This CIMdata Brief looks at some of the issues impacting health insurance companies’ ability to meet their customers’ needs. The Brief describes how Product Lifecycle Management is being applied to enable those companies develop and maintain portfolios of innovative, personalized products in today’s highly competitive health care industry while meeting state and federal mandates.
The health insurance industry continues to see an increase in the number and types of products being introduced in today’s highly-competitive health care market. In order to compete effectively, insurers must be able to respond quickly to the demands of their clients who seek products tailored to their unique needs. In meeting these challenges, insurers need to be more innovative and agile, e.g., innovative in streamlining the product development process to create a broad range of new offerings, and agile enough to respond quickly to market and regulatory pressures.
So how can a health insurance company speed to market a growing portfolio of innovative products in a regulatory intensive environment while reducing the cost of creating them? Insurers are applying lifecycle management—an approach that has proven effective for companies in many industries. Lifecycle Management is a strategic business approach to developing, validating, and servicing products and policies from inception through retirement. It helps companies create business environments that foster innovation and provide the agility needed to compete successfully.
Lifecycle management was initially used in manufacturing companies and is broadly known as Product Lifecycle Management or PLM. However, the principles of lifecycle management are now being applied in many different industries. It does not matter what form the products or services take—whether a healthcare product or a medical device, automobile, pharmaceutical, or plant—the core, or fundamental concepts of PLM are the same, namely:
- Centralized Repository—Capture all pertinent information related to a product in a centralized location for access and management and leverage it to refresh or create new products.
- Collaboration—Provide a common environment and managed business processes for product development across the organization.
- Product Structure & Definition—Maintain the integrity of the product definition and related information throughout the life of a product and its variants.
- Configuration Management—Manage changes and relationships among product components of a product and its variants.
- Product Distribution—Once a product is developed, the ability to manage the associated content from the centralized repository and dynamically publish product information in any format for delivery to clients and regulatory bodies.
When these PLM concepts are applied, the product development process becomes a competitive advantage, delivering faster time-to-market of new and refreshed products, enabling lower product development costs, and a providing a more flexible environment to respond to market requirements and regulatory mandates. By collaboratively leveraging product information, product lifecycle management enables companies to not only define and manage a portfolio of more innovative products, but to also operate in a more effective manner.
How does an insurer take advantage of PLM? A product is ultimately comprised of a discrete set of components or modules, each with its own features and attributes. By standardizing product information into common structural elements like paragraphs, tables, and graphics, providers are able to re-use or re-purpose product components and elements. These can be premiums, riders, schedules, or terms. With lifecycle management, components can be quickly created or modified and incorporated into an existing product or combined with other components to create a product. The ability to copy, assemble, and modify standard modules illustrates the reusability inherent in this approach.
Central to effective lifecycle management is a product development repository. Within that central repository, all product definitions and associated components are securely maintained. This provides a single source for all product-related information, including components, images, and specifications, that are used to define a specific product variation. Change control processes are used to ensure that all information is accurate and appropriate for use. As these components are centralized in a validated centralized system, all product data that is accessed and reused is up-to-date, accurate, and compliant.
In the health care industry, providing products to meet individual consumers’ requirements means that thousands of product offerings or variants need to be created and maintained. Insurers must be able to quickly assemble the appropriate set of product components in order to meet time-to-market requirements and mandate deadlines. Lifecycle management enables insurers to configure products dynamically based on fulfillment requirements of each customer. This can dramatically reduce the time to develop and refresh product offerings.
Developing innovative and profitable health insurance products is critical to the business, but how insurers do that is just as important. Health plan providers today have to work quickly and deliver more with the same or fewer resources. PLM is not only focused on the product but also the related development processes. Using lifecycle management with a shared repository access control, and workflows enables an insurer to streamline its processes associated with product development. Accountability and collaboration become inherent throughout the entire development cycle.
An additional capability in lifecycle management is portfolio management. This enables health plan providers to create families of products or policies and to review and evaluate the business performance of that portfolio and the individual policies. It also provides a management process for determining when to modify or retire policy products as the needs of clients and the business change.
PLM and its enabling technologies provide health plan providers the ability to enhance their investments and efforts around product introduction. Insurers should take an ongoing interest in implementing a PLM strategy to maintain competitiveness and compliance in this dynamic environment.
