Look to Your Data for Opportunities to Improve Your Workers’ Compensation Program
With mounds of data at their disposal, workers’ compensation managers and financial executives might find it difficult to know exactly which metrics can help them create programs that both improve financial performance and keep employees safe.
The amount of available data can be so overwhelming that, according to Marsh’s 2019 Excellence in Risk Management survey, only 29% of companies reported using data for strategic planning.
“There’s a huge opportunity curve for organizations to better leverage data for improved outcomes,” said Luke Harrison, senior vice president and central claim consulting practice leader at Marsh.
Digging through all of the different metrics is valuable. It can help companies spot cost drivers early by allowing them to recognize historical trends.
“The best predictor of the future is the past,” Harrison said. “Not understanding your own data and what historically has driven your costs creates gaps in your ability to measure areas of excess leakage or various inflection points during a claim where intervention might be beneficial.”
Data in Action
Using data to understand a company’s past experiences with injuries certainly helped 2017 Teddy Award winner Rochester Regional Health.
They were able to make safety improvements in patient handling — one of the leading causes of injury in the health care industry — because they took the time to understand what “story” their data on safety metrics was telling them, according to Rochester’s senior manager of workers’ compensation Monica Manske.
“Our data confirmed what we already knew about our own organization,” said Manske.
“But with that data, being able to tell the story of how much money and lost work days and possibility of, you know, patient error occurs with how to handle patients. We were able to set the wheels in motion and dramatically reduce our claims reported due to patient handling injuries, and we’ve had up to a 60% reduction in our claims.”
Part of the reason Manske believes their program was so successful is due to their use of internal data, which allowed them to track their progress.
“With the improvement in technology, we really have so much more information available to us to perform a full evaluation of a program. And the data itself can really tell us where we had been over time. So not only benchmark against industry like with OSHA [metrics], but benchmark against yourself,” she said.
“We know what our drivers are over time. We know that cost, lost work days and even the department in shift if necessary. And that provides us a framework for our program development.”
Data Cuts Down Costs
Just as Manske’s company was able to reduce claims and save money by using the data available to them, companies that avoid jumping in and analyzing their data to drive program improvement can face serious financial consequences, too.
In fact, large actuarial adjustments are something that Marsh’s Harrison sees frequently when companies don’t use data and analytics to evaluate and improve their programs.
“As a consultant, I can’t count the number of times I’ve heard from a claims manager that they found out from someone in finance in their company that they recently had a large actuarial adjustment out of nowhere,” Harrison said.
Manske said there are two major reasons why companies struggle to make the best use of their data: The sheer amount of data available and finding the time to analyze it all.
She believes collaboration can help solve these problems.
“I really recommend anybody collaborate with their TPA or churns carrier, because they can really be a great asset in this arena. And really helping you identify what are the best metrics that you should focus on,” she said.
Improvements in data gathering and technology have also made it easier for companies to turn to their data to find actionable solutions in real time.
“If you go back ten years ago we were really looking at Excel loss runs,” Harrison said.
“If you fast forward into 2019, I can say within Marsh we’ve created a new claims platform that provides real time analytic data feed out of your third party administrator or insurer.
“So rather than waiting six months or a year to look at your data for that year in a PowerPoint or in a printed document format, now our clients are able to leverage data on a real time basis,” he said.
At the end of the day, using data to improve workers’ compensation programs is well worth the effort because it provides companies with a way to both help their employees while also saving money and improving company culture.
“The data helps give you a tangible way to make a difference in peoples’ lives. Making things better for the organization and the employee together is a win-win,” Manske said. &
This November, NWCDC will feature two different sessions on using data to improve your workers’ compensation programs. The first is the pre-conference session “The Key Metrics for Understanding Your Workers’ Comp Program” led by Beth Dupre and Luke Harrison both of Marsh. The second session, “Improving Your Culture of Safety Through Analytics & Engagement,” will be led by Monica Manske. Check out the rest of the NWCDC line up here.