Reducing Administrative Costs, Resolutions, Strategic Partners, Analytics and Human Factor.
We have a problem in the workers’ compensation industry. It is an expensive, inefficient, and time-consuming problem. This problem involves an archaic process that nobody likes, but to which everyone continues to subscribe. In working toward the resolution of workers compensation claims, Insurance carriers and TPA’s majorly overspend through a process they have been utilizing for decades. This outrageously expensive process is somehow prioritized before a simple examination of the overall spend for the Total Cost of Risk (TCOR) incurred. The strategic management on new or long-term existing claims of dispute have a direct impact on the administrative costs incurred per claim, as all claims are unique. The current process utilized in the industry does not allow for this strategy on a wide scale.
Insurers and TPA’s take the same course of action and rarely change their position once litigation on a disputed claim has begun. This inefficient approach – from the over-utilization of Independent Medical Exams and physician evaluation services, to the endless legal fees contributes to a vast array of unnecessary administrative costs. When aiming to settle a case for a specific reserve mark, all carriers lose sight of the big picture with costs incurred for the claim. The majority of these claims could have been settled prior, at a fraction of the expense.
There are specific pivot points within every claim to achieve an amicable resolution.
During the course of a claim cycle, identifying these critical times are vital to your client and company’s risk exposure. For Example, when an Injured worker is refusing to resign and a claim is stalled for settlement. The adjuster may assign legal to the file, yet no one follows through just six months later when the employee resigns to reopen and address the communication breakdown, attributing to a substantial increase in administrative and legal costs as these claims continue to age with resolution finally occurring up to a year later.
Here, an additional set of eyes on each claim for early resolution protocol by a neutral party will help identify these specific points achieving final resolution while mitigating risk exposure, before they become additional unwarranted risk and incurred expenditures.
Before we can solve the financial problem, we must first look beyond the finances. As claims age, we have established that a breakdown in strategy exists within the insurer’s company, perpetuated by their existing model. Additionally, a breakdown in trust occurs between the claimant, the adjuster, and the carrier. The longer the litigation process takes, the more this mistrust spreads. Eventually, the claimant sees the dispute as a never-ending cycle, often resulting in mistrust between the claimant and even their own counsel. No winners emerge from this all-too-common scenario. The takeaway here is that the loss of trust is a catalyst for further inflation of expenses.
How do we free carriers from using such an archaic model for settlements in the 21st century? No attorney or adjuster can understand what a claimant has been through unless they have endured the same experience within the system – the experience of navigating their own workers’ comp disability. So, is it even possible to restore trust to resolve matters swiftly and affordably?
There is indeed a more efficient and cost-effective approach to workers’ compensation settlements today. This approach creates an environment in which saving money and restoring trust are not mutually exclusive ideas. When a common bond can be established between the claimant/ claimant’s counsel, and a unique private mediator, working in conjunction as an extension of your own risk management team allows for amicable settlements to be reached promptly. The goal is to achieve a middle ground, by utilizing a less adversarial approach allowing the claimant to feel heard at times by someone who can empathize with their experience. The result is a prompt resolution of their claim, thus reducing the carrier’s administrative costs and eliminating risk exposure.
The difference between a Strategic Partner and Vendor. The implementation of any vendor program change has costs. The term strategic partner is over utilized in the industry today. A true strategic partner invests in their clients, vs. a vendor is always being paid upfront or during the course of services provided, regardless of the programs success.
Data Driven Analytics is a key component to help measure the successful rate of programs and strategies yet, with all the progress within the industry over the last several years, one element from the equation is still missing. The human element factor. Utilizing all tools we have available today including data analytics along with the human element factor will continue to provide desired results with innovation for successful risk mitigation of claims in an advocacy approach model.
One quick flashback. Do you remember the miracle on the Hudson? Shall the Pilot and Co- Pilot listened to the data analytics simulations suggested instead of their specific human factor decision making process there would of been a very different outcome. This was proven when the FAA ran the simulations with accounting for human response times. The time for innovative change is now. We must utilize all tools available as claim costs continue to rise and our industry continues to evolve.
PG Resolutions Group Developed an innovative model providing added value services for clients removing these hard upfront costs. We believe in allowing clients to experience our services with paying for results not promises by offering contingency agreements to begin. We are a unique risk management strategic partner providing our clients added value utilizing a specialized risk management resolutions approach. Our Clients immediately realize reduced administrative costs while all future risk is mitigated when possible.
Do you have a strategic partner invested in your interests?
Pay for results not Promises!