In my last blog, I relayed many ways we helped self-insured employer groups deal with the workers' comp system in the 80s and 90s. As I noted, medical costs were beginning to skyrocket, and medical management was out of control.
The things we did were generally straightforward. They were all just good management practices. But implementing good management practices in a system that is breaking down can be rather complex and frustrating. When changing norms that have been the status quo for years, you will run into roadblocks, pitfalls, and influential people telling you to do what you want; but don't move my cheese.
Eighty percent of the time, our efforts proceeded with little pushback. However, twenty percent of the time, issues evolved and required additional attention. Let me share a few examples.
Our nurse with the "new sheriff in town" line generally worked well. However, when he got to some of the plants in rural Texas, the locals took issue with that line. We quickly realized we needed to tune down the testosterone level as there was some aggressive head-butting. We realized that it was not a battle we could win. Thus we retreated for a spell and addressed some other locations. Given an appropriate time, we resurfaced with a new nurse. While this nurse still had a spine of steel, she understood how to move mountains with a flattering word and a smile. It took the rest of the year, but at the annual performance meeting, the group was no longer on the problem list. This made the plant leadership very happy, as they got to pass their old spot on to another management team.
In another situation, our client was a national food processing/packaging company headquartered in the upper midwest. They had a plant in Louisiana that suddenly began having significant spikes in claims. So we were asked to take a look. We found many claims that were unlikely to be work-related. When we addressed this with the plant leadership, we were told in no uncertain terms how those (expletive deleted) Yankees gutted their health benefits, and they were not going to let their employees high and dry on health care. So, they decided to let the issues go through workers' comp. The only way that would change is if they get their health benefits back.
When we discussed this with our clients, we learned that the plant management at that location carried significant weight in the company, and it was not a bone anyone there wanted to pick. Subsequently, our task was to find something that could help mitigate the problem. After a significant amount of discussion to understand the new insurance arrangements and where the local management was willing to move, we arrived at a solution. We set up an occupational health clinic in the plant that served injuries and could provide primary care and direction to the workers and their families. As complex as the solution was, corporate saw it as cheaper than revising their company insurance program or continuing with the spiking comp claims. The local plant management saw it as a significant win for their business.
Every plant we managed had its unique issues. There were many commonalities, and many of them became routine. However, there was always an issue owned by a powerful manager, which would represent a significant challenge. People generally don't mind you moving other people's cheese. Just don't touch theirs. As a result, before attempting any change in a plant, we would meet with the management team. Our goal was to assess where the land mines were and who controlled the trigger. Then we set out to tackle as many lighter-weight issues as possible. By the time we needed to address the dangerous ones, we had removed as much potential ammunition from the field as possible.
It was challenging. We didn't successfully eliminate every issue, but we were always able to minimize the problem, so it did not significantly impair our objective.
Today's issues also involve the impact of social and cultural changes and how the world is interacting with claims administration companies. The actors are different, but just like today, the problems appeared ominous, and the threat to their continued existence was felt viscerally. But if you expect to remain a profitable company in today's world, you need to approach it much the same way:
Sacred Cows Have To Die. Understand that the practices that successfully got you to this point will lead to failure shortly.
There are No Single Source Solutions. The current evolution involves virtually every functional department within your business. Thus, consider your entire company. Where is value created, and where is value stifled? Eliminate those factors that are diminishing your worth. How can you maximize performance & productivity?
Value is Created by Processes that Occur on the Frontline. Importantly, you need to understand where and how you create value. You need to know your expectations and be able to quantify them. And you need to establish systems to alert you of negative variances and respond quickly.
The Ultimate Source of Value Creation. In the claim management business, the injured worker is the ultimate source of value creation. Your measure of success will be measured by your ability to demonstrate how your services are adding value to that market. Claim organizations that understand this will be the market leaders shortly.
Many companies are working through this process. Unfortunately, most are struggling. It is likely to 40% to 50% of the current claims management business will be either our of business or substantially changed during this transition. Honestly, it doesn't have to be overwhelming. You just need to approach it with a blank page and dispassion towards what has been. keep your eyes on the future and turn down the noise.
Bear in mind the future is changing as you read this. There is no percentage in fighting these changes; you will lose. They are impacting virtually every aspect of your business. Your only survival alternative is to figure out how to win at the base, and build up from there. That's how you can win in this game.
We can help you understand the game and offer tools to shore up certain critical elements of your business. We can help you ask critical questions to improve your understanding and awareness of the changes. However, these issues are impacting virtually every element of your business model. As a result, senior management involvement will be necessary to achieve success.