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to invariably waver as systems cost more than budgeted, take longer to implement than planned, and are often partially outdated by the time they’re implemented. 

So, what do workers’ compensation payers want in a claims system? Joseph Paduda, principal of Health Strategy Associates (HSA), and I decided to find out by conducting HSA’s First Annual Survey of Workers’ Compensation Claims System. The online survey probed the opinions, perceptions and attitudes about current systems as well as payers’ wish lists for the “ideal” system. It also examined perspectives on functionality, the purchase decision-making process, pricing, vendors, and opportunities for improvement.   

Viewpoints of Two Groups

We surveyed two distinct groups: Executives responsible for purchasing and maintaining claims systems, and the people who actually use them (frontline). What we found was that respondents are using a variety of claims systems; some developed in-house, some acquired through commercial off-the-shelf applications, others created by niche vendors. On average, payers had been using their existing systems for five and one-half years and expected to replace or significantly modify them within the next three years.  

Challenges with current systems included “missing key business functionality,” “high maintenance costs,” and “high cost of integration with other applications.” With some questions, answers of the two groups diverged. For example, 43 percent of the frontline users cited “difficulties with application vendors,” compared to only 12 percent of the executives. When discussing their future system, executives wanted it to be able to control, automate and enforce consistent claims handling through business rules and forms generation. Frontline users stressed the need for more flexibility and integration with external systems. 

There was also an interesting disparity in answers between the two groups on the issue of integration, specifically over whether the current system was fully integrated with their bill review and utilization review systems. More than 80 percent of the frontline users said there was no “full integration,” while 60 percent of the executives believed their systems were integrated. In fact, when asked, “What will systems vendors have to do in the next three years that is different from what they’ve done in the past,” the frontline users stressed integration capabilities, saying their systems were not fully integrated, despite vendors’ assurances to the contrary. This response was consistent with the findings of HSA’s 2009 Survey of Workers’ Compensation Bill Review.

  The Wish List

When asked what system “they wished they were using,” nearly half of each group was unable to name a preferred vendor. For the most part, the survey shows claims systems vendors have low name recognition, potentially indicating a highly fragmented, immature industry. 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, both groups agreed it would be increased staff efficiency and improved customer service. Respondents then categorized a list of attributes and functionalities into different areas including “basic and expected,” “critical,” and “unimportant.”  “Basic and expected” attributes included such items as ad hoc data inquiry and analysis, action plan creation and monitoring, report generation, and return-to-work programs.

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


A consultant with Health Strategy Associates, Sandy Blunt is a technical subject matter expert in the healthcare, workers’ compensation and disability industry. He may be reached at