Tag Archives: barry thompson

I Got 99 Problems, but a Glitch Ain’t One

I have taken some time to review notes from the Workers’ Comp Roundtable 2016 WC Summit. The laundry list of glitches and gripes is bountiful with few surprises. Although the notes themselves do little to move the needle, they clearly show where the needle points.

The collected bulk of issues contributed from various corners illuminate a fantastically disjointed hopelessness. If nothing else, this summit is a general acknowledgement of workers’ comp as a systemic failure. This is very useful. Accepting failure is essential to force a widened perspective and arrest the status quo.

Accepting failure means we don’t need a complicated sorting of issues to provide sense and direction. We need to stop glitch-fixing and work from a higher level. In that spirit, only two items picked from the vast summit notes are necessary to depict the problem and re-align a solution focus:

Item #1: “Every single service provider makes more money if the case goes south.”

Item #2: “80% of the system is working appropriately, but 20% needs addressing.”

Consider that Item #1 is a truth caused by the incorrect assumption that “20% needs addressing,” per Item #2. The WC claims failure rate of between 10% and 20% has been an accepted statistical constant since at least the start of my career in the 1980s. It has not changed. Therefore, I submit that we must realize that this 20% is a societal-social-human element, which no part of the WC vendor arsenal can, nor should be expected to, fix. We need to stop addressing the 20% as if it has any potential for cure and return to work (RTW) and resolution.

See also: States of Confusion: Workers Comp Extraterritorial Issues

Fueling item #1 is the decades-long growth of various for-profit interventions, managed care controls and other misguided efforts aimed at the 20%. These remain alive and well, all “going south” for profit. No one corner of the industry has incentive to change. Each has a value proposition that makes some sense standing alone but falls apart and creates cross purposes in practice. Consider that most of the other summit notes are a sub-set of this fact, relating directly to glitches in execution and the lack of human consideration in the process-monster this industry has created, All address the 20%, with the backdrop of legislative pendulums swinging to over-correct and triggering counter forces to over-react.

Consider the absurdity in this simple example: What if state law required restaurants to prepare food with 20% of their raw ingredients spoiled? Would any of their dishes be fit for consumption once the 20% was blended into recipes with the 80%? What if the restaurant’s solution was to charge more money to engage more specialized cooks and more expensive spices and techniques that promised to make the spoiled parts more palatable? What if the restaurant charged even more money to predict which dishes would be the most spoiled, yet served them anyway? What if over time the entire restaurant industry saw fit to lose money on the actual menu items but have profit rely entirely on the added services aimed at placating diners’ fears over spoiled food? This absurdity is our workers’ comp system. 

A restaurant should be able to throw away ingredients unfit for use. It is not that simple in WC, yet is it so far-fetched to consider legitimizing the statutory marking of such WC cases early or at any stage in real-time?  Can some escape-hatch of “skipping medicine for resolution” be a legitimate mutual position from the claimant and defense side? Can the system open means for very early strategies and legal methods to dispatch the 20% without a need to pretend to “cure?”

This has happened, in small doses. Remember back when California mandated vocational rehabilitation, and it became mostly an under-the-radar holding pattern to failure and a means to propel claimants into bigger and badder disability positions? Recall that the solution at one point was to allow the option for claimants to be paid the value of Voc Re, as if they attended. This situation is a legislative acknowledgement of my main point. Let’s expand this thinking on a grander scale.

Let us also agree that employers should have 90% of the responsibility to identify the 20% – they should know their employees better than any predictive model, and adjusters should have the time and mandate to properly decipher real-time information with employers. Further, employers should strive to reduce the 20% as part of overall workplace culture efforts, just as a restaurant supplier is expected to minimize the delivery of spoiled produce. This is not just about WC. Better employer culture serves to better overall productivity.

See also: Are Our Working Patterns Outdated?

The industry needs to eliminate much of what it does that keeps claims churning open. Fees for claims and related services should be based on outcome performance. Eliminate rewards for false notions of “saved” medical dollars or simple transaction fees for late-timed or ill-fitted interventions. Think of how efficient the WC process would be if the 80% with outcome responsibility suddenly became the 99%. Many managed care schemes and other interventions would become unnecessary.

Legislatively, we need an acceptance of the 20% as a human/societal anomaly and need to require judges to account for it in tougher court decisions. We need to craft law reforms that open different avenues to resolve these cases very early under a “nuisance” presumption.

We don’t need to fix the 20%. We need very big changes that relieve workers’ comp of this 20% burden. Once that happens, most every other item from the summit notes will be minimized or vanquished.

Note: PDF downloads of complete summit notes can be found here.

What Comes After Big Data?

The force of transformation in our technological age is undeniable, unpredictable, rapid and without controls to slow or stop. No industry can freeze a convenient moment in time when its commodity has high value that is safe from competitive disruption and in perfect alignment with technology. Any and every business can be blindsided by a competitor’s next-generation upgrade of IT, or an upstart’s reinvented consumer acquisition and interaction experiences. What is new today becomes old in a flash.

In the risk and insurance industry, investment is booming in predictive analytics and big data. Many proponents envision the death rattle of stodgy experience mod rating, which would give way to “Moneyball” fantasies flush with evergreen underwriting profits. While Moneyball fantasies may pan out for now, our industry cannot control the genie emerging from this bottle. I suggest we consider when and how big data might mature as a cheap ubiquitous commodity and how to hone the next logical step that capitalizes on its inevitable demise.

First, we must accept that the devaluation of predictive analytics is imminent, whenever that comes. Consider these questions:

–Will analytics still create any underwriting advantage when all companies are applying similar models?

–How will the “smart money” know when to stop huge investments in model-building? When 900 data points show no more appreciable value than 400? When the burdensome collection of data at the adjuster’s interface limits, dumbs down, dehumanizes and fast-tracks the front-line adjusting operation so as to, ironically, become a detriment to claim outcomes in and of itself?

See Also: Competing in an Age of Data Symmetry

–What happens when the first major broker or marketing interest cracks the dam and applies analytics as a loss-leader to fish for clients or tangentially grow a related market share? For example, offering to analyze a prospect’s work comp for free as part of winning a lucrative global property program. Can you beat the rush as more consumers expect predictive analysis “freebies” as part of the entry expense for winning customer contracts?

–How soon will some website’s appetite for “click-bait” mean that it offers free, robust, on-line predictive analytic calculators simply to build email lists of potential WC customers?

–What if government interests unleash the ability to apply top-notch WC analytics on an open-source employer platform for the good of the state? Can self-use, cost-saving analytics become a public “right” and not a paid-for “privilege”?

Today’s reality is simple: Information is vast, easily accessible and free. This fact not only foretells the demise of the value of big data in our industry, but it also instigates the next step in creating opportunity. This next step will arise from the changing nature of higher education and future job seekers.

I was recently privileged to hear a talk by the headmaster of an esteemed college preparatory school, who espoused a necessary wholesale change in education. His premise: There is no longer any value in teaching students facts and information because all of it is available and accessible for free. He considers it educational malpractice to make students learn facts. He has shifted a good part of his school curriculum to project-based learning. Student teams are presented with issues or situations and create solutions or new perspectives that open higher possibilities.

One of the project teams tackled the challenge of cross-teaching Mandarin and English languages. Their research discovered that the Chinese have a passion for U.S. basketball. The team produced a video of instructional interactive basketball drills that taught language during the real-time experience of following drill instructions. Their first module is now actually being used in China to support prospective students interested in American schools. The headmaster jokingly said his school may have to forego non-profit status to look for investor money and make the concept a complete language package. Mind you, these creators are teenagers with no real budget who were able to use the Internet and common technology to research, design and produce this valuable product and change notions of language-learning.

The bottom line is that future employee talent will not care to know facts but will find its highest value in being able to ignore the conventional, ask the right questions and conceive whole new visions from abundant data and information. This is where our industry must pick up a focus as big data’s intrinsic value declines.

Specifically: We need to cultivate real seat-of-the-pants critical thinking around micro-employer data and macro-industry data. We need thinkers who will ask incendiary, never-before-imagined questions and propose changes and interventions that will reinvent how any employer’s WC program might be constructed and operated and how vendors will provide action and service. While vast, yet soon-to-be-cheap, data points will still garner some valid predictions, monetizing the employer’s change proposition and perhaps having a stake in the outcome will be where the future profit lies.

Not just any claims expert can provide value at this needed level, as most in today’s world only know templates and best-practice concepts. Very few have skill in ground-up, project-based problem solving. The next wave of industry smart money must seek out and hire a new army of solution-prone human capital.

Our industry must admit that predictive modeling is but an early step toward other means of value beyond just the current fleeting ability to increase underwriting profit or fast-track a claim process. The ancient industry construct that silos underwriting, sales and claims needs a re-assessment of where priority human capital investment lies and of how cross-skills must work together.

See Also: The Science (and Art) of Data, part 1

Perhaps current position value will flip-flop… the soon to be data-rich yet bulk-automated underwriting process might become an offshore, outsourced common function while the adjuster will emerge as a future kingpin in protecting profitability and holding the highest salaried function – abundant with talent and intuition while provided ample time to ask the right questions employer by employer and claim by claim.

I welcome any entity that wants to explore and build the next value-wave on the downside of big data to please contact me.

Wanted: Workers’ Comp ‘Warriors’

Employers need to define and fortify the position of workers’ comp manager. It is a sad reality that this job often falls short of the impact and respect it deserves. It owns no distinct professional standard as compared with the role of risk manager, HR manager, safety engineer or even production supervisor, and the role is often added to those positions as an afterthought. Worst of all, employers freely allow vendors (third-party administrator or broker) to assign this job’s process and tasks. I say we retire the current notion of the “workers’ comp manager” and unleash the “workers’ comp warrior.”

Why? Because “warrior” recognizes what should be the employers’ daily fight against a WC system that puts data-driven process and so-called efficiency above personal service and intervention. The term “warrior” does not imply a negative position that simply fights fraud and bad actors… Rather, this is a noble fight that seeks the best and fastest route to employee healing and return to productivity.

Consider that “healing and return to productivity” as an endeavor has been dumbed down by our industry. Vendor preferences in the name of best practices would have you believe the task is met by simply reporting a new loss and leaving the employee at the whim of the claims and managed-care team. In reality, healing and return to productivity is an extremely complicated and personal process that is easily thwarted by the insult and cross-purposes of a claims team seeking “fast track” method while a managed-care team seeks “savings” based on a rigged system of medical reimbursement. Our industry-wide elephant in the room — churning WC claims — evidences a dire lack of ability to “heal and return to productivity.”

A WC warrior fights to ease the gauntlet for employees. She proclaims the hub-position in a turning wheel of WC action while establishing vendors and other aspects as spokes. Other wheel-spokes include employee expectation and responsibilities, supervisory role, top management support and resources, experienced-based allocation of costs, return to work (RTW) culture, medical providers, cooperation, etc. No two employer-wheels are completely alike, but all need a workers’ comp warrior at the center. No single vendor can re-create or support such a turning wheel. Most critically: In practical application, no employee skips the ride to a quality medical healing and return to productivity; however, any ill-intended employee who jumps off early is easily spotted.

Quick Tip: Raise the Bar and Redefine an Employer-Based “Warrior” Position

Key aspects of a “workers comp warrior” include:

– Emphasis on employee advocacy above all else

– Technical knowledge and experience in all the processes and interactions of WC

– Claim-by-claim insight otherwise not available via the common process

– Solutions, options and strategies tailored to each situation

– Real-time interaction, not adhering to adjuster diaries

– Inclusive program with company-wide involvement and awareness

– Learning opportunities seen in a poor claim outcome

– Accepting inevitable frustrations without blaming adjusters, doctors, state laws or employees

– Not falling for the perfect-world bubble that a broker or other vendors might try to claim exists

A Child’s View of Workers’ Comp

Step back and consider how simple workers’ comp should be.

If every professional from all corners of our industry took time away from their narrow daily focus and considered the big picture in general terms, we might all experience a collective re-setting of the communal respect we should carry for the essence of workers’ comp’s intent.

One evening in 2005, my daughter, then six years old, was “helping” me do work in my office. (As my good clients know, on any given day Risk Acuity might run a robust second or third shift!) I was reconciling a monthly pile of client first-reports, and she was making sure my finished stack was in date-order. At one point, she decided to create a report of her own on a blank paper, mimicking the lines, boxes and random numbers.

When she showed me her finished product, I was puzzled. In one area, she wrote “Jhon Elbort.” Near the top, she wrote “Broke hes legs.” Every other line was either blank or filled with a scribble. I asked if she wanted to know the kinds of information she could make up for other boxes (like the date, doctor’s name, birthday, address, etc.). She replied, “If he broke his legs, why do you need to know anything else?”

If only every aspect of our industry had such simple respect for this essence. In a perfect world of integrity, we would all uphold our ends of the bargain. Imagine employers, claim providers, doctors and employees making honest efforts to support what the system should be and make reasonable expectations about the limits of what the system owes. This would obviate most of the other tactical, legal and profit-driven “busy work” we all do that has no direct impact on an injured person’s recovery.

We should never forget that WC is all about the employee experience.

Needless to say, Jhon Elbort’s first report remains framed on my wall.

How to Avoid Work Comp ‘Fact-cidents’

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.