This is the third of eight parts. The first article in the series is here. The second article in the series is here. Workers’ compensation is a mysterious realm. Just pick a state. Even those of us who regularly read workers’ compensation statutes, regulations and official government websites have great difficulty triangulating the truth about basic rights and responsibilities for injured workers. The little communication provided to injured workers tends to be oversimplified, leaving them no choice but to hire a lawyer to navigate the system. In fact, armies of trial lawyers, insurance and claims personnel and government employees are needed for basic functions of workers’ compensation systems. These armies then find much to argue over, which drives an endless pursuit of “reforms.” Even the industry’s biggest proponents and thought leaders complain of dysfunction. OSHA has also now joined the chorus claiming that workers’ compensation systems “add inequality to injury” and shift too much cost to injured workers and other government programs. Against this backdrop, we’ve seen the Texas “nonsubscriber option” (often referred to as "opt-out") grow to cover considerably more than one million workers and successfully handle more than 50,000 injury claims a year. A more highly regulated “Oklahoma option” launched in 2014 and has withstood two challenges at the Oklahoma Supreme Court. Statistically credible data demonstrates that better outcomes for employees can be achieved through more deliberate, easy-to-understand communication that supports requirements for employee accountability. Such simple injury management principles have resulted in billions of dollars in employer savings and economic development. Now, both Tennessee and South Carolina are considering option legislation, with several other states wondering if they should do the same. Having worked on legislation and regulatory systems related to option programs for more than 25 years, I can understand the initial confusion and distrust by option opponents. Moving from a hyper-regulated, almost exclusively state-regulated system to a more free-market alternative that relies on a combination of state and federal laws takes people out of their comfort zone. They have legitimate questions that deserve good answers. But too much of the discussion to date has been devoid of any spirit of inquiry. Workers’ compensation carrier associations issue fallacious descriptions of the purpose and mechanics of option programs. Allegations by plaintiff attorneys in lawsuits are quoted by workers’ comp industry media as irrefutable facts. Instead of research, option opponents attempt to promote class warfare while falsely disparaging reputable employers. In the midst of this chaos, only one thing is sure: We are in a period of transition, and the facts will emerge, one way or the other. In-depth information about options to workers’ compensation is more accessible every day. For those who are willing to have a reasoned public policy dialogue and information exchange, a path of progress emerges. For those who prefer uninformed hostility over homework, their true intentions will become more obvious, and their voices will be less credible as the days go by.

This is the second in a series of three articles. The first is here. With the entire insurance industry at a tipping point, where many of the winners and losers will be determined in the next five to 10 years, it's important to think through all the key strategic factors that will determine those outcomes. Those factors are what we call STEEP: social, technological, environmental, economic and political. In this article, we'll take a look at all five. Social: The Power of Connections The shifts in customer expectations present challenges for life insurers, many of which are caught in a product trap in which excessive complexity reduces transparency and increases the need for advisers. This creates higher distribution costs. A possible solution lies in models that shift the emphasis from life benefits to promoting health, well-being and quality of life. In a foretaste of developments ahead, a large Asian life insurer has shifted its primary mission from insurance to helping people lead healthier lives. This is transforming the way the company engages with its customers. Crucially, it’s also giving a renewed sense of purpose and value to the group’s employees and distributors. Further developments that could benefit both insurers and customers include knowledge sharing among policyholders. One insurer enables customers to share their health data online to help bring people with similar conditions together and help the company build services for their needs. Similarly, a DNA analysis company provides insights on individual conditions and creates online communities to pool the personal data of consenting contributors to support genetic studies. A comparable shift in business models can be seen in the development of pay-as-you-drive coverage within the P&C sector. In South Africa, where this model is well advanced, insurers are realizing higher policyholder retention and lower claims costs. This kind of monitoring is now expanding to home and commercial equipment. These developments are paving the 
way for a move beyond warranty or property insurance to an all-'round
 care, repair and protection service. These offerings move the client engagement from an annual transaction to something that’s embedded in their everyday lives. Agents could play
 an important role in helping to design aggregate protection and servicing. In banking, we’ve seen rapid growth in peer-to-peer lending; the equivalent in insurance are the affinity groups that are looking to exercise their buying power, pool resources and even self-insure. While most of the schemes cover property, the growth in carpooling could see them play an increasing role within auto insurance. Technological: Shaping the Organization Around Information Advantage More than 70% of insurance participants in our 2014 Data and Analytics Survey say that big data or analytics have changed the way they make decisions. But many insurers still lack the vision and organizational integration to make the most of these capabilities. Nearly 40% of the participants in the survey see "limited direct benefit to my kind of role" from this analysis, and more than 30% believe that senior management lacks the necessary skills to make full use of the information. The latest generation of models is 
able to analyze personal, social and behavioral data to gauge immediate demands, risk preferences, the impact of life changes and longer-term aspirations. If we look at pension planning, these capabilities can be part of an interactive offering for customers that would enable them to better understand and balance the financial trade-offs between how much they want to live off now and their desired standard of living when they retire. In turn, the capabilities could eliminate product boundaries as digital insights, along with possible agent input, provide the basis for customized solutions that draw together mortgages, life coverage, investment management, pensions, equity release, tax and inheritance planning. Once the plan is up and running, there could be automatic adjustments to changes in income, etc. Reactive to preventative The increasing use of sensors and connected devices as part of the Internet of Things offers ever more real-time and predictive data, which has the potential to move underwriting from "what has happened" to "what could happen" and hence more effective preemption of risks and losses. This in turn could open up opportunities for insurers to gravitate from reactive claims payer to preventative risk adviser. As in many other industries, the next frontier for insurers is to move from predictive to prescriptive analytics (see Figure 2). Prescriptive analysis would help insurers to anticipate not only what will happen, but also when and why, so they are in a better position to prevent or mitigate adverse events. Insurers could also use prescriptive analytics to improve the sales conversion ratio in automated insurance underwriting by continually adjusting price and coverage based on predicted take-up and actual deviations from it. Extensions of these techniques can be used to model the interaction between different risks to better understand why adverse events can occur, and hence how to develop more effective safeguards. Environmental: Reshaping Catastrophe Risks and Insured Values Catastrophe losses have soared since the 1970s. While 2014 had the largest number of events over the course of the past 30 years, losses and fatalities were actually below average. Globally, the use of technology, availability of data and ability to locate and respond to disaster in near real-time is helping to manage losses and save lives, though there are predictions that potential economic losses will be 160% higher in 2030 than they were in 1980. Shifts in global production and supply are leading to a sharp rise in value at risk (VaR) in under-insured territories; the $12 billion of losses from the Thai floods of 2011 exemplify this. A 2013 report by the UN International Strategy for Disaster Reduction (UNISDR) and PwC concluded that multinationals’ dependencies on unstable international supply chains now pose a systemic risk to "business as usual." Environmental measures to mitigate risk 
Moves to mitigate catastrophe risks
 and control losses are increasing. Organizations, governments and UN bodies are working more closely to share information on the impact of disaster risk. Examples include R!SE, a joint UN-PwC initiative, which looks at how to embed disaster risk management into corporate strategy and investment decisions. Governments also are starting to develop plans and policies for addressing climatic instability, though for the most part policy actions remain unpredictable, inconsistent and reactive. Developments in risk modeling 
A new generation of catastrophe models is ushering in a transformational expansion in both geographical 
breadth and underwriting applications. Until recently, cat models primarily concentrated on developed market peak zones (such as Florida windstorm). As the unexpectedly high insurance losses from the 2010 Chilean earthquake and the 2011 Thai floods highlight, this narrow focus has failed to take account of the surge in production and asset values in fast-growth SAAAME markets (South America, Africa, Asia and the Middle East). The new models cover many of these previously non-modeled zones. The other big difference for insurers is their newfound ability to plug different analytics into a single platform. This offers the advantages of being able to understand where there may be pockets of untapped capacity or, conversely, hazardous concentrations. The result is much more closely targeted risk selection and pricing. The challenge is how to build these models into the running of the business. Cat modeling has traditionally been the preserve of a small, specialized team. The new capabilities are supposed to be easier to use and hence open to a much wider array of business, IT and analytical teams. It’s important to determine the kind of talent needed
 to make best use of these systems, as well as how they will change the way underwriting decisions are made. Emerging developments include new monitoring and detection systems, which draw
 on multiple fixed and drone sensors. Challenges for evaluating and pricing risk 
Beyond catastrophe risks are disruptions to asset/insured values resulting from constraints on water, land and other previously under-evaluated risk factors. There are already examples of industrial plants that have had to close because of limited access to water. Economic: Adapting to a Multipolar World Struggling to sustain margins The challenging economic climate has 
held back discretionary spending on life, annuities and pensions, with the impact being compounded by low interest rates and the resulting difficulties in sustaining competitive returns for policyholders. The keys to sustaining margins are likely to be simple, low-cost, digitally distributed products for the mass market and use of the latest risk analytics to help offer guarantees at competitive prices. The challenges facing P&C insurers center on low investment returns and a softening market. Opportunities to seek out new customers and boost revenues include strategic alliances. Examples could include affinity groups, manufacturers or major retailers. A further possibility is that one of the telecoms or Internet giants will want a tie-up with an insurer to help it move into the market. More than 30% of insurance CEOs
 now see alliances as an opportunity to strengthen innovation. Examples include the partnership between a leading global reinsurer and software group, which aims to provide more advanced cyber risk protection for corporations. Surprisingly, only 10% of insurance CEOs are looking to partner with start- ups, even though such alliances could provide valuable access to the new ideas and technologies they need. SAAAME growth Growth in SAAAME insurance markets will continue to vary. Slowing growth 
in some major markets, notably Brazil, could hold back expansion. In others, notably India, we are actually seeing a decline in life, annuity and pension take-up as a result of the curbs on commissions for unit-linked insurance plans (ULIP). Further development in capital markets will be necessary to encourage savers to switch their deposits to insurance products. As the reliance on agency channels adds to costs, there are valuable opportunities to offer cost- effective digital distribution. Successful models of inclusion include an Indian national health insurance program, which is aimed at poorer households and operates through a public/private partnership. More than 30 million households have taken up the smart cards that provide them with access to hospital treatment. The already strong growth (10% a year) in micro-insurance is also set to increase, drawing on models developed within micro-credit. The challenge for insurers is the need to make products that are sufficiently affordable and comprehensible to consumers who have little or no familiarity with the concept of insurance. Rather than waiting for a market-wide alignment of data and pricing, some insurers have moved people onto the ground to build up the necessary data sets, often working in partnership with governments, regional and local development authorities and banks and local business groups. Urbanization The urban/rural divide may actually be more relevant to growth opportunities ahead than the emerging/developed market divide. In 1800, barely one in 50 people lived in cities. By 2009, urban dwellers had become a majority of the global population for the first time. Now, every week, 1.5 million people are added to the urban population, the bulk of them in SAAAME markets. Cities are the main engines of the global economy, with 50% of global GDP generated in the world’s 300 largest metropolitan areas. The result is more wealth to protect. Infrastructure development alone will generate an estimated $68 billion in premium income between now and 2030. Urban citizens will be more likely to be exposed to insurance products and have access to them. Urbanization is also likely to increase purchases of life, annuities and pensions’ products, as people migrating into cities have to make individual provision for the future rather than relying on extended family support. Yet as the size and number of mega-metropolises grow, so does the concentration of risk. Key areas of exposure go beyond property and catastrophe coverage to include the impact of air pollution and poor water quality and sanitation on health. Tackling under-insurance A Lloyd’s report comparing the level 
of insurance penetration and natural catastrophe losses in countries around the world found that 17 fast-growth markets had an annualized insurance deficit of $168 billion, creating threats to sustained economic growth and the ability to recover from disasters. Political: Harmonization, Standardization and Globalization of the Insurance Market Government in the tent At a time when all financial services businesses face considerable scrutiny, strengthening the social mandate through closer alignment with government goals could give insurers greater freedom. Insurers also could be in a stronger position to attract quality talent at a time when many of the brightest candidates are looking for more meaning from their chosen careers. Government and insurers can join forces in the development of effective retirement and healthcare solutions (although there are risks). Further opportunities include a risk partnership approach to managing exposures that neither insurers nor governments have either the depth of data or financial resources to cover on their own, notably cyber, terrorism and catastrophe risks. Impact of regulation Insurers have never had to deal with an all-encompassing set of global prudential regulations comparable to the Basel Accords governing banks. But this is what the Financial Stability Board (FSB) and its sponsors in the G20 now want to see as the baseline requirements for not just the global insurers designated as systemically risky, but also a tier of internationally active insurance groups. The G20’s focus on insurance regulation highlights the heightened politicization of financial services. Governments want to make sure that taxpayers no longer have to bail out failing financial institutions. The result 
is an overhaul of capital requirements 
in many parts of the world and a new basic capital requirement for G-SIIs. The other game-changing development is the emergence of a new breed of cross-state/cross-border regulator, which has been set up to strengthen co-ordination of supervision, crisis management and other key topics. These include the European Insurance and Occupational Pensions Authority (EIOPA) and the Federal Insurance Office (FIO) in the U.S. Dealing with these developments requires a mechanism capable of looking beyond basic operational compliance at how new regulation will affect the strategy and structure of the organization and using this assessment to develop a clear and coherent company-wide response. Technology will allow risk to be analyzed in real time, and predictive models would enable supervisors to identify and home in on areas in need
 of intervention. Regulators would also be able to tap into the surge in data and analysis within supervised organizations, creating the foundations for machine-to-machine regulation. A more unstable world From the crisis in Ukraine to the rise of ISIS, instability is a fact of life. Pressure on land and water, as well as oil and minerals, is intensifying competition for strategic resources and potentially bringing states into conflict. The ways these disputes are playing out is also impinging on corporations to an ever-greater extent, be this trade sanctions or state-directed cyber-attacks. Businesses, governments and individuals also need to understand the potential causes of conflict and their ramifications and develop appropriate contingency planning and response. At the very least, insurers should seek to model these threats and bring them into their overall risk evaluations. For some, this will be an important element of their growing role as risk advisers and mitigators. Investment firms are beginning to hire ex-intelligence and military figures as advisers or calling in dedicated political consultancies as part of their strategic planning. More insurers are likely to follow suit. The final article in this series will look at scenarios that could play out for insurers and will lay out a way to formulate an effective strategy. If you want a copy of the report from which these articles are excerpted, click here.

The role of stigma for people who are in need of mental health treatment is both profound and devastating. According to a 2011 study by the Association for Psychological Science, only 60% of people diagnosed with mental health problems reported receiving treatment. That means 40% of the millions of people in the U.S. who need professional help are getting no treatment whatsoever. Social stigma, myths and stereotypes play a huge role in limiting both access to care and discouraging people from pursuing mental health treatment. The problem is multifaceted and complex and has a wide-reaching effects on people's education, employment, health, well-being and relationships.

There are many forms of stigma and stereotypes. First, there is a widespread public perception that people with mental illness are dangerous, unpredictable and responsible for their own illness and not deserving of compassion and care. As a result, people in need of help are excluded from jobs, education and much-needed social interaction.

This problem also plays out in the professional medical setting, where negative stereotypes often lead medical providers to be less likely to focus on the patient rather than the disease and to not place the needed focus on recovery and referral for needed consultation and care.

Stigma in society and lack of awareness among medical providers also contributes to what is known as self-stigma. That is: People in need of help believe these stereotypes themselves and develop low self-esteem, which results in denial, attempts to hide problems, alcohol and drug abuse and a sense of hopelessness -- they feel they are unable to recover, so why try? These are the people who make up the 40% not seeking treatment and consultation.

Stigma results in a double problem for many people. They have real underlying symptoms, which lead to an actual disability, while myths and misconceptions lead to stereotypes and prejudice. Too often, people turn against themselves. Depression, for example, has been referred to by mental health professionals as "rage turned inward." This can lead to fear of rejection, isolation and hostile behavior. The result often is that the needed health care system is replaced by the criminal justice system.

How many people incarcerated today have an underlying untreated mental health condition? My guess is most, if not all. These are the people who did not pursue potential life opportunities for themselves but rather pursued illegal drugs or crime out of a sense of low-self-esteem and hopelessness. The overall result is both devastating to them and society as a whole.

Underlying mental health issues also have a huge impact on both healthcare and disability costs for private and public employers, health and disability insurers and both Medicare and Medicaid and the Social Security disability system (SSDI). How many people collecting private or public disability have an underlying, undiagnosed mental health problem? Nobody really knows, but many disability experts believe the number is staggering. The resulting costs to employers, insurers and taxpayers of untreated or undiagnosed mental health issues is in the billions of dollars.

In 2003, I helped conduct an unpublished study for a major U.S. corporation regarding its active employees out of work on full disability with a primary diagnosis of depression. The analysis cross-referenced these employees' disability claim data with their health insurance data base. It was found that 80% of the primary treating providers in the healthcare benefit side had no mention whatsoever of a primary or secondary diagnosis of depression. This means that their primary treating provider or "family doctor" was either unaware of the underlying mental health issues or failed to acknowledge or consider the possibility.

What was not able to be studied in this research was how many workers out on disability or workers compensation for a "bad back" really had an underlying mental health issue. The study did determine the No. 1 and 2 co-morbidities for employees out on disability for depression was musculoskeletal conditions and gastrointestinal conditions. The overwhelming number of medical providers treating and submitting claims for these co-morbidities (80%) had no mention of an underlying mental health issue despite the fact that their patient was out of work on full disability with a primary diagnosis of depression. The healthcare and disability costs of these employees out on full disability with a primary diagnosis of depression was staggering and in the millions just to this U.S. corporation. Because this large employer was self-insured for healthcare, disability and workers' compensation these costs go directly to its bottom line. These costs are then indirectly passed on to corporate customers and the general public purchasing the company's products and needed services.

What needs to be done to address underlying and untreated mental health conditions?

I do not believe any new federal legislation is required at this time. The Affordable Care Act (ACA), the Americans with Disabilities Act (ADA) and the Mental Health Parity Act are all in place to help people receive needed mental healthcare access. There is no reason people should not seek professional help that they need.

As in most complex public health issues, the answer lies in awareness, education, outreach and research dollars. Educating the public is a very difficult task. As we have learned the hard way with overall prejudices, urban myths and misinformation in society, in general educating people can take generations. Medical authorities in leading medical schools and institutions have also stated that documented research and best practices based on evidence-based medicine can take 20 years to filter down to local medical practices, if ever.

People suffering with underlying mental health issues don’t have 20 years to wait for proper referral and treatment. Medical professionals on the front line need to be educated today to ask the right questions with their patients about potential underlying mental health issues and help reassure people that the overwhelming majority of mental health issues can be diagnosed and successfully treated.

As a society we can no longer allow people to hurt themselves or others when treatment is readily available for people who need help because of genetic and other environmental causes that are no fault of their own. How many of our major problems such prejudice and gun violence have a root cause in untreated mental health issues? Maybe all of them.

ITL Editor-in-Chief Paul Carroll recently hosted a webinar on "Captivating Customers With All-Channel Experiences,” featuring experts from Capgemini and Salesforce.com and the former chief customer experience officer at AIG. To view or listen to the webinar, click here. For the slides, click here. The insurance industry is getting "Amazoned." The term dates back to the late 1990s and early 2000s, as the online retailer’s friendly interface, including the ability to buy with one click, made consumers wonder why their experiences with other companies were so much more cumbersome. Retailers were the first to suffer by comparison, but customers have become increasingly demanding of companies in all industries. Now, the insurance industry faces similar comparisons with disruptors outside of the insurance industry. Consider the questions today’s policyholders are raising:

• “Why can’t I know the status of my claim the way Fedex tracks packages in real time?”
• “Why can’t I get help interactively in the same way I collaborate on Facebook?”
• “Why can’t I search and compare products like the way I answer questions on Google?”
• “Why can’t my experience be as speedy and personalized as hailing a limo on Uber?”

Insurance companies can no longer just incrementally do better than they have in the past and hope to please customers, let alone captivate customers. Simply outdoing immediate competitors is not enough. Insurers now must find ways to satisfy – even delight – customers who have been conditioned for years to demand stellar service. Customers now insist that every person and every computer system they deal with have full knowledge of them and of all previous interactions regardless of channel, whether it be an employee, agent, self-service portal, mobile app or contact center. Customers want to initiate a request for a quote and pick the request up at any time later, basically in mid-sentence, after doing some online research, conferring with friends and family or just grabbing a cup of coffee. The words to keep in mind in dealing with today’s customers are: --Fluid and intuitive (seamlessly engage and make the transition from channel to channel or any device, know what the customer may be interested in or needs before he gets there) --Effortless (once and done; i.e., entering information once and never again) --Efficient (especially when processing a claim) --Personalized (know who I am when I call in and what I’ve done. I called yesterday, so acknowledge my journey in your world and help advise me) The bar will keep being raised, as Amazon and others keep showing what’s possible, but delivering on those four terms will do an awful lot to delight customers for the foreseeable future. This is the second in a series of four articles adapted from the Capgemini white paper “Cloud-Enabled Transformation in Insurance: Accelerating the Ability to Deliver Exceptional Customer Experiences.” The first article is here. For the full white paper, click here.

In December 2008, a spot appeared on my face. It looked like a large freckle. I ignored it. In March 2009, Floyd and I were having breakfast. He asked, “What’s that spot on your face?” I answered, “A freckle.” He then responded, “What are you going to do about it?” My reply, “Not a thing – it’s just a freckle.” We debated the issue for a few minutes longer, but I’ll save you the details. The next day, Floyd called to announce my appointment with Dr. Patout (a local dermatologist) in a few weeks. He had called another doctor, but she couldn’t see me until August. Dr. Patout had been booked up until August, as well, but Floyd intervened with her husband (Floyd’s tennis partner) and got me in earlier. I agreed to the appointment more to shut Floyd up than as a concern for my health. The next week, Dr. Patout removed the “freckle” and sent it to the lab to test. I still felt this was much ado about nothing. At 1:30 p.m. on April 20, I was walking out of the Regions Insurance Office in Baton Rouge. My phone rang, and I heard a statement I’ll never forget. “Mike, this is Dr. Patout. The test results are in; it’s melanoma.” I took a breath and said, “That’s the kind of cancer I don’t want – right?” She answered: “That’s right. Come see me tomorrow.” Dr. Patout reassured me that we had gotten it early. She sent me to Dr. Walker, who cut a double-quarter-sized hole in my face and sent this specimen off for more tests. Two weeks later, I got the good news I had prayed for – “Mike, we got it all.” Come see me every three months. Suddenly, my attitude changed. Going to the doctor and listening to her recommendations were now a priority, not a pain in the butt. On the third visit, Dr. Patout explained, “Mike, understand that if we had waited until August, you’d be dead.” This was (and still is) a sobering thought…. Floyd saved my life. He didn’t find the cancer, and he didn’t cure it. Floyd’s role was more important than that – he was the gadfly who motivated me (read: nagged me) to do what needed to be done. Now I want to ask you two most important questions – “Is there a spot on the face of your organization?” and “What are you going to do about it?” In March 2009, I felt good. I looked good (except for a little spot on my face). I was one admonition away from a quick and painful death! THANKS, FLOYD! The good news is that you don’t have to die, either! The bad news is that to avoid dying you must change. Change is difficult – the excerpts from the article “Change or Die” by Alan Deutschman from Fast Company Magazine (www.fastcompany.com) explain the challenge of change: “What if you were given that choice? For real. What if it weren't just the hyperbolic rhetoric that conflates corporate performance with life and death? Not the overblown exhortations of a rabid boss, or a slick motivational speaker, or a self-dramatizing CEO. We're talking actual life or death now. Your own life or death. What if a well-informed, trusted authority figure said you had to make difficult and enduring changes in the way you think and act? If you didn't, your time would end soon -- a lot sooner than it had to. Could you change when change really mattered? When it mattered most? Yes, you say? Try again. Yes? You're probably deluding yourself. You wouldn't change. Don't believe it? You want odds? Here are the odds, the scientifically studied odds: nine to one. That's nine to one against you. How do you like those odds?” I say this in particular for independent agents. What matters with independent agencies is INDEPENDENCE, the entrepreneurial spirit of this group and its members. You as individuals and operating entities have been declared dead or dying by the experts for decades. You’re prospering – so why change now? The answer is simple – the marketplace you serve is changing. This is all about people and culture – not products and services. If you haven’t noticed, the Gen Y and whatever follows are much different than their older siblings, parents and grandparents. They are taking charge of the market as we are forced to relinquish control. Address that "freckle" or die.

The devastation resulting from identity theft correlates with the fact that it infiltrates every part of a victim’s life: robbing them of time, privacy and money; possibly requiring both legal and financial action; and affecting victims mentally, physically and emotionally. When someone becomes a victim, so many facets take the toll that victims need a holistic approach to ID protection – one that readily addresses all of those facets so victims can recover from their losses, regain their reputation and rest assured with protection against future attacks. What does legal assistance have to do with a holistic approach to identity protection? A victim’s need for legal assistance comes into play, for example, when debt collectors harass the victim about a fraudulent debt, a bank or creditor refuses to acknowledge an account as fraudulent, criminal activities surface because of a thief’s actions or criminal activities are attributed to a victim’s records or when the victim wants to take a fraudster to court. These kinds of legal issues can make the victim’s recovery quite challenging, which is why a well-rounded protection plan should include legal assistance. Legal assistance could be providing referrals for trustworthy attorneys who know how to handle identity theft cases, and who work within reasonable distance of the victim’s location. How can an identity theft protection plan address financial issues? Monitoring members’ information and catching thieves in the act will help limit the damage done, but, for people who do find themselves victim to identity theft, an important part of recovery is adjusting to a new financial situation. Financial repercussions of identity theft may involve fraudsters draining the victim’s bank accounts or racking up debt in the victim’s name, and, on top of that, victims usually spend thousands of dollars trying to get the money back and clear their name with debt collectors. Those are major financial setbacks for any budget. A holistic approach takes into account the need for financial counseling. Victims will need access to financial professionals, like Accredited Financial Counselors, who can assist them with getting back on track financially. Financial counselors could help them assess and work on things like…

• Adjusting budget to any financial losses
• Allocating money to restoration needs (e.g. money to pay an attorney)
• Restoring bank accounts
• Rebuilding credit

How can a protection plan mitigate health issues? A holistic approach recognizes the health consequences of being a victim and provides assistance to mitigate the issues. More than one-third (36%) of victims said the identity theft incident caused them moderate to severe emotional distress. Why? Dealing with the evidence of fraud requires research, phone calls, dispute letters and claim forms, police reports, money and a lot of time. The to-do list can get overwhelming pretty quickly. If victims have a fraud resolution specialist at their side, they have access to professional guidance from someone they can trust to provide the correct materials and next steps for reestablishing safety and privacy. Getting assistance can alleviate some of the stress involved because members know they’re not alone, and they’re getting confirmation about what to do next. Top-of-the-line assistance would also include specialists who can actually take on some of the tasks that a victim must complete for resolution. Dealing with identity theft is difficult, which causes a ripple effect of stress infiltrating other areas of life. When victims must race against the clock to repair the damage, they’re worried about the financial losses and stressing over how they’re going to make sure the problem doesn’t happen again. How is education involved in a holistic approach to identity theft protection? A checklist of features should also include education, so members can make smarter decisions with the day-to-day activities that may affect their risk of becoming a victim. Resources could include tips, newsletters, articles and webinars with helpful information like…

• Understanding what is on a credit report, what’s problematic and how to resolve each matter – whether it’s an error or theft-related
• How to file and dispose of paperwork with sensitive information
• Extra precautions to take and questions to ask when creating an account or applying for a new credit card
• Recent data breaches and who’s at risk
• What’s the latest and greatest security software for consumers

A holistic approach includes some sort of education because it helps people protect themselves against future identity theft attacks. People need a plan that takes a holistic approach to identity theft protection, covering every part of prevention and restoration. They need a plan that addresses fraud in a timely matter to prevent heightened stress, with features like monitoring and alerts for any suspicious activity, quick assistance for anyone who becomes a victim, financial counseling and legal assistance.

Every workers’ compensation claim is not preventable, when you consider that some are deliberate. With due respect to the art and science of safety, preventing real physical accidents and repetitive traumas is essential. However, we also need to be mindful of and prepared for the non-accident accident. Let us refer to these situations as “fact-cidents” because their construct relies on the ability of a claimant to tell a credible story void of facts. First of all, let’s establish fact-cident detection as an employer’s responsibility. An adjuster with the best list of “red flags” cannot match the gut instinct of an astute employer who knows an employee’s history and extraneous issues and has opportunity to look that employee in the eye. An unwitnessed fall out of a chair or a bump against a restroom-stall door, or a “giving out” of the knee when turning with a parts tray in hand can be very valid claims… until they are not, mainly because the employer knows something deeper about the employee’s motivation. The employer must share concerns with the adjuster within the early hours or days of a claim to support heightened focus. Most fact-cidents cannot simply be denied. Very quick work is required. The good news is that fact-cident defense is time-consuming but not complicated. It simply involves obtaining multiple verifications of the story. Just like the old saying, “there is no such thing as the perfect crime,” there is also no such thing as the perfect false claim. Enough prodding will diminish credibility and isolate the fact-cident for the house of cards that it is. Quick Tip: Ask, Ask Again and Ask Some More An injured worker should be required to reiterate his story four to six times within the first 48 hours. Here is an optimal sequence: – Report to supervisor, who writes down claimant’s account – Call in to triage line, where a nurse interviews and records claimant’s detailed account – Workers' comp lead (WC or risk manager, HR, benefits, company nurse, etc.) requires discussion and writes down another reiteration of the incident – Treating doctor requires a detailed reiteration of the incident as part of history – Adjuster takes recorded statement of the claimant’s account – Adjuster and employer-leaders separately circle back to claimant after doctor visit to get claimant’s version of the doctor’s assessment With these multiple stories and queries, the true detective work begins in comparing and sharing claimant versions. Fact-cident claimants notoriously will assume what certain parties want to hear and adjust stories accordingly. They also may enhance their story gradually with each reiteration. After medical visits, they often alter what actually happened or was said by the doctor. Sadly enough, many seem to think they can play all sides to the middle with no cross-checking among the crowd. Don’t let that happen! The investigative test relies on comparing all versions and then, as might be indicated, sharing with other parties. For example, if the initial supervisor and HR manager reports mention non-falling incident with ankle pain but the version to the doctor claims a fall to the floor adding hip, back and elbow pain, you have an immediate piece of evidence validating suspicions. You can confidently invest and engage denial, defense, independent medical exam (IME), surveillance, field nurse, et. al. Inconsistencies can also be presented to the doctor for review and revision or re-exam to correct any false reliance on claimant’s story. If possible, with cooperative providers, the early internal reports can be shared with treating doctor in real time so she can diligently test the employee’s credibility against other statements. An even more powerful reason to collect and solidify various versions is to avoid future attorney representation and fact-cident influencing. Worst-case scenario with lack of early employee statements is that an attorney gets to coach the employee into a tighter self-serving story later on. When you suspect an accident is actually a fact-cident, don’t accept any aspect at face value. Put in the time to either confidently validate and pay the claim or justify heavy investments in defense. As a bonus, from the big-picture perspective, this type of consistent diligence establishes a general no-nonsense workplace attitude and culture when it comes to workers compensation.

In 1990, I had the good fortune to meet the founders of a new technology company focused on the automation and real-time adjudication of health insurance claims. The company, Paperless Claims Inc., (PCI) was way, way ahead of its time, deploying “rules-based” logic to achieve an 80% first pass adjudication rate for completed health insurance claim transactions originating from a physician’s office via a dial-up modem. The final claim determination and payment details were transmitted back to the provider’s office in less than two minutes. PCI found some early adopter health payers for their technology, but the industry preferred to use people to process the massive amounts of paper for the majority of claim transactions over the next 20 years. Fast-forward to today when suddenly the insurance segment is “ripe for digital transformation,” and all segments are scrambling for solutions to support online distribution and automated administration for virtually all types of insurance products across the personal lines, accident and health, small business commercial lines spectrum. How do decision-making executives in the insurance segment know how to move beyond the status quo and put their company on the right path toward digital transformation? There are four key (and remarkably simple) constructs that provide the guidance: 1) All insurance products are the same. When you stop and think about it, all insurance products follow the same path from the acquisition of account data, to underwriting, rating, quoting and binding, then through policy issuance, premium invoicing, (billing), commission administration, financial reporting and renewals. Some products may require more underwriting than others, and others have more fulfillment than others, but, deep down, they all follow the same course. 2) All insurance products are governed by rules. There is a rule for every element of every product: underwriting rules, class codes, Zip codes, type of risk, height, weight, smoker/non-smoker, etc. All the rating rules and quoting parameters, questions around when certain endorsements and riders will apply, the rules for binding accounts and issuing policies, of premium billing, commission hierarchies and financial reporting are all known. The issue in most carriers today is that the application of those rules may vary based on the systems or people applying them. 3) Rules can be (and should be) automated. All insurance product and process rules can be automated, and, when they are, results for each transaction component require fewer touch points. The digital transformation of the process work flow provides users with “real-time” actions. You may say, “But there may be exceptions to rules, like giving an underwriter the ability to change a premium by up to 5%”. And I agree. In that case, you still want capture the reason(s) for the change and have a manager sign off – and both actions are just additional rules. 4) One system is better than many. Most carriers are saddled with single-function, component systems that have been banded together over the years. Every new product (and every product change) requires a Herculean effort to make sure “the system” can handle the business.   Each year “the system” takes up ever-increasing resources for “maintenance,” “data reconciliation” or other non-revenue-generating activities. A single comprehensive system built on a relational database platform will reduce both staffing and maintenance costs and allow you to measure your product time in weeks, not days. These are pretty simple concepts that can have an enormous impact on your business. Defining all product rules so that the majority of work flow, process transactions may be automated requires different thinking about the approach to systems than has been the traditional insurance segment view. Senior insurance industry executive are beginning to understand and appreciate the power of a comprehensive, platform.

This is news you can use. If you want to evaluate the cost/benefit ratio of a wellness program, the following is a list of costs that are almost always overlooked in wellness evaluations. These are not the only things that need to be evaluated, just the ones most commonly overlooked. When the items in the following list are fully considered, wellness evaluations can look entirely different. 1. The cost of staff hired to manage the program. A rule of thumb is to multiply their salary times two to account for FICA, benefits, office space, training, workers comp, management, etc. 2. The cost of wages for workers while attending wellness events at work. One company I looked at was spending about $175 per employee per year on this, not a trivial sum. 3. The opportunity cost of the HR staff running the program. 4. The full cost of wellness communications. Sending wellness communications to people at work has a wage cost. See #2 above. 5. The total cost to evaluate the program periodically. 6. The cost of false positives, which come from sending employees to doctors when they’re not sick. This is especially pernicious if you’re paying for wellness exams for employees. At one company, the cost of the false positives, sometimes as high as $80,000 per event, nearly cost more than the physical exams themselves. You have to examine claims data to see this. 7. If you have a fitness center, you need to take into account sports injuries for users. (Understanding this also involves access to claims data.) I’ve evaluated the impact of fitness centers for three very large companies. Taking into account sports injuries, etc., you could not make the case for an ROI for any of the three of them. In one company, we examined claims data on a) moderate or occasional fitness center users, b) people who used the fitness center regularly, and c) nonusers. Nonusers had the lowest average medical costs. Moderate users had higher medical costs than nonusers and regular users had the highest medical costs, a perfect reverse correlation. Surveys of employees are notoriously unreliable. They measure employee opinions, at best, and opinions are not facts. As we all know, sometimes in employee surveys people will say what they think the surveyor wants to hear. Medical claims and sick pay data are about the most meaningful ways to measure wellness outcomes. Short- and long-term disability data can be useful, too, as can life claims experience when compared with norms. If you only use employee surveys and other surrogate data, too bad. I met an actuary who spoke at a conference on this topic and used the measurements above to evaluate wellness programs. He said he’d never seen one that had a positive ROI, except ones that used payroll deduction penalties.

Nurse case management (NCM) has a powerful impact on workers’ compensation claim cost and outcome. Positive results of nurse involvement have long been anecdotally accepted, but widespread evidence of nurse impact has not emerged, and objective proof of value is still missing. Several factors account for this. Inconsistent Referrals For one thing, NCMs are usually considered an adjunct to the claims process, called upon in sticky situations. Too often, referrals to nurses is a last resort rather than an integral and standardized part of claim management. When claims adjusters have the sole responsibility to refer to NCMs, it can be subjective, uneven and therefore unmeasurable. Besides receiving referrals for sundry issues at different points in the course of the claim, nurses have not clearly articulated their case management interventions. Claims adjusters sometimes misunderstand the nurses’ approach. However, consistent referrals and standardized procedures can bring about major change. Consistent referrals Referrals to NCM should be made based on specific medical conditions in claims such as comorbidity like diabetes or problematic injuries like low back strains that tend to morph into complexity and high cost. Specific risky situations found in claims data should automatically trigger NCM notification. A recent article published in Business Insurance, “Nurses a linchpin in reducing workers’ comp costs,” points out how Liberty Mutual has developed a tool that notifies claims adjusters of cases that would most benefit from a nurse’s involvement. Decision burdens for claims adjusters are eliminated. Referrals to NCM are automatic based on specific high-risk situations found in the claim. Inconsistency disappears, and several benefits evolve from this approach. Process standardization An operational process can be dissected and categorized, thereby gaining better understanding of its components and relative importance. Review the data to determine which medical conditions in claims result in longer disability, lower rates of return to work and, of course, higher costs. Select the conditions in claims that should activate an NCM referral. An example is a mental health diagnosis appearing in the data well into the claim process. A mental health diagnosis appearing during the claim for a physical injury such as a low back strain is a strong indicator of trouble. The injured worker is not progressing toward recovery. However, the only way to know this diagnosis has occurred in a claim is to electronically monitor claims on a continuous basis. Data monitoring To identify problematic medical situations in claims and intervene early enough to affect outcome, the data should be monitored continually. Clearly, this is an electronic, not a human function. When the data in a claim matches a select indicator, an automatic notice is sent to the appropriate person. Standardized procedures Catching high-risk conditions in claims is just the first step. NCM procedures must be established to guide responses to each situation triggered. Standardized procedures should describe what the NCM should evaluate and advise possible interventions. Such processes not only explain the NCM contribution, they assist in documentation and are the basis for defining value. Measuring value NCM has been under-appreciated in the industry because measuring apples-to-apples cost benefit has been impractical. When claims adjusters decide about referring to NCMs and individual nurses create their own methodology, variables are endless and little is measurable. In contrast to the subjective approach, specific conditions in claims found through continuous data monitoring can automatically trigger a referral to the NCM. In response, the nurse is guided by the standard procedures of the organization. When referrals are based on specific conditions in claims and response procedures are delineated, outcomes can be analyzed and objectively scored.