Workers’ comp insurers need to invest in new talent and improve the use of technology in managing vendor relationships and best practices, according to Rising Medical’s 2013 workers’ comp benchmarking study.
Denise Algire, principal researcher and author, said the survey was sent via direct invitation to workers’ comp claims executives and also highlighted in social media. It was broken into four main areas: prioritizing core competencies, talent development and retention, impact of technology in data and medical performance management.
There were 258 responses to the survey – half of the responses came from insurance carriers and self insured employers with the remaining responses coming from TPA’s, governmental entities and risk pools.
Three main themes were derived through the survey, she said.
One of the primary findings was that there is a limited investment by insurers in current and future talent.
“We’re an aging industry and we’re having trouble bringing in new talent,” said Algire. “What we found is that there is a significant opportunity that organizations are not investing in talent.”
Another major finding was that there was limited systems integration and technology to drive best practices.
“We looked at how organizations are integrating the current systems that they work with, and how are they using technology to either monitor internal best practices or monitoring and managing best practices with their vendor partners,” Algire explained.
The results revealed that there were very few organizations using data to manage their external partners as well as their internal best practices, she said.
Outsourcing medical management was the third notable theme arising from the survey.
“Medical is really the driving cost behind workers’ comp. Many organizations outsource a lot of those services,” Algire said.
The workers’ comp industry veteran said there was limited use of risk and reward strategies or SLA agreements with vendor partners to manage performance.
According to Algire, the survey responses resulted in five takeaways for those organizations involved in handling workers’ comp claims.
First, organizations need to invest in talent development and alternative recruitment strategies to drive claims effectiveness. They need to use different venues to impact both recruitment and retention of claims professionals.
Second, insurers need to understand and leverage data warehousing capabilities.
“Big data is probably one of the buzziest words out there. But there is an opportunity. In workers’ comp, we tend to be the late adopters when it comes to data. But I think there is a significant opportunity for organizations to leverage the capabilities of big data and data warehousing to manage their systems, because one of the biggest problems with claims organizations is that we have many legacy systems generally. There are multiple legacy systems, as well as whatever your current systems that you’re working with,” Algire said.
She noted that combining data and managing performance from a variety of systems can be challenging.
Third, companies need to consider using predictive analytics and workflow automation.
“I think this is probably one of the most aha moments that we’ve heard from others that have talked about the report, other industry leaders that maybe weren’t even involved in the advisory council, but they were surprised at how many organizations reported that they were not using workflow automation, which has been around for a while and even fewer organizations are using predictive analytics,” said Algire.
An additional takeway is that organizations should use performance strategies with their vendor partners.
“If we think about it, most claims organizations are held accountable by their clients for their performance. But if you’re outsourcing a lot of that to vendor partners, how are you then holding those vendor partners accountable to the same performance measures that you as a claims organization are being held accountable to,” asked Algire.
She said there is an opportunity for organizations to harness those strategies to better partner and manage vendor relationships.
The final takeway is that more organizations need to use qualitative or outcome based performance measures for medical performance management.
“We were surprised at how many organizations really are not using either with their provider partners, medical providers and/or their vendor partners,” Algire said.
Rising’s 2014 follow up survey which closed recently included additional focus on the impact of the Affordable Care Act and on talent development and retention. Results of the survey are anticipated to be released in the latter part of 2014.
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