Risk Insider: Rachel Fikes

3 Critical Steps Claims Organizations Need to Take Now

By: | June 1, 2018 • 2 min read
Rachel Fikes is Vice President and Program Director of Rising Medical Solutions’ annual Workers’ Compensation Benchmarking Study. Under Rachel’s leadership, the study is the industry’s largest survey of claims leaders and validates how high performing claims organizations differ from the average. She can be reached at [email protected]

In the past five years, I’ve learned a lot from the 1,700-plus claims leaders who’ve participated in our annual Workers’ Compensation Benchmarking Study. Now the study team has distilled five years’ worth of study reports into the top three distinguishing characteristics of successful claims organizations. Adopting these traits is critical for closing the claims performance gap — or organizations risk falling further behind.

Study results indicate 24 percent of claims payers are “high performers.”
How do the other 76 percent catch up?

  1. Best performers focus more on what’s most important.

Study participants define an employee’s return to the same or better pre-injury functional capabilities as the number one classification of a “good claims outcome.”  They also consistently rank medical management, disability/return-to-work management, and compensability investigations as the top three core competencies most vital to successful claim outcomes.

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But high performing claims organizations are five times more likely to measure their performance in core competencies, six times more likely to measure claim outcomes based on evidence-based treatment guidelines, and 10 times more likely to measure claim outcomes based on evidence-based disability duration guidelines.

The study graded “performance” by ranking respondents by their claims closure ratio – a common industry benchmark of operational effectiveness.

  1. Best performers invest more in people.

High performing claims organizations better equip and better capitalize on their most important asset: their claims talent. Here’s some proof. Top performers:

  • Arm adjusters with decision support tools known to improve claims outcomes four to five times more often
  • Invest in career-long training of their staff at seven times the rate of lower performers
  • Adopt advocacy-based claims models four times more than lower performers

The best claims organizations use an outcome strategy (versus a process improvement strategy) for success. They measure outcomes, equip their claims talent to better influence outcomes, and allocate more financial resources to outcome management tools.

  1. Best performers invest more in advanced tools and techniques.

When it comes to technology, the most successful claims organizations are far more likely engage in numerous activities. Here are a few:

  • About half of all organizations use a data warehouse today, and usage among high performers is five times the rate of lower performers.
  • Forty-one percent of organizations leverage various outcome-based systems/data, and top performers do so six to 10 times more.
  • Only a third of claims operations use predictive analytics, yet high performers use it eight times more.

How to Close the Performance Gap

With 24 percent of industry payers achieving top performer status, what steps can the remaining 76 percent take to advance their operations?

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Taking stock of the above three differentiators, the commonality is clear. The best claims organizations use an outcome strategy (versus a process improvement strategy) for success. They measure outcomes, equip their claims talent to better influence outcomes, and allocate more financial resources to outcome management tools.

We know employers are predominantly interested in outcomes. Injured workers are only interested in outcomes – theirs.  Millennials entering the claims field today want an environment that helps injured employees with health, functional, and work outcomes. For those claims organizations that choose to close the performance gap, the data and path to success is clear.

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]