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: