Why Analytics by Themselves Do Not Change Processes

Decision-making
Research suggests 40% of major business decisions are based not on facts, but on the manager’s gut.1 Hopefully, most of those gut-based decisions are not life endangering. Yet, many of them directly impact organizational viability.

In Workers’ Compensation, critical decisions are made daily by front-line workers. Claims adjusters and medical case managers make course-swerving decisions every day. On what basis do they make these decisions? What kind of decision support is available to them? How timely are the decisions they make? How are outcomes traced back to the decisions made? Are any of the decision based on analytics?

Only analytics fused into operations can respond to these questions. Only analytics that are linked to operations can consistently provide good decision support and positively affect outcomes.

Distributed knowledge
“If you really want to put analytics to work in an enterprise, you need to make them an integral part of everyday business decisions and business processes—the methods by which work gets done and value gets created.”2

Both garden variety and highly sophisticated analytics are common now in many organizations. A few apply the analytics to their operational process effectively, thereby making significant impacts on outcomes and profitability. Unfortunately, those exceptions are not often found in the Workers’ Comp industry. Applied analytics in Workers’ Comp, and particularly those relating to the medical aspect of claims, is rare.

In Workers’ Comp, analytics are most often sequestered on the executive floor. Analytic results are displayed at board meetings and are lavishly portrayed at marketing shindigs. They are represented in colorful graphics while decision-makers ponder them. Nevertheless, just executing and reviewing analytics has little impact on outcome. Analytics must be linked to operations seamlessly to the end that processes are changed and changes are documented.

Dashboards—an attempt that falls short
Dashboards have become a fashionable way to display analytics, but they don’t necessarily link the analytics to operations. They are designed to present conditions in the organization across a broad swath of indicators in one view.

An example is a hospital where a dashboard displays vital operational statistics including admissions and discharges for the period, average lengths of stay, acuity rates, and mortality rates. Dashboards are interesting and informative of activity and organizational performance, but what will or should be done operationally to influence the indicators going forward is not always clear. Results may vary depending upon the leader present that day.

Basically, dashboards are for viewing, and unless the organization has designed response procedures and accountable persons, the impact is negligible. Dashboards have no direct relationship with operations and usually there is no mechanism for tracking action responses to the information.

Changing processes in this top-down manner is difficult, time-consuming and often inaccurate and costly. Corporate communications, regardless of how sophisticated, do not effectively translate analytic knowledge into actions on the front line.

Actionable analytics
For analytics to be actionable they must be linked to, and fused into operations electronically. The best way to do this is to continuously monitor current and historic data, execute the analytics in real time, and initiate the desired actions among workers by means of an electronic message. This approach hurdles the communication log jam found in most organizations with an immediate, specific directive. It requires a computer system designed to monitor and analyze all transactions and to automatically send the action message, thereby communicating the results of current analytics to the appropriate persons.

Computer-aided analytics
Design and build intelligent systems designed to monitor the data continuously and identify data combinations that portend risk. Set up rules-based profiles defining data combinations that can be captured by the computer. IT will build the system or outsource to a vendor that specializes in this service. The latter is usually a much less expensive and quicker option. Outsource to a turn-key solution provider.

Infused accountability
When the computer finds a claim containing the data elements in a profile, the appropriate person is automatically notified electronically. The system should also keep an audit trail noting all claims tagged, the reason it was tagges, and to whom the alert was sent. The end-to-end process will infuse analytics into the process, render the process more efficient, and keep everyone accountable.

It’s true, analytics by themselves will not change processes. But analytics linked to operations with built-in tracking systems will.

MedMetrics is an Internet-based Workers’ Compensation analytics company that provides the services described here. You are invited to read other articles dealing with issues of Workers' Comp medical cost management. Click MedMetrics Blogs.

1. Davenport, T. Harris, J., and Morison, R. Analytics at Work, Smarter Decisions, Better Results. Harvard Business School Publishing Corporation. 2010.
2. Ibid.

How to Leap-frog to the Next Generation of Managed Care

Workers’ Comp medical costs continue to scale, yet managed care programs persist in doing business as usual. Such industry-wide paralysis is hard to explain, especially because realistic answers are available. Managed care initiatives can be powerfully recharged through analytics because the core problems inherent to Workers’ Comp managed care can be addressed using technology. Foremost among the deficits is fragmented data.

Like the weather, data silos are one of those issues everyone talks about but little effort is applied to change. The prevailing attitude is “it is what it is”. Managed care programs (bill review, provider discount networks, medical case management, utilization review, and PBM) individually produce their unique data, but do not consistently share it. The data are so fractured that a unified and current data platform is rarely available for current constructive analysis, new insights, and decision support that could change claim outcomes.

Efforts to integrate data have focused on pulling it all into claims systems, a slow and complex endeavor. But there is a quicker, easier and far less costly way to correct the problem, one that supports an organization’s IT rather than depleting it. The new, more effective strategy is contracting with a specialized Workers’ Comp managed care SaaS partner.

Get a “SaaSy” partner
A cloud-based, web-enabled SaaS (Software as a Service) partner makes it happen—now. Cloud-based means it is Internet-based, with SaaS being the software and other technical tools and services made available from the web. Data are imported from disparate sources for an organization by the SaaS partner, then integrated and analyzed on a concurrent basis. The Internet-based SaaS partner grants all authorized persons in an organization access to secure, analyzed, and re-portrayed data online. Information is integrated across managed care programs and analyses are based on historic and current data from all the relevant sources. And yet, some still resist.

It really does not need to be invented here
Some are still mired in the notion that all initiatives must be created in-house to be of value. This idea could be simply territorial and protective, but it’s time for the old mantra to vanish. IT departments are too overburdened and underfunded to achieve the level of performance available from an specialized SaaS provider. Smart IT leadership will quickly see the value of an expert SaaS managed care partner to relieve them of the burden of retooling managed care.

Create a unified and concurrent data platform
Data is the prerequisite for everything analytical.1 Moreover, data integrated across the enterprise, analyzed, and results made accessible to all the business units involved is critical to improving managed care. Businesses in other industries have proven repeatedly that analytics change outcomes and now those in Workers’ Comp can similarly realize the benefits.

Once the data transfer to the SaaS partner is in place, it can be set to an automatic scheduler for updates. Rather than reviewing graphic presentations of the previous month, quarter or year, the most current data available is analyzed and the information made available to those who need it. Critical information can be accessed on demand and alerts sent to the right person as events in a claim develop. It is the integrated, analyzed data that generates knowledge and results.

Link analytics to operations
The process described here links analytics to operations, making the insights immediately available and actionable. It accelerates current decision support knowledge, making it available to claims adjusters, UR, medical case managers, medical directors, and supervisors. Linking analytics to operations permits and sustains proactive medical cost management.

For instance, current and historic integrated claim data is used to analyze and rate provider performance based on the broad scope of data. Likewise, the SaaS partner develops rules-based electronic monitoring technology to continually search for data combinations in claims that portend high risk or cost. The process of integrating and analyzing data in near-real time by a knowledgeable SaaS partner produces computer-aided, intelligence-guided managed care. The efficiencies and knowledge created through such applied analytics enable communication and timely action, thereby making medical cost management initiatives effective.

Economies of scale reap affordability
A knowledgeable Managed care SaaS partner spreads the cost of development and technical management over multiple clients, thereby significantly reducing the cost for individual organizations. The challenges of system design, development and programming, support and maintenance are all managed by the SaaS partner. And yet, for most organizations the annual cost of partnering with a SaaS provider is far less than hiring one analyst.

Therefore, the question is not why, but when. Who can justify continuing business as usual? “Those who get caught in the past and resist change will be forced deeper into commoditization. Those who can create value through leadership, relationships and creativity will transform the industry and strengthen relationships with their existing and new clients.”2

Note: MedMetrics is an Internet-based SaaS provider experienced in managed care and cost management solutions. You are invited to read other MedMetrics Blogs.


1. Davenport, T. Harris, J., and Morison, R. Analytics at Work, Smarter Decisions, Better Results. Harvard Business School Publishing Corporation. 2010.
2. Friedman, T. The World is Flat. A Brief History of the Twenty-First Century. 2005.