The Computer System That Nearly Hospitalized An Insurer

It was a failure of the first order. Blue Cross & Blue Shield of Massachusetts spent six years and $120 million developing a computer system that would be cheaper and more responsive to customers. System 21 was trumpeted as "the future of Blue Cross." But early this year, behind schedule and over budget, the project was scrapped and the company turned over its computer operation to an outside contractor, Electronic Data Systems Corp. "We couldn't face the board and ask them for another $120 million," says Martin V. Joyce Jr., a consultant hired last year as the Blues' senior vice-president of operations.

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