When New Jersey regulators told Horizon Healthcare that it was time to incorporate the pages of mandates stuck at the back of its insurance packets into the contracts themselves, the carrier faced two choices.
It could hire 10 temps for a year and continue to process contracts manually. Or it could license Calligo Doc Services from InSystems. The costs were about the same, but with the InSystems approach, the company would then have a document management solution.
Until this point, the company’s approach had been entirely manual. Employees would take a Word document of an insurance contract and type in the group name.
Now, with 46,000 small group contracts to process, the company chose technology over manpower, said Pranav Mehta, the program manager who oversaw installation of the software. Once InSystems Calligo Doc Services was installed, the company could take six of the nine staff out of the contract preparation office.
The first phase of the project was completed in the spring of 2004. Since then, said Mehta, volumes have risen dramatically as Horizon has extended the InSystems document automation to other types of insurance. Because the system has been extended to departments that were understaffed, it hasn’t resulted in head count reduction, but it has helped the staff cope with its continuing workloads.
In addition, because Calligo Doc Services takes data directly from source systems with no manual keying, errors have been reduced. The system has improved document storage and retrieval. Users can view contracts online and email them out as PDFs. Printing costs have dropped from $7.92 per contract to $5.13 while mailing costs have been reduced by 32 percent. Total savings from the first phase of implementation are running about $500,000 per year, said Mehta.
For large group coverage, Horizon has an InSystems Customizer component that lets it tailor a contract to the requirements of an insured company. In large firms, the senior executives often receive more extensive and expensive benefits than other employees, and the contract may distinguish between union and nonunion, fully-employed and retired.
Mehta has been pleased with the software from InSystems. It scales well, and the company has been responsive when the advisory group has asked for specific improvements.
His group built the connection to back-office systems with Microsoft .NET, he added.
Neil Betteridge, vice president of marketing at InSystems, said that the software connects business people across product development and contract production, which saves time and permits a company to implement new products and new pricing faster. The front-end module of InSystems suite, Writer, uses a combination of Word and insurance specific markup tools to draft documents and prepare templates. For carriers writing policies across the United States, business users can create a single master template and then highlight to show where wordings must vary to address different state regulations. A policy template might have general language and then show a highlighted exception for Texas, or offer different language that applies only to New York and New Jersey.
With InSystems, instead of maintaining a different document for each state, and trying to keep up with regulatory changes in each of them, the main document remains the same with specific exceptions noted in it. This approach reduces the compliance challenges.
Insurance is changing the way it approaches technology, added Betteridge. Instead of simply seeking to reduce costs, it is looking for ways to grow revenue through better use of software.
“Customers are under pressure to update their products,” he said, noting that many are pursuing niches, such as life and investment products with a secondary guarantee. With its Writer software, InSystems is moving support for insurance processes earlier into the life cycle – to the stage where business people are drafting the contract. The natural way to grow revenue is to get more products to market faster, catch price increases quicker, and launch innovative products faster than the competition.
“If you were running an IT project of any size and didn’t use Microsoft Project or some other project management tool, you’d be considered backward, even irresponsible. Yet on the business side of the shop, they often make do with working through email and sneakernet, or maybe a task list in Excel,” Betteridge said. “But there’s far more complexity in launching a new product or a major enhancement because you have to work with so many departments.”
A new product launch requires input from marketing to find the opportunities and identify weak spots in the product line; actuarial to determine pricing and costs structure; legal on the contract wording; sales and distribution; compliance staff who work with the states; and the IT group that puts all this work into code. InSystems provides Writer and for collaboration a product called Tracker, which runs on a SQL Server database, to enable carrier staff across departments to work together efficiently on developing, filing and launching products.
Tracker appeals to carriers because it improves speed to market. It includes tools that help carriers file in all 50 states and it links directly to SERFF, an electronic clearinghouse between carriers and regulators.
www.insystems.com
www.horizon-healthcare.com