Baltimore Ravens Coach John Harbaugh complained that Patriots Coach Bill Belichick used deceptive tactics in a playoff game last weekend, after a novel, efficiently executed series of third-quarter plays disoriented the Ravens defense and helped power the Patriots to AFC championship game. But the complaint is short on Henry Wadsworth Longfellow and Ralph Waldo Emerson and overlarded with Edgar Allan Poe.

Everything about the Patriots resounds with innovation, resourcefulness and the persistence celebrated by Longfellow and Emerson.

In "Paul Revere's Ride," Longfellow expressly celebrates those virtues achieving independence against a stronger adversary:

"In the books you have read,

How the British Regulars fired and fled,

--How the farmers gave them ball for ball,

From behind each fence and farmyard-wall,

Chasing the red-coats down the lane,

Then crossing the fields to emerge again

Under the trees at the turn of the road,

And only pausing to fire and load."

Individual and organization, player and team, succeed when all embrace innovation, as Emerson says in "Self-Reliance": "Power...resides in the moment of transition from a past to a new state…. This one fact the world hates, that the soul becomes; for that forever degrades the past.... [A] man or a company of men, plastic and permeable to principles, by the law of nature must overpower and ride all cities, nations, kings, rich men, poets, who are not."

The Patriots' clever disguise of which players were eligible receivers and which ineligible presented a new way of reading, a fresh legibility executing so quickly that the Ravens could not read the play until it had transpired.

The play was simply another of Belichick's irrepressible innovations. A decade or so ago, in two Super Bowls, linebacker Mike Vrabel deployed on offense and caught touchdown passes in both games.

Ravens Coach John Harbaugh's choice of words after last week's deception captures his frustration. "It's a substitution type of a trick type of thing," Harbaugh told journalists. "They don't give you a chance to make the proper substitutions.... It's not something that anybody's ever done before…. They...announce the ineligible player, and then Tom Brady would take them to the line right away and snap the ball before we had a chance to figure out who was lined up where. That was the deception part of it." A complaint got nowhere with the league. Celerity trumped incumbent legibility.

In effect, Coach Harbaugh is perseverating Poe.

Poe portends as much in the team's namesake, the poem "The Raven":

"Prophet!" said I, "thing of evil!-prophet still, if bird or devil!-

Whether Tempter sent, or whether tempest tossed thee here ashore,

Desolate yet all undaunted, on this desert land enchanted-

On this home by Horror haunted-tell me truly, I implore-

Is there—is there balm in Gilead?-tell me-tell me, I implore!"

Quoth the Raven "Nevermore."

Of course, no one is saying "nevermore" about the Ravens or the coach, whose team did well in a competitive game and won a Super Bowl but two years ago.

But immersive reading in Emerson and Longfellow charts the Colts' best shot prepping for the AFC championship game against the Patriots. Colts coaches and players would find few other drills as efficient or effective as they get ready to challenge New England champs.

Comprehension of Emerson's and Longfellow's insights shows how to innovate in a highly competitive game.

Police officers and firefighters in California and Arizona in separate cases are alleging violations of the Racketeers and Influenced Corruption Act against third-party administrators York and Corvel and the municipalities those companies serviced. In California, the defendant cities are Rialto and Stockton. In Arizona, it's Phoenix.The California complaint says the companies "routinely and improperly chose to hurl frivolous and legally unsound roadblock after roadblock to wrongfully deny care" to injured first responders.The plaintiffs believe that a "pattern of practice" at the defendant companies together with the involvement of certain personnel for the defendant municipalities created an enterprise to fraudulently deny benefits in violation of RICO statutes. Michael P. Doyle, a founding partner of the Doyle Raizner law firm, which filed both complaints, told WorkCompCentral the Arizona case already survived a motion to dismiss, and he anticipates going to trial by the middle of summer. The California case is just getting started, he said. The defendant cities paid the administrators based on a flat fee per claim and a percentage of savings from utilization-review and bill-review services that were provided, creating an incentive for improper conduct, the plaintiffs claim. The alleged pattern of denying legitimate claims allowed the defendants to "lower the liability of the city, while at the same time maximizing the TPA's revenues (and allowing the TPA to maintain and obtain contracts with other public entities based on their 'outstanding' financial performance at the expense of public servants)." The defendant employers conspired with the defendant administrators and "denied claims in hopes that some plaintiffs will simply not continue to seek benefits under workers' compensation entirely," the complaint says. The complaint also alleges the defendants ignored California law regarding pre-existing injuries that are aggravated by a new incident, as well as statutes creating a presumption of compensability for certain conditions suffered by first responders.

Representatives for the various defendants would not comment on the cases to WorkCompCentral reporter Greg Jones because of the pending litigation or were not available prior to deadline.

Credit rating is a highly concentrated industry, with the two largest CRAs, Moody's Investors Service and Standard & Poor's (S&P) controlling 80% of the global market share, and the "Big Three" credit rating agencies, which also include Fitch Ratings, controlling approximately 95% of the business. While the value of the rating agencies has been highly questioned, they remain critically important to many organizations. Risk managers can play a key role in preserving and improving their organizations' credit rating. Having had the opportunity to participate in rating agency presentations for a publicly traded company and a non-profit, I learned that the process was similar for both and that the stakes were high, requiring a tremendous amount of preparation. In the case of the publicly traded company, my presentation materials were focused on traditional risk management and audit practice (it was the ‘90s), and with the non-profit my focus was on enterprise risk management (progress). The following, though not a comprehensive description of the rating process, describes key areas where risk managers should focus:

• Engage with the lead on the rating team (typically within the CFO division)
  • Prepare a high level report for the lead's review. Provide information regarding how the organization is addressing risks, both insurable and non-insurable.
• Inquire about the rating agency criteria
  • Agencies do not use the same criteria, but they are required to be transparent about the criteria and will share them beforehand. Through inquiry, you can identify the areas of risk that will be their focus. Read other institutions' credit reports for clues.
• Know your financial statements
  • Carefully review your financial statements for what the rating agency analyst will be looking for: debt, finances, significant litigation, mergers and acquisitions, etc. and be prepared to address questions around risk in all these areas.
• Understand the metrics that are used
  • In addition to financial metrics, the focus will also be on legal review, risk management and governance.
    • Strategies and polices
    • Board composition and capabilities
    • Bank covenants
    • Management turnover
    • Ability to anticipate, predict and respond to potential challenges
• Rehearse your presentation
  • It is common to rehearse individually and as a group for the presentation. Your presentation time will likely be less than 30 minutes. There may also be tours provided to the rating agency analysts, so assist in preparing the people involved and the physical location.

What can lead to a downgrade? Failure to meet targets, two or more years of declining revenue, debt burden that exceeds 10% of operating revenue, significant turnover in leadership and litigation. What can lead to an upgrade?  Consistent financial performance, lower debt burden, modest future capital plans (not overextending) and a strong enterprise risk management program. At the University of California (UC), we presented our enterprise risk management program during the rating agency review. Universities access the capital markets to finance their working capital need, so a strong credit rating is critical. The result was that UC was the first non-financial institution to receive credit agency acknowledgement of an enterprise risk management program. S&P's RatingsDirect on the Global Credit Portal wrote on Sept. 9, 2010: "The UC has implemented a system-wide enterprise risk management information system, which in our opinion, is a credit strength." As a result of the presentation, Standard & Poor’s requested that we conduct a webinar on Enterprise Risk Management in Higher Education for its analyst in New York and has continued to focus on the importance of ERM. The company has written: "Standard & Poor’s Ratings Services has expanded its review of the financial service industry’s enterprise risk management (ERM) practices. This enterprise risk management initiative is an effort to provide more in-depth analysis and incisive commentary on the many critical dimensions of risk that determine overall creditworthiness. This enhancement is part of Standard & Poor’s holistic assessment of enterprise risk management of corporations and financial institutions. Standard & Poor's is continually enhancing its ratings process to respond to the emergence of new risks and marketplace needs and conditions." The presentation centered on demonstrating that risk management programs and tools were in place and effective, fulfilling the following criteria: ERM aims to measure an institution's achievement of four primary objectives:

1. Strategic - High-level goals that are aligned with and support the institution's mission
2. Operational - Continuing management process and daily activities of the organization
3. Financial reporting - Protection of the institution's assets and quality of financial reporting
4. Compliance - The institution's adherence to applicable laws and regulations

Within each of these four objectives, there are eight related components:

1. Internal environment - The general culture, values and environment in which an institution operates. (e.g., tone at the top)
2. Objective-setting - The process management uses to set its strategic goals and objectives, establishing the organization's risk appetite and risk tolerance
3. Event identification - Identifying events that influence strategy and objectives, or could affect them
4. Risk assessment - Assessment of the impact and likelihood of events, and a prioritization of related risks
5. Risk response - Determining how management will respond to the risks an institution faces. Will they avoid the risk, share the risk or mitigate the risk through updated practices and policies?
6. Control activities - Represent policies and procedures that an institution implements to address these risks
7. Information and communication - Practices that ensure that the right information is communicated at the right time to the right people
8. Monitoring - Consists of continuing evaluations to ensure controls are functioning as designed, and taking corrective action to enhance control activities if needed

Your criteria (framework) could be different; the key is to demonstrate that you have an effective means of identifying, managing and monitoring a wide variety of risks across the enterprise. Of primary importance is the identification of risks. The analysts are very concerned that organizations are going to be hit by surprises and thus be ill-prepared to respond and recover from them. Examples of programs and tools that evidence your ability to detect risks:

• Policies that are supported by awareness and education (people know the right thing to do), backed up with reward and accountability for doing the right thing – built into employee selection process, job description, development plans and reviews and compensation plans (people want to do the right thing)
• Multiple reporting channels – anonymous hotlines for employees, customers and the public and ease of access to human resources, compliance, risk management and legal and the inclusion of continual communication that retaliation is not tolerated
• Incident reporting and tracking systems (claims, safety, human resources information systems, etc.)
• Risk assessments at both an enterprise level and at the functional level
• Business intelligence system – the ability to aggregate and analyze data across the organization to enhance detection and advance predictive modeling

Key takeaway: As a risk manager or enterprise risk practitioner, your engagement in the credit rating process is an ideal way for you to add value. Leverage your ERM program to highlight your organization's ability to detect, manage and respond to risk events.

Usage-based insurance, a.k.a. pay-as-you-drive, is an intriguing proposition to drivers. For most drivers, usage-based insurance offers plenty of allure: cost savings, extra motivation to drive safely and added incentive for the ecologically minded to drive less often. But some customers note privacy concerns. Here are three ways to address privacy to make customers feel more comfortable. 1.  Show them the benefit. Younger consumers have grown up in the digital age, and, as such, they’ve gotten used to sacrificing a bit of privacy to gain something of value. According to Pew, 81% of Millennials are on Facebook, and a full 55% have posted a “selfie” on a social media site. If they understand that giving up some driving privacy may allow them to earn better rates, and that they may even become better drivers from the feedback they receive, privacy concerns may fall by the wayside. 2.  Be transparent. Track only the data you need, and be straightforward about it. Inform your customers of what you track, where you store it, why you need it and how you protect it. Honesty garners respect, and transparency puts you one step ahead. In the area of transparency, smartphone UBI delivers a clear advantage over the use of onboard diagnostic devices. With a black box plugged into the dash, consumers have no idea what you’re looking at. With smartphone UBI, they can see every factor measured and how they score. When marketing and onboarding new customers, be clear about how data will and will not be used. Some consumers may want to know if their information will be given to police or other third parties. Answer these questions clearly, and abide by the policies established. 3.  Continue to offer choices. Some drivers love the concept of UBI and are willing to reveal their habits to participate. Others are not -- and that’s okay. By providing your customers the information they need to understand their options, and reminding them they’re free to choose whatever is best for them, you relieve concerns and build trust -- not to mention brand loyalty. For more on how UBI works for drivers, click here.

Less than 10% of people keep their New Year's resolutions for at least six months, according to research from Cancer Research UK, with half breaking their resolutions within a fortnight, blaming a lack of will power. 20% planned to cut back on alcohol, others to spend less money (34%), cut down on chocolate (21% and go to the gym (22%). New Year’s resolutions aren’t just for individuals, though. They can also be found in the annual reports of most companies, including insurers, when they set out their strategic objectives for the coming year. Sadly, most insurers say the same thing, even if different language is used: reduce costs, improve efficiency, grow, focus improve service. There’s a more than reasonable chance that they will be saying the same things next year, as well. Delivering against strategy objectives is as much a matter of leadership as it is of planning. I wonder how many business leaders are also abject failures in keeping their New Year's resolutions? After all, a leopard doesn’t change its spots. Maybe the answer is to set up a project team and delegate some responsibilities. I imagine an interesting conversation in the office: "Jim, I’ve decided that your role this year is to give up chocolate for me...." Maybe it’s about having an incentive? Insurers might say to a policyholder that they will give a 20% discount on premiums if the policyholder gives up booze. Such a discount, coupled with the money saved, could be a compelling argument. And, after all, isn’t that what user-based insurance is fundamentally about? I wonder: Will future insurance models need to have greater alignment between risk mitigation plans of insurers and personal behavior of the individual? I suspect we are already close to having that capability, as insurers increasingly use analytics to understand their customers and create more compelling offers at renewal. Can’t we extend that thinking? So here’s a challenge for insurers – not to promise the same old stuff but rather to make a single big resolution for their organization which will be differentiating, ambitious, maybe even bold! Perhaps insurers need to look into the crystal ball and imagine not only themselves, but also the industry in 2030, and start to realize how different the insurance business will be by then. And then, in 2015, do "just one thing" of significance to take them along that journey. As for me and my resolution? I asked a friend what she thought I needed most, and she suggested a visit to the opera, on the basis that it’s apparently good for the soul. How I see myself, and how she saw me, are apparently different. Isn’t that the same for all of us, and for the insurance industry as a whole? I’ll tell you when I’ve been to the opera!

Once again, I’ll head out on a limb with saw firmly in hand… 1.  Aetna will NOT be able to sell the Coventry workers' comp services (CWCS) division.  I’ll double down on last year’s prediction: Even if the giant health plan wants to dump workers' comp, the network – which is where all the profit is – isn’t sellable. The rest of the operation isn’t worth much; the bill review business continues to deteriorate (and CWCS is looking for a replacement bill-review application), competitors are picking off key staff and customers continue to switch out services and network states. 2.  Workers' comp premiums will grow nicely, driven by continued improvement in employment and gradually increasing wages coupled with increases in premium rates in key states (we’re talking about you, California). 3.  Additional research will be published showing just how costly, ill-advised and expensive physician dispensing of drugs to workers’ comp patients is. Following on the excellent work done by CWCI and Accident Fund/Johns Hopkins, we can expect to learn more about the damage done to patients, employers, insurers and taxpayers by docs looking to Hoover dollars out of employers’ pocketbooks. 4.  Expect more mergers and acquisitions; there will be several $250 million-plus transactions in the workers' comp services space, with more deals won by private equity firms. Of late, most transactions have been “strategics,” where one company buys another; the financials of these have been such that private equity firms couldn’t match the prices paid. I’d expect that will change somewhat in 2015 as  “platform” companies come on the market. 5.  A bill renewing TRIA will be passed; the new GOP majorities want to show they can “govern,” and this has bipartisan support. 6.  Liberty Mutual will continue to de-emphasize workers’ comp. The company’s continued focus on personal lines and property and liability coverage stands in stark contrast to the changes in workers' comp. The sale of Summit, management shifts and the financial structuring of legacy work comp claims portend more change to come. Recent financial results show the wisdom of this strategy. 7.  After a pretty busy 2014, regulators will be even more active on the medical management front. Workers' comp regulators in several more states will adopt drug formularies or allow payers to more tightly restrict the use of Scheduled drugs via evidence-based medical guidelines and utilization review (UR). While the former is easy, the latter is better, as it enables payers to more precisely focus their clinical management on the individual patient. Expect more restrictions on physician dispensing and compounding, increased adoption of medical guidelines and UR, along with incremental changes in several key states (California, we hope) to “fix” past reform efforts. 8. There will be at least two new workers' comp medical management companies with significant mindshare by the end of 2015. These firms, pretty much unknown today, are going to be broadly known among decision-makers within the year. While they will not generate much revenue this year, they will be attracting a lot of attention. 9. Outcomes-based networks will continue to produce much heat and little real activity. After predicting for years that small, expert-physician networks will gain significant share, I’m throwing in the virtual towel. There’s just too much money being made by managed care firms, insurers and third-party administrators (TPAs) on today’s percentage-of-savings, huge generalist network/bill review business model. Yes, there will be press releases and articles and speeches; no, there won’t be more than a very few real implementations. 10.  Medical marijuana will be a non-event. Amid all the discussion of medical marijuana among workers’ comp professionals, there are very few (as in no) documented instances of prescribing/dispensing of marijuana for comp claimants. Yes, there will likely be a few breathless reports about specific claims, but just a few. And, yes, there may also be a few instances of individuals under the influence of medical marijuana incurring workers' comp claims, but these will be few indeed. There you have it – here’s hoping I’m more prescient this year than I was last. This article first appeared on Managed Care Matters on Jan. 5, 2014.

Much has been written about the promise of digital technology to change insurance. But what does this mean in practical terms? Can digital technology reshape traditional patterns of engagement between insurers and their customers that have existed for decades (or centuries)? Can technology create a value proposition that avoids a zero sum game and benefits both insureds and insurers simultaneously? This post identifies three major opportunity areas for insurance and describes what one insurer, Tokio Marine & Nichido Fire Insurance, has delivered to make the transition to a digital insurance platform. Consumer expectations are increasingly being conditioned by the best practices found on sites such as Amazon, PayPal and eBay. Compared with these experiences, the traditional insurance process presents insurers with a number of challenges. Three problematic areas are:

• Buying is periodic: In the majority of sales, insurance is purchased infrequently. In some lines of business, such as life insurance, it may only be bought once (and used only once!). In personal lines, annual or semiannual renewals are automated, and a customer may never speak with an agent or a representative of an insurer. This lack of contact limits the opportunity for a distributor or an insurance company to establish a significant relationship with a customer and personalize the buying experience.
• Risk is poorly managed: Sales may be periodic, but risks are continuous. Business conditions and lifestyles change over time, and specific products, limits and coverages should be introduced at strategic times to respond appropriately. Changes in conditions – when a contractor offers a new type of construction, or a commuter in a dense metro area begins working from home and parks his automobile – need to be identified immediately and responded to appropriately. In an ideal insurance scenario, risks are managed on a continuous basis. However, in the current model, active risk management is a high-touch, high-cost service. Low premiums on products such as small business insurance provide little incentive for agents to service the risk management needs of customers appropriately. As a result, too often, insureds unintentionally self-insure. Many a claim submission includes the comment, “I have insurance; I thought I [or my business] was covered!”
• Payment, not avoidance, is the focus: The best loss is the one that is avoided altogether. However, the core of most traditional insurance products is to compensate an insured financially for a loss caused by a covered peril. This results in an emphasis on paying claims, not avoiding losses. While insurers are very familiar with the typical causes of loss, their customers generally are not aware of how their day-to-day behavior affects their loss exposure. Consumers and business owners do not typically evaluate their behaviors, lifestyles, operations or choices in light of loss potential and, thus, participate in behaviors that expose them to loss. For example, individuals choose to post vacation pictures on public forums such as Facebook, which increases their exposure to theft at their vacant home.

Tokio Marine & Nichido Fire Insurance (TMNF) began addressing the periodic sales challenge in 2010 by moving to a more continuous delivery platform. Offering personal lines insurance in the Japanese market, the company found that its traditional products did not allow it to sell to clients on a frequent basis. To change this dynamic, the company combined new technology with updated insurance products to fundamentally change the traditional process of customer engagement. The company developed a series of one-time, short-term insurance solutions that addressed targeted needs such as travel, skiing and one-day automobile insurance. The company partnered with a leading telecommunication provider, NTTdocomo, to sell these on mobile telephones. The buying experience requires very little customer input of information (because the phone company has most of the required demographic information), and payment for the policy is part on the next phone bill.  Over time, the product set has expanded into health coverages and now takes advantage of continuous health tracking technology. These make wellness recommendations to users on a daily basis and has helped TMNF make the transition from a periodic insurance provider to an active participant in its customers’ lives. Leading insurers are beginning to discover how to innovate with technology and product to change traditional trade-offs and deliver higher-value solutions to their customers. In subsequent posts, some solutions to the challenges of suboptimal risk management and loss avoidance will be detailed.

Now that the implementation of the Affordable Care Act (ACA) is well underway, opportunities for insurance product innovations are emerging. The ACA, or Obamacare, has been accelerating the changes that have been occurring in the last decade in how healthcare is delivered. A large portion of this change has manifested itself in the consolidation of healthcare institutions, physician medical practices and the employment of physicians by hospitals. As a result, the ACA is contributing to blurring lines that have separated those providing, managing and coordinating care. All those changes create opportunities for innovative carriers to thrive over the next decade. As an example, look at the trend of hospitals and hospital systems directly employing physicians, which Obamacare is encouraging, to seek greater efficiency and lower costs. Healthcare organizations are adding physicians, either by hiring them or by purchasing practices that employ them, and this shift has substantially increased demand for a seldom-used feature of a product known as the extended reporting period (ERP). An ERP endorsement, as part of what is known as a claims made product, addresses medical incidents that have occurred during the period of a policy that is about to expire but that are not yet known or made as a claim. Using ERP coverage can help insulate a new employer from any lingering medical incidents that occurred before it employed the physician but that become claims during his time with the new employer. Claims of malpractice can take months or even years to surface and then resolve, and a facility employing a new physician wants to be sure it isn’t inheriting a host of problems. The ERP carries an additional premium that is sometimes 250% of the expiring annual premium. Historically, ERP was largely purchased by physicians as a last resort – if they were leaving a claims made carrier, and the new carrier wouldn’t honor the prior carrier's retroactive date (the date after which any medical incident must take place to potentially be covered under a policy). This situation requiring the purchase of ERP was relatively infrequent, and pricing the risk was a challenge, because exposure can be carried for an unlimited time under an ERP. Typically, the physician’s only option was to buy it from her incumbent carrier, which is generally required to offer an ERP endorsement. Few carriers developed a separate ERP product to compete with the incumbent carrier’s endorsement approach, so there was little competition. In 2012, though, there was an opportunity to provide a competitive stand-alone ERP policy. The ACA was accelerating consolidation in the industry and boosting interest in purchasing ERP. At the same time, ERP pricing was still based on the hard market that began in the late 1990s even though claims frequency was showing an unprecedented decline in more recent years. In other words, premiums were substantially more than adequate for the risk. For quick-acting carriers, there was a chance to offer a stand-alone policy at generally a better price, but one that was still adequate in a small but rapidly expanding market. This also opened up the opportunity to innovate on product features, including providing options of different limits, various levels of risk-sharing and a variety of durations for the ERP. The market welcomed these pricing and innovations. Here is an example of how the ERP issues play out: A physician enters into an employment contract with a hospital, coming out of private practice. She may have done most or all of her work at that very same hospital, and, as part of standard guidelines for credentials in most states, she needed to provide proof of insurance of at least $1 million/$3 million to maintain privileges there while working as an independent contractor. Options for the prospective hospital employer are:

1. Ask the physician to obtain a quote from her existing insurance carrier for an ERP. That amount could become part of negotiations about her compensation.
2. Assume the exposure for the physician’s prior acts as part of the hospital’s self-insured retention, its captive insurance program or its balance-sheet obligations. After all, the physician practiced at this hospital almost exclusively, and the hospital may consider that it has the exposure to the physician's incurred but not yet reported liability obligations anyway.

Under option 1, there can only be one quote for the ERP, because there is only one existing insurance carrier. If the carrier provides ERP coverage, it is increasing the time period within which claims can be brought under its policy, which increases uncertainty and requires, in the actuarial vernacular, "risk load" or “rate load” (defined as rate needed to account for the potential adverse claims fluctuation inherent in the extended time frame for claim reporting) or, from the perspective of a cynic, increases the fat, the fudge or the cushion, which creates an opportunity in option 2. Given that ERP rates are based on historical losses and that claims frequency has declined, it’s a good bet that – with the added risk load and without the challenge of competition – the quote may be, as an actuary or a lawyer might say, “disproportionate to the risk.” Moreover, with the existing carrier, there oftentimes are no options for a deductible that has a different (lower) limit or shorter duration as a means of lowering the cost to the physician and her new employer. Option 2 introduces a wrinkle: When a hospital grants a physician privileges as an independent contractor, the hospital potentially has a stronger defense than when it employs the physician. If the physician’s prior acts as an independent contractor are covered under the hospital’s insurance program, the lines between independent contractor and employee blur, and the hospital may become more vulnerable. Additionally, the hospital’s coverage would not generally provide a specific individual limit for the physician, meaning the hospital exposes its entire tower of insurance to a claim against the physician. With an ERP covering the period before she became an employee, a $1 million policy might suffice, and the hospital could maintain its defense against claims for her time as an independent contractor. There is an opportunity for stand-alone ERP policies to provide a third option – one that can carry a better price than in Option 1 and that allows for the opportunity to provide a better defense against claims than Option 2. ERP is just one of many opportunities to innovate that ACA will provide. There could be, for example: --A blurring of the lines between different aspects of healthcare and of health insurance products. --An explosion in the power of telemedicine – and for new thinking about coverage. --A need to be far more careful about data breaches and other cyber issues – perhaps even leading to a decision to confiscate physicians’ phones. My colleagues and I will tackle these and other topics in subsequent articles.

[Editor's Note: A debate about the effectiveness of corporate wellness programs began on this site in late November, with the publication of a piece arguing that rigorous analysis showed no savings. A prominent proponent of wellness responded with a piece acknowledging some common ground but pushing back on the need to have wellness programs show a return on investment (ROI). Two of the authors of the original piece then raised 11 questions for the proponent. Now, one of them, Al Lewis, forwards an email he sent to the proponent, Ron Goetzel, that does a solid job of laying out what I see as the common ground -- including an agreement not to sell wellness based on claims of ROI. The hope is to forge an agreement on how wellness should be sold and administered. As of this writing, Lewis says Goetzel has not responded. We've attached the email, which was sent Jan. 5.] Ron, based on your posting I think we have enough common ground to stop arguing and sign a joint open letter like the one below.  Feel free to edit it. Let’s aim to have it out in a week. If people haven’t had a chance to sign it by then, they can add signatures. Eventually, we should get a lot because there isn’t really any major controversy left, if ROIs are no longer an issue and we agree on adherence to guidelines. Al   The signatories of this note, leaders in the wellness field who have previously been unable to find common ground, now agree on many key aspects of workplace wellness and would like to share that consensus. First, instead of what are known as “pry, poke, prod and punish” programs that require financial forfeitures (large penalties or loss of large incentives) by employees who refuse to (1) divulge personal health information on health risk assessments; (2) participate in overly frequently blood draws or (3) be sent to the doctor when they aren’t sick, we would encourage employers to adhere to USPSTF [U.S. Preventive Services Task Force] screening/checkup guidelines and frequencies (once every three to five years for most working-age adults). Aside from these infrequent screenings, we recommend that employers stay out of employees’ personal medical affairs unless they ask for help, because overdoctoring produces neither positive ROIs nor even healthier employees. There is also strong anecdotal and behavioral economics evidence that morale is adversely impacted by interference in employees’ personal medical affairs. Second, we also all believe that employers should respect the dignity of employees not just by no longer economically forcing these programs upon them, but also by not shaming employees who can’t lose weight. Third, we would jointly like to apologize to Penn State, Honeywell, Nebraska and others for not helping them recognize the importance of adhering to guidelines and/or of respecting employee dignity. Finally, we recommend that future programs be undertaken without regard for return-on-investment (ROIs) in medical spending since there is too much controversy surrounding the calculation of those ROIs.  Journals and consultants supporting wellness find positive ROIs from wellness whereas other journals and consultants do not, while no vendored program has ever been validated by the industry’s gold standard, the Validation Institute, for medical claims savings, though it is possible this happens in the future. Instead, we propose that wellness programs be done for employees rather than to them, in order to enhance the engagement and productivity of America’s workforce, which ultimately is what will keep America competitive in international markets for the foreseeable future.  Because of the importance to corporate America of having an engaged workforce, we urge the Business Roundtable and other wellness influencers to support us in this new direction.

They may seem like curses of modern corporations, but org charts and regular reorganizations are now a fact of business life. I'm sure, as an insight leader, you will have seen your fair share. As you've risen up the hierarchy, you've probably changed your role, from recipient to author. From my experience, two major opportunities exist for organizing customer insight functions. The first is to bring together the different technical areas that can best collaborate to provide deeper insights that lead to more action. These include teams that are often located in different functional silos. In line with my definition of customer insight, I would recommend bringing together: customer data, analysis and modelling, research and database marketing teams. Suitably integrated and with a culture focused on outcomes, these teams can work together for an "insight engine" that produces not just technical output but actions that result in both commercial impact and improved customer experiences. The second opportunity tends to come later in the maturity of a customer insight function. It is the centralization challenge. Whereas I would not encourage accelerating this (my experience is that insight teams drive more value when close to the business area they serve, with shared targets and emotional engagement), there do come times when it is appropriate. This will often be driven by wider corporate changes in line with simplification and cost reduction. But centralization can also be an opportunity. Integrating into one center of excellence on customer insight that drives consistent processes and coordination of customer interactions across lines of business can also drive value. Here are some of the benefits and risks I've seen in these centralized models: Benefits of a center of excellence:

• Economies of scale in specialist technical work;
• Career paths for more technical practitioners;
• More independent overview from business partners;
• Optimization and coordination of customer interactions.

Risks of a center of excellence:

• Loss of knowledge about specific business areas (becoming an "ivory tower");
• Loss of a sense of belonging to a business area (engagement);
• Inflexibility about different local needs (one best way);
• Apparent bureaucracy -- some things take longer (common process).

Interestingly, a poll we ran on customer insight found that all the leaders answering were running or part of a center of excellence. It would be interesting to hear from any customer insight leaders who are still successfully running a more federated or localized insight model. What is your experience?