By Steve Riley
Mid-sized companies are caught in a catch-22 in today's workers compensation marketplace. While they can shift from carrier to carrier--and even agency to agency--in pursuit of better prices and better service, they won't benefit from the consistency and impact of long-term relationships.
As a 60-year-old agency, we at Murray Insurance Associates, Inc., recognize that nurturing long-term relationships is one of our strengths, but it is also our number one challenge. The question we face is this: How do we maintain our traditional service focus and at the same time expand our customer base by differentiating our firm and services from others in a soft market?
Our answer: Take the frustration out of the workers compensation claim process--make it customer focused.
We accomplished this through our new workers compensation program called CoordiNET, which is based on a process known as the Coordinated Services NetworkSM (CSN), owned by a CIGNA property and casualty company.
Thanks to this process, we're building collaborative relationships with the key stakeholders involved in a claim. In addition to providing loss control and claim services, we also coordinate the entire compensation process by leading a team that involves the employers' representatives and the physicians.
After one year of using this process, we're encouraged by customer reviews. Early indicators suggest that employees believe that their recovery is the number one priority; employers have a say in their own program; doctors are more involved--becoming contributors to a team effort. Team members are working together to develop a customized plan that's based on the employer's loss history and real-time data gathered by our technology tool.
Updating claim information is easier because of the supporting technology--an interactive, Windows 95-based application that provides real-time case-management data, medical information, claim records, loss statistics and pertinent management information. Customers have online access to this system (as permitted by law) and can input and retrieve data to track trends and take a more active role in risk management and case outcomes.
In fact, within two hours of the employee's medical visit, brief notes from the doctor's visit can be in the hands of the employer and the broker, allowing us to make better medical management decisions.
There are similar claim information systems in the marketplace, but they have not been affordable or easily accessible to mid-sized companies. We're able to provide this interactive tool to our customers who generate $50,000 a year in premium.
It's an affordable solution. All they need is a PC, a modem and about an hour and a half of training time. Much of the training can be accomplished during the introductory presentation. The system also lets us go online with our customers and see the same screen they are looking at to solve problems. In addition, we're establishing customer user groups to share insights on what customers learn about their own business just by using this system.
An added benefit: Our customers are reporting a decrease in surprises. As a risk manager for 12 years, I remember getting regular inquiries from the treasurer, such as: "How are our claims doing?" and, "What's it going to cost me now and into the future?" Those were tough questions to answer. I never felt that I had much control over that information because it was not readily available.
Our approach brings together all the stakeholders on day one of a claim. With everyone involved from the start and information sharing occurring on a real-time basis, problem claims are easier to identify.
Old vs. new
This new process is the latest evolutionary step in building up our services to strengthen customer relationships.
In the "old days," we operated as a traditional regional agency. Our role was to be the advisor and the intermediary, finding the best program at the best price. Nothing more.
We then recognized the importance of providing localized, dedicated loss control and claim services. That's what our customers told us they needed to get a handle on their compensation claims. We listened and hired loss control and claim specialists to provide services on a local level. For us, it was an investment in relationship building, not an expense.
Next, we realized that all our hard work learning one carrier's claim administration system was for naught if our customer changed carriers. There was no broker-level technology to keep consistent records of claims and manipulate data for customized loss reports and loss control planning.
And, unlike Fortune 1000 companies, smaller companies can't afford to staff an internal risk management department to improve loss experience, lower lost time costs and earn the company lower premiums.
Typically in smaller companies, one person administers compensation programs and gathers the numerous claim details required by compensation regulations and insurers. They spend a lot of time contacting employees, physicians and insurance representatives to fill in the information gaps. Then, if there's any time left over, they promote work safety through programs developed generically for their industry.
So what happens? Proactive loss control gets pushed to the bottom of the "to do" list. Information is collected from a number of sources, but no one has time to sift through volumes of reports to analyze the data. Effective loss control becomes mired in the data collection function.
Positive impacts
Our agency uses processes and technology to coordinate efforts that reach far beyond that of a third-party administrator (TPA). This new technology becomes an active-party facilitator of the risk management process by giving us immediate access to information, allowing us to make timely and efficient decisions. We set up a provider network and use the technology to communicate and share data (as permitted by law) among our agency, the employer and the medical care provider.
The CSN process includes administrative case management which provides a single source of information for each claim. Employees are contacted by administrative case managers and are helped through what was once considered an arduous process. Appointments are scheduled, treatment is tracked and the return-to-work process becomes much easier for all involved. Employees aren't the only group to benefit from this approach. The case manager gathers the majority of information required by compensation regulations and adjusters, thus reducing the time the doctor spends getting data and filling out paperwork. With the burden of front-desk administrative duties lifted, doctors are more effectively managing their cases.
In one case, a doctor noticed a trend among the patients he was treating from a local theater company--all their compensation injuries were happening around the same time each week. The reason? The dancers were not warming up sufficiently before their second performance of the day, which made them more injury-prone. The doctor came forward with his findings and the company instituted a mandatory stretching period. That simple step vastly decreased their claims. Thanks to this process and its team approach, this doctor knew the importance of information-sharing.
The most significant impact of this entire process, of course, is on the employer. Take, for example, the case of our largest client--a food processing company. When we introduced this program, an occupational nurse on staff said she was already handling the work we were proposing to do in the medical arena--she wasn't convinced her company needed our assistance. Now, she's one of our biggest advocates. Why? Because we took the frustration out of the process. She now has a lot more claim data to work with and less information to track down. She's even been able to switch from claims administration to loss prevention--which, unfortunately, had always been on the back burner. Claims are down because of her new focus.
Customers are also involved in the claim management process. They can request changes on the local level that might not be possible if they worked with another agent or carrier. By being more involved in the process, customers can have a direct impact on how their workers compensation programs are administered. The result? A more satisfied customer and higher retention figures for our agency.
Our approach is also unique because it does not take an adversarial approach--it involves everyone. We explain the compensation process in detail, answer questions about medical treatments, and even set up appointments for employees with medical care providers. We give employees a local contact who will help them get back to work and make sure their bills get paid promptly.
Studies show that if you inform employees about the process and keep communication lines open throughout the recovery period, they are less likely to seek legal remedies.
Looking to the future
We see this coordinated program as a way to prepare our agency for the day when the 24-hour revolution hits the mainstream. We'll have the solid relationship with our clients and the administrative system to handle the claims--and a demonstrated record of controlling costs.
What's heartening is that our integrated approach is garnering considerable interest from potential clients, particularly those who are proactive about managing their workers compensation claims. Everyone who has seen our presentation has asked us back. Every customer we've met has asked for a follow-up meeting and proposal. The value of this unique process gets us in the door. It's that simple.
Why? Because we're able to show customers a unique solution that helps them today, prepares them for a future with more integrated services, and gives them a strong, consistent relationship with their broker. CSN brings the customer as close as possible to being self-insured and self-administered, with the advantages of the competitive insurance market. A typical customer response is, "Why wouldn't we want do it this way?" *
The author
Steve Riley is vice president for Murray Insurance Associates, Inc., a 60-year-old commercial, group health and personal lines insurance broker located in Lancaster, Pennsylvania.
The Coordinated Services Network (CSN) is a program owned by a CIGNA property and casualty company, and is available to selected CIGNA agents and brokers.
CIGNA Property & Casualty is an operating division of CIGNA Corporation providing global and risk management services to U.S. businesses of all sizes and to other groups and individuals with specialized insurance needs. CIGNA Corporation is not an insurer, and all products and services are produced and offered by operating subsidiaries.
©COPYRIGHT: The Rough Notes Magazine, 1998