­- Establishing strong, effective partnerships with service providers, including carriers, brokers, third party administrators, consultants, actuaries, attorneys, medical providers and others who service the program. Each of these parties offers a degree of expertise that can be harnessed and managed for the benefit of the program. Carefully defining service standards and communication expectations can improve the odds of successful performance.

• When setting goals and determining key performance indicators, it is necessary to balance macro and micro objectives:

­- Macro – This includes long-term, big picture objectives (i.e. build safety awareness throughout the organization and develop a strong return-to-work culture).

­- Micro – This encompasses claim file details and standard metrics, such as frequency, lost time to medical only ratios, production, disability durations, individual medical cost trends and ultimate claim costs; as well as immediate opportunities to control costs and improve productivity.

Leveraging technology to improve results

Technology has advanced at light speed in recent years. Effective use of technology can improve decision-making, produce more positive outcomes and increase communications among all stakeholders. Some areas that offer valuable benefits include:

• Predictive modeling – The underlying data on which the modeling is based coupled with the action that is taken after the analysis is completed are key factors. Being able to drill down to the department or division level is very important, but going one step further and utilizing the data to reveal trends can offer valuable insight and ultimately improve outcomes. It is the combination of data, technology and industry expertise that enables employers to uncover trends that lead to successful claims resolution. Most current predictive modeling techniques try to identify patterns that, if not acted upon, will repeat. Using an employer's own data to provide a richer and more meaningful analysis of the claim information can be invaluable in these types of assessments.
• Outcomes-focused approach to quality – This goes beyond conventional compliance principles to proactively review claims with audits scheduled earlier in the claims lifecycle. Employers can reduce costs and drive better results by concentrating on claim-level performance as well as conventional compliance principles.
• Customized scorecards – These can provide in-depth details and a high level summary to share with others within your organization. Dynamic real-time measurement is key to successful and progressing risk management programs

Key rules for measuring performance

For each program to be successful, employers must develop customized performance metrics with the following essential characteristics:

• Simple to understand at all levels of the organization
• Provides information that is meaningful and valuable to the C-suite
• Offers consistent information across all variables to produce an accurate picture
• Conducted on an ongoing basis to improve outcomes and maximize opportunities for early intervention

Conclusion

The well-known expression, “if you can't measure it, you can't manage it,” is anything but trivial. A good risk management program can only become great if quality and performance are effectively measured and managed. Today, access to claim data, quantitative expertise and advanced technology give employers an edge like never before. Measuring performance is not only important to risk management success; it is essential.