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With old claims systems come old claims processes – You can’t change one without the other!

So you need a new claims system

You know the darn thing doesn’t work or do what you want it to do so what’s next?

You can’t just go out and buy a new system without understanding what your current process looks like. Over the years you have adopted your operation to your existing technology.  However, with older technology comes outdated and sometimes ineffectual processes. Extra steps and workarounds were common ways you dealt with the inadequate technology, but updating the system alone will not get rid of those extra spreadsheets and additional paper. Those steps have become part of your organization and its “processing culture” and as you know – old habits are hard to break. A detailed assessment as to what is really going on must happen before you spend a dime on new technology.  Not doing a process assessment will make your expensive new solution function just as poorly as the old.

As recently reported in Claims Magazine, transforming your technology is more than just buying a new system. The authors of The Claim Transformation Journey correctly understand that:

Because of the age of many legacy systems, over the years, carriers have often adopted business practices that were built around their claim system’s limited capabilities and increasing shortcomings. As a result, the entire claim operation must be reevaluated. Changing the system without examining directly and indirectly related business processes, the interaction with claimants, and how data is managed would be akin to driving a sports car the same way great grandpa drove his Model-T: You’ll not only have a serious crash, but you’ll also do so much faster.

Even new systems can feel old when existing processes are not updated

While working for a client and performing an end-to-end process evaluation I learned how important the need for a pre-implementation assessment was. This firm had adopted new technology five years prior to my retention. They previously had a basic program to capture transactions but no real claims management system. In adopting their new claims system they continued managing files the same old way. Instead of feeling more organized and efficient, claim handlers now felt they had even “more work to do.”  In evaluating their process I found out that they were only using a fraction of their claim system’s capabilities. They had, however, created nine spreadsheets to track multiple versions of similar information and duplicated their work, time and time again. Had they assessed their operation prior to buying the system and changed not only their technology, but the way they were going to use it, they would have save hundreds of thousands of dollars.

Lessons learned

  • Before you assume your current technology is failing you – check your current processes and business rules against the systems capabilities
  • Create an end-to-end map of how things are being done and see if any tasks were created solely to fit into your technology
  • If tasks were created to ram a square peg into a round hole your claims solution may not be adequate
  • Make sure a new solution can reduce or eliminate old problems and not create new ones
  • Buying a new system will not improve efficiencies unless you understand how your current work flows function versus how you want them to function

Posted in Claims Technology, SPOT on Costs.

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Continuing the Discussion

  1. 5 expense reduction opportunities insurance CEOs should not overlook – The Claims SPOT linked to this post on January 28, 2010

    […] Utilize your technology to its full capabilities: Do you have the right technology and has it been implemented correctly? Failing to incorporate technology appropriately can increase costs. Procedures must be coordinated with new or existing technology so claim adjuster’s jobs are easier and the customer, not repetitive tasks, are the focus (also see our post on implementing claims technology and processes). […]

  2. uberVU - social comments linked to this post on February 16, 2010

    Social comments and analytics for this post…

    This post was mentioned on Twitter by dimechimes: RT @TheClaimsSPOT: New blog post: With old claims systems come old claims processes – You can’t change one without the other!

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