I debated whether or not to use this title, since it is a little crass. During Bill Clinton's presidential campaign, James Carville, Clinton's campaign manager, was concerned that Clinton's campaign efforts were getting diluted because Clinton was trying to address so many issues. They decided to identify one item to effectively focus on for the campaign. Carville coined "it's the economy stupid" for a group of campaign workers and it became a primary theme of the successful campaign.

As I read this, it occurred to me that many risk managers and claims managers have a difficult time focusing on critical issues because they have so many wide-ranging responsibilities. Their attention and focus can become diluted and overcome by the minutiae. They are also frequently bombarded with interruptions from others who make it even more difficult to focus on the most important items. Therefore, they sometimes get bogged down by the frequent interruptions rather than focusing on the most important issues. This article focuses on:

  • Setting aside time to analyze data

  • Identifying critical items on which you should concentrate your time and attention

  • Developing report formats that focus on high-level information for those critical items that identify trends and "hot spots"

  • Setting priorities on the work to be done to address issues found.

How can data keep you on track?

Data can keep you on track by reducing information to your most critical needs rather than bombarding you with detail. Some of you may be young enough to picture the days when insurers and TPAs sent monthly detail claim listings to their clients, which provided numerous lines and columns of information on each and every open and closed claim. In pre-electronic delivery days, these detail listings were delivered in shrink-wrapped continuous pages that were often several inches thick. On many occasions I saw these listings on a risk/claims manager's floor, their usefulness limited to function as a doorstop, which was replaced the next month when the new listing was received. There was obviously some useful data and information in there somewhere, but the detail got in the way of useful data analysis.

Consider this scenario as you think of the vast volume of electronic data available to peruse.

There are several important items to address when determining how claims data can help and the reasons it should be used. In all cases it is important to capture financial information regarding your claims; however, you may have other needs for various types of claims data. The following questions (see table, below) will be helpful in identifying the valuable information.

As you answer these and other questions relative to your claim system, determine whether changes are required to capture the necessary data.

Setting aside time to analyze data

It is critical that the claims manager set aside time to focus on data that may drive his or her work for the day, week, or month. I recommend setting aside time each Monday morning to analyze the data and set the stage for the balance of the day or week.

During my corporate claims career I had many different responsibilities, and found it difficult to juggle them. My immediate manager, a wise and analytical risk and claims management professional, suggested that we list all of the items that we could address, and then focus on the ones that created the greatest return on investment (ROI) for our time. This "open items list," as he called it, helped us to identify approximately 75 items that we could address. However, by analyzing the list we found and considering the fact that there are only so many hours in a work week, we decided to focus on 10 items, and listed them in priority of importance. We found that we could create a greater benefit for the company, and less frustration for us, by focusing on these critical items and reviewing the open items list each week.

This is the same as the Pareto Principle, or the 80-20 rule. In claims management, it is definitely true that approximately 20 percent of the items create 80 percent of the costs, so focusing on those items will help you create the greatest ROI on your time and attention.

Concentrate time and attention on critical items

How do you identify the items that are critical and create the greatest ROI for your company (and for you)? I believe we already know many of them. For example, if you are a workers' compensation claims manager, two of the major items that can reduce claim costs and expense include:

  • Development of "best practices" for your claims program that drives consistency and performance at a high level.

  • Creation and/or improvement of a modified duty program that can get employees back to work at earlier points.

If you identify these as critical items for your attention, then metrics should be developed to determine whether these requirements are being met. As you develop additional reports like those listed here, you will identify other items on which you should focus your time.

Developing reports for critical items that identify trends and "hot spots"

Don't get bogged down in the minutiae. Focus on the important by summarizing key information that will help you see trends and "hot spots." Create reports such as:

  • Loss experience reports, that show the number of claims (by type), the paid to date, total incurred, outstanding reserves, and number of open claims for each program year. This allows you to easily see program trends in claim frequency and severity. These reports can also be created for each region, state, or location, helping you see the areas that need the most support, and where the location manager should focus his/her efforts.

  • Large losses, which are typically identified by total incurred costs that exceed a predetermined value, such as $50,000 or $100,000. A "large" loss will have different meanings for different companies, but regardless of the definition, you should be able to identify those quickly and take steps to resolve them. These reports can also be used to identify those claims that should be reported to your excess carrier.

  • Significant reserve changes (e.g., increases of $25,000, decreases of $10,000), and again the definition of "significant" will vary by company. These changes may signal a new "large" loss or may signal a claim that has deteriorated and requires immediate attention.

Set work priorities and address issues

Now that you have identified the critical items that require your attention, it is easier to set your schedule for the day, week, or month. The "open items list" approach may be the organizational tool you need, or you may be able to take other steps to reduce less important tasks and interruptions. If we do not take these personal organization steps, then we will be relegated to the workday that is spent on interruptions, e-mails, and less important tasks that draw us away from the critical items that will increase our ROI.

NOT FOR REPRINT

© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.