Translate Risk Data Into Familiar Language
Sorting through a mountain of data to deliver valuable information to a corporation can be a daunting task for risk managers.
But aligning risk management metrics with the company’s broader strategic vision while tailoring information to meet the specific needs of corporate leadership, operations personnel, and injured employees can inspire positive change throughout the organization, according to risk managers for The Walt Disney Co. and Wal-Mart Stores Inc.
Instead of providing operations managers with workers’ compensation claims measurements that risk managers comprehend -such as case reserves or average cost per claim- think creatively to provide actionable information and performance measurements that operations personnel easily grasp.
Report to operations managers how much more additional product or services their business units must sell or produce annually to offset their claims losses, advised Michele Adams, director claims management & business strategies risk management services in Lake Buena Vista, Fla. for Walt Disney World Resort.
Discussing the “unit cost equivalent,” or the amount of additional sales needed to offset claims costs, will grab managers’ attention, Adams said.
“That is meaningful,” she said. “That is a different way to approach analysis than just [evaluating and reporting] typical, run-of-the-mill loss runs.”
Adams spoke at the recently held Workers’ Compensation Institute’s annual conference in Orlando, Fla. She was joined by David Stills, VP risk management for Wal-Mart and Scott P. Rogers, executive director and executive VP casualty operations at Sedgwick Claims Management Services Inc.
“The audience in particular is one of most important things you should think about when you begin approaching risk management and data analysis,” Adams said.
The scope and scale of Disney operations produce a complex array of data. To mine it for meaningful information, Adams said she continually considers the company’s strategic vision.
Safety is one of Disney’s key cornerstones and part of its culture, for example. So she connects her metrics and messages to safety because people across the organization respond to the concept.
“The audience in particular is one of most important things you should think about when you begin approaching risk management and data analysis.”
— Michele Adams, director, claims management and business strategies risk management services, Walt Disney World Resort
But she does that in language they understand. To do that she continually reminds herself that she works for an entertainment and resort-destination company, not a risk management company, Adams said.
“Ensure you have alignment between your risk management metrics and the company’s objectives,” Stills agreed.
At Wal-Mart that calls for a balancing act of controlling costs while taking care of injured associates.
Common claims practices such as contracting for discount provider networks, reducing charges for bill review services, and negotiating down legal counsel fees are probably not enough, Stills said. So Wal-Mart relies on “advanced analytics.”
“By advanced analytics I am talking about taking it to next level and using the data that you have,” he explained.
Wal-Mart, for example, uses data to understand early on which workers’ comp claims will likely become litigated cases.
It also analyzes its data to determine which case managers and medical providers will have the greatest positive impact on a specific claim. That includes rating doctors based on their outcomes and ability to help associates.
“Number one for us is to take care of our associates,” Stills said “So if we know who the best providers are we want to get our associates to those providers. If we know the cases that are more significant we want to get those cases to our best case managers so the associate can heal, get back to work and get back to their normal lives.”
However, succeeding with data analytics requires employers to take responsibility for understanding their own data and how they can use it to meet their objectives. That cannot be left only to business partners, such as third party administrators or insurers, to manage, he added.
“Your TPA is important in your business, but don’t rely on them completely to hand you a metrics package at the end of the month,” Stills said. “You need to own the data. You need to be proactive.”