April 22, 2014
Workers' Comp Benchmarking Study
The study on operations found workers’ comp leaders face challenges that limit their talent pool, technology potential and performance.
Like most industries, the workers' compensation industry has hurdles that challenge growth and operational effectiveness. Many of these hurdles for workers' comp are commonly the focus of research, with numerous studies published about the state of cost drivers, claim trends, workforce demographics, jurisdictional comparisons and the like. However, less is reported about how peers compare in terms of operational challenges, priorities, concerns, skills gaps and budgets.
In response to this need, the 2013 Workers' Compensation Benchmarking Study was developed, and Rising Medical Solutions published it. The study stems from a 60-question survey distributed to claims leaders from varying disciplines nationwide. The questions were designed to generate data that would help claims executives pinpoint operational outliers, advocate for resources in areas that need more support and validate existing strategies. The study report has compiled confidential responses from 258 claims leaders to support workers' compensation leaders with meaningful information for their important role.
The study results indicate that workers’ compensation claims leaders are facing critical challenges that are limiting their talent pool, technology potential and performance abilities.
1. Limited investment in current and future talent development.
Less than half of the survey participants provide training to senior-level claims staff, and a smaller percentage invest in training new hires.
2.Limited systems integration and use of technology to drive best practices.
A third of participants report that no integration exists between their core claims system and their ancillary systems (e.g. pharmacy benefit manager (PBM), utilization review (UR) and bill review), and many report a web-link or manual copy-paste of information as “integrated.” Study results also indicate room to advance the use of existing and emerging technologies to drive claims best practices.
3. Limited use of risk/reward strategies to propel top performance from internal staff, vendor partners and medical providers.
Just more than 50% of participants report using performance strategies with internal staff and considerably fewer use these strategies with medical providers and vendor partners. A significant competitive opportunity exists for claims organizations that implement risk/reward models, particularly with medical management vendors, given the prevalence of outsourcing these functions.
Study Context and Focus Areas
Compared with other lines of business, workers' compensation presents a number of unique operational challenges for claims organizations, including: complex compliance requirements, the long-tail nature of workers’ compensation claims and conditions leading to higher rates of fraud. These challenges have contributed to increasing loss adjustment expenses (LAE) and poor underwriting results, with loss costs in excess of premiums collected.
To better understand the daily experience of claims leaders operating in this environment, the study explores how the industry is advancing best practices, investing in talent, using technology and affecting medical outcomes. The study report provides an in-depth view of these four focus areas:
To request a free copy of the full study, click here.