The Role of Technology in Claims Management
Chase, Larry, Risk Management
Risk managers have been pointing and clicking for years, but are only now beginning to get an inkling of just how revolutionary the new technologies will be. In the workers' compensation arena, cutting-edge technology has advanced to a point where it can support equally progressive new attitudes toward dealing with injured employees, producing a synergy that will lower costs and increase productivity.
However, sophisticated tools demand sophisticated ways of thinking. We don't all have to become computer experts, but we do have to learn how to get the most out of the new systems. Fortunately, this doesn't have to be as difficult as it may sound.
A New Approach
As you've probably noticed, near-instant access to information and new techniques for analyzing data have already changed the way we view claims management. Risk managers are also beginning to see workers' comp in ways that reflect changing attitudes of employers toward such "soft" assets as employee satisfaction. In the past, many employers had what has proved to be a shortsighted view of workers' comp. They tried to squeeze every dollar they could out of the cost side of the equation, which all too often meant adopting a needlessly adversarial attitude toward their workers. At the same time, they ignored the larger issues, especially the link between workers' health and the company's broader objectives. Today, however, companies are "running mountains of data through elaborate computer models to measure the links between employee satisfaction, customer satisfaction and revenue," The Wall Street Journal reported in July. In other words, employers are learning what forward-looking risk managers already knew: The happier and healthier workers are, the more productive they'll be. That insight alone has changed, for the better, the way we direct our energies when someone is injured on the job.
Products now exist that enable employers to better implement and manage programs-such as early intervention and aggressive return-to-work-that will boost productivity. Claims managers are realizing that they save their companies more money by working closely with employees to maintain a stable, healthy workforce.
Boeing, the Seattle-based aerospace powerhouse, is a proponent and beneficiary of this new approach. "New software applications help Boeing know exactly what their workers' comp costs are doing to their cost of productivity, which is the building of airplanes," says Bill Harriman, vice president, senior consultant, J&H Marsh & McLennan, a member of a group that provides Boeing with claims consulting services. "Boeing's claims people will be able to know how much that days lost are costing them and what they can do about it. There's a greater emphasis these days on the overall cost of claims and the impact it has on the cost of the product." Employers are increasingly aware of the need to institute programs that reflect the new thinking about workers' comp. "We are trying to improve our processes for things like early reporting and aggressive return-to-work," says Richard M. Smoski, director of insurance services for Boeing. "But to design programs that make sense for us, we need good, reliable data. The new technology makes that possible. It allows us to see where we are today and what we need to improve in the future."
This is a key point. Policies based on the most advanced thinking in claims management could prove of marginal value at best if an employer or third party administrator lacks the technological wherewithal to support them. Good intentions alone will only get a company so far.
Making It Work
Unfortunately, most workers' comp programs do not have the technological support they need. And some risk managers who are fortunate enough to have the latest equipment still need help figuring out how to get the most value from it. The following set of questions will help risk managers arrive at a clear view of the possibilities new technology presents, both for workers' comp and other applications:
1. What are we trying to accomplish with this technology? For a tool to be valuable, it must support a company's overall business goals, both internal and external. You need to understand how it will help you do your job and help your clients, customers and strategic partners meet their goals. What outcomes are you seeking? How will you define success?
Remember that the point is not to have mind-boggling gadgets to dazzle your friends but useful equipment that helps you achieve real-world business goals. Try to determine how you can use the technology and the data it produces to help everyone involved work more efficiently and profitably.
2. What tasks will the technology perform? You need to identify as specifically as possible what information is to be created, collected, controlled and communicated. You should also seek to understand as many contingencies as you can, which means developing a realistic sense of possible weaknesses in your program and how they might be addressed when glitches occur.
3. Who will use this technology? Determine who will have access to the system and how it will affect what they do. This requires that you think less about who has performed what functions in the past, and focus on what the future distribution of tasks will look like, How can the technology you choose help the doctors in your workers' comp system access application forms more quickly? What incentives should you consider? If you expect the doctors you work with to deliver information more rapidly, you should help them by easing some of their administrative burdens. Since you want the system to work well for everyone involved, consider appropriate quid pro quos. The risk manager of tomorrow will need to give as much attention to designing his or her system as companies of yesterday did to denying claims.
If your organization is like many others, integrating functions will be challenging. Most companies have entered the computer age in fits and starts, one department-and sometimes one workstation-at a time. That means that over the last 15 to 20 years you have probably amassed an unwieldy array of stand-alone components, many of which cannot even communicate with each other, much less with strategic partners like medical providers. Such arsenals of outdated machinery are costly to maintain and become costlier by the day as competitors surge ahead with better systems. Clearly, these islands of technology must be replaced; it is probably too late to link them. No department within a competitive business can afford to be isolated.
Much of the software and hardware that supports existing workers' comp programs was also developed in the days of a more adversarial approach to claims and is therefore doubly obsolete. New, fully integrated programs need to support approaches that treat workers as valued customers, whose health and happiness contribute to a more productive workplace. The technology must serve their interestswhich means ensuring that employees receive whatever care they need to get back to workjust as it serves those of their employers and medical providers.
Cutting-edge technologies will not only allow communication among all parties, they will also lend themselves to continuous, almost instantaneous adjustment. As you and your associates use them, you will discover new capabilities and make refinements based on those discoveries. The systems tend to be iterative, meaning that applications continually change, complementing each other, evolving over time and helping everyone work more efficiently.
Efficiency, after all, is the goal. "To succeed in today's world you need timely information," says Mr. Harriman. "In the old days, you were at the mercy of this hugely cumbersome process that involved an awful lot of time waiting for written reports. Now, with the right technology and people that know how to use it, you are much better able to act immediately to intervene early and get people back to work with a minimum of delay. You are also able to spot-check problems and fix them."
Working Both Ways
The new technology will have a powerful effect on the working relationship between risk managers, their service providers and strategic partners. For example, it will enable third party administrators to specify for their clients how long it takes to assess a claim, and provide that information more quickly than ever. They will be able to report real outcomes-not only the number of hours that pass before they make contact with an employee who has been injured, for example, but also the effect that their way of handling claims has on the overall cost of risk. To put it simply, third party administrators that use technology wisely will be able to show their clients exactly how and where they have added value. This in turn will enable them to offer increasingly solid performance guarantees and still better incentivebased relationships. All of which adds up to better results for risk managers.
In the near future, employers will have access to ever more advanced systems for gauging the financial impact of their workers' comp system and finding ways to improve it for both themselves and their employees. Whether the demands of risk managers are driving innovation, or innovation is opening up new approaches for risk managers, we have reached a point where science and insight can make a significant change for the better. By knowing how and where they want to apply new technology, risk managers can take full advantage of the possibilities.…
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: The Role of Technology in Claims Management. Contributors: Chase, Larry - Author. Magazine title: Risk Management. Volume: 45. Issue: 10 Publication date: October 1998. Page number: 20+. © 1999 Risk Management Society Publishing, Inc. Provided by ProQuest LLC. All Rights Reserved.
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