Easier, faster, cheaper, better

Risk & Insurance, June, 2005 by Peter Rousmaniere

Here are more glad and disruptive tidings about how information technology has begun to change how we manage work injury risk. Key words: easier, faster, cheaper and most importantly, better. Driving these advances of course is information technology, or IT. Some have said that the performance-to-cost ratio of IT nationwide has been improving 30 percent a year for a long time. In the '90s we invested heavily in new client/server systems and databases. Today we are investing in Internet-based systems.

Costs of hardware have dropped like a rock. The grueling task of connecting different systems became much easier. Organizations have been changing their risk management information systems about every five to seven years. It is possible that this pace of replacement is speeding up.

I will describe three ways we get our work done at a fraction of the time it took just five years ago. Then I'll describe a new collaboration that may transform our field.

* Safety audit planning. If you are a safety manager in a restaurant chain, you need to schedule safety audits at dozens of locations based on recent claims. In the '90s, you would need to manually reconcile OSHA and claims reports, punching figures into a spreadsheet. This might take a day or more. But today's systems can give you automatic analysis, with reports and audit plans done for you. The bottom line is that it takes just one hour, saving 90 percent in staff time.

* Sharing claims files. If you are a claims adjuster, you need to pull together everything about a claim and send the entire package to a colleague working for a servicing vendor. Fully electronic claims files are now feasible, with imaging technology and the ability to link via the Internet to medical clinics. With a good claims system, it should take about three to five minutes. The result is that processing time has dropped by 90 percent.

* Checking for unapproved medical care. If you belong to a medical management team, you need to ensure that no medical provider is paid for services that were not preapproved. I am told that about six out of 100 issued medical invoices are for unapproved work. In the '90s, you might have spent a half-hour comparing invoices to a treatment plan. Today it will take you a few minutes.

Now for that new collaboration that may transform our field. Say your CEO sends word he or she wants to compare your company's injury experience with that of his or her peers, in lost time from work and nonwork causes.

This had been an impossible undertaking until the creation of Employer Measures of Productivity, Absence and Quality. EMPAQ is the brainchild of the National Business Group on Health. Heavies such as General Electric Co. and the Integrated Benefits Institute are involved. For the first time, companies have a standard set of data on disability.

Close to 200 employers are pooling data to create a standardized set of metrics on variables used in disability management such as operational efficiency, outcomes, satisfaction and costs. Vendors, employers and associations are building what may in a few years be a data utility for many users.

Marybeth Stevens, who leads workplace absence and disability operations for GE, expects that the number of participating employers will likely double next year.

I mentioned to Stevens that no workers' comp insurers appear on the participant list. Her response was, in essence, "Watch this space."

PETER ROUSMANIERE, a Vermont-based consultant and writer, is the workers' comp columnist for Risk & Insurance[R]. He can be reached at riskletters@lrp.com.