The workers' compensation claims system is the heart of anypayer's operations, directly affecting productivity, losses,compliance, marketing, and productivity. Despite spending tens ofthousands to tens of millions of dollars annually to update,replace or modify claims systems, payers' satisfaction levels seemto invariably waver as systems cost more than budgeted, take longerto implement than planned, and are often partially outdated by thetime they're implemented.

So, what do workers' compensation payers want in a claimssystem? Joseph Paduda, principal of Health StrategyAssociates (HSA), and I decided to find out by conducting HSA'sFirst Annual Survey ofWorkers' Compensation Claims System. The online survey probedthe opinions, perceptions and attitudes about current systems aswell as payers' wish lists for the “ideal” system. It also examinedperspectives on functionality, the purchase decision-makingprocess, pricing, vendors, and opportunities forimprovement.

Viewpoints of Two Groups

We surveyed two distinct groups: Executives responsible forpurchasing and maintaining claims systems, and the people whoactually use them (frontline). What we found was that respondentsare using a variety of claims systems; some developed in-house,some acquired through commercial off-the-shelf applications, otherscreated by niche vendors. On average, payers had been using theirexisting systems for five and one-half years and expected toreplace or significantly modify them within the next threeyears.

Challenges with current systems included “missing key businessfunctionality,” “high maintenance costs,” and “high cost ofintegration with other applications.” With some questions, answersof the two groups diverged. For example, 43 percent of thefrontline users cited “difficulties with application vendors,”compared to only 12 percent of the executives. When discussingtheir future system, executives wanted it to be able to control,automate and enforce consistent claims handling through businessrules and forms generation. Frontline users stressed the need formore flexibility and integration with external systems.

There was also an interesting disparity in answers between thetwo groups on the issue of integration, specifically over whetherthe current system was fully integrated with their bill review andutilization review systems. More than 80 percent of the frontlineusers said there was no “full integration,” while 60 percent of theexecutives believed their systems were integrated. In fact, whenasked, “What will systems vendors have to do in the next threeyears that is different from what they've done in the past,” thefrontline users stressed integration capabilities, saying theirsystems were not fully integrated, despite vendors' assurances tothe contrary. This response was consistent with the findings ofHSA's 2009 Survey ofWorkers' Compensation Bill Review.

The Wish List

When asked what system “they wished they were using,” nearlyhalf of each group was unable to name a preferred vendor. For themost part, the survey shows claims systems vendors have low namerecognition, potentially indicating a highly fragmented, immatureindustry. In support of this conclusion is the number-one answer to“Who is the leading systems vendor,” which was “do not know.”

As for the “primary business driver” for a system change, bothgroups agreed it would be increased staff efficiency and improvedcustomer service. Respondents then categorized a list of attributesand functionalities into different areas including “basic andexpected,” “critical,” and “unimportant.” “Basic andexpected” attributes included such items as ad hoc data inquiry andanalysis, action plan creation and monitoring, report generation,and return-to-work programs.

Lastly, as to the question of what “benefits would you expectfrom a new system” the executives and frontline usersoverwhelmingly agreed on “improved productivity and workflowmanagement” and “workflow automation and exception identification.”However, they then diverged, with executives wanting the new systemto “drive the adoption of claims handling best practices,” whilefrontline respondents selected “reduced claims cost.”

ABOUT THE AUTHOR

A consultant with Health StrategyAssociates, Sandy Blunt is a technical subject matter expert inthe healthcare, workers' compensation and disability industry. Hemay be reached at [email protected].