These Workers’ Comp Experts Agree: The Industry Must Prepare for Huge Change After the Pandemic
A lot has changed for workers’ compensation professionals over the last year. COVID-19 sent many of them out of their offices and into work-from-home arrangements for the first time. New regulations and complex claims stemming from the novel coronavirus have given claims adjusters a lot to manage.
Still, all of these changes have made some of the long-time goals of frontline claims staff a reality. Rising Medical’s 2019 Workers’ Compensation Benchmarking Survey found that remote work and other benefits were some of the keys to keeping claims professionals happy in their jobs.
It also found that putting injured workers first is what defines a good claims outcome, something that adjusters have had to put to the test during the COVID-19 pandemic.
With all these changes, some might ask what is the current state of the workers’ compensation industry and how has it been affected by COVID-19?
Recently, Rising Medical announced the direction for their 2020 Workers’ Compensation Benchmarking Study. For 2020, the study will focus on how the industry responded to the perspectives from frontline claims professionals and the COVID-19 crisis.
They’ll survey management, directors and executive-level workers’ compensation leaders who oversee claims operations. The study will assess how COVID-19 is affecting claims management practices and identify strategies claims organizations are using to support employers, injured workers and staff during these times.
Ahead of the 2020 Workers’ Compensation Benchmarking Study, Risk & Insurance® spoke with Rachel Fikes, chief experience officer and director of the Workers’ Compensation Benchmarking Study for Rising Medical and two members of the advisory councils for the 2019 and 2020 studies: Tom Weise, vice president of claims for the MEMIC Group and Dr. Adam Seidner, MD, MPH, chief medical officer at The Hartford.
They looked back at highlights from the 2019 study, discussed how COVID-19 has affected the industry and shared what they think the future holds for workers’ comp.
R&I: What are some of the most interesting findings from the most recent Workers’ Compensation Benchmarking Study?
Rachel Fikes (RF): There is a tendency when our studies come out for readers and the media to focus on the “negative” – i.e. what our industry is doing poorly. While there are improvements and advancements that any industry can make, I am largely encouraged by many of the 2019 study findings. Here are three:
1) Frontline professionals are putting the injured worker first, they value employee-centric outcomes, and they are supporting a greater industry mission.
As alarming as it may be that 72 percent of frontline staff do not know what an “advocacy-based” claims model is, their priorities demonstrate they are embracing the approach. Moving past industry vernacular and digging deeper into the 2019 results, you find they are “walking the walk.”
Frontline staff rank “employee return-to-work within anticipated benchmarks” as the most important claims outcome, followed closely by “employee return to the same or better pre-injury functional capabilities.” They also rank “return-to-work/patient functional outcomes” as the most important measure of medical provider quality.
These findings are similar to previous claims executive survey results and validate that our industry’s mission to restore workers to gainful employment and health is not window dressing or marketing fodder, it is believed at all levels of the claim ranks.
2) Frontline staff and claims leaders are focusing on the same key competencies.
Frontline claims professionals rank compensability investigations, disability/return-to-work (RTW) management, and medical management as the top three core competencies most critical to positive claim outcomes.
In past surveys, claims leaders also selected these three capabilities as most important. With so many demands and competing priorities in claims management, such operational alignment bodes well for the industry and claims performance.
3) The talent crisis is compelling us to do things that we need to do anyway.
To remain viable, our industry must attract and retain a new generation of claims talent who are ambitious, technology-friendly, and focused on achieving a sense of higher purpose in their work.
Synchronously, past Workers’ Compensation Benchmarking Study data has shown that higher-performing claims organizations are more progressive, use technology and data, and have adopted advocacy-based claims models to a much greater extent than lower-performing claims organizations.
To advance as an industry, we’ve got the opportunity to leverage a “perfect match” in marrying young talent with strategies that are proven to drive better injured worker outcomes — we just have to tap into, develop and deploy this generation’s potential effectively.
Tom Wiese (TW): The interesting findings are probably a few key things. First, and this is well known, that we have a critical staff shortage within the industry and as a result of that we have challenges ahead with effectively staffing our organizations for the present and future.
Associated with that, there was a section of the study that touched on training and whether adequate training programs are in place. The responses were very similar between leaders surveyed in previous years and the frontline users we surveyed in 2019 as far as whether or not the training programs were in place, what types of programs were in place and how available they were.
However, two interesting facts stood out to me in the study. One was that over the past few years, the amount of available training has actually gone down a bit, which is surprising considering the fact that we’re having staffing challenges in the industry. So that was an interesting finding that came out of the study.
Additionally, what was very interesting to me was that at the time we asked leadership and frontline staff whether or not the training provided adequately prepared claims handlers to manage claims. Leadership had a much greater belief that it did than frontline handlers did.
Another area that I’ll touch on as an interesting outcome of the study. In past studies, leadership and frontline claims handlers were very aligned on what the top four or five priorities were and the top three things were the same for each of them. So it was good to see that consistency between leadership and our frontline handlers related to their knowledge and understanding of what’s critical in claims management.
Another very interesting thing from the study was the discussion around the injured-worker advocacy claims management model. That has been on the forefront of leadership discussions in the industry as a trend for the last three to four years. But what was clearly revealed is that while a strong portion of leaders believe they understand the concept of injured worker advocacy, the majority of frontline claims handlers have no concept of what it is.
Adam Seidner (AS): I think I would start with what I see is probably one of the more important ones: the utilization of an advocacy-based claims model.
In 2017, we surveyed leaders about an advocacy-based claims model and only about 50% knew about it. Obviously the 2019 Frontline Claims Professionals survey was done and only about 28% of the frontline really knew about an advocacy-based claims model.
I think that’s important because there are real opportunities in the model for the frontline workers. The three main areas are, one, that they are able to engage at a greater level with the injured employee. The second would be that they change from being an adjuster to an advocate, which I think is important to keep in mind.
And then third they also have an opportunity to really improve their organization’s reputation in the market because of changing their areas of focus to an engagement and advocacy model.
R&I: What motivates frontline workers’ compensation professionals? How do you think their priorities have changed due to COVID-19?
RF: The data is clear, from an employee benefits perspective, frontline professionals collectively value flexible work arrangements, such as working from home or a four-day workweek, more than they value monetary rewards, such as bonuses or profit sharing.
Frontline professionals are also motivated by growth opportunities. While 34% of respondents ranked “salary/benefits” as the number one reason they’d leave their current job – this is practically a given across all industries and job types. What’s more compelling is the second highest ranking, with 21% of frontline professionals citing “growth opportunities” as their number one reason for a departure, yet survey respondents report that only 40% of claims payers offer a formal career path with growth opportunities.
Finally, among the “next-gen” younger claims professionals, study results show they are more motivated than senior claims professionals in key areas. They are more inclined to want enhanced tools to communicate with injured workers (i.e. mobile apps, text messaging options), they cite a greater need for job mastery through additional jurisdictional and medical management training, and they value organizational metrics as more meaningful to claim outcomes than veteran staff.
As for COVID-19, I don’t believe it is changing frontline claims professionals’ priorities as much as it is intensifying them. For instance, whereas our industry has historically lagged in terms of flexible work arrangements, now payers have a predominantly remote frontline team — the majority of whom will likely prefer it to stay that way.
Additionally, the need for more jurisdictional and medical management training is underscored as states pass varying COVID-19 presumption laws and many frontline professionals are finding themselves in highly unfamiliar territory as they manage communicable disease claims for the first time.
TW: What the study showed when it came out, which was before COVID-19, is that what clearly motivates frontline handlers are both those non-standardized, or typical financial rewards. So not necessarily base-salary, not necessarily tuition reimbursement programs, and not so much your standard benefit package.
What motivated them was additional financial rewards through bonus programs, incentives, etc., and then also training and educational opportunities. And then also the soft benefits, I’ll call them, of work flexibility — both from a time and place perspective.
Now, how has that changed during COVID-19? I don’t know that it has changed. It’d be interesting to do a study and see if it’s statistically changed.
I think what clearly has changed is, since most employers have made significant strides in implementing work-from-home policies during the COVID-19 pandemic, there’s a much better understanding of individual workers’ capabilities for themselves when working from home and a much greater understanding for leaders of the capability of their staff when working from home.
So my belief is, continuing through COVID-19 and coming out of COVID-19, there will be a much stronger emphasis on that workplace flexibility.
AS: I think the top three motivations are that their job is meaningful, that they have growth opportunities and, obviously, their salary and benefits. Those are the three big areas that motivate the frontline workers’ compensation professionals.
Going forward because of COVID-19, I don’t see real changes in what’s motivating them. I think it’s still going to be meaningful jobs, growth opportunities and salary and benefits. What I do think is going to happen is two things. One is they’re going to have to consider the social determinants of health impact on a claim’s outcomes.
The second is just generally stress management for the frontline professionals because you realize a lot of them may be working remotely from home. They’ll have family stressors, as well as the work stressors. So that work life balance becomes that much more important in the COVID-19 world.
R&I: The report notes that the talent crisis is one of the top threats to workers’ compensation. What is the scope of this crisis and how can the study’s findings help companies address the talent gap in the industry?
RF: Because the industry has been talking about the impending talent crisis for years, I think executives have become somewhat desensitized to its magnitude, as demonstrated by the annual study survey responses which haven’t shown the advancement in talent recruitment and retention that’s needed. Now, COVID-19 is both a distractor and disruptor of the issue. Pre-COVID, predictions indicated the insurance industry would need to fill 400,000 positions in 2020. With the pandemic expected to create a major economic hit to the industry, through decreased premiums and increased disability durations, as well as current and future industry layoffs, it’s unclear what the staffing shortfall may be.
That said, the peak of the talent crisis is an eventuality that will come to pass as Boomers retire. The study can help claims organizations by disseminating what frontline staff value, as we did in 2019, and where recruitment and retention advancement opportunities exist, as we’ve done in all our studies since 2013.
For organizations that are or will be hiring, a COVID-19 silver lining is the flood of talent on the market. And, I’d encourage us to think outside the box to places like the restaurant service industry. For instance, out-of-work bartenders are some of the best public agency COVID-19 tracers because they’re expert communicators and service professionals. Perhaps we need look no further than our friendly, local bartender or barista to fill that open position?
TW: The scope is significant. I think the industry as a whole is facing significant challenges in bringing on board new staff. If you look at the study you can see statistically that a great portion of respondents, of frontline workers, have 20 or more years of experience in the industry. There is a significant volume of staff that are approaching retirement which will open up a significant number of positions.
In addition to that, the incoming resource channel has declined over the last few years for a variety of reasons. There’s much more of a significant interest for young adults, whether college educated or not, in pursuing other lines of career opportunities, whether it be in other areas of the financial industry, medical industry or areas of technology. I think interest in insurance, while it was low in the past, has declined even more significantly.
So, you don’t have a lot of interested members coming into the hiring pool. As a result, combined with what was a low unemployment rate before COVID-19, there just weren’t a lot of resources out there. There were a lot of challenges to getting potential candidates in front of hiring managers and finding the right person.
What does that study reveal that can help? Well I think it reveals a few key things. One, we have to change how we approach managing and incentivizing our employee base. And again, I’m not only speaking of financial incentives, I’m speaking anywhere from the work time and workplace flexibility aspect of opportunities, obviously the financial incentives, and providing educational and training opportunities, not just initially but ongoing.
AS: There’s a couple of different things. I’ll start with basically realizing that about 25% of claim professionals are in a retirement age and may retire in the next two or three years. So, one fourth of the workforce will be in a position to retire. That obviously requires us to improve either efficiency or find the talent.
There’s a number of different ways to get the talent, and The Hartford and other companies have been involved in different ways. One is recruiting, making our job awareness visible at the high school and college levels, as well as providing opportunities for internships.
Having our folks go out and recruit or talk to people as they’re coming into the job market and also, again, giving them opportunities to kind of test and learn what insurance is all about is helpful because I don’t think a lot of people recognize just how robust the organizations are.
R&I: How can workers’ compensation professionals use the study’s findings to improve claims performance and claims outcomes?
RF: It’s not so much a question of how, as which. All our studies include practical recommendations and strategies for performance advancement. Considering that all organizations have finite resources, it becomes a question of which of the many recommendations/strategies does the organization want to prioritize for that year? Using the study in “bite-size” chunks is much more feasible, otherwise, it becomes overwhelming and implausible for even the most resource-abundant organizations.
TW: I think they can use the study to identify areas that the study identifies as needing improvement. A few of those are: a better understanding of an injured worker claims advocacy model, a better understanding of the psycho-social behavioral impacts on workers’ compensation claims and how to effectively manage them, and a better understanding of medical practice principles. This could be as simple as learning how to read and interpret medical reports, medical terminology, diagnostic tests and standardized course of treatment.
AS: I believe better use of the metrics and data will help because some of the things that were pointed out in this study were the caseloads that are out there. So, being able to more efficiently manage claims and handle claims.
The other part is that the data metrics help us helps us identify those claims that are going to need the additional resources and expertise of those claim professionals on the frontline and take away some of the compliance and administrative tasks that they are involved with.
Maybe then the industry can move that to a new skill set so that we can really embrace the claims advocacy model, increase engagement and the meaningful work. So that’s one of the areas that we really need.
R&I: What trends do you expect to see in next year’s study?
RF: As you would expect, I think much of the 2020 claims leader survey data will reflect the impact of COVID-19 on their operations. This impact will be multi-faceted and could range from – to name a few – a delay in prior strategic initiatives, the reallocation of resources, escalating caseloads among less staff, and focus on remote workforce management.
TW: If COVID-19 wasn’t in the forefront right now that would be a much easier question to answer because things would have been moving along and I think we would see a great implementation of training, greater and increased utilization of technological and analytical tools, and more flexibility regarding the work environment. I think we would have seen those areas evolve pretty significantly.
With COVID-19, I think that’s probably put a temporary halt. Increased focus on data analytics, increased focus on technological development, increased focus on training programs, increased focus on the injured worker advocacy model, all those types of things I think are on the back-burner right now.
AS: I think what we’re going to see is an enhancement in training and coaching so that claim professionals will have mentors, and there’ll be all sorts of ways to train them.
Once we’ve got COVID-19 under control, we will be back in the classroom, but right now a lot of it will be virtual. There’ll be things that are online that claim professionals can go and access when they need it.
We’ll have opportunities for claim professionals to assess all the stress identifiers that are impacting the injured worker, who may be thinking catastrophically. They think this is bad. They’ve never had a claim before and they are really worried that they’re not going to be able to get better and get back to work, or they’re fearful that if they go back to work, they’re going to re-injure their back or whatever body part was affected.
So really being able to identify that and engage the worker and get them the skills so that they feel comfortable.
We have a whole program called iRecover that has health coaching for the injured workers. It’s all voluntary and it can help them with some of these skills, so that they are able to navigate the medical treatments as well as the workers’ comp system and do it with a lot less anxiety. That’s been helpful too. &