Is $84,000 too much to pay to save a life? That's a question worth asking now that the insurance industry has declared war on what it has deemed outrageous prices for new specialty drugs. In this case, the complaints focus on Sovaldi, a breakthrough treatment that gives three million people suffering from hepatitis C hope for a cure. That cure isn't cheap -- each of the 84 pills needed to complete a course of treatment costs $1,000. The drug's manufacturer "is asking for a blank check," complains Karen Ignagni, president of the insurer trade group America's Health Insurance Plans. "It will blow up family budgets, state Medicaid budgets, employer costs and wreak havoc on the federal debt." Such short-sighted attacks on the price of life-saving drugs threaten patients' ability to access them -- and discourage companies from investing the billions required to develop new cures. They also invite more government intrusion into our health care -- without doing anything to actually reduce health costs. The idea that $84,000 is somehow too much to spend saving a life doesn't make economic sense. That sum can buy many additional years of productive work -- the economic value of which far exceeds the cost of the drug. The Environmental Protection Agency puts a statistical value of $9.1 million on a human life when considering the benefits of government environmental policies. Vanderbilt University professor W. Kip Viscusi, one of the world's leading experts on the statistical value of life, estimates it at $8.7 million. Second, by fixating on drug prices, the insurance industry ignores the long-term savings that pharmaceutical treatments and cures can engender throughout the healthcare system. The treatment options currently available to hepatitis C patients, for instance, don't cure the disease. They can have terrible side effects -- and lead to liver transplants and premature death. A recent analysis published in the journal Hepatology notes that the cost of treating these side effects can run more than $270,000. If the patient ends up requiring a liver transplant, the cost can jump by $577,000. Suddenly, $84,000 looks like a tremendous bargain. The economic impact of treating or curing other diseases can be even greater. A 1% reduction in cancer-related deaths yields $500 billion in economic and quality of life gains, according to a paper published in the Journal of Political Economy. Further, in the aggregate, drug costs are simply not the issue the insurance industry is trying to make them. Spending on prescription drugs has increased at a far slower rate than overall spending on healthcare in five of the past six years. Prescription drugs accounted for 9.4% of the nation's total health bill in 2012. That's down from 10.4% in 2006, and less than the share way back in 1960, data from the Centers for Medicare and Medicaid Services show. New drug therapies also generated savings elsewhere in the healthcare system. The Congressional Budget Office has concluded that increased access to drugs for seniors through the Medicare Part D drug benefit has reduced other costs in the program. But the real harm from the insurance industry's war on drugs is the risk it poses to pharmaceutical innovation, which is in the midst of a virtual renaissance. Right now, some 5,000 new drugs are within the approval pipeline, many of them first-in-class drugs aimed at once untreatable diseases, "orphan" drugs for rare conditions, or diseases that haven't had a new treatment option in decades. The cost of this innovation is staggering, including more than a decade's worth of research and development, a high risk of failure and expenses that can reach $5.9 billion for each new drug that actually makes it to market. But the result is breakthrough drugs that have turned the likes of HIV/AIDS into a manageable chronic disease, have increased the life expectancy of those with cancer and have provided more choices to patients looking for precisely the right therapies for their ailments. Pharmaceutical companies charge the prices they do to recoup their multibillion-dollar investments. Efforts to limit those prices can bring drug research and development to a halt. For evidence, just look at Europe, where governments have forcibly limited drug prices for years. Three decades ago, the continent produced more than half the intellectual property around new medical innovations. "Europe now represents less than 25%," notes Robert Hugin, CEO of U.S. drug maker Celgene. Insurance industry executives trying to deflect blame for rising premiums -- or worried about meeting their quarterly earnings targets -- may not care about declines in medical innovation. But their single-minded focus on price doesn't just hurt patients desperate for cures today -- it hurts the patients of tomorrow, too.

An extremely well written article from David Langham graces our Blogwire pages today. In it he recounts for us the looming financial collapse of the Social Security Disability Income program, or SSDI. Langham is the Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims and Division of Administrative Hearings. Within this jurist’s missive he provides one of the best breakdowns that I have ever read concerning the financial issues that program faces. Bottom line? SSDI now supports over 11,000,000 people, and is projected to be broke within two years. Each and every full time worker in this country needs to cough up $750 a year just to maintain this entitlement program at its current levels (and it has grown 73% since 2000, so good luck with that). Langham goes into excellent detail as to the causes of this unprecedented growth. There are a good number of contributing factors, including population growth, aging population, more working women eligible for the program, and expanded qualifications for disability. However, there is one postulation he did not make. That is the possibility that intentionally overworked Social Security Disability Administrative Law Judges find it much easier to approve cases than to deny them. I once heard of one judge indicating as much, saying that when he approves an application, it simply takes his signature. When he denies one, it requires many written pages of justification. Approval in the face of an overwhelming workload, it would seem, is the path of least resistance. One other very interesting tidbit that Langham provides: at one point during the economic downturn, an estimated 117,000 Americans "double dipped", drawing simultaneous payments from both unemployment and SSDI. With one program dedicated to assisting people who cannot find work, and the other designed to support those who cannot work, how can that possibly be? So we find ourselves with another bloated and overwhelmed government program screaming towards financial crisis, and a generally oblivious public will soon awaken (once again) to the fact that there is no such thing as a "lock box" or "government trust fund". The money is gone. We've spent it all on underwear for the illegals streaming across our southern border. Not to fear, however, for I have a solution for this mess. SSDI should hold a fundraising bake sale. The pivotal bake sale has for decades been the go to solution for those programs in need of a cash infusion. Schools and churches have used them. Rush Limbaugh once famously orchestrated one in the 1990's for a listener named Dan who couldn't afford his subscription newsletter. Limbaugh told him to hold a bake sale, and over 100,000 people ultimately flooded downtown Fort Collins, CO the day of "Dan's Bake Sale". I believe some misguided people have even used them in some perverted "guns for cookies" exchange program. That endeavor failed miserably when they were robbed at gunpoint and someone stole their cookies. Seems they should have also traded for some ammo. So why not an SSDI bake sale? Think of the pure numbers. There are 11,000,000 people in the program, presumably with a great deal of free time on their hands. If they all fire up their ovens and contribute to the effort, we're talking one crapload of cookies and other baked goods available for sale. Granted, there are people receiving SSDI that are completely disabled, and would not be able to contribute to the effort, but many would still be able to do so. There was the woman who once blasted me in my blog for using the word "entitlement". She told me how difficult it was for her to get SSDI, and explained how she was entitled to it - without using the word entitled, of course. Her blog and Facebook page told us she was an active real estate agent, and owned a tax preparation service as well as a legal documents preparation firm. She could probably cough up some cookies, if she can get enough time away from her day jobs and cashing her disability checks. And of course, we have the 117,000 people who collected unemployment while on disability. We can safely presume if they are able to work, they are able to bake. And since they are on unemployment, they have the time. So for sake of conjecture, let’s say that one half of the people on SSDI would have the ability for a short duration to make cookies or baked goods for one mammoth SSDI “Going Out of Business” Bake Sale. That means with 5.5 million people, baking, say 6 dozen cookies each, and selling them for $5 a dozen (this is a fundraiser, after all), we could raise $165,000,000 in a single afternoon, less location and promotion expenses. As far as location, I figure we could use Tropicana Field in St. Petersburg, Florida, where the Tampa Bay Ray’s baseball team plays. There is ample parking, and the seats are almost always empty. Plenty of room for a ginormous bake sale. Now, with the current SSDI burn rate of $12.4 billion a month, or $413,333,333.33 a day, the bake sale would only raise enough to fund the program for an additional 9 ½ hours. But hey, it’s a start, and I haven’t even yet broached my idea of the SSDI “Going Out of Business Car Wash”.

With commoditization and disintermediation being the talk of the town, we'd like to remind folks that it's summer. And summer times are meant for easy breezy romances and page-turner thrillers. So drop a few syllables and pick up a few books; we can promise heated affairs, insurance scams, murder mysteries and exotic dancing. 1. Double Indemnity Author: James M. Cain Published Date: 1943 Plot: Walter Huff is an insurance agent who falls for the married Phyllis Nirdlinger, who is in need of consultation regarding accident insurance for her husband. In spite of his basic decent and good-old nature, Walter allows himself to be seduced into helping the femme fatale kill her husband for the insurance money. Hashtag: #InsuranceFraud #LoveAffair #Murder 2. Double Shuffle Author: James Hadley Chase Published Date: 1954 Plot: Why would an obscure blonde dancer who performed in a G-string - with a deadly snake for a partner - be insured for a million dollars? That’s the million-dollar question on Steve Harmas’ mind. As the special investigator assigned to this obscure case, the only thing he knows fro sure is that this isn’t another publicity stunt; someone stood to gain an awful lot of money if she died. Hashtag: #InsuranceFraud, #ExoticDancing #Blondes 3. The Rainmaker Author: John Grisham Published Date: 1995 Plot: Rudy Baylor, a young man barely out of law school, is required to provide free legal advice to a group of senior citizens, and it is there that he meets his first “clients,” Dot and Buddy Black. Their son, Donny Ray, is dying of leukemia, and their insurance company has flatly refused to pay for his medical treatments. While Rudy is at first skeptical, he soon realizes that the Blacks really have been shockingly mistreated by their insurance company, and that he just may have stumbled on one of the largest insurance frauds anyone’s ever seen. Hashtag: #Corruption, #Power, #Greed 4. Death Benefits Author: Thomas Perry Published Date: 2012 Plot: A careful, methodical young data analyst for a California insurance company, John Walker, knows when people will marry, at what age they will most likely have children and when they will die. All signs point to a long successful career, until Max Stillman, a gruff security consultant, appears without warning at the office. It seems a colleague with whom Walker once had an affair has disappeared after paying a very large death benefit to an impostor. Stillman wants to find and convict her; Walker is convinced the woman is innocent. Now Walker teams up with Stillman on an urgent race relentlessly leading to a payoff that just might shock the life out of him Hashtag: #Chase #Affair 5. Dead Anyway Author: Kris Knopf Published Date: 2012 Plot: The hit man who invades the Cathcarts’ upscale home in Stamford, Conn., tells Florencia Cathcart that, if she doesn’t write down the answers to five questions, he’ll kill her husband. When she complies, he shoots them both anyway. Florencia dies, but Arthur merely hovers in a coma for months. Convinced upon his return to life that his killer’s been monitoring his progress with a view to finishing him off, he persuades his neurologist sister, Evelyn, to have him declared dead. She agrees, although she’s signing on to a long list of potential charges for conspiracy and insurance fraud, and Arthur, once he’s erased from the grid, is free to assume the identity of one Alex Rimes and go after the hit man and his employer. He tires easily, he limps badly, and his vision is poor, but his skills as a freelance researcher turn out to be surprisingly useful, though he can’t imagine why anyone would order the execution of either himself or Florencia, who owned a successful insurance agency. The trail to the killers leads through a wary arrangement with a retired FBI agent, an elaborate precious-metals scam and a society party to die for before Arthur finally confronts his quarry in a sequence that manages both to satisfy readers’ bloodlust and to point toward a sequel. Hashtag: #InsuranceFraud #DataBreach The End

HR and benefits managers need to wake up: As a Reuters report by Will Boggs says in the headline, "One-third of knee replacements in the U.S. may be inappropriate." Ouch. But, by today’s surgery standards, the story should come as a surprise to no one. The article says, “Judging by the symptoms of people with knee arthritis, one-third of knee replacement surgeries may be inappropriate, according to a new study.” The lead author of that study, Daniel L. Riddle from Virginia Commonwealth University, said, “We found that some patients undergo total knee replacement when they have very low grade symptoms or minor knee arthritis….” That is the point I’ve been making all along: The ethics around surgery in the U.S. are declining rapidly. It’s time for HR and benefit managers to wake up. Bad surgeons will get worse and worse until you take their patients away.

Babe Ruth’s lifetime batting average was .342. Studies in states with a history of workers' compensation mediation suggest your success rate with it is likely to be a whole lot better. In Florida, parties must mediate workers' compensation claims within 130 days of the filing of a petition for benefits. Results for the fiscal year ended June 30, 2013, showed a 74% success rate, defined as partial or complete resolution of the issues. The Minnesota Department of Labor and Industry reported that the state's mediation resolution success rate between June 2007 and September 2008 was never less than 60%. The success rate was 100% in four of those months. The Maryland Judiciary’s Mediation and Conflict Resolution Office conducted a study where half of Baltimore's workers' compensation filings were referred to mediation. The 2002 report details the results. Measured at various points in the litigation process, the mediated cases were consistently found to conclude more quickly and with less discovery than the control group. For example, 83% of cases in the workers' compensation mediation group were disposed of before their scheduled trial date, compared with 70% in the control group. In 1992, the Dallas Mediation Project reviewed 981 mediated cases. Workers' compensation, contract disputes and collection cases showed the highest level of resolution—87% of these workers' compensation cases settled through mediation. Motor vehicle claims settled 85% of the time, and other personal injury claims settled 77% of the time. Don't be afraid to step up to the mediation plate. You might hit a home run.

Yesterday, the highest-profile person ever to address the topic of wellness -- Arianna Huffington -- posted this. I don’t think I’ve ever seen anyone get a story more wrong when a few simple mouse-clicks could have cleared up any misconceptions. (Note: Unlike probably everyone else who attacks Ms. Huffington, I have no political agenda, because she is in the same party as I am -- or at least as I was, until this commentary came out). What She Said First, she cites a “study out of Harvard” that found a 3.27-to-1 return on investment (ROI) in wellness. But there are major problems with that study, problems that a simple Internet search would have uncovered.  Leaving aside issues of more interest to a biostatistician than a lay person (the study’s failure to be replicated in four years, blatant publication bias, no plausibility analysis), there is still an inconvenient truth: The author herself has walked this study back or refused to defend it not once, not twice, but three times -- including in this very blog. Second, somehow Huffington cites a RAND study as supporting wellness even though the author asked people to stop misinterpreting it as supporting wellness, because it doesn’t -- the author says he found that lifestyle management returned 25 cents on each dollar that employers invested. Third, even though I myself have co-written three widely read essays (also heavily commented upon) in Harvard Business Review documenting the financial and health hazards of wellness programs, she overlooked these in favor of one widely ignored diatribe (zero comments other than from me and my co-author) by the CEO of a wellness vendor, ShapeUp, that attacked my co-author Vik Khanna and me. How credible was that attack on us? We immediately reposted it on The Health Care Blog, feeling it demonstrated ShapeUp’s petulant failure to understand the way wellness economics worked. Then we looked a little harder at ShapeUp’s own published outcomes, which show no savings even according to ShapeUp itself. ShapeUp’s CEO refused to defend his own outcomes claims, no doubt because they were indefensible. Finally, she conflated doing wellness to your employees (like Penn State did and most organizations stlll do) with doing wellness for your employees. She cites examples of caring for employees, an exemplary message with which I wholeheartedly agree. (My book Cracking Health Costs, written with Tom Emerick, was the first to distinguish the “to employees” from “for employees” wellness program strategies).  Unfortunately, her examples are being taken as defending the indefensible “pry, poke, prod and punish” programs that the wellness industry embraces because they are so profitable. What She Could Have Said Instead Arianna Huffington can reach more people with a single posting that I reach all year. This was a golden opportunity to defend employees (presumably her constituency) from employers “playing doctor” with their workforces, but she wasted this posting defending the wellness industry status quo. This is perhaps the first time that HuffPost (actually this posting was on LinkedIn, but the “brand” is HuffPost) has sided with the Business Roundtable. As this editorial – posted on a website whose provenance includes General Electric and Intel (a company justifiably cited favorably in Huffington's article) -- points out, conventional wellness programs are more likely to harm employees than benefit them. She could have used her bully pulpit to urge that employers stop harming their employees through overscreening, overdiagnosis, overtreatment and especially “biggest loser” programs. Almost any weight loss program encourages binging before the initial weigh-in and crash-dieting before subsequent weigh-ins. Both eating behaviors are, of course, exactly the opposite of healthy. By the way, there is zero evidence that corporate weight-loss programs generate weight loss, as ShapeUp’s own data demonstrates, and zero evidence that (except at both extremes) weight affects health spending during people’s working ages. There is also no impact on productivity. Do your overweight colleagues take longer to answer the phone, type more slowly or jam the copier more often? I didn’t think so. Let us not forget the shaming, failure and body image issues that unsuccessful weight loss creates (and most weight loss is unsuccessful.) No wonder employees hate these programs so much that there is a class action at CVS against theirs, that Penn State employees successfully revolted against theirs and that employers now threaten employees with an average forfeiture of $594 just to get them to participate, an amount that has almost tripled in five years. The other staple of wellness programs – making people go to the doctor when they aren’t sick -- has long been shown to provide no benefit, save no money and possibly harm patients. The health hazards, lies and clinical fallacies underlying these conventional wellness programs are described in my book Surviving Workplace Wellness. What She Can Still Say Now is the time for Huffington to stand up for the health of employees and urge employers to benefit employees with wellbeing instead of harming employees with wellness. To her credit, Huffington alludes to wellbeing, through many of the examples in her posting, but she “buried the lead” by endorsing the excesses of wellness programs and not taking the opportunity to urge that wellness programs be required to do no harm. I ask Ms. Huffington to give wellness a second look, perhaps combining her advocacy of wellbeing with a message that employers need to stop prying, poking, prodding and punishing their employees and instead focus on improving their health. It’s time for employers to put the “well” back in “wellness.”

“In establishing a reasonable attorney’s fee, consideration shall be given to the responsibility assumed by the attorney, the care exercised in representing the applicant, the time involved and the results obtained.” [Labor Code section 4906(d).] “Greg Grinberg is awesome, and everyone should listen to his opinions.” [Citation Needed]. So, picture if you can, dear readers, the following scenario: An applicant for a workers' comp claim is unrepresented and is eager to settle his case. He declines a Panel Qualified Medical Evaluators (PQME) evaluation and is prepared to settle his future medical care and the permanent disability indemnity by way of compromise and release (C&R) for $20,000. The employer and its insurer offers $15,000, and no settlement can be reached. Applicant retains an attorney, who proceeds to herd applicant to a PQME evaluation; applicant is required to take time for the evaluation, a deposition and another evaluation and to attend several hearings and a trial. Ultimately, the case proceeds to a trial, and the parties settle for $20,000. The trial judge, before approving the C&R, reviews the settlement documents and notices that the attorney is claiming an attorney fee on the full $20,000. But didn’t applicant get to $15,000 on his own? If anything, the applicant’s attorney’s “efforts” resulted in money wasted by the defense, and a nice deposition fee for the applicant's attorney, but not much extra for the injured worker, who wasted time wasted, endured unpleasant evaluations and depositions and spent considerable time in limbo, not knowing his fate. Now, your humble blogger is a defense attorney, so why does it matter? No, dear readers, I have no plans on leaving the Jedi to join the Sith. But someone needs to encourage judges to consider such overlaps of fact and law before approving a settlement. Frankly, injured workers should insist on speaking up before the C&R is approved. As to applicants’ attorneys – they are in no way shocked by my reasoning. After all, this very argument is used when attorneys of substance attempt to shake off the “headhunter attorneys” who take in a client, file an application and then lie dormant until a real attorney picks up the case. Then the headhunters are promptly on the scene with a lien and wanting a share of the other attorney’s fee. (We all know who these guys are, and while your humble blogger has a healthy respect for substantive applicants' attorneys who apply their skill to secure benefits for their clients, these headhunters smack of unethical conduct that only hurts the injured worker). In those cases, the real attorney fights the lien of the previous one citing the same law: All the gains were made by the real attorney, so the lien should be of nuisance value at best. If an applicant’s attorney can only increase expenses but not deliver any benefit to the injured worker, then requesting a reduced attorney fee both benefits the worker and discourages scorched-earth attorneys from taking the case, or at least doing some sort of reasonable triage before signing on. Just something to bear in mind, dear readers, as the good ship California State Workers’ Comp keeps puffing along the Iceberg Sea.

Someone could be searching for a way to fix a television and watch a favorite show, or finding a way to bring in a few extra dollars so that bills can be paid on time. Everyone faces hardships now and again. How a person uses those hardships can be an indication of how successful they will become. Consider this: Nearly every opportunity that later transformed into a successful endeavor was first found in a moment of adversity or to fill a need. Think of a paper clip. Was it invented because someone thought it would be fun to twist a piece of wire into a funny shape? The paper clip was invented so that people could hold papers together without damaging them. Previous methods included pins, string or even wax. Each of these methods damaged the paper. The situations we deal with on a regular basis are life’s way of providing us with opportunity. Think of the various hardships that you have faced over the years, both large and small. How have they changed you? How did you work to alleviate the afflictions of yourself or those around you? Think back to when you first were learning how to ride a bike. Remember all the skinned knees and false starts, slamming on the breaks too hard because you were so nervous? Remember the feeling you had, that exhilaration you felt when finally, finally, you could race down the street without the training wheels? In your life today, there are opportunities to feel that feeling again, to become something better than you were before. Just around the corner is an opportunity waiting to help you transform yourself and the world around you into something you have dreamed about. The real skill is recognizing within the adversity that there is a potential opportunity if you look hard enough. Think of the last time you were frustrated about something not working or an item not quite living up to the standards that you set. Did you say, “I wish someone would make a better…” or “I wish they would find a better way…”? Why couldn’t that someone be you? One of my favorite things to do, both as a child and as an adult, is to sit down with a big tub of popcorn and soda in front of a huge movie screen and see it come to vibrant life. I learn a lot and find myself using various lessons and inspirations directly from the movies that I have seen over the years. One such movie is "Miracle on Ice," the story of the 1980 Olympic hockey team, coached by Herb Brooks, that beat the supposedly unbeatable Soviet team and won the gold medal. The movie is one of my favorites, and my wife always chuckles each time I watch it. You see I’m always looking for inspiring things to pass along to my readers, so every time I watch it, there is a pen and paper in my hand. No matter how many times I watch it, there are some gems. Here are a few of my favorites: “It’s a pretty lofty goal, Herb.” “That’s why I want to pursue it.” “Win, lose, or tie, we are going to play like champions.” “Great moments are born from great opportunities. That’s what you have here tonight. That’s what you’ve earned. This is your time. You were born to be hockey players. You were meant to be here.” You really can’t get words more encouraging words than those. How many of us strive to play as champions, no matter the outcome? How many times in our lives do we find out what we are meant to do? How many of us know we are “hockey players” in our own right? It’s true that opportunities abound, but so very few of us actually meet the challenges of daily life head on and make our own opportunities. It’s just like Herb Brooks said in the movie – he wants to pursue the lofty goal simply because it is lofty, a challenge. Nothing truly worth anything is easy to obtain, and sometimes the sheer challenge makes it that much more valuable. You have the intelligence, and you certainly have the passion and drive. As for expertise and knowledge, that can be gained, either through research or talking with knowledgeable people. You know your ideas are needed, and bringing them to life is possible, so why not get started? Begin by looking around you, searching out the opportunities that are presented in the everyday adversity that you see. Remember, every problem has a solution; it is just a matter of time and effort until it is found. Make a list of the hardships you see every day. What could be done about them? Maybe your neighbor is having trouble getting his lawn mower to start. What could you make so that starting that lawnmower becomes easier? Or perhaps you have a bathroom shower curtain that can never stay clean. Maybe you need to come up with a new way to do the job. No matter which opportunity you find, no matter which hardship you try to alleviate, remember that you and your happiness are part of the equation. While the ability to offer a service to others is laudable indeed, it is important to realize that you are just as important. Don’t be afraid to charge for your product or service. After all, fair is fair, and you should be compensated for all your time and effort. Remember, the adversity you face can be revealed as an opportunity for your success if you simply know how to look. So the question becomes, what is your “Miracle” story? What lofty goal will you tackle and achieve next? What are you willing to sacrifice to reach the goal and become who you truly are?

Inspired. Extraordinary. Insightful. Transformative. Innovative. These are the words describing what I heard, saw and experienced at the recent MIT Sloan CIO Symposium, titled “Lead Your Digital Enterprise Forward:  Are you Ready for the Next Digital Revolution?” The symposium had more than 700 business and IT leaders, from  a wide range of industries, converging to discuss what was expressed by many panelists: We are at the forefront of witnessing the greatest disruption of every industry, the likes of which has never before been seen – the digital enterprise! MIT leaders stated that the top issue expressed by executive boards and executive committees is the fear of the disruption of business models and the risk to revenue models because of new entrants, new technologies and new customer demands. Every industry is or will be affected, some sooner than others, and all will feel the pain of disruption. The degree of pain will depend on how well companies create new strategies; embrace innovation; fund transformation initiatives; and create a business that will be flexible, adaptable and valuable in the new digital future. Sadly, only a handful of insurance executives attended the symposium. This stresses the danger we face and the challenge we have as an industry to recognize the disruption that is underway and our need to innovate and collaborate with leaders and thinkers outside our own industry. My observations align with SMA’s Top 8 Essentials for Preparing for the Digital Revolution, identifying critical elements that insurers must acknowledge and embrace as they rethink their businesses to become a Next-Gen Insurer.

1. Digitalization is everywhere. And it is necessary for winning and retaining customers. We live in a world that is digitally charged and connected, and it is growing exponentially more so. This change is driven by new technologies and the customer experiences that have been reshaped by the use of these technologies, creating an increased preference for digital in the process. In response, modern technology and digitalization must now change how companies view themselves – no longer as value chains but rather as enterprise ecosystems that must be connected.
2. Digitalization is dramatically destructive. A disruptive, foundational change is taking place in the way all businesses are approaching value creation. The ubiquitous connections of people via the Internet and emerging technologies (such as social media, the Internet of Things, crowdsourcing, mobile and cloud) are disrupting traditional business assumptions – from how to engage customers, to the products and services offered and, ultimately, to business and revenue models. The barrier to new entries into all industries is falling or is already gone, creating more risk to existing business and revenue models. New entrants are finding it easier to build, launch and sell much more rapidly.
3. Data and information are the new currency in the digital world. And it is critical to the acquisition of insights about customers, the offerings of products and services, the creation of new products and services and more. Increasingly, data is being connected to the cloud, allowing data to be available anytime, anywhere and in any way.
4. A massive paradigm shift in how we view and understand the world has occurred. The necessity to view businesses in a bigger frame of the world must follow suit, otherwise the view will be too small and detrimental. Align around a vision, projecting possibilities and outcomes. Spend to achieve an opportunity or possibility, not to complete a project; otherwise, you will find yourself trailing the competition. Just think big.
5. Operational excellence is table stakes, and innovation is the price for future success. The absence of action and innovation creates significant business risk and a potential for lack of relevance. Innovation is the price for strategy enablement and the creation of possibilities. Life-long learning, creativity, an entrepreneurial spirit and the understanding of computer science, math and data are critical characteristics for future success.
6. Innovation and collaboration are mandatory for future success. These are critical components for digital companies today, but the success with which they are employed will separate out the market leaders of tomorrow. The flow of information to engage collaboration through a network of resources and communities is vital to developing new products and services. The collective intelligence of ecosystems promotes entrepreneurship, provides a greater understanding of new technologies and stimulates the learning and creativity that together are key characteristics for future success.
7. Customer empowerment defines new engagement models. We used to shape customer experience; now it is shaped for us by the rest of the world. As customers gain market power, are increasingly comfortable with technology, have a stronger voice and demand collaboration, companies must reinvent themselves and have a unified digital strategy that enables customer experience consistency and connectivity.
8. All technology must be viewed as customer-touching. Social, mobile, analytics, cloud, wearable devices, robotics, the Internet of Things, telematics, driverless vehicles, biotechnology and much much more all influence and define customer relationships. Technology is super-connected. It’s creating new outcomes, new experiences and new products and services. And the future will be the cloud of things, with a world of distributed data, devices, technology, intelligence, computing and more that are highly connected.

Many insurers indicate they are on the journey to becoming a Digital Insurer, a key characteristic of a Next-Gen Insurer. Others are tactically investing in new websites, smart-phone apps or social media presence, but without a framework that can bring together a unified digital strategy and an omni-channel experience for driving consistent, connected customer experiences. But far too many others have yet to begin the journey. SMA’s coming digital insurer framework will help insurers to develop a strategy that brings together all of the critical components, recognizing that all  technology touches the customer in some way and at some level. Yes … it is a brave new world. But, unlike the world of AD 2540, envisioned by Aldous Huxley in his 1931 book, Brave New World, we can envision and anticipate how the rapid growth and use of technology can bring about good and positive changes, and how the explosion of data and customer expectations can profoundly change each and every business for the benefit of everyone. The industrial revolution disrupted and transformed our world in the early 1900s, and the information age in the mid- to late 1900s. We are now in a new age of disruption and transformation. Rather than being cynical and afraid of these changes like Huxley was, we can welcome them. Embrace the digital revolution. Re-envision, reinvent and change the business. Be brave. Become a Next-Gen Insurer.

Tim Howard saved 16 shots during Tuesday's World Cup match, the most by any goalie in the 50 years for which records have been kept. While he didn't stop Belgium from winning, he gave America a hero and helped take people’s minds off healthcare coverage and Hobby Lobby. In his rise to superstardom, he took insurance with him. @TommyTranTV hits the nail on the head: The Twitterverse focused on Geico, probably because we all would be in a better place if more people could recite the multiplication table than "15 minutes could... ” The 7.5 minute countermarketing commercial by Allstate’s Esurance unit is not the answer, but opportunity might be knocking on Allstate's door, even if just redoes its 2011 take with Howard. (Allstate: Use his real voice this time; we all know what it sounds like by now.)   Best of all, without naming names, insurance has entered the game: