Why Predictive Analytics Isn’t Helping Your WC Claims and How to Use It Better

Turning data into actionable claims management strategies starts with asking the right questions.
By: | November 12, 2018

Predictive analytics can provide powerful insights that enable organizations to find solutions to persistent problems. But the tool is only useful if the person wielding it knows how to use it.

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“The data is only as good as the questions you ask,” said Caryl Russo, Senior Vice President, Corporate Care, RWJBarnabas Health. Russo will be presenting on both pre-loss and post-loss applications of predictive analytics at the upcoming National Workers’ Compensation and Disability Conference, held December 5-7 at the Mandalay Bay Resort and Casino in Las Vegas. Her co-presenter will be Caroline Burhenne, Regional Claims Service Manager, PMA Companies.

Russo said she too often sees risk managers become paralyzed by their data. They simply don’t know what to do with the information, so they keep asking new questions and running new reports, while never actually arriving at an action plan that makes use of that data.

“You need to understand what the problem is that you want to solve, and identify the information you need in order to begin formulating a plan,” Russo said.

Caryl Russo, Senior Vice President, Corporate Care, RWJBarnabas Health

At RWJBarnabas Health, for example, Russo wanted to identify their top loss drivers by severity. Asking a TPA to provide that data without specificity will likely result in a report identifying top drivers by frequency.

“The results depend on what you’re looking for. We wanted to see what claims were costing us the most, so it’s important to consider severity as well as frequency,” she said. The data showed that patient handling injuries were resulting in the costliest claims. That allowed Russo and her team to develop a plan to reduce the incidence of those injuries and avoid claims altogether — the primary pre-loss application of predictive analytics.

“We used that data to justify a financial investment in safe patient handling equipment, and over time we reduced the frequency of those injuries and brought down the cost. Now, our top loss driver is slips, trips and fall, so we can start to build a plan for that,” she said.

“A lot of times workers’ comp can become so immense, it’s difficult to know, what do I focus on first? And how do I rack up a couple of wins so I can demonstrate need for additional resources? Predictive analytics provides you that opportunity to understand what your program looks like, so you can identify where to start.” – Caryl Russo, Senior Vice President, Corporate Care, RWJBarnabas Health

“Analytics gives you a starting point. A lot of times workers’ comp can become so immense, it’s difficult to know, what do I focus on first? And how do I rack up a couple of wins so I can demonstrate need for additional resources? Predictive analytics provides you that opportunity to understand what your program looks like, so you can identify where to start,” Russo said.

In addition to formulating new safety strategies, Russo and Burhenne will explain how organizations can transform data into post-loss claims management techniques. Predictive analytics can identify claims likely to become complicated that require closer attention. Red flags include things like comorbidities, multiple claims, body part injured, and injury morphing.

“We’ll talk through how we approach those red flags through five case studies that demonstrate how the red flag came to our attention, what the escalation process was, what the intervention was, and the outcome,” Russo said. “We’ll show why and how these claims should be managed more closely and perhaps require more resources.”

Though predictive analytics can be a powerful tool, Russo cautioned that it is just that — a tool. One of many the risk manager should have in his or her arsenal.

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“Predictive analytics is not the holy grail. It’s not going be the silver bullet we’ve been looking for to get control of our workers’ comp costs, but it is still hugely valuable,” she said. “We can use it to develop programs meaningful both for our employees’ safety and for the financial health of the organization.”

In addition to providing examples of how to turn data into action, Russo and Bernhenne will elucidate just how much data is available from TPAs and workers’ comp insurers.

“Make sure to take advantage of those resources. They more often than not have the information you need,” Russo said. Catch this session on Thursday, Dec. 6, from 3:00-4:00pm in Islander F-H. &

Katie Dwyer is a freelance editor and writer based out of Philadelphia. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]