Efficiency

The economy (we can't get away from it) is forcing us to consider all areas for efficiencies. So, allow me to pinpoint what I feel is an obvious area for improvement.

Commercial policyholder (customer/policyholder) has an accident or on the job injury. Event is reported by the employee on, say, Wednesday at Noon. Event is reported to insurance carrier or TPA possibly the next day and from there we typically see that the response from the assigned adjuster is another day or two.

Recently a review of a claim for a customer showed that there were ten (10) Note entries in the claim system within a five day period once the claim was received; however, only one (1) of the entries was not system generated and it was a brief note by the supervisor.

Point here is that we must gain efficiencies in reporting and responding. The company, the policholder is in a position to respond immediately to any event, regardless of the first impression of severity, as opposed to waiting for the insurance carrier or TPA to respond.

Psychological Warfare?

Ever wonder why change is not more of a constant? Consider the auto industry. Easy now to ask why they haven't developed fuel alternatives in light of our current prices for gas but I truly wonder; especially our big 3, could they not have anticipated the spike in fuel? Could they shrink the development time or getting new models to market?

The insurance industry may have no rival when it comes to staid processes. In particular, the way claims are adjudicated. A good friend likes to say that claims process has not changed since the advent of the pc! I can't argue with that logic.

Part of what drives us (no pun intended) is the passive manner in which commercial auto cases are handled. Minor impact (see photo) results in claim for injuries some weeks or months after the accident. Adjuster receives letter from plaintiff attorney and acknowledges then...we wait. Adjuster calls the attorney's office for a medical update and when we are given no new information we diary the file for 30 days! And this continues for months while the claimant, with the preexisting condition-has found an orthopedic surgeon who "slaps" a diagnosis of bulging disc on the claimant and associates the condition to this accident since the claimant described it as a hard impact.

Consider the psychological aspect. The claimant nor the doctor or attorney are challenged in any way while we sit back and wait for, essentially, a demand. They all know they game and they calculate how to take advantage (read TIME). Medical is submitted months later along with the bills.

Consider the reaction of the claimant, the treating physician and attorney when they are notified that we have empirical evidence that the impact in NO WAY could have caused an injury and we are prepared to use this information at trial and, further, we are willing to share our information! Back to the psychological aspect, the treating doctor, when they read this along with confirming documents, will run, run, run away from the patient/plaintiff after quickly pronouncing them as 100% cured. The attorney, if they do not drop the case, will get very reasonable with their demand and a case that could have settled for $50,000 now has true nuisance value.

For the benefit of the policyholder and their bottom line we must change our process. The insured-policyholder must become actively involved (people) and ensure that aggressive steps are taken, quickly, to pose psychological obstacles that most claimants, attorneys and doctors will back away from.

Why Wikinomics?

The following was posted at the Wikinomics Blog (http://www.wikinomics.com/blog/index.php/2007/11/26/all-bugs-are-shallow/#comment-64060)

"There are two groups; those that ‘get it’ and those that do not. Efficiency is the name of the game in business and those who cling to structure-the tangible- have ‘insecurity’ written all over their faces. I have begun to give the book “Wikinomics” to those who yearn to work smarter and quicker."

Would You Pay $330 for a $1 Pill?

If you are involved in the management of Workers' Compensation or 3rd Party BI claims it is important to understand what drives the cost of these claims. The medical portion (charges) is something that Carom finds is not regarded with enough scrutiny. So, we offer you the following information that we hope will cause you to question every line of every bill from every hospital.

A midwest health insurance provider recently sent me a letter explaining why certain charges from our local hospital were not covered for blood work done for my Wife. The letter went on to say that the insurance company analyzes charges from all hospitals and sees the markups that are billed. They wanted to let me know that "Based on the most recent public data, ______ Hospital marks up their prices, on average, by 330% times cost."

Enough said.

We Bring It On Ourselves

Here is yet another example of how our Cost of Risk is not being managed. This is both a Workers' Compensation example as well as an Auto example:

Truck Driver (company driver, not an Independent Operator) reports to his company that his truck was hit in a truck stop and he was injured. Adjuster in Trucking Company's Risk Dept instructs the Driver to seek medical attention and to call back with a diagnosis (first of many mistakes). Driver calls several days later and reports that HIS doctor is recommending a referral to an orthopedic surgeon. Fast forward 18 months and the Driver is still off work. In spite of a lien letter being sent by the Trucking Company the trucking company that hit the truck in the lot settled the 3rd Party BI claim with the Driver for $40,000.

When we asked the Adjuster in the Risk Dept just what sort of accident this was we encountered a blank stare. You see, no one, not the insured (self administered) trucking company or the 3rd party truck line ever bothered to look into just what this accident was all about. The handling Adjuster, upon learning that the settlement was made for the $40,000, advised that the impact resulted in a dent the size of a quarter in the bumper of the truck.

This is the norm, unfortunately, where we are focused on quickly paying the WC benefits and not taking the time to investigate the loss. Secondarily, the 3rd party truck line also never conducted an investigation nor challenged the legitimacy of the impact and allegation of injuries being related to such a minor event.

Our desire to find a better way has resulted in Carom developing a relationship with an engineering firm that produces a $360 Force Analysis that is used to effectively challenge these types of claims. They key is to quickly conduct the investigation and present the Analysis to the Claimant, the attending physician and plaintiff counsel. Often times the word "fraud" can be woven into the conversation and the end result is a diminished claim value.

Primacy Case Management; Primacy Event Management

Carom has applied to trademark its Primacy Case Management and Primacy Event Managment.

Deep Risk Smarts; Collaboration

Question for the day: What will cause the insurance industry to be efficient? Will they ever understand the power of Collaboration and an open source approach or will the every growing sense of Mediation continue to dominate their thinking? For those who have not been exposed to "Wikinomics" I strongly suggest you cuddle up with this book and then consider the impact it can have on outcomes; the cost of claims and service to the policyholder. There IS a better way!