Risk Insider: Jeff Driver

Hooba-Dooba! Digital Health Care Reality: Part II

By: | August 15, 2017 • 4 min read
Jeff Driver is the Chief Risk Officer- Stanford University Medical Center and the Chief Executive Officer - The Risk Authority, LLC. He can be reached at [email protected]

As discussed in Part I, digital health care use is on the rise, and while in many ways rewarding, is not without risk. At TRA Stanford, we identified cyber security, misdiagnosis, and informed consent as three pressing issues risk managers will face.

Cyber security: As medical devices are increasingly connected to the internet, hospital systems, and other medical devices, there is a higher risk of hackers collecting sensitive information, or worse, interrupting “life critical systems” that protect human life.

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In 2015, the FDA and Department of Homeland Security provided a warning that medical devices could be tampered with by hackers.  Devices, such as IV pumps, could be accessed remotely through a hospital’s network which would allow an unauthorized person to control the device and change the dosage of medication delivered to the patient.  The vulnerability is the same for digital health apps and wearables.

A variety of clinical risks may arise through the use of digital health apps.  One such concern is informed consent and the question regarding what consent means when care is supplemented through the use of digital health apps.

The risk mitigation strategies between medical devices and the devices used to transmit or receive data through digital health apps and wearables are very similar. Due diligence efforts should ensure that digital health apps are provided through HIPPA compliant platforms and appropriate security measures are in place. Some measures include, for example, a technology backbone and infrastructure to support the function, remote device integration with real-time data sharing, reporting and cross data correlation; interoperability, data analytics and big data management, and privacy and security. A thorough risk analysis of all potential vulnerabilities is indispensable.

Misdiagnosis: While rife with potential for preventative health care, many apps have been developed without being validated for diagnostic accuracy or utility using established research methods. The use of digital health apps and any technology requires an overhaul of existing processes and procedures, as well as a process to evaluate and revise workflows. The following due diligence may help mitigate operational risk related to validity and ethicality:

  1. Research whether the app does what it says its going to do. Developers should be able to provide information about testing and provide disclaimers that their apps are not medical devices and are not approved by the FDA, when applicable.
  2. Prepare the patient, practitioners and organization to utilize the digital health app.
  3. Carry out a mock trial run of a patient encounter utilizing the technology before it is actually incorporated into patient care.

Informed consent: A variety of clinical risks may arise through the use of digital health apps.  One such concern is informed consent and the question regarding what consent means when care is supplemented through the use of digital health apps.  For example, patients may be given a code to download a specific app.  When the patient downloads the app, does that mean the patient consented to the use of the app?  Of course the clinician should complete the risk and benefit conversation with the patient, but when is consent complete?

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Clinicians should follow existing guidelines for informed consent and revise the process as necessary to conform with the unique nature of incorporating technology into patient care.  There are multiple criteria for informed consent that are applicable to this process, such as:

  1. Evaluating and documenting the patient’s competence to understand and to decide.
  2. Voluntary decision-making.  This is important because the patient should not be coerced into using this technology if he/she does not want to.
  3. Disclosure of material information is a key component of the consent process. It should be clear to the patient how the information gathered will be used in their treatment plan.
  4. The patient should expressly, in writing, authorize the plan.  The plan should include when and how the patient should access the digital health app, and a process should be in place to follow-up with the patient to determine whether the patient has accessed the app at the designated time and whether the patient has been able to utilize the app as intended.

Digital health apps will quickly become a regularly used tool to complement existing patient care practices.  There are many upsides to the risk, including more expeditious care through transmitting information in real-time, greater patient satisfaction, greater practitioner satisfaction, chronic disease management, and opportunity for competitive advantage. There are potential risks, too, but these risks can be effectively managed when proactively identified.

More from Risk & Insurance

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Lead Story

Improving the Claims Experience

Insureds and carriers agree that more communication can address common claims complaints.
By: | January 10, 2018 • 7 min read

Carriers today often argue that buying their insurance product is about much more than financial indemnity and peace of mind.

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Many insurers include a variety of risk management services and resources in their packages to position themselves as true risk partners who help clients build resiliency and prevent losses in the first place.

That’s all well and good. No company wants to experience a loss, after all. But even with the added value of all those services, the core purpose of insurance is to reimburse loss, and policyholders pay premiums because they expect delivery on that promise.

At the end of the day, nothing else matters if your insurer can’t or won’t pay your claim, and the quality of the claims experience is ultimately the barometer by which insureds will judge their insurer.

Why, then, is the process not smoother? Insureds want more transparency and faster claims payment, but claims examiners are often overburdened and disconnected from the original policy. Where does the disconnect come from, and how can it be bridged?

Both sides of the insurer-insured equation may be responsible.

Susan Hiteshew, senior manager of global insurance and risk management, Under Armor Inc.

“One of the difficult things in our industry is that oftentimes insureds don’t call their insurer until they have a claim,” said Susan Hiteshew, senior manager of global insurance and risk management for Under Armour Inc.

“It’s important to leverage all of the other value that insurers offer through mid-term touchpoints and open communication. This can help build the insurer-insured partnership so that when a claim materializes, the relationships are already established and the claim can be resolved quickly and fairly.”

“My experience has been that claims executives are often in the background until there is an issue that needs addressing with the policyholder,” said Dan Holden, manager of corporate risk and insurance for Daimler Trucks North America.

“This is unfortunate because the claims department essentially writes the checks and they should certainly be involved in the day to day operations of the policyholders in designing polices that mitigate claims.

“By being in the shadows they often miss the opportunity to strengthen the relationship with policyholders.”

Communication Breakdown

Communication barriers may stem from internal separation between claims and underwriting teams. Prior to signing a contract and throughout a policy cycle, underwriters are often in contact with insureds to keep tabs on any changes in their risk profile and to help connect clients with risk engineering resources. Claims professionals are often left out of the loop, as if they have no proactive role to play in the insured-insurer relationship.

“Claims operates on their side of the house, ready to jump in, assist and manage when the loss occurs, and underwriting operates in their silo assessing the risk story,” Hiteshew said.
“Claims and underwriting need to be in lock-step to collectively provide maximum value to insureds, whether or not losses occur.”

Both insureds and claims professionals agree that most disputes could be solved faster or avoided completely if claims decision-makers interacted with policyholders early and often — not just when a loss occurs.

“Claims and underwriting need to be in lock-step to collectively provide maximum value to insureds, whether or not losses occur.” – Susan Hiteshew, senior manager of global insurance and risk management for Under Armour Inc.

“Communication is critically important and in my opinion, should take place prior to binding business and well before a claim comes in the door,” said David Crowe, senior vice president, claims, Berkshire Hathaway Specialty Insurance.

“In my experience, the vast majority of disputes boil down to lack of communication and most disputes ultimately are resolved when the claim decision-maker gets involved directly.”

Talent and Resource Shortage

Another contributing factor to fractured communication could be claims adjuster workload and turnover. Claims adjusting is stressful work to begin with.

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Adjusters normally deal with a high volume of cases, and each case can be emotionally draining. The customer on the other side is, after all, dealing with a loss and struggling to return to business as usual. At some TPAs, adjuster turnover can exceed 25 percent.

“This is a difficult time for claims organizations to find talent who want to be in this business long-term, and claims organizations need to invest in their employees if they’re going to have any success in retaining them,” said Patrick Walsh, executive vice president of York Risk Services Group.

The claims field — like the insurance industry as a whole — is also strained by a talent crunch. There may not be enough qualified candidates to take the place of examiners looking to retire in the next ten years.

“One of the biggest challenges facing the claims industry is a growing shortage of talent,” said Scott Rogers, president, National Accounts, Sedgwick. “This shortage is due to a combination of the number of claims professionals expected to retire in the coming years and an underdeveloped pipeline of talent in our marketplace.

“The lack of investment in ensuring a positive work environment, training, and technology for claims professionals is finally catching up to the industry.”

The pool of adjusters gets stretched even thinner in the aftermath of catastrophes — especially when a string of catastrophes occurs, as they did in the U.S in the third quarter of 2017.

“From an industry perspective, Harvey, Irma and Maria reminded us of the limitations on resources available when multiple catastrophes occur in close succession,” said Crowe.

“From independent and/or CAT adjusters to building consultants, restoration companies and contractors, resources became thin once Irma made landfall.”

Is Tech the Solution?

This is where Insurtech may help things. Automation of some processes could free up time for claims professionals, resulting in faster deployment of adjusters where they’re needed most and, ultimately, speedier claims payment.

“There is some really exciting work being done with artificial intelligence and blockchain technologies that could yield a meaningful ROI to both insureds and insurers,” Hiteshew said.

“The claim set-up process and coverage validation on some claims could be automated, which could allow adjusters to focus their work on more complex losses, expedite claim resolution and payment as well.”

Dan Holden, manager, Corporate Risk & Insurance, Daimler Trucks North America

Predictive modeling and analytics can also help claims examiners prioritize tasks and maximize productivity by flagging high-risk claims.

“We use our data to identify claims with the possibility of exceeding a specified high dollar amount in total incurred costs,” Rogers said. “If the model predicts that a claim will become a large loss, the claim is redirected to our complex claims unit. This allows us to focus appropriate resources that impact key areas like return to work.”

“York has implemented a number of models that are focused on helping the claims professional take action when it’s really required and that will have a positive impact on the claim experience,” Walsh said.

“We’ve implemented centers of excellence where our experts provide additional support and direction so claim professionals aren’t getting deluged with a bunch of predictive model alerts that they don’t understand.”

“Technology can certainly expedite the claims process, but that could also lead to even more cases being heaped on examiners.” — Dan Holden, manager, Corporate Risk & Insurance, Daimler Trucks North America

Many technology platforms focused on claims management include client portals meant to improve the customer experience by facilitating claim submission and communication with examiners.

“With convenient, easy-to-use applications, claimants can send important documents and photos to their claims professionals, thereby accelerating the claims process. They can designate their communication preferences, whether it’s email, text message, etc.,” Sedgwick’s Rogers said. “Additionally, rules can be established that direct workflow and send real time notifications when triggered by specific claim events.”

However, many in the industry don’t expect technology to revolutionize claims management any time soon, and are quick to point out its downsides. Those include even less personal interaction and deteriorating customer service.

While they acknowledge that Insurtech has the potential to simplify and speed up the claims workflow, they emphasize that insurance is a “people business” and the key to improving the claims process lies in better, more proactive communication and strengthening of the insurer-insured relationship.

Additionally, automation is often a double-edged sword in terms of making work easier for the claims examiner.

“Technology can certainly expedite the claims process, but that could also lead to even more cases being heaped on examiners,” Holden said.

“So while the intent is to make things more streamlined for claims staff, the byproduct is that management assumes that examiners can now handle more files. If management carries that assumption too far, you risk diminishing returns and examiner burnout.”

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By further taking real people out of the equation and reducing personal interaction, Holden says technology also contributes to deteriorating customer service.

“When I started more than 30 years ago as a claims examiner, I asked a few of the seasoned examiners what they felt had changed since they began their own careers 30 year earlier. Their answer was unanimous: a decline in customer service,” Holden said.

“It fell to the wayside to be replaced by faster, more impersonal methodologies.”

Insurtech may improve customer satisfaction for simpler claims, allowing policyholders to upload images with the click of a button, automating claim valuation and fast-tracking payment. But for complex claims, where the value of an insurance policy really comes into play, tech may do more harm than good.

“Technology is an important tool and allows for more timely payment and processing of claims, but it is not THE answer,” BHSI’s Crowe said. “Behind all of the technology is people.” &

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]