How to Make WC Analytics Profitable

By Karen Wolfe

Organizations in Workers’ Comp are allocating significant dollars to develop analytics but many are still unable to realize its benefits. In fact, nearly all organizations in the industry are entertaining advanced analytics including data analysis, predictive analytics, or predictive modeling. Yet, they are unable to experience positive results. That is because analyzing the data is only half the job.

Stated simply, the way to accelerate return on investment for analytics is to make its insights actionable. In other words, translate analytic insights to specific actions that inform frontline professionals, making them more accurate and efficient.

Predictive analytics
Predictive analytics is a way of predicting the future using data from the past, thereby helping organizations and their professional workers respond quickly and in more appropriate or consistent ways. It enables organizations to tap their collected data to predict future business outcomes when similar conditions occur or inform workers of the best action based on historic outcomes. It is also provides guidance, accuracy, and decision support for frontline workers, thereby making them more efficient. Analytic-informed action is triggered by an automatic alert.

Intelligent actions
Analytic-informed alerts are directed to those who make day-to-day decisions. The technology-driven process of analyzing, then monitoring data is designed to provide timely and accurate information to those on the front lines, thereby streamlining operational processes. Analytics-informed efficiency and accuracy generate savings. However, many organizations stop at the data analysis stage, missing the opportunity to maximize efficiency and accuracy that leads to profitability.

Informed
Efficiency is achieved when those making frontline decisions are automatically provided the information they need when they need it. Search, lookup, and data entry are not needed to make a decision and move forward because the needed information is at hand. Consider how timely, comprehensive information sent to adjusters for Workers’ Comp reserving that includes probable ultimate medical costs based on historic information would offer process efficiency. Moreover, automatic coordination with medical case management based on predetermined protocols enriches the process and outcome.

Timeliness
The timing of delivered information with insights is critical. Systems should be designed to push correct information to the right person at the right time, requiring no effort on the part of the recipient. They simply act on the insights gained through predictive analytics, the key to making historic data valuable.

Comprehensive intelligence
Analytic-informed intelligence sent to frontline professionals in the form of an alert should be comprehensive, meaning all the information necessary to make a decision is provided in the alert. When the information is incomplete, other steps, including research and data entry are required and the efficiency advantage is lost. Moreover, the recipient, pressed by other matters, is less likely to heed the alert when required information is absent.

Accountability

Some complain claims reps are so busy they ignore alerts. However, a predictive analytics-informed system will automatically create an audit report of alerts sent, to whom, along with the claim and issue that prompted the alert.  Management then has an easy means of overseeing individual accountability and follow-through. Recall the Hawthorne Effect that demonstrated observed behavior results in improved performance.

Profitability

Analytic intelligence is redrafting the laws of profitability and providing direction for how to create new strategies and operational efficiencies. The opportunities to gain accuracy and efficiency through analysis of historic data are nearly limitless. Unfortunately, organizations stop at the data analysis stage, missing the opportunity to maximize profitability.

Karen Wolfe is the founder and President of MedMetrics®, LLC, a Workers’ Compensation, predictive analytics-informed medical loss management and technical services company. MedMetrics offers intelligent medical management systems that link analytics to operations, thereby making insights actionable and the results measurable. karenwolfe@medmetrics.org