic information building blocks:

• A set of unique numbers, identifying both employer and employee;

• A chip card with this number, enabling every Belgian to identify himself

• A technological network, connecting all 2000 organisations;

• An electronic message exchange protocol (EDI), so every organisation could talk to all other organisations.

Information Management

Also the following basic information management principles were put in place:

1. Information modelling: Information has to be modelled to take into account the expected use of the information.

2. Unique collection and re-use of information: All information is collected only once, as closely as possible to the authentic source (the ‘creator’ of the information preferably in an electronic way.

3. Management of information: For every element of information it is decided which institution stores and manages this information and makes this available to all authorized users in the network.

4. Electronic exchange of information: Once collected and validated, information is stored, managed and exchanged electronically to avoid transcribing and re-entering it manually.

5. Protection of information: Personal data are only accessible to authorized institutions and. The access to personal data is granted by an independent committee (members of parliament, scientist, civil society), after having checked whether the access conditions are met. Every concrete electronic exchange of personal data is logged.

The IT-principle: The abolition of all paper form declarations

Any physical piece of paper is in fact an attempt to obstruct! Normally every civil service asks its citizens for paper declarations, with which the citizen can prove a certain situation to be true. This can be a birth certificate, a wedding certificate, a divorce certificate, but also certificates are produced to prove that you’re an invalid, unemployed, have no means, etc., etc. These paper declarations have a judicial value, proving that you live in such a condition that you are entitled to a certain right. Every declaration produced nowadays, is in fact nothing more than a print-out produced by some government computer! This paper print is then carried by the citizen to some other counter, where they take in the declaration, filing it as part of the dossier. This exchange of paper declarations, where the citizen is actually used as the go between, can be abolished when the recipient of the declaration is allowed access to the database that was used to produce the declaration in the first place (the sender).

Results of the KBSS:

The introduction of the Crossroads Bank for Social Security resulted in:

• About 185 sorts of paper certificates that the socially insured persons or their employers had to get in one social security institution only to hand it over to another social security institution, have been eliminated and replaced by direct electronic data exchanges between the concerned social security institutions; in 2005 500 million concrete electronic data exchanges took place with a response time for the on line messages lower than 4 seconds in 98,5 % of the cases;
• About 50 sorts of declaration forms towards social security have been eliminated;
• In the remaining 30 declaration forms towards social security the number of headings has on average been reduced by two thirds;
• A lot of declarations are directly and electronically made from the personnel administration packs and accountancy packs at the employers’;
• The socially insured persons and their employers can from now on report each data only once to social security as a whole;
• The number of contacts between employees/employers and agencies has drastically been reduced;
• The remaining contacts have been streamlined according to their life events. (to enter into office, to perform work, to get sick, to leave office, to get unemployed, to get retired, ...)
• Personal services to the employers and to the socially insured persons are offered;
• A huge number of subsidiary rights are automatically granted;
• Hospitals and pharmacists are freed from encoding about 100 million paper certificates a year ;
• The administrative burden is reduced by 1,7 billion euros, annually (estimate);
• Extra income (premiums paid for) of may be up to 2 billion euros, annually.

Related case study analyses

Related educational pages