Friday, September 28, 2007
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!
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The model for management of Workers' Compensation claims in place by most insurance carriers and Third Party Administrators (TPA's) does not allow for focus on Closure and, therefore, reduced costs. Why? The carriers have internal, profit centers that help to manage the case. Medical Case Management is but one example. Another example is the re-pricing of medical bills submitted by treating physicians and hospitals. TPA's have relationships with medical case management firms where the the TPA's earn a fee from the case management firms based on the billings through the TPA. So, with these arrangements how can a claims organization really focus on Closure and reduced costs?
Questions for Today: Do the large medical case management firms have impact? Do they measure their results? Does their telephonic case management approach provide value? If you have exampless please share! For too long we have supressed EXPENSES and ignored the impact on Loss Costs, Reserves and, most importantly, Collateral Requirements.
How does the insurance industry handle the 'big truck hits small car' type of accident? Invariably the handling adjuster calls the attorney and asks for medical and then waits, and waits and waits. Without consideration for the impact, the damage to the auto and the likelihood of force into the vehicle the claim is negotiated once the medical arrives. We must have tools at our disposal, cost effective tools that allows the adjuster to argue the relevant issues such as Force, Delta V and the Federal Motor Vehicle Safety Standards thresholds for injury. Frankly, the insurance industry is too passive and does nothing to combat these frivolous cases. It leaves the consultant-types and policyholders to ask whether what the true aim of the insurance carrier really is.
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