Measuring success in workers’ compensation

What can be measured to truly improve outcomes for everyone in the workers’ compensation system?

Employers need data to measure success, but they need to be sure they measure the right metrics. (Photo: Shutterstock)

The old adage says, “What gets measured gets managed.” What does that mean for workers’ compensation/? What can we measure to truly improve outcomes for everyone in the workers’ compensation system, from injured workers, to employers, to insurers and others? Are we measuring the most important metrics, or are we as an industry spending too much time measuring less relevant issues and excluding those that can have a real impact? How can we drive optimal outcomes by adjusting what we measure and the analytics we use to measure success? Finally, what should we measure as the industry moves forward?

There is certainly no shortage of data in the workers’ compensation system, but what we do with it, how we measure it and, most importantly, how we apply it, are key components to improving the system for everyone. Four prominent industry thought leaders joined us to discuss this important issue during our most recent Out Front Ideas webinar, which also served as the opening keynote session for the 74th annual Workers’ Compensation Educational Conference in Orlando:

Our speakers did not necessarily agree on which specific metrics are the most important to measure. But they were unanimous on what they considered the most important element of any program: treating injured workers well and getting them back to health and work as quickly as possible. Anything measured should be considered a tool to accomplish that in the most caring and efficient ways possible.

Process versus outcome measurements

It’s easy to get absorbed in our processes and to overlook the most important thing – helping the injured worker. The definition of “success” may differ for an adjuster, the employer, and the medical provider. Collectively, we need to be creating measurements that will ensure a focus on providing the best outcome for the injured worker.

Defining success and deciding what to measure is not a black-and-white issue in workers’ compensation. As one speaker said, “It’s not as if we are counting widgets; these are individuals, all with different issues and backgrounds.”

Processes and outcomes must go hand in hand. Optimal outcomes are the goal, but the processes used to get there are important. Measuring each, to a certain extent, is important. For example, measuring the timeliness of first reports of injury is valuable if it has a positive impact on a large number of injured workers.

Commonly used metrics

Three-point contact, adjuster caseloads, and the speed of communicating with the injured worker all are metrics that are or have been extensively measured. But are these still relevant? Does success for these measurements lead to better outcomes, or should they evolve?

There is no definitive answer except that measurements are important when they ultimately lead to better outcomes. For example, two of our speakers disagreed on the importance of the adjuster verbally communicating with the injured worker within the first 24 hours.

One believed it is absolutely critical to the employee’s experience and the outcome of their injury to speak with the adjuster quickly. As they explained, it shows the injured worker that the employer cares. Also, injured employees have a tendency to say things verbally that they might not in an email or text, and they are more likely to remember events of the incident closer to the timing of it.

However, another panelist viewed 24-hour contact as an “age-old requirement” that doesn’t fit in with the adoption of mobile technology. In addition to logistical problems, such as being able to contact the injured worker as he is getting medical attention, there is little, if any, information to share with him at that early point.

Allowing metrics to evolve with advancing technology is important, the speakers explained. For example, the first communication with the injured worker (whenever it occurs) may be a very different conversation than it was just a short time ago. Some employers are now able to view employer video footage within hours of a claim being reported. That means the first conversation with the injured worker doesn’t need to focus on discovering what exactly happened, because that’s already known.

The number of cases per adjuster is another metric that may be losing its importance. Despite some calls for an industry-standard, many feel it’s less relevant than it was several years ago. Technology has made medical-only claims much easier to handle. Also, factors such as the skill level of the adjuster and the complexity of each claim should dictate the number of cases each adjuster handles.

Measuring savings from managed care may be less significant than it once was. Savings from bill review, and looking at a 12-month rolling average, don’t show how well an organization is doing as opposed to a comparison over time or to another benchmark. Some employers are investing heavily in onsite clinics to make sure injured workers get quality medical care as soon as possible.

One panelist said the most important metrics to measure are those that focus on three core factors:

Keeping a balance on the metrics measured is key.

Using metrics appropriately

A criticism of the workers’ compensation system is the inability to make certain measurements meaningful, collecting all sorts of data, but not using that information to make positive changes.

One panelist pointed out that although the industry extensively measures the first report of injury, it doesn’t measure or adequately discuss the small percentage of disputed claims that go to trial. They noted that the number of settlements has gone up dramatically, while the number of awards is decreasing. Although that may indicate improvements in the workers’ compensation system, the information is not being used to improve processes.

According to the panelists, sharing data is one of the biggest opportunities to improve the system. Safety information and workers’ compensation data are being gathered in the same building, but not shared among the departments collecting them.

Breaking down the silos within the regulatory side of the industry has also been a major focus, as this can result in more aggregate information available to all stakeholders. Regulators are also providing more data to the industry, which can allow employers and injured workers to explore trends and see types of injuries by county, injury type, and industry.

Understanding what is being measured, and relating it back to the way the system functions, can drive positive performance and create superior outcomes.

Finally, the panel explained that maintaining actuarial predictability is important for employers. If you’re making significant changes to your program, be sure to discuss these with the actuaries so they can adjust their modeling accordingly. Employers should meet with actuaries frequently to monitor trends that are impacting their program. It is important to show actuaries how all the metrics work together, so they see the whole story, rather than looking at any one metric in isolation.

The future

The industry will need to learn to trust the metrics more, the speakers said. Sometimes, the data that’s captured through predictive analytics and other new tools contradicts what we think is correct. But it’s time for stakeholders to rely on the technology, rather than what their guts are telling them should be right.

At the same time, it’s crucial to make sure the customer is happy, regardless of what the measurements show. Measurements don’t matter if the injured worker has a bad experience.

There is no single measure that will guarantee success. The metrics can lead to positive outcomes as long as they are viewed as one factor in the overall injury management program, and organizations are willing to evolve and change with technology and the experiences of injured workers.

At the end of the day, it’s how well we care for injured workers that is the most important thing.

You can view the complete presentation at Out Front Ideas.

Kimberly George is the senior vice president of corporate development, M&A and healthcare at Sedgwick Claims Management Services, Inc. She can be reached at kimberly.george@sedgwick.com.

Mark Walls is vice president of communications & strategic analysis at Safety National. He can be reached at mark.walls@safetynational.com.

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