In this issue of the Journal, we'll take a look at some of the major trends we saw at the NWC&D conference in Las Vegas last month. The 2017 meeting was a fascinating mix of new tech and back to the future ideas. Here's our take on a few sessions that seem to epitomize the major threads and issues we expect to hear more about in 2018. You can find more at the conference web site.
People Talking to People - Can It Be That Simple?
The conference began with a plenary session that took us back to basics. "The Nordstrom Way: Boosting Injured-Worker Engagement" was presented by Janine Kral, VP of Risk Management at Nordstrom. As every mall maven knows, Nordstrom is justly famous for its customer service culture. Their people are trained to help customers, not just push merchandise and ring up sales. If you can't find what you're looking for at a Nordstom store - ask. They'll tell you where to get it, even if it's at another store down the mall.
What Nordstrom has done - hang on to your preconceptions of hard-nosed claims wrangling - is to apply its customer-focused approach when engaging injured workers and advocating for their care. Nordstrom invests heavily in inculcating its service culture in its employees, so they have developed practices over time to ensure that injured workers are able to stay on the job and continue to deliver the service level crucial to Nordstrom's mission as a successful retailer.
Nordstrom believes in taking the time to talk to injured workers, understand their situation, pain points, and needs. Their goal is not to process claims, get settlements, and close files. It is, rather, to find a way to bring the injured person - a person, not a generic "claimant" - back to work and back in the Nordstrom fold. Imagine, they talk to people. Obviously, they use all the usual tech pieces that all modern claim shops use, but the secret to their success is simple engagement, creating a space of mutual understanding between the adjuster and the injured worker.
Can this work for other employers? The presentation did not address this question. Nordstrom's employee population and culture are unusual and their approach to handling comp claims is clearly aligned closely with a full range of specific company values, but at bottom, it comes down to treating injured people like people, like customers, like people you want to help. Might be something to that.
Insurtech - Of Course
Just try to get through an industry conference now without hearing the word "insurtech" a few gazillion times. Two breakout sessions looked at the intersection of claims and technology from different, but complementary viewpoints. First up on Wednesday was a panel entitled How High-Performance Claims Organizations Use Technology to Differentiate Their Operations". The first eye-opener in this presentation was a look at what percentage of annual spend various claims organizations devote to comp related IT operations and projects. While the winner was "unknown" (a serious comment in itself), the responses spread across a very wide range, from 1% to 16% or more. But the bulk of the responses clustered in the 5% or less range, suggesting that, despite what we hear about insurtech, comp claims operations are not all flocking to that banner.
In contrast, the stats from the Workers' Compensation Benchmarking Study show that the highest claim closure rates adhere to those organizations with the highest spend in workflow automation and predictive analytics. High performing claims shops show a consistent use of predictive modeling across all types of decision support activity. Similarly, the high performers also showed a strong tendency to use a variety of outcome metrics to manage performance. In sum, many claims shops are not investing heavily in systems support, but those consistently turning in the best performance definitely are.
In a related session on Thursday, Jeff White of Gallagher Bassett asked the question directly, How Will ‘Insurtech' Impact the Claims World?". His wide-ranging answer was - in more ways than we can easily think about right now. In addition to the internal pressures that claims organizations routinely face - how to improve outcomes in an era of shrinking claim frequency but expanding claim complexity - he added in external pressures, such as the low repute in which the industry is generally held nowadays plus increasing consumer expectations in a world where there's an app for that, whatever it is.
Mr. White pointed out that leading insurers are making investments (see above) across a range of new technologies, from decision support systems to advanced analytics to drones and, of course, blockchain, with more to come in the next five years. Unlike other sessions in related areas, he also looped in how tech and DIY are starting to impact medical management in comp. We are just now seeing the first hints of this new trend which may even include - hold tight - the return of the medical house call.
Technology, these and other sessions tell us, is only beginning to reshape the face of comp claims handling. An unstated but unavoidable corollary is the probability that those organizations without the funding or the will and talent to pull themselves through the high tech knothole may well be kicked to the curb in short order. A question for the TPAs and carriers you talk to - what's in your pipeline?
ADA and FMLA - Still There and Even More Important
More alphabet soup! Workers' comp has enough acronyms of its own, but it also intersects with the ADA, the ADAAA, FMLA, and a whole host of related state level statutes and regulations. One "must see" session was poetically titled, Tell Me What I Need to Know About the ADA and FMLA. It was presented by Kathleen Bray, Corporate Counsel for SFM Mutual Ins. Co., and Richard Mrizek, Trial Attorney for the U.S. EEOC - a dream team of practical legal expertise in this complex area.
While the Americans with Disabilities Act and the Family Medical Leave Act have been around for most of the last generation, they are constantly changing through new legislation and regulations, at the state and federal levels, and through an ongoing series of court decisions which "refine" the meaning of the laws and regulations. If you took a course in FMLA/ADA and their interactions with comp several years ago, you could be seriously out of date.
The session covered a wide array of topics concerning the interactions between these legal domains and workers' comp, but most of the discussion centered on these main points:
- Look at the big employment picture - not just the work injury. In other words, when an employee is disabled on the job, this is not just a comp issue and decisions about such matters as RTW and accommodation should not be made in the comp vacuum. An employment action which appears to be consistent with state comp law may be a serious abrogation of the employee's rights under other applicable laws.
- Don't let the concept of reasonable accommodations intimidate you. This is at the core of RTW and it is one of the primary places where comp, ADA, and FMLA all cross paths, but due and comprehensive consideration can advance the claim while satisfying all the regs.
- Routinely revisit policies –and how they are actually applied. That latter point is critical. Comp adjusters don't necessarily know how ADA or a state medical leave reg, for example, may apply to a given claim. That's up to you and your colleagues in HR, and the EEOC is more than willing to step on your toes if you get it wrong.
- Be flexible - reconciling comp practices and ADA/FMLA can take some original thinking in some cases to meet the intent and spirit of the laws.
- Be consistent - this is critical. Don't make it up as you go along and make certain that the same regs are observed consistently in, for example, your manufacturing divisions and your sales operations. Disparate application is discoverable and actionable. And unnecessary.
- Marijuana and other chemicals - the presentation offered some guidance through these related minefields as well. The topic is too complex to summarize here, but the on-line PowerPoint (see above) is quite informative.
The primary takeaway from this session for risk managers and comp program managers is simplicity itself: comp does not happen in a vacuum nowadays. You can check all the comp boxes and have your company still wind up in a world of hurt. If you don't have regular channels of communication with the appropriate folks in HR, set them up. If you have them, use them.
You can never attend all the sessions at a large conference. Here are a few more intriguing titles worth checking out on the conference web site -
- Old Dogs, New Settlement Tricks
- Leveraging Mobile & Web Technology to Reduce Opioid Misuse
- Understanding Injured Worker Perceptions About Workers' Compensation
This old dog really wanted to learn new settlement tricks, for example. Don't hesitate to browse the agenda. The PowerPoints will be posted for several more months. Lots of good stuff.